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How Capitalism Will Save Us
Forbes.com ^ | 10.22.08 | Steve Forbes

Posted on 10/24/2008 3:25:50 AM PDT by ari-freedom

We are experiencing the devastating consequences of a chain of major economic policy errors, which, to use a current cliché, created the perfect storm. These government blunders temporarily paralyzed the global credit system and are now sending the U.S. and Europe into recession, while sharply cutting back Asia's growth rates.

Left to its own devices, the credit crisis, which began in August 2007, would have crushed economies as severely as did the Great Depression.

Belatedly, but thankfully, governments recognized that the only way to get credit flowing again was for them to make quick and direct massive infusions of new equity into beleaguered banks, as well as commit to other emergency measures hitherto unimaginable.

If sensible rescue efforts continue--and they will--the immediate crisis will quickly pass. Shell-shocked businesses and consumers won't recover rapidly from the trauma of recent months, especially as we now cope with recession. But the downturn shouldn't be prolonged: The economy here and those overseas should start to pick up no later than next spring.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Editorial; News/Current Events
KEYWORDS: 2008; capitalism; economy; steveforbes

1 posted on 10/24/2008 3:25:50 AM PDT by ari-freedom
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To: ari-freedom

“The housing bubble burst in 2007, and banks and investors began to be fearful—who had this junk, and how much did they hold? The credit system showed the first signs of panic. The Federal Reserve responded with another round of easy money, thus creating yet another commodities bubble. Finally, this summer, the Fed ceased spraying money like a fire hose. Dollars that had been lent out through the Fed’s various borrowing facilities were then soaked up in its open-market operations. That’s why, when the panic reached a peak this fall, gold prices didn’t go through the roof as everyone sought safety. In fact, gold never reached the level it had in July.

Maybe, just maybe, Ben Bernanke has learned a lesson about the need for stable money that his predecessor, Alan Greenspan, never did.”


2 posted on 10/24/2008 3:31:06 AM PDT by ari-freedom (Obama: If we are going into war, then all of us go, not just some.)
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To: ari-freedom

And Obama and his minions will get and take full credit for it like Clinton did. And will pull this once great country even further under.

It’s like flying an airplane. The greatest danger of stalling the aircraft in flight, is to create a secondary stall by over correcting the initial stall, which the pilot might not be able to recover from.


3 posted on 10/24/2008 3:31:34 AM PDT by PSYCHO-FREEP (Sara Palin; The Orca in a bay of Democrat Belugas!)
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To: ari-freedom
"If sensible rescue efforts continue--and they will--the immediate crisis will quickly pass."

I sure hope this turns out to be true!!! My "hope" are certainly NOT pinned on any 0bamanation administration!!!

4 posted on 10/24/2008 3:33:20 AM PDT by SierraWasp (Hey Colin Powell...Fidel Castro and Che Gueverra were "transformational figures" too, you idiot!!!)
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To: PSYCHO-FREEP

well if obama wins, he’ll have a dem congress and everyone will be scared. The economy will not be given a chance to recover before the secondary stall because he’ll screw it up from day 1.


5 posted on 10/24/2008 3:37:30 AM PDT by ari-freedom (Obama: If we are going into war, then all of us go, not just some.)
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To: ari-freedom

Probably so, but any small increase or positive change will result in a media frenzy for their messiah. They are looking for any excuse they can to push their agenda.


6 posted on 10/24/2008 3:44:04 AM PDT by PSYCHO-FREEP (Sara Palin; The Orca in a bay of Democrat Belugas!)
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To: ari-freedom

this is a fairly long Fact and comment, 3 pages, sp please read all of it. This is interesting:
Economic growth will help prevent another financial time bomb—credit default swaps, a form of debt insurance—from exploding. The nominal amount peaked at $62 trillion and is now down to $55 trillion. Renewed prosperity will enable big companies to service their debts, thus nullifying the need to ever collect on the insurance. Most of these swaps will expire within five years.


7 posted on 10/24/2008 3:47:54 AM PDT by ari-freedom (Obama: If we are going into war, then all of us go, not just some.)
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To: ari-freedom

I disagree. Capitalism would save us but this is not capitalism. The fed and the government are a broken Ponzi scheme that is coming unraveled. Alot of us are capitalists but we have been playing a rigged game. It was impossible for it to continue forever. Capitalism would let the damn thing go bankrupt like it should. The next move the fed takes will be hyperinflation of moneyprinting. It is the ONLY possible way to pay their bills and debt of over 60 trillion in government debt alone. Add that to consumer debt of who knows how many trillion. I am thinking Weimar and Zimbabwe.


8 posted on 10/24/2008 3:52:18 AM PDT by screaminsunshine
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To: PSYCHO-FREEP
The greatest danger of stalling the aircraft in flight, is to create a secondary stall by over correcting the initial stall, which the pilot might not be able to recover from.

I have a buddy who's a pilot who told me once "Sometimes the best thing to do is just stop flying the plane. A lot of times it will correct itself."

9 posted on 10/24/2008 3:55:41 AM PDT by Hardastarboard (0bama's past associations need a good "Ayering out".)
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To: screaminsunshine

well it does appear that we’re seeing a bit of disinflation right now.


10 posted on 10/24/2008 3:56:38 AM PDT by ari-freedom (Obama: If we are going into war, then all of us go, not just some.)
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To: ari-freedom

Yes the precurser to the hyperinflation to come.


11 posted on 10/24/2008 3:57:51 AM PDT by screaminsunshine
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To: screaminsunshine

well if obama wins and taxes and regulates the economy to death then yeah. We’d be in big trouble.


12 posted on 10/24/2008 4:00:30 AM PDT by ari-freedom (Obama: If we are going into war, then all of us go, not just some.)
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To: Hardastarboard

That’s exactly the primary element in stall recovery procedure. Cut the power, Drop the controls and let the aircraft find it’s own stability.

I’ve done it many times, it works. Perhaps we can apply these principles to this country if Obama is elected.


13 posted on 10/24/2008 4:00:53 AM PDT by PSYCHO-FREEP (Sara Palin; The Orca in a bay of Democrat Belugas!)
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To: screaminsunshine

Once that 700b hits the 10% fractional reserve banking system, it turns into 6.3 trillion over time, if it’s all put against loans. That’s A LOT of money supply to digest. Hyperinflation is a slam dunk prediction.

I did hear though, that some banks were looking at using our confiscated tax money to acquire assets instead of using it for the intended purpose. Moron politicians.


14 posted on 10/24/2008 4:05:03 AM PDT by ovrtaxt (Only a coalition of Marxists and Islamists can destroy the United States. ~ Carlos the Jackal)
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To: ari-freedom
That’s why, when the panic reached a peak this fall, gold prices didn’t go through the roof as everyone sought safety. In fact, gold never reached the level it had in July.

Gold didn't peak out because hedge funds started dumping their gold positions for cash! They're still dumping it, but eventually they'll run out. Plus, October isn't a delivery month, from what I understand, but November is. Will be interesting to see what happens.

15 posted on 10/24/2008 4:08:51 AM PDT by ovrtaxt (Only a coalition of Marxists and Islamists can destroy the United States. ~ Carlos the Jackal)
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To: ari-freedom

A good read by Forbes.


16 posted on 10/24/2008 4:29:52 AM PDT by marktwain
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To: ovrtaxt

I see it as their only way out. Right now they are flailing away with all kine schemes to keep afloat. Won’t work. For the government and Fed to admit they are wrong will never happen. Ron Paul the kook is the only one who seems to be right at this point. I wish all these tricks would help but I really doubt it. I am trying to get more silver coins at this price but none available. Makes no sense.


17 posted on 10/24/2008 4:37:34 AM PDT by screaminsunshine
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To: ari-freedom
Most of these swaps will expire within five years.

Only to be replaced by new ones .. as the "gurus" keep throwing the dice.

18 posted on 10/24/2008 4:44:17 AM PDT by tx_eggman ("The urge to save humanity is almost always a false front for the urge to rule" - Mencken)
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To: screaminsunshine

I ordered some a few weeks ago. You have to wait if you want them at just over spot, otherwise pay the premium.

try seekbullion.com


19 posted on 10/24/2008 4:45:57 AM PDT by ovrtaxt (Only a coalition of Marxists and Islamists can destroy the United States. ~ Carlos the Jackal)
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To: ovrtaxt
Gold didn't peak out because hedge funds started dumping their gold positions for cash!

Who is buying?

20 posted on 10/24/2008 4:47:55 AM PDT by Carry_Okie (If Barack Obama is Vladamir Lenin, Bill Ayers is Leon Trotsky.)
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To: ovrtaxt

Markets are limit down thismorning. Glad I bailed out 401k. At least we got soup money.


21 posted on 10/24/2008 4:51:29 AM PDT by screaminsunshine
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To: Carry_Okie

Mints. They’re talking orders for bullion, but they’re backordered. I won’t get my silver until January.


22 posted on 10/24/2008 4:51:55 AM PDT by ovrtaxt (Only a coalition of Marxists and Islamists can destroy the United States. ~ Carlos the Jackal)
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To: ari-freedom

23 posted on 10/24/2008 1:43:56 PM PDT by T. Buzzard Trueblood (Odinga is the new Ayers.)
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