Replies

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

~~Ludwig von Mises

Dow, three year view.

it makes no sense to refuse funds while other businesses are using the new funds to compete!...And why doesn't the population at large just refuse to participate? Because Congress has established high transaction costs (capital gains taxes) and legal tender laws that prevent common citizens from the use of alternative assets to replace government money.

This is the point that a lot of blame those in trouble freepers miss. 1. The US $ is the coin of the realm. and 2. A lot of the currency of the realm is circulating in the form of interest bearing IOU's.

When prices are set by the amount of debt the average person will take on, those who abstain lose. THe guy with a family of 4 who has a decent job, a house, a car, and needs to feed his family and go to work, cannot cut his standard of living by 20% - 50% to avoid any debt, when everyone else is taking it on, unless he wants to deprive his family of the normal opportunities (clean clothes, 3 squares, reasonable social interaction with their peers). Even if he did, at the end of the day, what he might have gained in financial security (might) he loses by not having a life for himself or his kids.

This circle all comes back to one place - the federal reserve and the banks (read top executives and traders, not the instututions that get stuck with the paper) that profit enormously from the cycle of debt while everyone else pays.

Adam Smith recognized that the decisions and doings of a financial elite are for their benefit, not the benefit of society as a whole. The way to get out of this mess is not to get in in the first place, but now that we are here, we need to remember who got us here.