Posted on 03/15/2009 7:39:49 PM PDT by 4rcane
This a good time to do 3 things; adopt the fairtax system, reverse split our currency one for ten, a new dime would buy what a dollar did, metal prices would be a tenth what they are now, allowing us start using copper and silver in our coins, again start a vollentary re-work with our agreements with other nations, and those that don’t want too will be on notice to mind their P’s & Q’s. Lead again, instead of trying to copy sociakism. Plus it would wreck those that have $ they can’t explain in that you would have a short time to exchange yor old money for the new. My post is too long, I know.
Inflation happens when there are more dollars in the money supply. The stock market meltdown took 11 (eleven) Trillion away, so the money that is left, is worth more. Okay, lets use some common sense. Although I despise the Democrats for spending like drunken sailors, the amount they are spending - even the 4 trillion isn’t as much as was lost in the stock market crash. The money that is out there now is worth more, and the dollar is strong against the Yuan. If China devalues the dollar by dumping their investments, they only hurt themselves; sort of like losing their biggest customer because they won’t provide credit.
We are now in a period of deflation, if anyone has noticed. Gas is less, milk is below cost, and prices continue to fall on everything BECAUSE there are less dollars out there floating and flowing. Less of everything spent because the boomers lost their pants in the stock market.
The housing bubble was INFLATION, but no one seemed to care as long as it was their wallets being inflated. Now prices are down and they’re all complaining.
The internet creates this mass hysteria, and people will believe anything anymore. China is actually MORE free market and capitalistic than the USA, and it is easier for a Chinese citizen to become a capitalist in China than it is in the USA. I’m sure the Chinese government sees the USA government as inconsistant, and at the moment moving further to the left than China is.
Furthermore, just to hear Americans who’s country is barely over 200 years old comment on a country who has survived 4000 years is nearly laughable, and shows the ignorance of the Pink Floyd generational know-it-alls driving their cadillacs to the golf course while commenting ignorant xenophobic bigotry while pointing at Wall Mart signs. Folks, the smiley face on the wall mart prices is yellow for a reason, or you’d still be enriching american unions for simple household items which used to cost 400 times more than they do today.
The real inflation will happen when trade protectionism keeps global components out of USA products; and at that point, what would China have to lose by dumping our worthless dollars if we stopped buying their products?
Here’s the link...I looked it up a couple of days ago.
http://www.treas.gov/tic/mfh.txt
Treasury actually shows it at 727 billion.
Interesting. Since the main danger seems to be past, should we now let fallible men fail? The US taxpayer, through the US government should not be protecting men who made bad decisions. It seems that we are not going to get through this until the wheat is sepreated from the chaff.
AIG should not be handing out bonuses. Rewarding failure just ensures more failure. I don’t care how hard they say they worked, they failed. It would be better to let them go to Chapter 11 now.
Right now (in early 2009) it's obvious that you mean China.
In two years things may be more ambiguous :0(
Thanks for the info.
Was it wise, I wonder, to sell US bonds to China ?
Excellent posts from you.
I am British but I have most of my net worth in dollar-priced stocks. The stocks haven’t done so well in themselves, but their value (to me) has appreciated 50% across the board just from the dollar rising against the pound.
I've considered that before, and for the US, I don't think it really made much difference. Regardless who buys the bonds, we are just as responsible for them.
I think the real risk was on the Chinese. Instead of taking their trade surplus and using it on domestic upgrades, they hoarded it. Now they are in the position that they cannot sell the bonds at once without depressing the market for them and lowering the value....costing them money.
The Japanese are in the same boat, and in fact kept the dollar overvalued for years to protect their investment in bonds.
Global warming will kill 6 billion
SPPI | 14 Mar 09 | Christopher Monckton
Posted on 03/16/2009 5:37:40 PM PDT by I got the rope
http://www.freerepublic.com/focus/f-chat/2207923/posts
-sidebars-
Free Republic
President Hussein’s 2012 Resignation : A historical Prediction
N / A | 2009-01-29 | Patton-at-Bastogne
Posted on 01/29/2009 8:45:33 PM PST by Patton@Bastogne
http://www.freerepublic.com/focus/f-news/2174736/posts
Text of G20 joint statement
Marketwatch | March 14, 2009 2:01 p.m. EDT | By MarketWatch
Posted on 03/14/2009 11:55:14 AM PDT by Ernest_at_the_Beach
http://www.freerepublic.com/focus/f-news/2206620/posts
-archival-
Bush resists $25bn aid for US carmakers
The Financial Times | 11/11/2008 | James Politi and Bernard Simon
Posted on 11/11/2008 9:55:29 PM PST by bruinbirdman
http://www.freerepublic.com/focus/f-news/2130575/posts
Yao Jingyuan: China’s foreign exchange reserves exceed US $2 trillion
english.people.com.cn | Nov.27,2008 | me
Posted on 11/28/2008 6:09:38 AM PST by badguy2000
http://www.freerepublic.com/focus/f-news/2139529/posts
U.S. debt approaches insolvency; Chinese currency reserves at risk
http://www.asianews.it/ | 19 Dec 2008 | Maurizio d’Orlando
Posted on 12/26/2008 12:10:25 PM PST by Blogger
http://www.freerepublic.com/focus/f-news/2154544/posts
Treasuries purchases will depend on risk: China’s Wen (threatens Obama)
reuters
Posted on 01/31/2009 3:51:38 PM PST by maccaca
http://www.freerepublic.com/focus/f-news/2175902/posts
Europe’s Growing Crisis Puts Fed at Risk
(Fed loaned $400 Bil to a Europe that can’t pay)
Barron’s | 2/2/08 | JACK WILLOUGHBY
Posted on 02/01/2009 5:52:44 PM PST by Golddigger3
http://www.freerepublic.com/focus/f-news/2176461/posts
Europe’s Growing Crisis Puts the Fed at Risk
Barrons | 31 Jan. 2009 | JACK WILLOUGHBY
Posted on 02/08/2009 8:39:36 AM PST by RKV
http://www.freerepublic.com/focus/f-news/2180976/posts
They’ll stone you when you’re tryin’ to go home...
‘There will be blood!’ Top economist warns of civil violence, government overthrow
World Nut Daily | 3-2-09 | Jerome Corsi
Posted on 03/03/2009 2:47:56 PM PST by puffer
http://www.freerepublic.com/focus/f-news/2198473/posts
Famed pastor predicts imminent catastrophe
World Net Daily | 3-8-09
Posted on 03/07/2009 11:31:23 PM PST by puffer
http://www.freerepublic.com/focus/f-news/2201777/posts
Bible Prophecy/Current Events *ALERT*:
COMET WORMWOOD APPROACHING!
drug induced haze
Posted on 02/18/2009 12:28:42 PM PST by puffer
http://www.freerepublic.com/focus/f-chat/2188550/posts
Scientific Scenario Of A Comet’s Impact And
The Wormwood Star Prophecy by Marshall Beeber
The Messianic Literary Corner | February 2008 | Marshall Beeber
Posted on 09/21/2008 9:24:38 AM PDT by mbeeber
http://www.freerepublic.com/focus/f-religion/2087113/posts
Psychics: Stars not aligned for Palin
(One predicts riots, martial law, suspended elections)
The Politico | October 2, 2008 | Daniel Libit
Posted on 10/02/2008 12:47:59 PM PDT by 2ndDivisionVet
http://www.freerepublic.com/focus/f-bloggers/2096028/posts
The treasury (1) guarantees all bank deposits, if not paying $100 causes $1000 in defaults on bank deposits the treasury is out $900, not up $100; (2) receives 20% of all private economic activity in taxes, if not spending $100 causes a $1000 drop in economic activity the treasury is out $100, not up $100.
On the ridiculous populist "bonus" crapstorm, half of Wall Street pay takes that form in normal years, and it goes out on individual not firm aggregated results. There are specific traders who bring in hundreds of millions of revenue and receive a modest portion of that as incentive pay.
Here is a parallel idiocy in an industry more people understand. "Gosh, what with car companies losing so much money, it is outrageous for car salesmen to be receiving commissions for selling cars. I mean, car sales are off 25 to 50%, surely car salesmen don't deserve any *bonuses* for selling cars!" So right when you need to sell cars, and after you'd already closed half the big dealerships and fired 20% of your combined staffs, you in addition decide to get rid of paying commissions to car salesmen. Just pay 'em minimum wage to stand around the lot or whatever, regardless of how many cars each one sells. That'll sure recover your sales, won't it?
If AIG goes chapter 11 that means they don't pay their debts; that means anyone who they won money takes the hit instead. AIG doesn't take the hit, they haven't got it. Now you get to bail out of let fail all their counterparties, and everyone scrambles to not do business with anyone else you might take a dislike to because they once went to a golf course or something.
The losses from that scramble are 10-100 times the size of the initial hit. In case nobody noticed, the entire banking system has lost $1 trillion of its capital and is undercapitalized by half that easy. Being in favor of failure in the form of Lehman has already cost the treasury 20 times what letting it fail without loss would have cost, and cost everyone else more like 200 times.
You can't get blood from a stone and the capital of the banking system is not optional, you can't raid it like a piggy bank. Every dollar of loss you put there, from the time of Bear onward, has cost many times any direct savings.
It simply isn't a zero sum game, therefore redistributionist envy driven thinking is hopeless in addressing it. Only a restoration of profits and confidence can help the US treasury. Destroying every US company there is would not save it one thin dime. The US treasury to wed at the hip to the future profitability of the US corporate sector. It is only punishing itself every time it takes another populist whack at them.
How stupid are you people?
AIG is just writing the insurance policies. Eventually, people at a lot of levels At AIG made flawed decisions. Okay, men are fallible. I didn’t like propping up the banks decisions in October, but I accepted it.
Now, it’s March and basically the banks have not materially corrected their deficits. Why should they, the world’s governments have basically proven they will throw mad sums of cash at them?
If State Farm screwed up and wrote insurance policies they couldn’t cover should the government bail them out? Should state far, if bailed out, even continue to write insurance policies to then require it to give bonuses to it’s agents, until it’s back in order?
I’m do a bonus myself in February. I don’t happen to be a banker. Would you support the government stepping in to insure I get my bonus if my company fails?
AIG made a lot of bets that there wouldn't be epidemic deadbeatism in the world. There was and is, and it cost them. Goldman and similar correctly bet that there easily could be, because they wanted to hedge against it. If AIG goes bankrupt, does it punish AIGs failure or Goldman's successful prediction? Answer, the later. Bankruptcy doesn't hurt the deadbeat, it hurts his creditors.
"Well Goldman should have hedged with somebody else instead". Right, because it should have known beforehand that AAA rated trillion dollar book companies were clearly going to be insolvent the next day. Acting on that principle, do you know who in the world deserves a dime of credit? Nobody. Not you, not your neighbors, not your bank, not even the government.
AIG shareholders deserved to get hurt because they back men who were wrong. Guess what? AIG stock is at 40 cents, and the government took 80% of it to boot. They were wiped out, what more blood do you think is in that stone? Now we are instead just debating whether those who bet *correctly*, should be stuck with the loss *anyone*, because the men they bet *against* were stupid. If you answer "yes", you aren't punishing failure, you are punishing success. You aren't demanding that men bet intelligently, you are demanding that they not deal with each other at all.
And if you enforce that demand, then there is no capital because there is no credit because nobody pays. You aren't stopping the epidemic of deadbeat behavior, you are demanding it run. Well, it will run until it arrives at *your* door. How long do you remain solvent if everyone who owes you a dime defaults and welshes, while all your creditors demand payment instantly? That includes your bank welshing and not letting you withdraw a dime, by the way.
I don't understand why this is so hard to see. The loss already exists, it will careen around destroying everything in its path is it isn't *allocated* and *eaten*. You can't make it go away by not paying it. You just make it destroy 10 more intermediaries who don't have it, and it arrives right back at your feet.
There is no one to allocate a $2 trillion loss to "only those responsible". Those responsible blew out about five exits back, they already lost their shirts and their creditors creditors creditors creditors have their collateral, such as it is. In case nobody noticed, the guys on the winning sides of all the bets *are* the ones paying, that is what default and bankruptcy mean. Think the borrowers on the street who stiffed their bankers for a trillion in bad debts are the ones who paid?
Pay up already! The only way this gets behind us is to *take the loss* and move the hell on. Fighting over it just multiplies it, you'd think that would be tolerably obvious by now. All the populist attempts to punish the heart for having heart attack won't get the patient up off the table. Without a functioning healthy profitable financial system, the government is broke and so are you. You can't save yourself by demanding the economy's heart by cut out and burned on an altar. Give it up already.
If I made a bet with Joe down the street for $100, and we agreed that my neighbor would take $10 from each of us and insure the bet in case the loser couldn’t make the payment, I would be a blame fool for thinking I would ever see more than $10 off of that bet, even if I won. Joe might not pay up, and Harry might not have more than the $20 we gave him. That would be the risk I took.
But, what the hey I’m not a banker with more brains than common sense apparently.
We should have let horse racing officials or maybe some casino owners handle these bets. They would have done better handling bets than these elites.
The bankruptcy code is a political animal skewed to protect deadbeats by pols who want the votes of great masses of deadbeats.
When this bites them, because great masses of voters are *also* bank depositers, and stealing from banks too much all at once threatens great masses of voters, they blame anyone but themselves.
But they are on the hook for it and they will pay.
Today the Fed is paying by buying $1 trillion in securities from corporations. That works.
Not paying doesn't work. Pretending it is all the dang rich banker's fault is an utter lie and a slander. They are approximately the only honest men in the building. The winners among them are approximately the only intelligent men in the building. Everyone else is by comparison a rogue.
Is the congress going to give back all their own pay and retirement benefits and campaign contributions, because the government is running a deficit?
It is all utter class warfare hogwash, start to finish. Nobody (but the Fed right now) is paying any attention to the common good and recovery, everyone is just smearing their neighbors hoping to avoid blame for any of it.
As though blame has anything to do with fixing a particle of it, and as though those casting the stones are the biggest sinners in the universe...
You are truly a “voice crying in the wildreness”. Stick to your guns. You recall your writing, “Don’t fight the Fed.”
Today, on CNBC, Jim Cramer said EXACTLY the same thing. He went a step forward and said that “In Bernanke We Trust” should be stamped on our currency.
So at least you have the company of one in Cramer.
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