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The answer is "DELAYED". We delayed the Great Depression for a decade by borrowing trillions of dollars from the future and giving it to the banks to spend. Now we are UNWINDING that great mistake or that temporary brilliance, depending upon your perspective .
So, my view of this is, the FED is finally acting responsibly; but this does not mean everything will be painless. When I say the FED is finally trying to become responsible, I add the note that they are trying to correct the mistakes made by those two clowns Greenspan and Bernanke, but mostly by Bernanke. The UNWIND still has a long way to go.
Can this UNWIND be done without pain in the world? No, it cannot be. We were supposed to feel the pain of deflation between 2001-PRESENT. Instead we chose to "kick the can down the road" and let someone else become responsible for the pain.
I admire Jerome Powell; as I admired Paul Volcker in the early 1980's. Volcker jacked up the FED FUNDS rate to 20% to break the back of inflation (price inflation, not debt inflation, which is our version of inflation today).
If President Trump could understand that Jerome Powell's FED, in attempting to UNWIND the "mistakes" of Ben Bernanke (yes, I think these were mistakes, perhaps with decent intentions), then he would support the FED's strong dollar policies and stop chipping at him, demanding the return of low-interest policies, which have weakened America and weakened the foundation upon which our nation stands (or falls), the US Dollar.
Instead of everyone suffering together in 2001-PRESENT, we instead had the richest people in the system get away like bandits and the rest of you survive in a paralyzed FED-controlled zombie state. Capitalism, in it's true state, depends upon recessions to destroy non-competitive companies and corporations. ZIRP undermines this, allowing weak corporations to survive off of loans, regardless of their health. ZIRP is SOCIALISM FOR THE RICH. ZOMBIE CORPORATIONS are those companies dependent upon low interest rates to stay in business.
Bernanke's policies allowed weak companies to survive the Great Recession by having you and I bail them out. Corporate Socialism. We should OWN these companies now. We should all have a capital stake in these companies, as we "loaned" them money so they could survive.
Our Capitalist forefathers would role over in their graves to hear that we perverted Capitalism doctrine to such an extent - "the survival of the most adaptable" - and have now become a society that believes that the corporations should only be taxed at a minimum rates during Growth Seasons and that the working public should bail them out during periods of darkness and recession. Is this what we have become? We exist for the survival of the Corporations? Which is worse, this scenario, or the Socialist scenario, that Corporations and Capitalism exist for the welfare of the masses?
We now have corporations that are addicted to low interest rates for their existence, many of which will die if we meaningfully raise interest rates. This is a rock and a hard place.
We cannot have Perpetual Growth. Expansion-Contraction. Expansion feels good, growth feels good. Contraction hurts people. We cannot simply ignore the laws of nature because they sometimes cause pain. Life sometimes is painful, sad, demoralizing. I wish it was not. But it is.
It's a long rant, but I agree with the gist of it.
Ok, I'm a spelling geek here, but it really made me cringe when you wrote "Our forefathers would role over in their graves". I assure you, they are not doing that, but I do suspect they did roll over in their graves.
The answer is "DELAYED". We delayed the Great Depression for a decade by borrowing trillions of dollars from the future and giving it to the banks to spend. Now we are UNWINDING that great mistake or that temporary brilliance, depending upon your perspective .
So, my view of this is, the FED is finally acting responsibly; but this does not mean everything will be painless. When I say the FED is finally trying to become responsible, I add the note that they are trying to correct the mistakes made by those two clowns Greenspan and Bernanke, but mostly by Bernanke. The UNWIND still has a long way to go.
Can this UNWIND be done without pain in the world? No, it cannot be. We were supposed to feel the pain of deflation between 2001-PRESENT. Instead we chose to "kick the can down the road" and let someone else become responsible for the pain.
I admire Jerome Powell; as I admired Paul Volcker in the early 1980's. Volcker jacked up the FED FUNDS rate to 20% to break the back of inflation (price inflation, not debt inflation, which is our version of inflation today).
If President Trump could understand that Jerome Powell's FED, in attempting to UNWIND the "mistakes" of Ben Bernanke (yes, I think these were mistakes, perhaps with decent intentions), then he would support the FED's strong dollar policies and stop chipping at him, demanding the return of low-interest policies, which have weakened America and weakened the foundation upon which our nation stands (or falls), the US Dollar.
Instead of everyone suffering together in 2001-PRESENT, we instead had the richest people in the system get away like bandits and the rest of you survive in a paralyzed FED-controlled zombie state. Capitalism, in it's true state, depends upon recessions to destroy non-competitive companies and corporations. ZIRP undermines this, allowing weak corporations to survive off of loans, regardless of their health. ZIRP is SOCIALISM FOR THE RICH. ZOMBIE CORPORATIONS are those companies dependent upon low interest rates to stay in business.
Bernanke's policies allowed weak companies to survive the Great Recession by having you and I bail them out. Corporate Socialism. We should OWN these companies now. We should all have a capital stake in these companies, as we "loaned" them money so they could survive.
Our Capitalist forefathers would role over in their graves to hear that we perverted Capitalism doctrine to such an extent - "the survival of the most adaptable" - and have now become a society that believes that the corporations should only be taxed at a minimum rates during Growth Seasons and that the working public should bail them out during periods of darkness and recession. Is this what we have become? We exist for the survival of the Corporations? Which is worse, this scenario, or the Socialist scenario, that Corporations and Capitalism exist for the welfare of the masses?
We now have corporations that are addicted to low interest rates for their existence, many of which will die if we meaningfully raise interest rates. This is a rock and a hard place.
We cannot have Perpetual Growth. Expansion-Contraction. Expansion feels good, growth feels good. Contraction hurts people. We cannot simply ignore the laws of nature because they sometimes cause pain. Life sometimes is painful, sad, demoralizing. I wish it was not. But it is.
Good Luck!!!
ZIRP is not "socialism for the rich". For the rich, it is the real interest rates, not the nominal rates, that matter more. Low interest and low inflation is not more of an incentive for massive borrowing than high interest and high inflation, if the real rate is the same in both cases.
I agree but fundamentally the only way to get them to stop the charades is to tighten immigration and lower the domestic birth rate. As long as there are workers willing to accept the BS, reproduce and live a sub-standard life, the existing system can continue to function.
It's a long rant, but I agree with the gist of it.
Ok, I'm a spelling geek here, but it really made me cringe when you wrote "Our forefathers would role over in their graves". I assure you, they are not doing that, but I do suspect they did roll over in their graves.
The spelling error and overall repetition of the same underlying themes in multiple threads might indicate that the OP is dealing with OCD.
Bailing out the companies was a huge mistake. We should have let them fail.
Quote:
Originally Posted by C2BP
The answer is "DELAYED". We delayed the Great Depression for a decade by borrowing trillions of dollars from the future and giving it to the banks to spend. Now we are UNWINDING that great mistake or that temporary brilliance, depending upon your perspective .
So, my view of this is, the FED is finally acting responsibly; but this does not mean everything will be painless. When I say the FED is finally trying to become responsible, I add the note that they are trying to correct the mistakes made by those two clowns Greenspan and Bernanke, but mostly by Bernanke. The UNWIND still has a long way to go.
Can this UNWIND be done without pain in the world? No, it cannot be. We were supposed to feel the pain of deflation between 2001-PRESENT. Instead we chose to "kick the can down the road" and let someone else become responsible for the pain.
I admire Jerome Powell; as I admired Paul Volcker in the early 1980's. Volcker jacked up the FED FUNDS rate to 20% to break the back of inflation (price inflation, not debt inflation, which is our version of inflation today).
If President Trump could understand that Jerome Powell's FED, in attempting to UNWIND the "mistakes" of Ben Bernanke (yes, I think these were mistakes, perhaps with decent intentions), then he would support the FED's strong dollar policies and stop chipping at him, demanding the return of low-interest policies, which have weakened America and weakened the foundation upon which our nation stands (or falls), the US Dollar.
Instead of everyone suffering together in 2001-PRESENT, we instead had the richest people in the system get away like bandits and the rest of you survive in a paralyzed FED-controlled zombie state. Capitalism, in it's true state, depends upon recessions to destroy non-competitive companies and corporations. ZIRP undermines this, allowing weak corporations to survive off of loans, regardless of their health. ZIRP is SOCIALISM FOR THE RICH. ZOMBIE CORPORATIONS are those companies dependent upon low interest rates to stay in business.
Bernanke's policies allowed weak companies to survive the Great Recession by having you and I bail them out. Corporate Socialism. We should OWN these companies now. We should all have a capital stake in these companies, as we "loaned" them money so they could survive.
Our Capitalist forefathers would role over in their graves to hear that we perverted Capitalism doctrine to such an extent - "the survival of the most adaptable" - and have now become a society that believes that the corporations should only be taxed at a minimum rates during Growth Seasons and that the working public should bail them out during periods of darkness and recession. Is this what we have become? We exist for the survival of the Corporations? Which is worse, this scenario, or the Socialist scenario, that Corporations and Capitalism exist for the welfare of the masses?
We now have corporations that are addicted to low interest rates for their existence, many of which will die if we meaningfully raise interest rates. This is a rock and a hard place.
We cannot have Perpetual Growth. Expansion-Contraction. Expansion feels good, growth feels good. Contraction hurts people. We cannot simply ignore the laws of nature because they sometimes cause pain. Life sometimes is painful, sad, demoralizing. I wish it was not. But it is.
Leverage creates volatility implied in upswings and downswings. Not unlike cocaine the ups of the highs will seem great but wait for the reaper the morning after and you're toast. Needless to say we're due for a reaper, get out your life rafts ladies and gentlemen!
Bailing out the companies was a huge mistake. We should have let them fail.
Yes, and Jerome Powell’s new FED is trying to fix that mistake now. Old Crazy FED is out (Greenspan, Bernanke and Yellen = Crazy FED).
We NEED a stronger dollar and we need to deflate the Debt Bubble. This should have been our number one goal from 2001-PRESENT. Instead we chose to inflate a DEAD ECONOMY, so we now have a ZOMBIE Economy with many ZOMBIE Companies and Individuals, dependent upon ZIRP. These ZOMBIES will need to go bankrupt. Much debt will have to be defaulted, without taxpayer bailouts. This is nature's law. We cannot fudge this, no matter how good fudging sounds. The FED needs to stop being the FUDGE FACTORY of last resort - Jerome Powell seems to understand this. We should thank God and pray everyday for him.
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