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Unless the congress and president get together it might just be a policical stunt for the genral elction by Polsoi.Afterall teh persident has to sign the bill.
Actually most people were against the bailout at the beginning. But after the plan failed and the stock market plummeted and lost 1 trillion dollars of imaginary capital. Now you could say this was a conspiracy and try to blame a few rich folk for it for the fall in order to scare the sheep into supporting the bailout. But I think it was more of lower level wall streeters panicking trying to get out of their positions. Now after that trillion dollar fall I hear a lot more Joe six packs saying we need the bailout in order to keep order in the financial system. I'd say it got closer to 50/50 on the second in both the senate and the house. So I'd say they listen to half the folks out there.
Most people don't know what MONEY really is in the first place. Look money as we know it is nothing more than a abstract idea. The dollars in our pockets, the number in our bank accounts are figments of our imagination. The only reason why these things have any significance in everyones lives is because we have decided as a world community that they these things are worth a specific amount. Even gold really is worthless without humans putting worth (trust) in this metal. If you really want to bottom line it. the only things that are worth anything are things that give us Food, clothes and shelter. Everything else as I said earlier an abstract Idea that humans put trust (value) in. And right now there is no trust out there.
Well since we have decided to put a certain value in each of our world currencies. And since there are stipulations on what make a currency strong or weak. Than I would submit to you that the larger a deficit is for a nation the weaker an a currency will get. Especially if there is a question on if a nation can pay back what is has borrowed from another nation if called upon to do so. Right now the U.S. is running a record deficit and I think our creditors are getting nervous about our ability to pay back our debts. So it does matter whether or not where and how much money we add to the deficit. Each time we "throw" our good money (trust) after bad money (non-trust) we make situation worse for ourselves as a nation. And the world economy see that worsening situation and eventually will choose to avoid the U.S. economy and focus themselves on other opportunities on the world stage.
On top of this The federal reserve is printing money like it is going out of style. The problem with this is that each dollar"s purchasing power is being diluted. And from where I'm sitting is being diluted almost down to kindling status. basically we can use it to start a nice fire but for anything else it pretty worthless in the eyes of the world economy.
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This mentality ebbs and flows. While there will always be a need for debt. I believe the qualification for the ability to get oneself into debt is going to me much tougher in the coming years. In fact after this meltdown is over I seriously doubt the Xer's, Yer's and Z's will take debt so lightly. Not 2 to 3 Generation after this I believe debt as a way of life may take hold again. But short term the people the believe in perpetual debt are toast.
I don't know about Ron Paul.
But I'm one of those that agree with this type of philosophy. And I'm not super rich by any standard. Look we have propagated a false self worth since the Reagan days. Why is it that a house worth enough to cost more than 2 to 3 times year earning. Why is it a car is worth more than $10,000 - $15,000? Why do we allow ourselves to pay $2.00 for a cup of straining from coffee grounds with filtered water at our local starbuck. To my mind this is madness. Look perhaps some super rich folk will buy a whole bunch of stock and perhaps a lot of commodities. So what? They have the right to under our capitalist system. Also if you remember guys like Joe Kennedy that where relatively successful before the depression did extremely well during and after the depression do to their risk taking and foresights toward the future of the market.
I personally like what I'm seeing in the housing market right now. In that younger people just maybe able to afford a home in this country without putting themselves in to 30 or 40 years of crushing debt. Granted this is provided that they have the ability to scratch up and save at least 20% of that houses worth. Basically we would just be going back to where we started from on the housing issue.
Basically what I'm saying is that I'm happy see the days of unsubstantiated price inflation ending. And look forward to a rational price structure for all commodities and real estate.
I don't above statement was made but. I find it to be true to a point. let me reiderate.....To a point.
You can only push the populous so far until they rebel. Case's in point the United States rebelling and eventually beating the British empire and the Soviet revolution. In the case of America it was over being taxed by the British without there consent. In the Soviet Case really is was just that the Russian emperors didn't care about there own people so they thought they could get a better deal with the communist system. In both cases the reigns of power were forced from the hands the the holders and lead to to distinct ways of government. Now you can talk about conspiracy theories and the Rothchild family and the Illuminati somehow standing in the shadows controlling everything....but I don't buy it. Yes there is plenty of greed out there and there are some extremely rich folk that have influence in both business and politics. But having some type of strangle hold of power is far fetched to me.
Let me end with a question's for you.
1. Do you know how close America itself was to going communist in the 1930's?
2. Do you know how much civil unrest there was going on at that time?
Then as yourself.
If you don't allow for a certain level of success for the common man and you don't throw him/her a juicy bone with some meat on it every now and again while you feast on a nice tenderloin
3. What the chances of you getting a bit in the a$$ by them?
Hello baystater,
Everything you said is absolutely true in a rational system but I do not think you understand the actual situation. If you believe the Federal Reserve is printing money you don't understand the system. The commercial banks print 95% of the money at interest. No one has money that is not debt. Put these two things together, if inflation is a hidden tax then why do the commercial banks collect all of it? Do you know they do? Our system cannot function without perpetual and growing debt or perpetual foreclosure. Its built into the system.
As to Rothschild, an Encyclopedia Britannica cited biographer estimated their wealth to be 5 billion in 1850. Jacob Schiff practically decided the Russo-Japanese war by financing 25% of the Japanese war effort. Look it up in any encyclopedia. Put that together with money makes money.
Its quite possible to manage the masses without throwing them a bone. Simply scape goat another or put them against each other. A little class warfare, a little racism and you can even make money from it. Also as I said one class is trying to hold the system together because they are in the cross hairs but the powerful international financiers can go where they wish. Look what they have done with the World Bank and IMF. They are ruthless.
If they are giving us a stimulas rebate something really bad must be coming down the pike. Washington just loves to surprise us with bad news. Its like not feeding your son's hamster while he is at camp and he dies, but you break the news to him by buying him ice cream. Peace
Paid for by "windfall profits tax". Great idea, lets take the one sector of the economy that is actually making money and have the government seize it and give it away.
Location: Sitting on a bar stool. Guinness in hand.
4,428 posts, read 6,509,244 times
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if inflation is a hidden tax then why do the commercial banks collect all of it? Do you know they do?
I think you mean interest. They make money of interest of lend out the money for our saving accounts. That's why bank hate when you put most of your money in checking accounts because they have to have that money on demand so technically they can lend it out.
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Hello baystater,
Everything you said is absolutely true in a rational system but I do not think you understand the actual situation. If you believe the Federal Reserve is printing money you don't understand the system.
The commercial banks print 95% of the money at interest. No one has money that is not debt. Put these two things together, if inflation is a hidden tax then why do the commercial banks collect all of it? Do you know they do? Our system cannot function without perpetual and growing debt or perpetual foreclosure. Its built into the system.
Where a bank can make produce credit based on the other debtors ability to pay. I happen to forget the fractional reserve they had in the film. But basically Debt beget credit and so on. This is how we go to 12,000 on the Dow a while back because liquidity the bank being able to produce massive amount of liquidity and rack up massive amounts of debt. Of course no money down, no credit check, etc. didn't help much in stemming the irrationality of the lending practices.
Now unfortunately it seems some(trillions of dollars) of that debt will be defaulted on. I'm thinking 2 - 3 trillion maybe to stop the bleeding at this point.
Of course on top of this you had investment banks and lenders that packaged these loan and sliced and diced the mortgage products and sold them to other financial institutions, retirement fund, pension funds, etc. which where hoping to get money out of these asset back securities. Unfortunately the assets in the asset back securities ended up not being worth nearly as much as people thought they were and some of those/parts of those securities for lack of a better way to say it became worthless.
People basically lost out because others who got the some ridiculous loan defaulted.
Now bank are nervous to lend to everyone including among each other because no one know who has/how much poisoned paper. No one knows who may fail next. This is the root of the problem as seen by Paulson and bernake. This is why they are putting together this bailout to buy toxic paper. They want to take out as much bad paper as they can from the system. So they can say to the banks:
"look we taken a lot of paper out." So why not lend to your buddies at the other banks and let get back to business."
Unfortunately 700 billion ain't even close to cover it.
Now with this whole deficit thing and printing of money. The Treasury issuing T-bill and the fed it lending out the money mostly through the discount window. Where there is actual physical cash or not is not the point. The Treasury and the FED are pumping U.S. dollars Or lets say liquidity to the world market in the vain attempt to keep the overall lend market from freezing up.
Now I have already stated why this is not going to help the U.S. period. The nation is a debtor in and of itself and those countries that have lent us the money are now becoming nervous that we won't be able to pay. Basically it just like description I have of the asset backed securities above this. They are not sure if we can ever pay them and they don't like that. So expect a further downward spiral from there.
Look I'll tell you what just like I offer to do with some other of posts in the past. I will come and revisit this post in one years time. And we will see if some of my prediction will come true in this and other treads.
Something tell me they will........but I'm always willing to admit when I wrong.
I'll see you in a year.
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As to Rothschild, an Encyclopedia Britannica cited biographer estimated their wealth to be 5 billion in 1850. Jacob Schiff practically decided the Russo-Japanese war by financing 25% of the Japanese war effort. Look it up in any encyclopedia. Put that together with money makes money.
Interesting.
But I have heard this all before and there is some type of conspiracy against the Corporate and the banking world it becoming the boy that cried wolf. Perhaps there is influence and that I know there is a lot of money to by made in arms sale and the like. But control of the whole world conspiracy is something I just don't see.
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Its quite possible to manage the masses without throwing them a bone. Simply scape goat another or put them against each other. A little class warfare, a little racism and you can even make money from it. Also as I said one class is trying to hold the system together because they are in the cross hairs but the powerful international financiers can go where they wish. Look what they have done with the World Bank and IMF. They are ruthless.
Tax rebate, food stamp money possible in aid plan - Yahoo! News (http://news.yahoo.com/s/ap/20081011/ap_on_go_co/second_stimulus;_ylt=Aj7fmWP3EWzt0xjDc8yYuQ6s0NUE - broken link)
NOT good news. Stop taking money out of my pocket to bail out people that were not financially responsible with their own money.
I know this will sound irrational but I'm in the crash camp on this. If a depression comes from it.......so be it. Putting ourselves further and further into debt and (in my opinion) Printing our money until is near zero is economic suicide in and of itself.
Look we did the stimulus package......didn't work.
We have given billions of dollar to certain financial companies...........didn't spur confidence.
We past a 700 billion dollar package to buy asset back securities that we will probably take a loss on............market still heading downward.
lastly the U.S. and 6 other central bank cut rates at the same time.......U.S. stock market has worst week ever.
And Oh yes. Paulson makes that big conference on Friday evening and says.....???????????????? Absolutely nothing of significance. The only thing that seemed apparent is that the government is willing to bailout some banks but not others. Which bank those are remains to be seen. The only way that Sunday nights opening of the Asian market does not head in a downward direction is.....if Paulson makes some absolutely groundbreaking announcement that rock the financail world and stimulates a high degree of confidence into the market.
Look overall throwing good money after bad is not helping. It time back off and see where the chips land. It ain't going to be pretty and people will be hurt. But I in my personal beliefs think it's much better to take it square on the chin and be laid out for a while. As opposed to be squeeze slowly to death in a vice. Once we deal with the consequences of our debt addiction up front we can move on to rebuild our economic system from the ground up.
Now let me just say that we will still have to spend money (in the right places) if we decided to crash and burn. if for nothing else to quell civil unrest. We would need to sure up the food stamp system, start as I said earlier revisit the WPA programs of the 1930 to ensure some type of work and we definitely need to retrain and retool the work force for actually producing tangible products to export to the world. Agricultural produces, Medical produce, Alternative energy projects, etc. Now would this cost alot of money? Heck Yeah. But after see how much we've already have spent for not. I think this would be a way to get some tangible results.
Don't forget that they haven't actually spent any of the bailout money yet so that may have something to do with the market not moving. I was listening to Bob Brinker yesterday and his opinion was the bailout was a good thing and that he's interested that the current response is a "dynamic" policy that changes week to week as the situation changes.
The other interesting thing I see in this current stimulus pack is the timing. Ya think maybe Pelosi and crew are trying to buy or at least influence the election with some pre election day gimmies? I certainly think so...
Don't forget that they haven't actually spent any of the bailout money yet so that may have something to do with the market not moving. I was listening to Bob Brinker yesterday and his opinion was the bailout was a good thing and that he's interested that the current response is a "dynamic" policy that changes week to week as the situation changes.
The other interesting thing I see in this current stimulus pack is the timing. Ya think maybe Pelosi and crew are trying to buy or at least influence the election with some pre election day gimmies? I certainly think so...
Hi jimj,
Its not a matter of spending. What will banks spend it on? All this did was swap bad mortgage debt for treasury bonds which will keep banks solvent on the books.
So what is the problem? Why would banks want to loan? This is the only way money goes into the economy. Americans have had their assets deflate so where is the collateral? Those that do who wants to take a loan? You've lost 30% of you nest egg so is it time for a new car?
This is one of the fundamental problems with debt currency, fear and greed make for built in volatility. With rising prices everyone wants to buy assets increasing in value with leverage, mortgage the house to buy stocks. When they fall they convert them in to cash to pay debt while the collateral disappears and the banks refuse to loan.
Another rebate? When will the government ever learn? The last 2 checks they gave out didn't help the economy one bit. Seriously... when your 401k is tanking 20% - 40%, how's $600 check gonna help you any? I'm just getting more and more disheartened by the way this country is going.
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