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Old 03-06-2009, 01:14 PM
 
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Was it all done on purpose - the Fed knew that raise rates would kill the money - so why do it?

 
Old 03-06-2009, 01:21 PM
 
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Would you elaborate, please?

Most of the "money on paper only" has been created with speculation and manipulation. I'm not sure how you're tying the fed into this.
 
Old 03-09-2009, 03:57 PM
 
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Quote:
Originally Posted by nvxplorer View Post
Would you elaborate, please?

Most of the "money on paper only" has been created with speculation and manipulation. I'm not sure how you're tying the fed into this.
These guys arent stupid - thye just pretend to. They know what goes up must come doen - they pop the balloon with raise interest rates - they knew what they did. They knew the funny money would disappear - but why not keep it going - they didnt want to. They have their own reasons for that
 
Old 03-09-2009, 04:55 PM
 
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Their "own reasons" were a disproportionate free of inflation. The Greenspan philosophy, followed by Bernanke was that it wasn't the Fed's job to discourage bubbles, just to await their end and soften the blow to the economy. In short another lassie faire experiment gone awry.
 
Old 03-10-2009, 01:36 PM
 
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Originally Posted by ovcatto View Post
Their "own reasons" were a disproportionate free of inflation. The Greenspan philosophy, followed by Bernanke was that it wasn't the Fed's job to discourage bubbles, just to await their end and soften the blow to the economy. In short another lassie faire experiment gone awry.
Why make a bubble? It makes everyone rich - temporary - but why kill it? everyone was spending and its REAL when you can SPEND IT.
 
Old 03-10-2009, 01:39 PM
 
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Quote:
Originally Posted by freefall View Post
Why make a bubble? It makes everyone rich - temporary - but why kill it? everyone was spending and its REAL when you can SPEND IT.
You answered your first question with your second.
 
Old 03-10-2009, 01:43 PM
 
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Originally Posted by freefall View Post
Why make a bubble? It makes everyone rich - temporary - but why kill it? everyone was spending and its REAL when you can SPEND IT.
No, it's not real. It's based on expectation through the multiplier, which, if memory serves correctly, is nine times deposits.
 
Old 03-10-2009, 02:23 PM
 
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Quote:
Originally Posted by nvxplorer View Post
No, it's not real. It's based on expectation through the multiplier, which, if memory serves correctly, is nine times deposits.
So the house prices were inflated by the bubble - so everyone went out an refi or got equity loans, and bought new cars, remodel, another house, new tv - so the whole world is employed and making stuff - so the 'power that be' said - enought, lets pop the bubble, lets raise the interest rates 1/2 point, again and again - they knew it was going to pop the ballon when they did that - if I could see it, you telling me they dont know? The geniuses? they super smart Fed economists?
 
Old 03-10-2009, 02:29 PM
 
Location: Dallas, TX
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Quote:
Originally Posted by freefall View Post
So the house prices were inflated by the bubble - so everyone went out an refi or got equity loans, and bought new cars, remodel, another house, new tv - so the whole world is employed and making stuff - so the 'power that be' said - enought, lets pop the bubble, lets raise the interest rates 1/2 point, again and again - they knew it was going to pop the ballon when they did that - if I could see it, you telling me they dont know? The geniuses? they super smart Fed economists?
I'm not sure where you're getting this idea of feds increasing rates over and over, because it was the opposite that accelerated the bubble, if not create it. And by doing so, it was 1980s all over again, and back then too a credit bubble had created a recession as it has this time. Lower rates also discourage savings. There is no incentive to save when the returns are pathetic and credits are easy.

Right now, the rate is at about zero, isn't it?
 
Old 03-10-2009, 02:31 PM
 
Location: Raleigh, NC
9,059 posts, read 12,967,105 times
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Quote:
Originally Posted by ovcatto View Post
Their "own reasons" were a disproportionate free of inflation. The Greenspan philosophy, followed by Bernanke was that it wasn't the Fed's job to discourage bubbles, just to await their end and soften the blow to the economy. In short another lassie faire experiment gone awry.
The words Federal Reserve and laissez-faire are an oxymoron.
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