I have two questions. Where is the government getting all this money to bail out failing corporations? And what happens in 2-3 years down the road the economy has not improved and these companies are once again on the brink of collapse?
THE MONEY MASTERS -- probably THE best, most informative, and most complete look at the federal reserve, and the phony baloney US banking system that has EVER been made, and it was produced almost FIFTEEN years ago. This is of monumental importance.
If you don't understand WHY the system was structured the way it was, AND BY WHOM, you will NEVER understand why shit keeps happening the way it does, and why the "public" system KEEPS BAILING OUT "private" banks.
THEY ARE ONE AND THE SAME. OWNED BY THE SAME INTERESTS. DIFFERENT ARMS OF THE SAME CREATURE.
PEOPLE YOU MUST LEARN AND UNDERSTAND THIS STUFF.
You need to understand what the Federal Reserve is, how it works, who wanted it that way, and why.
b.
If \ When in 3 years the market is still fucked, and these firms are still struggling, the Federal Reserve will still have its printing presses on to hand out free money at your expense to these firms. If that doesn't work they will "inject liquidity" via other means ... or they will finagle their way out of it by perverting some accounting rules via congressional action of some sort ...
Folks you are looking at the ELITE GOVERNMENT protecting its own rulers, the ELITE BANKS ...
and if you do not understand that concept, and what the Federal Reserve is, and who made it and why, you will NEVER understand this.
I don't know why I have so much trouble communicating that concept on this board ... especially at this point.
You people sit here and scream socialism, and "republican scheme" and all sorts of goof ball cries of wolf ... and you have NO idea what is really going on.
If I was to smile and I held out my hand
If I opened it now would you not understand?
Feds say Monday they will not bail out AIG. putting pressure on Goldman and Morgan and other financials to come up with $85B loan. These companies have the most to lose from an AIG collapse, so they figure they will surely come up with it. Tuesday night comes around and the Financials call the bluff of the FEDs, they don't budge. The government is left with no other option, but to sustain a trillion dollar giant.
Goldman and Morgan and others knew that the government would not let AIG fail, if there was the possibility of it, the private sector surely would've come up with the money.
This is what happens when the foundation of our economy is debt. If every consumer in this country where to stop using credit cards and only purchase what they could afford with the money they had on hand, our economy as it stands would crumble. Ron Paul wrote about this in his latest book that this illusion of economic growth based solely on American's purchasing habits and their ability to live beyond their means would eventually catch up to us. This is exactly what is happening now. The foundation finally cracked and is crumbling under the massive wait of the debit it has incurred.
"When one gets in bed with government, one must expect the diseases it spreads." - Ron Paul
You need to understand what the Federal Reserve is, how it works, who wanted it that way, and why.
b.
If \ When in 3 years the market is still fucked, and these firms are still struggling, the Federal Reserve will still have its printing presses on to hand out free money at your expense to these firms. If that doesn't work they will "inject liquidity" via other means ... or they will finagle their way out of it by perverting some accounting rules via congressional action of some sort ...
Folks you are looking at the ELITE GOVERNMENT protecting its own rulers, the ELITE BANKS ...
and if you do not understand that concept, and what the Federal Reserve is, and who made it and why, you will NEVER understand this.
I don't know why I have so much trouble communicating that concept on this board ... especially at this point.
You people sit here and scream socialism, and "republican scheme" and all sorts of goof ball cries of wolf ... and you have NO idea what is really going on.
My questions where basically rhetorical. I am well aware of who is paying for these bail outs and what will happen a few years down the road if the economy continues to falter, which in my opinion it will.
"When one gets in bed with government, one must expect the diseases it spreads." - Ron Paul
This is what happens when the foundation of our economy is debt. If every consumer in this country where to stop using credit cards and only purchase what they could afford with the money they had on hand, our economy as it stands would crumble. Ron Paul wrote about this in his latest book that this illusion of economic growth based solely on American's purchasing habits and their ability to live beyond their means would eventually catch up to us. This is exactly what is happening now. The foundation finally cracked and is crumbling under the massive wait of the debit it has incurred.
This is true, The value of everything has been overinflated due to the ease of credit. If 50% of borrowers are paying thier credit cards off every month... no worries.
The AVERAGE american has around 8 grand worth of just Credit Card debt... that's freaking scary.
My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
This is what happens when the foundation of our economy is debt. If every consumer in this country where to stop using credit cards and only purchase what they could afford with the money they had on hand, our economy as it stands would crumble.
WHOA!
This is the most intelligent financial comment i have seen on this board, EVER.
Seriously.
SOMEONE GETS IT!
Folks this is what we are talking about here.
The system is a sham.
It only works because for every 1 you deposit at a bank, that bank gets to lend out 10 more that it never had.
And in reality it is more like 100 to 1 due to the way the leverage recirculates itself.
The reality is that money IS debt ... the amount of dollars in circulation are (for all general purposes) EQUIVILANT to the amount of national debt.
It all comes from nowhere, printed up by the Federal Reserve, backed by nothing but YOUR ABILITY TO WORK, and the government's promise to MAKE YOU WORK to pay off that debt, should it fail ...
The expansion of the US economy has been almost entirely based on the expansion of US DEBT ... which in large part is nothing more than consumer CREDIT.
And when the consumer stops using credit, or worse ... starts PAYING IT OFF ... what he is unknowingly doing is BRINGING DOWN THE SYSTEM BUILT AROUND HIM ... because every dollar of credit you pay off DESTROYS TEN DOLLARS OF POTENTIAL LEVERAGE AT THE BANK.
If you started withdrawing that money from your bank account to pay bills you would (at least temporarily, until that money ended back up in a bank account) be FUCKING THE BANKS BIG TIME.
If 50% of borrowers are paying thier credit cards off every month... no worries.
BIG WORRIES! BAD BAD BAD!
That is DESTROYING THE MONETARY BASE OF OUR COUNTRY. That would shrink the money\credit supply in this country so fast we would fall in to instand depression. The only reason we are staying afloat is probably because consumers CONTINUE to borrow. Remember, it may be a liability to you, but it is a HUGE ASSET to the system. Your debt is on a bank's BALANCE SHEET as an ASSET, and they use each dollar of debt you have to lend out MORE money. If you pay it back, you undo that chain of leverage, and cause an even worse catastrophe!
THIS is the VERY REASON the US Government will continue to BAIL OUT the banks.
Because what the USG is doing is KEEPING BAD LOANS ON THE BOOK AS ASSETS, by subsidization.
If it allowed these banks to fail, and allowed the debt to be WRITTEN OFF, it would be WIPING OUT THE MONEY SUPPLY OF THE COUNTRY, ...folks THAT is what "TOO BIG TO FAIL" means ... it means, TOO MUCH MONEY WOULD DISSAPEAR DOWN A HOLE TO NOWHERE, if they failed, and THAT CAN NOT HAPPEN!
Very impressed, Mamasans ...
best post in a LONG time on this board!
hip hip hooray.
If I was to smile and I held out my hand
If I opened it now would you not understand?
[/quote]And when the consumer stops using credit, or worse ... starts PAYING IT OFF ... what he is unknowingly doing is BRINGING DOWN THE SYSTEM BUILT AROUND HIM ... because every dollar of credit you pay off DESTROYS TEN DOLLARS OF POTENTIAL LEVERAGE AT THE BANK.
hip hip hooray.[/quote]
What are you saying here banks are looking for people NOT to pay their debts? Not sure i get that. If the consumer could actually pay off the credit cards and mortgages, and student loans and car payments then this wouldn't be happening. The banks are looking for there money and people are defaulting that is the start, the leveraging that was done just magnified the situation.
...this board is largely socialist. You're points are 100% valid. Those who are socialists aren't applauding this move. Why? Most likely, because they want Republicans to look like they are responsible and at fault ect. In other words they care more about winning an election than actual policies. I think that's ironic. People lose sight of their beliefs, if parties cross lines.
The bottom-line question (to any socialist on here) is.... if it was the Republican party that moved us further towards socialism (in other words closer to a European-style economy), would you agree with that aspect of the Republican party?
In other news, oil may fall below $90 today. No media coverage on that one. lol
This issue revolves around accountability, not partisanship.
AIG had record profits in 2005, three years later they need an $85 billion bandaid from the fed at my expense- that sucks and businesses will continue to make risky decisions knowing the govt will be there to hold their hand in a time of need.
WHOA!
This is the most intelligent financial comment i have seen on this board, EVER.
Seriously.
SOMEONE GETS IT!
Folks this is what we are talking about here.
The system is a sham.
It only works because for every 1 you deposit at a bank, that bank gets to lend out 10 more that it never had.
And in reality it is more like 100 to 1 due to the way the leverage recirculates itself.
The reality is that money IS debt ... the amount of dollars in circulation are (for all general purposes) EQUIVILANT to the amount of national debt.
It all comes from nowhere, printed up by the Federal Reserve, backed by nothing but YOUR ABILITY TO WORK, and the government's promise to MAKE YOU WORK to pay off that debt, should it fail ...
The expansion of the US economy has been almost entirely based on the expansion of US DEBT ... which in large part is nothing more than consumer CREDIT.
And when the consumer stops using credit, or worse ... starts PAYING IT OFF ... what he is unknowingly doing is BRINGING DOWN THE SYSTEM BUILT AROUND HIM ... because every dollar of credit you pay off DESTROYS TEN DOLLARS OF POTENTIAL LEVERAGE AT THE BANK.
If you started withdrawing that money from your bank account to pay bills you would (at least temporarily, until that money ended back up in a bank account) be FUCKING THE BANKS BIG TIME.
BIG WORRIES! BAD BAD BAD!
That is DESTROYING THE MONETARY BASE OF OUR COUNTRY. That would shrink the money\credit supply in this country so fast we would fall in to instand depression. The only reason we are staying afloat is probably because consumers CONTINUE to borrow. Remember, it may be a liability to you, but it is a HUGE ASSET to the system. Your debt is on a bank's BALANCE SHEET as an ASSET, and they use each dollar of debt you have to lend out MORE money. If you pay it back, you undo that chain of leverage, and cause an even worse catastrophe!
Very impressed, Mamasans ...
best post in a LONG time on this board!
hip hip hooray.
Thank you. I've been spending many sleepless nights educating myself on the issue. Reading as much as I can get my hands on to further understand the in's and out's of our economy. Also dating someone who works in the financial sector has it's benefits.
"When one gets in bed with government, one must expect the diseases it spreads." - Ron Paul
And when the consumer stops using credit, or worse ... starts PAYING IT OFF ... what he is unknowingly doing is BRINGING DOWN THE SYSTEM BUILT AROUND HIM ... because every dollar of credit you pay off DESTROYS TEN DOLLARS OF POTENTIAL LEVERAGE AT THE BANK.
hip hip hooray.[/quote]
What are you saying here banks are looking for people NOT to pay their debts? Not sure i get that. If the consumer could actually pay off the credit cards and mortgages, and student loans and car payments then this wouldn't be happening. The banks are looking for there money and people are defaulting that is the start, the leveraging that was done just magnified the situation.[/quote]
The lending institutes want you to pay your debt but not pay it off in full. As long as consumers but themselves in debt through their spending habits but pay the monthly minimum, or above, the economy will continue to grow. It is not real growth, just the illusion of growth. It is one you stop paying those monthly payments, or just pay off the entire debt all at once, that trouble starts.
"When one gets in bed with government, one must expect the diseases it spreads." - Ron Paul
What are you saying here banks are looking for people NOT to pay their debts? Not sure i get that. If the consumer could actually pay off the credit cards and mortgages, and student loans and car payments then this wouldn't be happening. The banks are looking for there money and people are defaulting that is the start, the leveraging that was done just magnified the situation.
There is a happy medium.
SOMEONE must continue to keep paying,
but as long as the banks can work a deal out with the government, or lie via accounting practices to KEEP THOSE LOANS ON THE BOOK ... they (at the end of the day, bottom line) would MUCH PREFER TO KEEP THEM ON THE BOOKS ... whether you are paying or not ... of COURSE they want your account in good standing ... they want you paying SOMETHING on those debts ... otherwise they would (according to GAAP - generally accepted accounting principles) be required to WRITE OFF those loans ... but the BEST situation and the BEST customer a bank could EVER hope for is a customer who will NEVER ... NEVER EVER EVER pay off their debt, but simply pay the bare minimum in perpetuity.
THIS GUARANTEES THEY HAVE PERMANENT ASSETS ON THEIR BOOKS ... and they use that value to LEND OUT MORE MONEY ... so it does NOT matter to them (at the end of the day) whether you are paying it off or not ... or even if you are paying ... as long as they can find a way to lie and KEEP THE LOANS ON THE BOOKS they are happy ... because they can make TEN NEW LOANS off that money that hopefully will be solvent in some fashion.
Its when consumers start PAYING OFF THEIR DEBT that the banks have a HUGE problem.
What IS a problem is that consumers have reached their credit LIMITS and are not in a position to help the banks EXPAND their current balance sheets, and THAT is a VERY real problem, because the credit supply must continue to EXPAND or the risk of all that leverage toppling over becomes imminent. THAT is, in part, what is happening right now.
The pyramid scheme is falling apart, from the bottom up.
The Federal Reserve can lend and inject liquidity to these banks until they turn blue in the face, but at the end of the day, if NO CONSUMER (corporate, private person, cat, dog, or sheep) is willing to USE THAT CREDIT (to BORROW FROM THE BANK) then IT DOESN'T MATTER FOR SHIT because the bank MUST find someone to LEND that money to, in order to get it on their books and to extend the leverage further!
If I was to smile and I held out my hand
If I opened it now would you not understand?
So these last few posts, what are you getting at ? Gold Standard.
In a perfect world yes, but unfortunately a return to the Gold Standard will not occur. The best we can hope for is that the economy, after this crisis, will be supported by something other than debt, by something other than a dot com or house boom or debt. Our economy used to be based on the strength of our manufactoring industry so we need to great a new industry, maybe as Obama proposed a green industry, to become the foundation of our economy.
"When one gets in bed with government, one must expect the diseases it spreads." - Ron Paul
In a perfect world yes, but unfortunately a return to the Gold Standard will not occur. The best we can hope for is that the economy, after this crisis, will be supported by something other than debt, by something other than a dot com or house boom or debt. Our economy used to be based on the strength of our manufactoring industry so we need to great a new industry, maybe as Obama proposed a green industry, to become the foundation of our economy.
Prime debt is a good thing. Subprime debt bad thing. Credit worthy consumers deserve credit. It would be a ridiculous thought to say that somebody has to come up with 100% cash on spot for purchase of say house or car. something like that would set our world back decades.
So these last few posts, what are you getting at ? Gold Standard.
Milton Friedman's prefered STOP GAP solution would have been to LIMIT INFLATION by route to some SET FIGURE ... like 2 or 3% per year.
Make it a congressional act that sets the mandatory target,
and then no amount of political hocus pocus could cause massive inflation, or allow massive bailout ... because there would be a SET amount of dollar value inflation allowed, period.
His prefered ABSOLUTE SOLUTION (which he recognized the Status Quo would NEVER allow to happen -- because the Banks and The Government are very much one and the same power structure, they BOTH are The Status Quo) would be ABOLISH THE FEDERAL RESERVE, STOP PRINTING MONEY PERIOD placing an absolute cap on the outstanding "high powered money" supply ... meaning whatever dollars are out there now are whatever dollars there will be in the future, period.
When the market needs, wants, or in some way is seeking excess liquidity on top of that capped dollar value, it would be allowed to create credit on the freemarket OUTSIDE of "US Dollars".
Unfortunately, such a proposition is NOT something you could even dream about getting away with in a financial crisis of this magnitude.
It would be like a heroin addict going cold turkey after a 2 week binge of the good stuff.
What we, very unfortunately, probably need to do here is find some balance between bailing out these firms (and believe me it makes me sick to say that) to maintain some semblance of order and oppositely, letting these firms fail to instill discipline and help the credit situation "reset". And AFTER this blows over (if and when. Folks this COULD be catastrophic, and mean the end of the ENTIRE current order, political, financial, and otherwise) ... probably 5 years or more down the line, in reality ... start talking about legislation to (as Ron Paul supporters so loudly chanted) "End The Fed"!
ps.
two final thoughts.
a. Gold - you can't have a system based on gold, when the ruling elite that fucked us so badly to begin with OWN all the gold. In all probability the Rothschild elite own some 90% PLUS of the gold supply ... keep in mind the Federal Reserve is NEVER EVER EVER audited, and that money can simply slip right off the printing press and out the back door to buy gold, meaning the elite can buy gold effectively for something like 5 to 20 CENTS an ounce (the cost of printing a bill). And they've probably been doing it for decades. :(
b. Carbon Credit Economy - NOOOoooOOoOoooooOOOooO! ... if you thought things were bad and out of balance when they took us off the gold standard and had fiat (unbacked) currency ... you have ZERO clue how HORRIBLE it will be when they start running the world economy ON THE VERY AIR YOU BREATHE!
MAKE NO MISTAKE. THAT IS WHAT THEY WANT! It would be the ULTIMATE alchemy! And it would be MORE INFLATIONARY THAN YOU COULD EVER IMAGINE!
Prime debt is a good thing. Subprime debt bad thing. Credit worthy consumers deserve credit. It would be a ridiculous thought to say that somebody has to come up with 100% cash on spot for purchase of say house or car. something like that would set our world back decades.
No for large purchases credit is definitely necessary and I'm not advocating that we eliminate credit but to base our entire economy on credit is completely foolish. Sooner or later it is bound to collapse. We need to base our economy on something sound, like it was back during America's manufactoring heyday.
"When one gets in bed with government, one must expect the diseases it spreads." - Ron Paul
No for large purchases credit is definitely necessary and I'm not advocating that we eliminate credit but to base our entire economy on credit is completely foolish. Sooner or later it is bound to collapse. We need to base our economy on something sound, like it was back during America's manufactoring heyday.
all we really need to do is stop the giant wealth funnel that this banking CARTEL has set up ... the funnel that runs right out of OUR wallet and in to THEIR pockets via the Federal Reserve mechanism.
We don't need to infuse the water (our fiat money) with minerals (some form of backing) ... we just NEED TO TURN OF THE SPICKET before it floods the country and drowns us!
Just STOP PRINTING MONEY.
The ENTIRE power structure, and EVEN THE VERY WARS which half of you seem to think are the problem (and in reality are just a SYMPTOM of the problem), is DIRECTLY DEPENDENT on the flow of cheap (nearly free) money from The Federal Reserve to the coffers of private banking.
Just stop that mechanism, and you will have come 85-95% of the way to reaching an amicable solution for the average american.
Just be ware that doing so means that Americans THEMSELVES will have to stop living in a bubble world. There will still be credit, but it will not be ANY where near as easy to obtain ... because the banks themselves can not simply have it printed up at will.
If I was to smile and I held out my hand
If I opened it now would you not understand?
all we really need to do is stop the giant wealth funnel that this banking CARTEL has set up ... the funnel that runs right out of OUR wallet and in to THEIR pockets via the Federal Reserve mechanism.
We don't need to infuse the water (our fiat money) with minerals (some form of backing) ... we just NEED TO TURN OF THE SPICKET before it floods the country and drowns us!
Just STOP PRINTING MONEY.
The ENTIRE power structure, and EVEN THE VERY WARS which half of you seem to think are the problem (and in reality are just a SYMPTOM of the problem), is DIRECTLY DEPENDENT on the flow of cheap (nearly free) money from The Federal Reserve to the coffers of private banking.
Just stop that mechanism, and you will have come 85-95% of the way to reaching an amicable solution for the average american.
Just be ware that doing so means that Americans THEMSELVES will have to stop living in a bubble world. There will still be credit, but it will not be ANY where near as easy to obtain ... because the banks themselves can not simply have it printed up at will.
With the exception of buying a home I never use credit. I pay for everything either with my debit card, or cash. If I do, on the rare occassion, use my credit card I pay the balance off the following month. So I'm well prepared for that change. Unfortunately it will never come.
"When one gets in bed with government, one must expect the diseases it spreads." - Ron Paul
That is DESTROYING THE MONETARY BASE OF OUR COUNTRY. That would shrink the money\credit supply in this country so fast we would fall in to instand depression. The only reason we are staying afloat is probably because consumers CONTINUE to borrow. Remember, it may be a liability to you, but it is a HUGE ASSET to the system. Your debt is on a bank's BALANCE SHEET as an ASSET, and they use each dollar of debt you have to lend out MORE money. If you pay it back, you undo that chain of leverage, and cause an even worse catastrophe!
THIS is the VERY REASON the US Government will continue to BAIL OUT the banks.
Because what the USG is doing is KEEPING BAD LOANS ON THE BOOK AS ASSETS, by subsidization.
If it allowed these banks to fail, and allowed the debt to be WRITTEN OFF, it would be WIPING OUT THE MONEY SUPPLY OF THE COUNTRY, ...folks THAT is what "TOO BIG TO FAIL" means ... it means, TOO MUCH MONEY WOULD DISSAPEAR DOWN A HOLE TO NOWHERE, if they failed, and THAT CAN NOT HAPPEN!
Very impressed, Mamasans ...
best post in a LONG time on this board!
hip hip hooray.
I'm one of those weirdos without any debt (other than I do owe about 60% of my house). I don't really care if it screws up the system. I'm not going to have consumer debt regardless of whether that's good for the economy or not.
The only people we should try to get even with...
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
I'm one of those weirdos without any debt (other than I do owe about 60% of my house). I don't really care if it screws up the system. I'm not going to have consumer debt regardless of whether that's good for the economy or not.
Don't feel alone. I'm one of those lunatics as well. Only debt I have is the home. I can't honestly believe that this much debt is good for any economy. I thought our economy was driven by the consumer and the ridiculous amounts of unnecessary crap they purchase? Don't people spend less when they're drowning in debt? Or do they just keep spending with no consequences? I feel like the foundation of our ecomony is being supported by a large group of idiots. We need to let these idiots fail but if we do then the entire foundation crumbles and everybody gets hurt that much worse. It's a no win situation.
I'm one of those weirdos without any debt (other than I do owe about 60% of my house). I don't really care if it screws up the system. I'm not going to have consumer debt regardless of whether that's good for the economy or not.
i don't think he's saying that that's a bad thing. i think he's pointing out than the system is dangerously flawed. that not having debt should be a good thing, but instead our system makes it a bad thing.
i don't think he's saying that that's a bad thing. i think he's pointing out than the system is dangerously flawed. that not having debt should be a good thing, but instead our system makes it a bad thing.
exactly.
sadly, one of the primary reasons that the bankers got together to reimplement the central bank in America (keep in mind the Federal Reserve is central bank number THREE, i believe) was SPECIFICALY BECAUSE AMERICANS WERE SAVING WAY TOO MUCH.
That is right.
America was actually incredibly prosperous on the whole around the turn of the century, but large banks were failing because citizens were not borrowing enough from them, and their risky business loans were starting to go bad.
In short the banks needed to find some way to get MORE DEBT on to their books, debt that was relatively solid.
Creating a central bank thereby turned ALL MONEY directly in to DEBT ... this is refered to as "the monitization of debt" and it is now the fundamental underpining of our monetary system. ALL MONEY IS DEBT.
This was the SMARTEST IDEA EVER ... FROM THE PERSPECTIVE OF THE BANKS.
From the perspective of a national economy and a national government, it was probably the biggest fleecing and fuck up in the history of fleecings and fuckups. :(
So no,
Catch22 is correct, i am NOT saying being in debt is a good thing ...
i am only saying from the perverse perspective of our current financial system it is IMPERATIVE.
I would much prefer that we have an honest system of money, where if we were going to print fiat currency, THE CONGRESS DID SO WITHOUT INCURRING DEBT TO PRIVATE BANKERS.
Remember the sad fact is, and we have completely lost touch with this reality ... OUR COUNTRY WAS FOUNDED PRIMARILY BECAUSE THE ENGLISH MONARCHY WOULD NOT ALLOW THE COLONIES TO RUN AN "HONEST SYSTEM OF MONEY".
Here is a quote widely attributed to Benjamin Franklin:
"The colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction. The inability of colonists to get power to issue their own money permanently out of the hands of George the III and the international bankers was the PRIME reason for the Revolutionary War."
If I was to smile and I held out my hand
If I opened it now would you not understand?
Comments
a.
You need to understand what the Federal Reserve is, how it works, who wanted it that way, and why.
b.
If \ When in 3 years the market is still fucked, and these firms are still struggling, the Federal Reserve will still have its printing presses on to hand out free money at your expense to these firms. If that doesn't work they will "inject liquidity" via other means ... or they will finagle their way out of it by perverting some accounting rules via congressional action of some sort ...
Folks you are looking at the ELITE GOVERNMENT protecting its own rulers, the ELITE BANKS ...
and if you do not understand that concept, and what the Federal Reserve is, and who made it and why, you will NEVER understand this.
I don't know why I have so much trouble communicating that concept on this board ... especially at this point.
You people sit here and scream socialism, and "republican scheme" and all sorts of goof ball cries of wolf ... and you have NO idea what is really going on.
If I opened it now would you not understand?
Goldman and Morgan and others knew that the government would not let AIG fail, if there was the possibility of it, the private sector surely would've come up with the money.
My questions where basically rhetorical. I am well aware of who is paying for these bail outs and what will happen a few years down the road if the economy continues to falter, which in my opinion it will.
This is true, The value of everything has been overinflated due to the ease of credit. If 50% of borrowers are paying thier credit cards off every month... no worries.
The AVERAGE american has around 8 grand worth of just Credit Card debt... that's freaking scary.
WHOA!
This is the most intelligent financial comment i have seen on this board, EVER.
Seriously.
SOMEONE GETS IT!
Folks this is what we are talking about here.
The system is a sham.
It only works because for every 1 you deposit at a bank, that bank gets to lend out 10 more that it never had.
And in reality it is more like 100 to 1 due to the way the leverage recirculates itself.
The reality is that money IS debt ... the amount of dollars in circulation are (for all general purposes) EQUIVILANT to the amount of national debt.
It all comes from nowhere, printed up by the Federal Reserve, backed by nothing but YOUR ABILITY TO WORK, and the government's promise to MAKE YOU WORK to pay off that debt, should it fail ...
The expansion of the US economy has been almost entirely based on the expansion of US DEBT ... which in large part is nothing more than consumer CREDIT.
And when the consumer stops using credit, or worse ... starts PAYING IT OFF ... what he is unknowingly doing is BRINGING DOWN THE SYSTEM BUILT AROUND HIM ... because every dollar of credit you pay off DESTROYS TEN DOLLARS OF POTENTIAL LEVERAGE AT THE BANK.
If you started withdrawing that money from your bank account to pay bills you would (at least temporarily, until that money ended back up in a bank account) be FUCKING THE BANKS BIG TIME.
BIG WORRIES! BAD BAD BAD!
That is DESTROYING THE MONETARY BASE OF OUR COUNTRY. That would shrink the money\credit supply in this country so fast we would fall in to instand depression. The only reason we are staying afloat is probably because consumers CONTINUE to borrow. Remember, it may be a liability to you, but it is a HUGE ASSET to the system. Your debt is on a bank's BALANCE SHEET as an ASSET, and they use each dollar of debt you have to lend out MORE money. If you pay it back, you undo that chain of leverage, and cause an even worse catastrophe!
THIS is the VERY REASON the US Government will continue to BAIL OUT the banks.
Because what the USG is doing is KEEPING BAD LOANS ON THE BOOK AS ASSETS, by subsidization.
If it allowed these banks to fail, and allowed the debt to be WRITTEN OFF, it would be WIPING OUT THE MONEY SUPPLY OF THE COUNTRY, ...folks THAT is what "TOO BIG TO FAIL" means ... it means, TOO MUCH MONEY WOULD DISSAPEAR DOWN A HOLE TO NOWHERE, if they failed, and THAT CAN NOT HAPPEN!
Very impressed, Mamasans ...
best post in a LONG time on this board!
hip hip hooray.
If I opened it now would you not understand?
hip hip hooray.[/quote]
What are you saying here banks are looking for people NOT to pay their debts? Not sure i get that. If the consumer could actually pay off the credit cards and mortgages, and student loans and car payments then this wouldn't be happening. The banks are looking for there money and people are defaulting that is the start, the leveraging that was done just magnified the situation.
This issue revolves around accountability, not partisanship.
AIG had record profits in 2005, three years later they need an $85 billion bandaid from the fed at my expense- that sucks and businesses will continue to make risky decisions knowing the govt will be there to hold their hand in a time of need.
Thank you. I've been spending many sleepless nights educating myself on the issue. Reading as much as I can get my hands on to further understand the in's and out's of our economy. Also dating someone who works in the financial sector has it's benefits.
hip hip hooray.[/quote]
What are you saying here banks are looking for people NOT to pay their debts? Not sure i get that. If the consumer could actually pay off the credit cards and mortgages, and student loans and car payments then this wouldn't be happening. The banks are looking for there money and people are defaulting that is the start, the leveraging that was done just magnified the situation.[/quote]
The lending institutes want you to pay your debt but not pay it off in full. As long as consumers but themselves in debt through their spending habits but pay the monthly minimum, or above, the economy will continue to grow. It is not real growth, just the illusion of growth. It is one you stop paying those monthly payments, or just pay off the entire debt all at once, that trouble starts.
There is a happy medium.
SOMEONE must continue to keep paying,
but as long as the banks can work a deal out with the government, or lie via accounting practices to KEEP THOSE LOANS ON THE BOOK ... they (at the end of the day, bottom line) would MUCH PREFER TO KEEP THEM ON THE BOOKS ... whether you are paying or not ... of COURSE they want your account in good standing ... they want you paying SOMETHING on those debts ... otherwise they would (according to GAAP - generally accepted accounting principles) be required to WRITE OFF those loans ... but the BEST situation and the BEST customer a bank could EVER hope for is a customer who will NEVER ... NEVER EVER EVER pay off their debt, but simply pay the bare minimum in perpetuity.
THIS GUARANTEES THEY HAVE PERMANENT ASSETS ON THEIR BOOKS ... and they use that value to LEND OUT MORE MONEY ... so it does NOT matter to them (at the end of the day) whether you are paying it off or not ... or even if you are paying ... as long as they can find a way to lie and KEEP THE LOANS ON THE BOOKS they are happy ... because they can make TEN NEW LOANS off that money that hopefully will be solvent in some fashion.
Its when consumers start PAYING OFF THEIR DEBT that the banks have a HUGE problem.
What IS a problem is that consumers have reached their credit LIMITS and are not in a position to help the banks EXPAND their current balance sheets, and THAT is a VERY real problem, because the credit supply must continue to EXPAND or the risk of all that leverage toppling over becomes imminent. THAT is, in part, what is happening right now.
The pyramid scheme is falling apart, from the bottom up.
The Federal Reserve can lend and inject liquidity to these banks until they turn blue in the face, but at the end of the day, if NO CONSUMER (corporate, private person, cat, dog, or sheep) is willing to USE THAT CREDIT (to BORROW FROM THE BANK) then IT DOESN'T MATTER FOR SHIT because the bank MUST find someone to LEND that money to, in order to get it on their books and to extend the leverage further!
If I opened it now would you not understand?
In a perfect world yes, but unfortunately a return to the Gold Standard will not occur. The best we can hope for is that the economy, after this crisis, will be supported by something other than debt, by something other than a dot com or house boom or debt. Our economy used to be based on the strength of our manufactoring industry so we need to great a new industry, maybe as Obama proposed a green industry, to become the foundation of our economy.
Prime debt is a good thing. Subprime debt bad thing. Credit worthy consumers deserve credit. It would be a ridiculous thought to say that somebody has to come up with 100% cash on spot for purchase of say house or car. something like that would set our world back decades.
Milton Friedman's prefered STOP GAP solution would have been to LIMIT INFLATION by route to some SET FIGURE ... like 2 or 3% per year.
Make it a congressional act that sets the mandatory target,
and then no amount of political hocus pocus could cause massive inflation, or allow massive bailout ... because there would be a SET amount of dollar value inflation allowed, period.
His prefered ABSOLUTE SOLUTION (which he recognized the Status Quo would NEVER allow to happen -- because the Banks and The Government are very much one and the same power structure, they BOTH are The Status Quo) would be ABOLISH THE FEDERAL RESERVE, STOP PRINTING MONEY PERIOD placing an absolute cap on the outstanding "high powered money" supply ... meaning whatever dollars are out there now are whatever dollars there will be in the future, period.
When the market needs, wants, or in some way is seeking excess liquidity on top of that capped dollar value, it would be allowed to create credit on the freemarket OUTSIDE of "US Dollars".
Unfortunately, such a proposition is NOT something you could even dream about getting away with in a financial crisis of this magnitude.
It would be like a heroin addict going cold turkey after a 2 week binge of the good stuff.
What we, very unfortunately, probably need to do here is find some balance between bailing out these firms (and believe me it makes me sick to say that) to maintain some semblance of order and oppositely, letting these firms fail to instill discipline and help the credit situation "reset". And AFTER this blows over (if and when. Folks this COULD be catastrophic, and mean the end of the ENTIRE current order, political, financial, and otherwise) ... probably 5 years or more down the line, in reality ... start talking about legislation to (as Ron Paul supporters so loudly chanted) "End The Fed"!
ps.
two final thoughts.
a. Gold - you can't have a system based on gold, when the ruling elite that fucked us so badly to begin with OWN all the gold. In all probability the Rothschild elite own some 90% PLUS of the gold supply ... keep in mind the Federal Reserve is NEVER EVER EVER audited, and that money can simply slip right off the printing press and out the back door to buy gold, meaning the elite can buy gold effectively for something like 5 to 20 CENTS an ounce (the cost of printing a bill). And they've probably been doing it for decades. :(
b. Carbon Credit Economy - NOOOoooOOoOoooooOOOooO! ... if you thought things were bad and out of balance when they took us off the gold standard and had fiat (unbacked) currency ... you have ZERO clue how HORRIBLE it will be when they start running the world economy ON THE VERY AIR YOU BREATHE!
MAKE NO MISTAKE. THAT IS WHAT THEY WANT! It would be the ULTIMATE alchemy! And it would be MORE INFLATIONARY THAN YOU COULD EVER IMAGINE!
Rothschild: Carbon Credits "could establish a new world order"! ... it's not fearmongering, its reality ... its what they want, and it SERVES THEIR INTERESTS ENTIRELY, NOT YOURS!
If I opened it now would you not understand?
No for large purchases credit is definitely necessary and I'm not advocating that we eliminate credit but to base our entire economy on credit is completely foolish. Sooner or later it is bound to collapse. We need to base our economy on something sound, like it was back during America's manufactoring heyday.
all we really need to do is stop the giant wealth funnel that this banking CARTEL has set up ... the funnel that runs right out of OUR wallet and in to THEIR pockets via the Federal Reserve mechanism.
We don't need to infuse the water (our fiat money) with minerals (some form of backing) ... we just NEED TO TURN OF THE SPICKET before it floods the country and drowns us!
Just STOP PRINTING MONEY.
The ENTIRE power structure, and EVEN THE VERY WARS which half of you seem to think are the problem (and in reality are just a SYMPTOM of the problem), is DIRECTLY DEPENDENT on the flow of cheap (nearly free) money from The Federal Reserve to the coffers of private banking.
Just stop that mechanism, and you will have come 85-95% of the way to reaching an amicable solution for the average american.
Just be ware that doing so means that Americans THEMSELVES will have to stop living in a bubble world. There will still be credit, but it will not be ANY where near as easy to obtain ... because the banks themselves can not simply have it printed up at will.
If I opened it now would you not understand?
With the exception of buying a home I never use credit. I pay for everything either with my debit card, or cash. If I do, on the rare occassion, use my credit card I pay the balance off the following month. So I'm well prepared for that change. Unfortunately it will never come.
I'm one of those weirdos without any debt (other than I do owe about 60% of my house). I don't really care if it screws up the system. I'm not going to have consumer debt regardless of whether that's good for the economy or not.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
Don't feel alone. I'm one of those lunatics as well. Only debt I have is the home. I can't honestly believe that this much debt is good for any economy. I thought our economy was driven by the consumer and the ridiculous amounts of unnecessary crap they purchase? Don't people spend less when they're drowning in debt? Or do they just keep spending with no consequences? I feel like the foundation of our ecomony is being supported by a large group of idiots. We need to let these idiots fail but if we do then the entire foundation crumbles and everybody gets hurt that much worse. It's a no win situation.
i don't think he's saying that that's a bad thing. i think he's pointing out than the system is dangerously flawed. that not having debt should be a good thing, but instead our system makes it a bad thing.
exactly.
sadly, one of the primary reasons that the bankers got together to reimplement the central bank in America (keep in mind the Federal Reserve is central bank number THREE, i believe) was SPECIFICALY BECAUSE AMERICANS WERE SAVING WAY TOO MUCH.
That is right.
America was actually incredibly prosperous on the whole around the turn of the century, but large banks were failing because citizens were not borrowing enough from them, and their risky business loans were starting to go bad.
In short the banks needed to find some way to get MORE DEBT on to their books, debt that was relatively solid.
Creating a central bank thereby turned ALL MONEY directly in to DEBT ... this is refered to as "the monitization of debt" and it is now the fundamental underpining of our monetary system. ALL MONEY IS DEBT.
This was the SMARTEST IDEA EVER ... FROM THE PERSPECTIVE OF THE BANKS.
From the perspective of a national economy and a national government, it was probably the biggest fleecing and fuck up in the history of fleecings and fuckups. :(
So no,
Catch22 is correct, i am NOT saying being in debt is a good thing ...
i am only saying from the perverse perspective of our current financial system it is IMPERATIVE.
I would much prefer that we have an honest system of money, where if we were going to print fiat currency, THE CONGRESS DID SO WITHOUT INCURRING DEBT TO PRIVATE BANKERS.
Remember the sad fact is, and we have completely lost touch with this reality ... OUR COUNTRY WAS FOUNDED PRIMARILY BECAUSE THE ENGLISH MONARCHY WOULD NOT ALLOW THE COLONIES TO RUN AN "HONEST SYSTEM OF MONEY".
Here is a quote widely attributed to Benjamin Franklin:
"The colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction. The inability of colonists to get power to issue their own money permanently out of the hands of George the III and the international bankers was the PRIME reason for the Revolutionary War."
If I opened it now would you not understand?