People buying **** they couldn't afford caused the crisis.

Oh, but if you want to be a typical American, yes you can pin the blame on pretty much anybody.

quote:

Originally posted by Napro:
People buying **** they couldn't afford caused the crisis.

Oh, but if you want to be a typical American, yes you can pin the blame on pretty much anybody.

I take it you are not knowledgeable in economics, credit and money creation. That's a shame.

quote:

Originally posted by 10tenths:

quote:

Originally posted by Napro:
People buying **** they couldn't afford caused the crisis.

Oh, but if you want to be a typical American, yes you can pin the blame on pretty much anybody.

I take it you are not knowledgeable in economics, credit and money creation. That's a shame.

I am pretty sure he nailed that one.

Nope, he just pointed to a symptom. Not a cause.

quote:

Originally posted by 10tenths:
Nope, he just pointed to a symptom. Not a cause.

Yes right. Spending beyond our means is the only cause of our problems.

as in 1857 "Panics" are similar is source.
""http://blueandgraytrail.com/event/Panic_of_1857


Often War has saved an economy, but not this time. Seems to me the more balanced an economy is, the more likely it is to be able to withstand reversals. Our economy is not well balanced at all. Worse still, all the current plans for this economy promise to make things worse, and will until a floor is established.

quote:

Originally posted by DMarkUhler:

quote:

Originally posted by 10tenths:
Nope, he just pointed to a symptom. Not a cause.

Yes right. Spending beyond our means is the only cause of our problems.

Nope, that is just another symptom, as well.

quote:

Originally posted by 10tenths:

quote:

Originally posted by DMarkUhler:

quote:

Originally posted by 10tenths:
Nope, he just pointed to a symptom. Not a cause.

Yes right. Spending beyond our means is the only cause of our problems.

Nope, that is just another symptom, as well.

A symptom of what?

I know I am going to regret asking that one....

quote:

First, how did our economy reach this point? Well, most economists agree that the problems we're witnessing today developed over a long period of time. For more than a decade, a massive amount of money flowed into the United States from investors abroad because our country is an attractive and secure place to do business.

This large influx of money to U.S. banks and financial institutions, along with low interest rates, made it easier for Americans to get credit. These developments allowed more families to borrow money for cars, and homes, and college tuition, some for the first time. They allowed more entrepreneurs to get loans to start new businesses and create jobs.

Unfortunately, there were also some serious negative consequences, particularly in the housing market. Easy credit, combined with the faulty assumption that home values would continue to rise, led to excesses and bad decisions.

Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.

This is one guys take on the problem and although it is highly simplistic in it's analysis with little evidence to support it, I pretty much agree with it. Feel free to believe what ever you wish on this issue.

quote:

Originally posted by DMarkUhler:

quote:

Originally posted by 10tenths:

quote:

Originally posted by DMarkUhler:

quote:

Originally posted by 10tenths:
Nope, he just pointed to a symptom. Not a cause.

Yes right. Spending beyond our means is the only cause of our problems.

Nope, that is just another symptom, as well.

A symptom of what?

I know I am going to regret asking that one....

Faith. We get mortgages not based on the pile of gold in the basement, but on the faith the lender has that we'll pay him back over time. The lender takes the house as collateral on the faith that the house is worth more than the amount of the loan. We spend more than we can because we have faith that the value of our home will rise so that we can borrow more from a banker with faith in the appraised value and the direction of the 'market. Credit card companies have faith that we'll spend more than we have and pay it all back with interest in a timely fashion.

Faith allows a banker to 'lend' a million dollars when he has only a small percentage of that present to pay his own depositors if you and others who borrow don't pay him back--10/10s fractional reserve.

Banks short of cash? Sell the 'assets' (because there's still faith that the IOUs are as good as gold) to somebody else and let them carry the fractional reserve. Lend more on faith.

Create wealth and a class of homeowners by recycling the same currency of faith with no real substantive backing.


It's good to believe things will get better. Predicting that improvement in exponential increments is financial suicide.

Loss of faith causes depositors to run for their money--faith ain't good enough anymore. Cuases credit card companies and lenders to call in the markers and close the faith-based lending window.

GM's payroll, your life insurance, the Dow Jones Industrial average...all faith.

Or smoke, as it's sometimes called.

Not technically accurate to an economist, but that's what I see happening.

quote:

Originally posted by DMarkUhler:

quote:

Originally posted by 10tenths:

quote:

Originally posted by DMarkUhler:

quote:

Originally posted by 10tenths:
Nope, he just pointed to a symptom. Not a cause.

Yes right. Spending beyond our means is the only cause of our problems.

Nope, that is just another symptom, as well.

A symptom of what?

I know I am going to regret asking that one....

The expanding of credit through fractional-reserve banking and the manipulation of interest rates, causing mass-malinvestment in the economy at all levels. This is an overly simplistic way of saying it. But, if you understand how money is created, credit expanded, how trade SHOULD be performed, etc then you can clearly see that it all comes down to expansion of credit and money through deceptive means.

You cannot create real wealth out of nothing as fractional-reserve banking does. The market forces eventually see the ruse and take action. To further exacerbate this problem, they manipulate the interest artificially rather than by the supply (savings) and demand (the willingness to borrow). Our central bank (owned by private interests) and all others try to maximize their own profits by controlling these things, but at the detriment of society as a whole.

LOL I knew it would be a conspiracy of some sort or another.

It is a fact. Please, if you can, explain to me how the fractional-reserve banking process is not a fraud. Or, how changing the interest to maximize credit expansion rather than having it based upon the supply and demand of money in the market is a good idea. Point to me one American panic or crisis that did not involve the over-expansion of credit, either through a central bank as we have had in different periods in our history, or through private or state-chartered banks in the periods we did not have a central bank.

Whether it is a conspiracy or not, it is a fact. The thing that pains me is the fact that most people are completely ignorant to how money is created and credit expanded. Most people do not even know that the interest rate is based upon savings vs. demand for credit. That in a free market, credit cannot be created without savings. That instead, we have a system that creates credit with negative savings rates. This isn't that hard to understand. The world we live in today where money just magically appears out of debt is not sustainable.

And, unfortunately for us, it has never been sustained. It has ultimately failed every time it has been used. While this current crisis is going to be huge, it won't be the end of this process. We may even be able to continue it for another couple of decades. But, eventually it will collapse. All ponzi schemes do.

The $1.5 trillion hit we took on 9/11 helped accellerate this entire process. Selling our debt (Our collective future income paying for past overspending) to foreign nations in such quantity should be a CRIME!

As it has bercome so vast, we are mailing our wealth to our enemies! How stupid is that? And so much more...

Don't forget that we have outsourced our inflation. We no longer trade, we buy. Our exports are quite low compared not only to historical trends, but also in respect to GDP. Instead of trading goods for goods, we instead trade US paper for goods. And, on top of that, we borrow from the same countries whose goods we are consuming. That is the prime reason why the M2 has been so manageable the last 8 years. But, our currency has still fallen dramatically when compared to foreign currencies, commodities and metals. So, we have lost a ton of buying power. China, Japan and Saudi Arabia hold a lot of our paper and as long as they hold it, our inflation will be low. If they start to sell, then rates on government paper is going to go through the roof and massive inflation will follow. Shoot, even if they reduce their buying of our debt by a relatively small sum, we stand to see double digit inflation.

Boy, I wonder what would happen if long-term rates doubled from their current level. They're right around 3.5% right now for 10 year notes. That means, if they doubled, it would take exactly 10 years for our entire national debt to double. Assuming rates wouldn't go higher than 7%. Scary thought. I wonder what that is per month. Exponential growth is a real B&@$h.

President Bush inherited much of the debt from the Clinton years but not all of it. When the Saudi Arabians attacked us on 9/11 Bush took action by invading Iraq. Right or wrong that war cost us about $2.5 Billion a day. Enough money to pay for Social Security and health care for a long time. However, things were still not too bad. Than SHAZAM SHAZAM, Americas favorite President came along with his hope and change and spent more in 100 days than any President in the history of this nation. Disagree all you want but the facts are the facts.

Obama and Bernanke is just doing the same thing that Bush and Greenspan did when they inherited the dotcom bubbles. Lowering interest rates and running huge deficits. Except, in order for Obama to be able to do what Bush did (create a bubble, giving the false sense of prosperity) he will have to spend many times more money. These problems do not just go away when your solution is more spending and cutting rates (Keynesianism), they just get swept under the rug. That is assuming we can expand our credit enough to overcome market forces this time around.

quote:

Originally posted by Duster6:
President Bush inherited much of the debt from the Clinton years but not all of it.

Nonsense.

To be sure, Bush did inherit a bubble. But, Greenspan deserves just as much or more blame than Clinton. And, don't forget Congress. They wouldn't know their arse from a hole in the ground.

quote:

Originally posted by DMarkUhler:

quote:

Originally posted by Duster6:
President Bush inherited much of the debt from the Clinton years but not all of it.

Nonsense.

Michael Jackson is nonsense.

quote:

Originally posted by Duster6:

quote:

Originally posted by DMarkUhler:

quote:

Originally posted by Duster6:
President Bush inherited much of the debt from the Clinton years but not all of it.

Nonsense.

Michael Jackson is nonsense.

The debt inherited by Bush II came from Reagan and Bush I.

WTF? Are you on the Kuznets Cycle? Or, just repeating what you are told and delusional? Maybe names like Volcker and Greenspan while smack some sense into ya'.

There is just no talking to these Obama loving Democrats. No matter how many facts you throw at them. Now I know why Barny Frank acts like he does.

There is just no talking to these Obama loving Democrats. No matter how many facts you throw at them. Now I know why Barny Frank acts like he does.

quote:

Originally posted by Duster6:
President Bush inherited much of the debt from the Clinton years but not all of it. When the Saudi Arabians attacked us on 9/11 Bush took action by invading Iraq. Right or wrong that war cost us about $2.5 Billion a day. Enough money to pay for Social Security and health care for a long time. However, things were still not too bad. Than SHAZAM SHAZAM, Americas favorite President came along with his hope and change and spent more in 100 days than any President in the history of this nation. Disagree all you want but the facts are the facts.

Hey Duster

Were these the facts you were referring to? Let's take them one by one:

quote:

President Bush inherited much of the debt from the Clinton years but not all of it.

Yes he did, but most of that debt was not generated by Clinton. Most of it came from Reagan and Bush I.

quote:

When the Saudi Arabians attacked us on 9/11 Bush took action by invading Iraq. Right or wrong that war cost us about $2.5 Billion a day.

Mostly true except the $2.5 billion a day business. Fact is the war has cost us about $800 billion so far in direct costs (http://www.cnn.com/2007/POLITICS/11/13/hidden.war.costs/index.html).

quote:

Than SHAZAM SHAZAM, Americas favorite President came along with his hope and change and spent more in 100 days than any President in the history of this nation.

Now this is were you take off to tin foil land. Fact is that GW Bush put on about $5 trillion in new debt over the course of his presidency. Now take out the $800 billion Bush spent on the war and that means he spent an incredible $4.2 trillion over budget. Obama in 100 days has not spent anywhere near that.

This message has been edited. Last edited by: DMarkUhler,

Aren't you proud that the $800 billion, which wasn enough in my book for our military, aided to bring Iraq to a place where its people can now experience freedom?

Our soldiers did a fantastic job on limited resources, with "the war was lost" attitudes, and bickering at every turn, don't you think?

quote:

Originally posted by charlie_echo:
Aren't you proud that the $800 billion, which wasn enough in my book for our military, aided to bring Iraq to a place where its people can now experience freedom?

Our soldiers did a fantastic job on limited resources, with "the war was lost" attitudes, and bickering at every turn, don't you think?

I was not discussing that. But yes I am proud of our brave soldiers and do not believe it was money well spent.

Spin it any way you want but who's watch is it now?

Well I know for a fact it is Obamas watch now and he is dealing with many screw-ups as we speak. Still I am reminded how long they (I would say you, but I don't have the time to pull the quotes) blamed Clinton....about 7 years into the Bush administration.

quote:

Originally posted by DMarkUhler:
Well I know for a fact it is Obamas watch now and he is dealing with many screw-ups as we speak. Still I am reminded how long they (I would say you, but I don't have the time to pull the quotes) blamed Clinton....about 7 years into the Bush administration.

You won't find me on that list, I blame them ALL for this mess. Both parties, every president from FDR on.