Ha Haa,,,, hyperinflation "can't happen here". The credit freeze probably "could not happen here" either, once the freeze is over with what else can possibly happen except inflation.. they are printing their way out of the freeze, massively, and if inflation starts up what can possibly keep it from going into the runaway mode... what I'm concerned about is what kind of a historic power grab will Obama come up with...
People are schmucks. They buy the hype, repeatedly. The FED routinely floats best-case theories as to how to solve future problems that morph like clockwork from solutions. Of course, those flowery theories never get applied and the situation always turns into a cluster fuck. Greenspan kept hammering on rates claiming future asset inflation took a backseat to tepid growth. Boy, did he fuck up! Then derivatives - who cares?! Then FannieMac legislated to write X% subprime. Who cares?! Nazdaq? Forgetaboutit The bailout doesn't solve a God-Damned thing, just prints cash into Banks. So whats next?! Does it even matter? For all the conjecture here (that in some cases, is very well documented and thought-out), not a God-Damned stick of it will get implemented. But people just keep rationalizing the raping as fuck ups even layman arm-chair quarterbacks - like us - can solve in a few hours of focused debate. Then squadrons of these Banker-fuck-types who make a PHD'd career working full-time on this stuff and the obvious solution eludes them?! Bullshit. Thats pure Bullshit. In most cases, there's a simple solution to nearly everything. Even economics. The complexity is engineered to obfuscate reality and create plausible deniability. Thats so common in any Government endeavor - layers and layers of bullshit stacked on bullshit in every department to excuse away the plundering and justify more money. Notice the solution to every government and economic problem is MORE MONEY. Its never less Government, less laws, or less money. Its more money. The General Public of couse is too ignorant, distracted or naive to face the brutal truth and keeps on hoping against hope it can't be true. While KashKari grins and tells Congress the 700 Billion won't be used to buy bad paper, but rather overpay for bank stock so well-paid execs can short the hell out of the companies they ran into the ground. Its one last fucking courtesy of the taxpayer. When Citi goes to 5$, execs will buy it all back for pennies on the dollar us taxpayers inflated their shorts at. Its a good deal. For them. A rational thinking person has to ask himself at some point, "What the FUCK is going on????!" Paulson taps Goldman cabana-Boy Kashkari to handout hundreds of Billions to..... Goldman. And people don't even blink. Conflict of interest isn't even in the lexicon anymore. Its presumed the Foxes know best how to guard the Henhouse. While they eat the Chickens right in front of us and we sit there like idiots in disbelief of what our eyes tell us. Thats the definition of brainwashed. Everyone knows how to fix this. But it will never happen. THATS THE PROBLEM.
Great question, a lot of people what to know exactly what the Fed has taken in collateral for some of the loans they've made recently. And, according to Bernanke's testimony on Monday, all of the collateral they've taken on is supposed to be low-risk, high-quality debt instruments. IMHO, since the US Treasury receives any excess income the Fed generates during a fiscal year it follows that they would receive the bad debt, which would ultimately get added to the national debt. BTW, for those who might be in shock over the idea that excess Fed income is returned to the Treasury, here's the source: http://www.federalreserve.gov/pf/pdf/pf_1.pdf "The income of the Federal Reserve System is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. Other major sources of income are the interest on foreign currency investments held by the System; interest on loans to depository institutions; and fees received for services provided to depository institutions, such as check clearing, funds transfers, and automated clearinghouse operations. After it pays its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury. About 95 percent of the Reserve Banksâ net earnings have been paid into the Treasury since the Federal Reserve System began operations in 1914. (Income and expenses of the Federal Reserve Banks from 1914 to the present are included in the Annual Report of the Board of Governors.) In 2003, the Federal Reserve paid approximately $22 billion to the Treasury."
Good resources as was the how money is created wiki. A little heard perhaps to follow for some at first. Paul Grignon's 47-minute animated presentation of "Money as Debt" tells in very simple and effective graphic terms what money is and how it is being created. http://video.google.com/videoplay?docid=-9050474362583451279 Spread the word. People need to understand how money is created.
Great speach about printing money. http://www.youtube.com/watch?v=YBVB1Uc0nko I hope to god they don't support the automobile industry..
ThriftyBob, what course of action would you recommend to the average middle class person in order to protect themselves in these times or (if they are debt free and thrifty) to well position themselves Peace birdman
I guess the Fed and Treasury can do whatever they want until the world stops buying our bonds or requires higher and higher rates of interest on those bonds. Until then, no problem. However, if long term rates were to suddenly shoot up then the govt. might be in a position where they can't repay.
Great elaboration. So you are saying the Fed is going to buy all the bonds for sale to prop the price? Totally disagree.