Tuesday, January 08, 2008

Money For Nothing

I found this video over at the most excellent The Mess That Greenspan Made blog. Because the video has such great potential to educate and the blogger does not add anything new to the topic, I thought it was well worth cross-posting.

It is lengthy (about 50 minutes); the first few seconds are blank so be patient and wait for the video to start.

After watching it, you can then understand why it is that savers and restrained consumers are so despised (and punished) in America today.

And consider these quotes from the video and the power they imply for us peons:
"The people who actually produce all the real wealth in the world are in debt to those who merely lend out the money that represents the wealth."

"If there is no debt there'd be no money."

'If all debts were paid off, then there would be no money at all and it would destroy the financial system and the country.'


Blogger John said...

This comment has been removed by the author.

Jan 8, 2008, 8:14:00 PM  
Blogger John said...

Again - new and improved with less typos ,,,

The BBC has a really great explanation of the Sub prime issue here - talks about Fresno and then goes on to explain how the banks got round the asset limits for lending.

Jan 8, 2008, 9:39:00 PM  
Blogger Matthew said...

I did not watch the video yet Marinite and your comment on the other thread regarding Paulson's comments on the economy are noted..

I will say that nothing, and I mean nothing, surprises me when it comes to what really transpired over the last 5-6 years around this country regarding this bubble or the influence big banking has on all our lives..

It's too bad so many people lost much of their work ethic and grit and had their values flipped upside down for a quick buck...

I will say that this housing bubble as reenforced with me a few things, including the notion that drugs should never be legalized in this country... Collectively, we don't have the fortitude to handle it..

Jan 8, 2008, 10:28:00 PM  
Blogger Matthew said...

I mentioned this before, but I resent how loosely the term "credit" is used on the financial markets and MSM.. credit (used) = debt, but, oh my, how much nicer is it to refer to everything as credit vice debt.

Debt cards
Debt markets
Consumer debt
Debt capacity
Debt limits

Those much more honest terms I'd say... teach them to your kids..

Jan 8, 2008, 10:36:00 PM  
Blogger Matthew said...

Continuation of my list from yesterday...

#8. Increase in global warming due to all the hummers and SUVs purchased via HELOCs. Who in their right mind buys a Hummer?... seriously ? which leads me to 8B
#8B. The Hummer itself
#9. The dumming down of the populace. Why work my tail off and pursue an advanced education when all I need to do is buy a house or get my Realtor license?
#10. Increase in property taxes, as well as home & mortgage insurance...

Jan 9, 2008, 5:48:00 PM  
Blogger Matthew said...

Fixed Interest Rates ... Fa Good !

Woke up this morning listening to a whole new bunch of financial pundits spewing all over themselves about what the Fed needs to do now, eg. cut interest rates in half by golly !!!

Then, in another Ron Paul moment, it dawned on me, what if interest rates were fixed for good ? What would that do to us as a nation and do to our economy ? What would be the impact on Wall Street and Main Street ? Who's no longer relevant to us and our lives ? Would that be a good thing ?

All the turmoil in the market place right now is the direct result of all the "tinkering" from man on interest rates primarily. We're like a junkie that's been filled with so many uppers and downers that we don't know which way to go... seriously.. another good analogy is Young Frankenstein (a brilliant comedy by the way), with Peter Boyle (the monster) playing the role as the economy and Gene Wilder (the good Dr) playing the Fed... "It's Alive !!"

But I digress..

Why not just stop tinkering ? Set the benchmark at some number based on healthy long-term growth and leave it. PERIOD !!

Could we weather the Hurricane Katrinas and Gulf Wars with this type of monetary policy? Could we offset the strick rigid monetary policy with fiscal policy where it's really (really) necessary (as in Katrina)?

I really think we could. I think this would remove many of the strings (read nooses) Wall Street has held over our necks for quite sometime. It would remove much of the speculation that is absolutely rampant everywhere in the market right now. It would trim back the power and influence of the hedge funds.

What are the long term downsides besides the fact that we need fewer Harvard MBA's trying to outsmart each other in NYC and Chicago ?

I have an advanced degree, but not in economics, so I'd like some comments on whether this could work or not ?

Maybe a good topic for the weekend Marinite .. label it.. "I have a dream"

Jan 11, 2008, 4:48:00 AM  
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