chicken coop?
I couldn’t find anything directly on that, just this general comment from yesterday, which says in part:
“These past few weeks have provided an unfortunate opportunity to discuss inflation. The dollar index has reached new all-time lows. The total money supply, M3, as calculated by private sources, is growing at a disturbing 17% rate. The Fed is pumping dollars into the economy at an alarming rate. Just recently the Fed announced new loan auctions totaling $100 billion. That is new money created from thin air. If these money auctions, combined with the bailout of Bear Stearns, continue to be the trend, we are in for some economic stormy weather. The explanation lies in understanding the basics of money, and why it is dangerous to give government and big banks control over it.
You cannot create more wealth simply by creating more money.
You see, the Fed creates new money and uses it to purchase securities from banks. Flush with funds, these banks seek to put this money to use. During the Fed’s expansionary period, much of this money went to home loans. Through a combination of federal government inducements to lend to risky borrowers, and the Fed’s supply of easy money, the housing bubble took shape. Fannie Mae and Freddie Mac were encouraged to purchase and securitize mortgages, while investors, buoyed by implicit government backing, rushed to provide funding. Money that could have been invested in more productive, less risky sectors of the economy was thereby malinvested in subprime mortgage loans.
The implicit guarantee from the Fed is quickly becoming explicit, as those institutions deemed “too big to fail” are bailed out at taxpayer expense. Wall Street made a killing during the housing bubble, reaping record profits.
Now that the bubble has burst, these same firms are trying to dump their losses on the taxpayers. This approach requires more money creation, and therefore debasement of all dollars in circulation.
The Federal Reserve, a quasi-government entity, should not be creating money or determining interest rates, as this causes malinvestment and excessive debt to accumulate.
The end game for this policy of monetary inflation is that the money in your bank account loses purchasing power. So, by keeping failing banks afloat, the Fed punishes those who have lived frugally and saved.”
And Bush’s idea is to give MORE leeway to the fed.
Has anyone seen a direct response by Ron Paul to the plan? Links would be appreciated.
http://www.house.gov/paul/tst/tst2008/tst033008.htm
Also, what are your thoughts on Ron Paul’s comments, above?
Seems Ron Paul will be on Glen Beck discussing this tomorrow night. Don’t know how deep he’ll be able to get in that forum, but glad he’ll have the platform.
Originally posted 2009-09-02 02:22:34.
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{ 2 comments… read them below or add one }
When I was in ELEMENTARY school, we were taught that if we print more money, it would cause run away inflation. My teacher used post war Germany to illustrate this. I saw the Paulson comment, and you are right, we have to be wary of what changes the government makes. My first impression was that it was too late, but now reading what you’ve said, governmetn does have a tendency to use tragedies topush for stuff they want, that would be bad for the public. They use the fear from the public to hide all the goodies that would normally get a protest from the citizens. As for the bail out, I am enraged that the executives of Countrywide are getting a golden parachute. THe government needs to step in and sue these executives if they think that they can bankrupt a company and take a huge payday. We need to send people to poor through their documents. As for the bear stern bail out, i have mix feelings. I am enraged that the Democrats are planning to bail out people who are about to go into foreclosure. They keep telling me to think of all the family who would be kicked out of their home. WELL, I WAS RESPONSIBLE WITH MY MONEY, and I have NO HOUSE. These people are keeping me from owning my home, by jacking up housing prices and increasing taxes to prevent me from buying a house. THey seem to care more about the irresponsible people then those who are responsible. They equate the bail out of these people to Bear Stern, but my belief is that I don’t like the bail out, but it is different. The ENglish bailed out one of their banks last year, and ENgland stated that teh people responsible for the bad decisions will be punished because they would be forced to leave, but they would save the jobs of the workers who have nothing to do with the irresponsible decision that left their banks in a mess, as well as the people who’s money was deposited in said bank. I don’t like the bail out, but I unlike the Democrats see the bail out of a corporation differently. I do question how innocent the line workers are though.
NOt yet. This means the government can control more and won’t that be great, just so we get our share of the money from the machine. Wink. Take care.