San Diego Housing Bubble News and Analysis

I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men." -Woodrow Wilson, after signing the Federal Reserve

Those are eerily prophetic words from both men.

We've gotten off-track. Remains to be seen if we're able to correct course.

We might be able to if we start to systematically vote just about all the incumbents out of office.

I wouldn't get too bent out of shape over the governance of the Federal Reserve. Yes, it's a very important institution. Yes, it can theoretically act against the wishes of Congress and the White House. But I think we all know that the Fed cannot really go up against those entities. On the margins, it can act against the wishes of Congress/WH, but that's about it.

Just imagine if Bernanke had a conversion experience and adamantly opposed any bailout for irresponsible institutions or people. He would be summoned before Congress within 24 hours. If the public humiliation before Dodd, Frank, Schumer et al failed to produce results, his power to block any bailout would be removed within a week.

Congress is the key. The WH is less important, and the Fed is down the list quite a way, important as it is.

Talk about an opportunity knocking, this may have been McCain's last chance to win the election, oppose the bailout and propose a serious alternative and be a real instead of fake Maverick.
too bad it turns out that McVain is just a fake Maverick and blew it so whoever is elected is, as it has been for many years, in Wall Street's back pocket....

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford

Congress is the key. The WH is less important, and the Fed is down the list quite a way, important as it is.

It's a private institution and it prints money out of thin air and trades for US Treasuries + Interest. How do you get that gig and wouldn't it be easier to just cut it out? It was slipped in the Christmas eve when most of congress was on break and was followed by the 16th amendment. So these guys get to come in charge us interest + treasuries and we get income tax. Before this income tax was considered immoral. Think about this, it prints money out of thin air and US citizens give a private institute US Treasuries + interest. Not only this we get income tax and a dollar that has devalued 95% since it's inception.

This is way Ron Paul wants to repeal both. Because the only reason we have income tax is because of the federal reserve which is not federal and has no reserves. Just digital money that we gobble us and mortgage our future, so what we can get Alan Greenspan to encourage people to take out risky loans in 2004 at the height of the bubble. Something stinks.

arraya,

I agree that the management of our money supply and credit has been irresponsible for many years now. But what you are seeing there is a projection of the wishes of the Congress, mainly.

If Congress wants to have cheap and easy credit, then they can make it happen, because they have the legislative power. Everyone in govt, or organizations that live or die at the pleasure of the govt, knows that. You don't think the CEO of Fannie Mae, in its day, made a move without chatting with Chris and Barney first? Same for the Fed. It's convenient for Congress to allow the Fed to 'get out in front' on issues opposed by most voters, but if the Fed were to actually act against Congress's real wishes, Bernanke would be humiliated or re-chartered in a flash.

I was thinking if Jefferson and Jackson were alive today and saw that their faces were on Federal Reserve Notes they would be mightily pissed off.

...and Lincoln too!

...oh yah Franklin as well!

"You have to have a command of the English language or you're just nowhere. I mean like...say you get out of college or whatever...you're gonna go into business, you're gonna open a bank just for an example. You've got to give it the right name. It's gotta be something big and strong like Security First Trust and Federal Reserve. And you have to name a bank that because nobody's gonna put their money in Fred's Bank. 'Hi, I'm Fred, I have a bank. You got $1500? Ahhh, I'll put it here...in my white suit'"

- Steve Martin

Just to lighten the thread a bit. My point? Just because you run Security First Trust and Federal Reserve doesn't mean you know any more about managing money than, say, Fred. You just have better command of the English language.

In fact, at this point in time, I bet Fred has lost less of his investor's money than most large banks.

Sounds like the beginnings of Socialism in America. I think what Jefferson is referring to is point #4 in Karl Marx remarks on how to develop a socialist government. This will all be augmented by Obama and the crazies that follow him.

"We've gotten off-track. Remains to be seen if we're able to correct course."

------------------------------------------------

If history is any guide then there really is no doubt as to whether we'll be able to correct course. I can't think of a single example of any empire faced with such debasement and decline ever able to accomplish restoring the empire to glory days.

Egypt - nope
Persia - nope
China - nope
Greeks - nope
Turks - nope
Romans - nope
Spanish - nope
English - nope
Soviets - nope
USA - ?

Can anyone think of one successful example?

Panama has no central bank. It uses the US dollar as its currency and what inflation they have comes from our own central bank monetary policy.
Since there is no one to bail out banks they behave with prudence, or they go out of business. Just a small preview of a banking system without a central bank.

Congress can abolish the Federal Reserve system
but it will take an informed electorate to get there.

It will take awhile to fight a deeply rooted belief, however.

Karl Marx in the late eighteenth century saw the recurring boom and bust when the industrial revolution began. He and economists of the time figured the problem lies within the capitalist market economy itself and what was needed to correct it was massive government intervention.

So the idea of government intervention in the economy as necessary goes way back. It is like
a punch served at most American universities.
No one hardly ever question the idea because most drank from the same punch bowl.

The Scottish David Hume and Englishman David Ricardo figured out that the actual cause was the activities of an institution that arrived on the scene---banking.

You might enjoy this article from Rothbard:

http://mises.org/story/3127