I’m only aware of three ways that government gets the money to spend on social programs, economic stimulus or wars: it must either tax, borrow or print the money.

Gibraltar, that sounds like a pyramid scheme!

Ok, so just so I’m clear, it sounds like a good way to pump up a tired economy; simply lower interest rates so people borrow, and then pretty soon everyone’s borrowing (and hopefully spending), and it stimulates the economy.
The problem is people are borrowing to obtain assets that are overvalued, so they actually have to borrow more than is really needed. Wouldn’t banks want to make sure home appraisals are indeed based in reality, else they (the banks) are also overextending themselves? Or is there something to be gained by the banks for lending bigger loans? Yes, maybe they get to post bigger ‘sales’ or loans, but that seems really risky to me. MONEYMAKER BANK is really making it’s own money.

I’ll tell you where its coming from and you won’t like it. The first thing you need to know is that your IRA and 401k or 403K are not Federally insured. There are a few execeptions, Union Bank has a FDIC IRA that I got a pamphlet on yesterday.

Your retirement savings are being invested by mutual fund managers that have never seen a bear market. The last one started in 1968. These people are buying the Fanny Mae and Freddie Mac bond packages. They are not federally insured and probably never will be. It is implyed that they are Federally insured but they ain’t and probably never will be without an act of Congress.

So what you are looking at is a repeat of the S&L fiasco from 10 years back.]

The only problem with it this time (if your 60 years or older), you may be dead before you can collect what you put in.

The other irritating thing, the losses are not tax deductable. Go figure!!!

We agree on the enormous size of money involved. The only people not to be hurt by this fiasco will be those with their money in the bank, its FDIC insured. And if you remember the government even bailed them out in the S&L massacre.

There are mutual funds out there that are privately insured. Failure of any one of them would bring down the private insurance that backs them up.

Take your Vanguard fund, if one of the units of that fund goes bankrupt, is the rest left intact? At that point, what happens if there is a run on the fund, and everyone wants to move their money?

6 Trillion dollars worth of real estate is going to be marked to market. Thats about 12 times the size of the Savings and Loan disaster of the ’90’s.

Since we are dealing with such fantastic amounts of money, I feel, the mutual funds have to be considered a prime suspect.

On the issue of the government printing money, they have to spend it to get it into circulation. The Democrats have been doing that for years :>).

I didn’t mean to get political both sides do it. The Republicans tend to spend printed money into the system with government purchases in the private sector that trickle down to the individual. The Democrats on the other hand are more into social programs like Social security, health care, food stamps. That part of the system can deliver printed money faster to more individuals. These are broad generalizations.

Since social programs are only transfer payments that consume and produce no product, they tend to be more inflationary.

Both party’s are pushing this hand basket to hell, I was (tongue in cheek) accusing the Democrats of pushing a little harder. I guess my “smily” before the period is not so obvious–:>).

I really appreciated seeing your original question, powayseller. In my opinion, America is doomed economically until people understand that we are living in a monetary system that is dishonest and rigged in favor of the bankers and politicians. Asking the question, “where does the money come from?”, is an excellent first step.

There is only one true statesman serving America right now. This man is Representative Ron Paul. He is the only person who questions the financial games that people like Greenspan, Bernanke and Snow play. If you pay attention, you will notice that when Mr. Paul asks a question of any of these people in public, the station takes a commercial break or cuts away to something else (why is that? – don’t want the sheeple to question the status quo like Mr Paul does?).

Mr Paul constantly talks about the perils of fiat currency and how America is on a slippery slope financially. Read his latest missive which is entitled, “Perils of Economic Ignorance”.
http://www.house.gov/paul/tst/tst2006/tst032706.htm

Gold as currency – unfortunately, I don’t see this happening until after the economy collapses (or at least until the US dollar is rejected by all players). My pessimistic view of human nature tells me that we will continue to do everything we can to maintain the status quo. This is easier than making painful changes now. Unfortunately, all we are doing is postponing the inevitable.

Our government will do everything it can to supress the price of gold because rising gold prices indicate economic problems (and/or monetary debasement). Prior to the coming collapse, we will probably have another period when gold and silver will be illegal for US citizens to hold. The government will tell us that terrorists are using silver and gold bullion to support their evil activities and therefore they have to make silver and gold illegal. The reality is that confiscating silver and gold will just let them maintain the status quo with the US fiat dollar for awhile longer.

Since you are in a questioning mood, here are some things for you to research and question:

> the Federal Reserve is a private corporation and IS NOT part of the US government – the owners of this private corporation are the other reserve banks
> We The People pay the Federal Reserve interest on all the money they create out of thin air (please let that sink in – we are paying a private corp interest on something that they created out of thin air!)
> our founding fathers were students of history – they understood the perils of fiat currency and central banking and they tried to protect us from them (that’s why the Constitution says only silver and gold will be legal money)
> there have been several trillion dollars in new loans made by banks since 2000 but overall reserves held by banks have DECREASED since 2000 – and people think their money in the bank is secure!!! – FDIC is just another underfunded agency (like PBGC the pension guarantee program) that will ultimately be overwhelmed as the economy collapses
> information about how the monetary system works has been intentionally removed from the education system of all western countries – don’t teach the people about something you don’t want them to understand or question

I don’t know what we as individuals can do about our dishonest monetary system. I believe this is the root problem underlying most of the issues in America today. I am trying to educate people when the opportunity arises but it is frustrating as hell.

Part of the challenge is that most Americans are living paycheck-to-paycheck so concepts like ‘store of value’ and ‘intrinsic value’ have no meaning when I try to educate them about money. We have also been fed a load of BS from the central banks and our government that inflation is necessary and even a good thing. Americans buy this BS because they don’t know any better. And who is the typical American going to believe, Alan Greenspan or 4plexowner?

Q: How do you know when a banker or politician (with the exception of Ron Paul) is lying?

A: Their mouth is moving.