Bernanke and the Fed are starting to panic…

[patientrenter]

partypup, you make it sound like some little cabal of upper-echelon US bankers and policy administrators are selling out the US. In a way, that is happening. But they are simply trying to find ways for the American people – you know, that huge mass of innocence and goodness and light – to continue to do what they insist on doing. What do they insist on? Investing without saving, spending without earning. House prices and stock prices going up forever, and borrowing without end.

If we lived in an old-fashioned kingdom under an absolute monarch, or some other top-down political system, then the right people to blame would be the few people at the very top. But we live in a democracy, imperfect as it is. Our politicians’ actions reflect, mostly, what we the voters demand. What’s going on between Geithner and Hu and all the other leaders is not THEM, it’s US. Blaming THEM is just compounding our failure to act responsibly by not even taking responsibility in the first place.

I realize conspiracy theories are a lot sexier, but they end up letting the people who are really irresponsible off the hook.

Oh, and why do you think the Democratic party is more committed to financial irresponsibility than Republicans? Arthur Burns was put in by Republicans, Paul Volcker by Dems. As far as I can tell, they both get near-perfect scores in the current bout of financial irresponsibility.

[partypup]

[quote=patientrenter]partypup, you make it sound like some little cabal of upper-echelon US bankers and policy administrators are selling out the US. In a way, that is happening. But they are simply trying to find ways for the American people – you know, that huge mass of innocence and goodness and light – to continue to do what they insist on doing. What do they insist on? Investing without saving, spending without earning. House prices and stock prices going up forever, and borrowing without end.

What’s going on between Geithner and Hu and all the other leaders is not THEM, it’s US. Blaming THEM is just compounding our failure to act responsibly by not even taking responsibility in the first place.

I realize conspiracy theories are a lot sexier, but they end up letting the people who are really irresponsible off the hook.[/quote]

Unfortunately, this isn’t even a conspiracy theory. These shenanigans are being perpetrated in broad daylight!

I do agree with you, PR, that for years the government tools have been doing their best to preserve the myth that Americans seemed to want to buy into, but here’s where I disagree with you: all that has changed now. Americans have just been bitch-slapped, and their tune has changed dramatically.

if Obama got on TV and leveled with Americans (not scaring them to death with no real plan, which is what he has been doing so far), I believe Americans would make the right choice:

OBAMA: My fellow Americans, as I told you last week, we’re OUT of money. This is a situation that we all share some responsibility for. You all were greedy, and so were we. So here we are. Now, we’ve really only got two choices, because a world of pain is coming no matter what we do. The question is, what kind of American do YOU want to live in when the pain is finally over?

We can continue to prop up our dollar, which we know is going to collapse in the near future if we keep spending, but that will require kissing so much Chinese ass that by the time a recovery comes, we’ll have a collapsed dollar AND no real assets (we’ll have to give those to the Chinese to “buy time” – we don’t need Hummers, Yellowstone, our NASA program anyway, right?); or we can pull the plug now, stop the bailouts, stop the insane borrowing, let interest rates rise, let the markets crumble and allow capitalism to work the way we have always trusted that it will: efficiently. The strong will eat the weak – and there will undoubtedly only be a few strong left to make the recovery – but when the smoke clears, we’ll have a sound currency and we will also have the fundamental structure in place to come back.

It’s your choice, America. Which will it be?

PR, if it were laid out like this to Americans, they would demand what they have been demanding for the last year: an end to our pointless and insane spending, and an end to the Chinese funding of our pointless and insane spending. Americans have learned their lesson, IMO, and just want this nightmare to be over with.

But Obama won’t do this, and neither will his party (or the GOP, for that matter) because they have one goal: to keep the Titanic floating until the next election. Period. If Americans had the power to stop the Obama deficit juggernaut in its tracks now, the economy would collapse and Obama would be run from the White House with pitch forks and torches. But clearly government tools in charge will do everything to stop this for as long as they can.

So yes, I do draw a distinction between THEM and US right now – because 70% of all Americans opposed TARP, and nearly as many opposed the $787 billion stimulus package. We have wanted out of Iraq since 2006 when the the Dems were swept into power in Congress (and they REALLY listened to voters, didn’t they?). Americans may have been complicit in the making of this disaster, but their voices are now being ignored when it comes to fixing it.

[quote=patientrenter]If we lived in an old-fashioned kingdom under an absolute monarch, or some other top-down political system, then the right people to blame would be the few people at the very top. But we live in a democracy, imperfect as it is. Our politicians’ actions reflect, mostly, what we the voters demand.[/quote]

Exactly how do you figure that our politicians’ actions reflect, mostly, what we the voters demand? As far as I can tell – be it the Iraq War, TARP, or a litany of other issues – the government tools have simply checked out at this point. They don’t give a s*** what we think or what we want, and I’d love for you to provide proof to the contrary. Because from where I stand, this place is starting to look a lot less like a democracy and a lot more like something I’m not familiar with. Christ, we’re following the Prom King and Queen to a taxpayer-funded date night in NYC! It’s starting to look and smell a lot like the UK monarchy to me 😉

There’s nothing sexy going on here, PR. This is all about the politics of power preservation. Bob said above that we welcomes an increase in interest rates and hyperinflation – if only to stop the jokers in Washington in their tracks and run the socialists out of town. I think there are more Americans than you can count who feel exactly the same way – and I happen to be one of them.

Voters want to stop Obama, but they are powerless to do so now. That die was cast on November 7. Now all we can do is stand by and watch the looting, plundering and pillaging as the goons give away what’s left until 2012. And if anything is still left at that point, they’ll loot some more. After that. they’ll probably be done with us.

[partypup]

[quote=patientrenter]partypup, you make it sound like some little cabal of upper-echelon US bankers and policy administrators are selling out the US. In a way, that is happening. But they are simply trying to find ways for the American people – you know, that huge mass of innocence and goodness and light – to continue to do what they insist on doing. What do they insist on? Investing without saving, spending without earning. House prices and stock prices going up forever, and borrowing without end.

What’s going on between Geithner and Hu and all the other leaders is not THEM, it’s US. Blaming THEM is just compounding our failure to act responsibly by not even taking responsibility in the first place.

I realize conspiracy theories are a lot sexier, but they end up letting the people who are really irresponsible off the hook.[/quote]

Unfortunately, this isn’t even a conspiracy theory. These shenanigans are being perpetrated in broad daylight!

I do agree with you, PR, that for years the government tools have been doing their best to preserve the myth that Americans seemed to want to buy into, but here’s where I disagree with you: all that has changed now. Americans have just been bitch-slapped, and their tune has changed dramatically.

if Obama got on TV and leveled with Americans (not scaring them to death with no real plan, which is what he has been doing so far), I believe Americans would make the right choice:

OBAMA: My fellow Americans, as I told you last week, we’re OUT of money. This is a situation that we all share some responsibility for. You all were greedy, and so were we. So here we are. Now, we’ve really only got two choices, because a world of pain is coming no matter what we do. The question is, what kind of American do YOU want to live in when the pain is finally over?

We can continue to prop up our dollar, which we know is going to collapse in the near future if we keep spending, but that will require kissing so much Chinese ass that by the time a recovery comes, we’ll have a collapsed dollar AND no real assets (we’ll have to give those to the Chinese to “buy time” – we don’t need Hummers, Yellowstone, our NASA program anyway, right?); or we can pull the plug now, stop the bailouts, stop the insane borrowing, let interest rates rise, let the markets crumble and allow capitalism to work the way we have always trusted that it will: efficiently. The strong will eat the weak – and there will undoubtedly only be a few strong left to make the recovery – but when the smoke clears, we’ll have a sound currency and we will also have the fundamental structure in place to come back.

It’s your choice, America. Which will it be?

PR, if it were laid out like this to Americans, they would demand what they have been demanding for the last year: an end to our pointless and insane spending, and an end to the Chinese funding of our pointless and insane spending. Americans have learned their lesson, IMO, and just want this nightmare to be over with.

But Obama won’t do this, and neither will his party (or the GOP, for that matter) because they have one goal: to keep the Titanic floating until the next election. Period. If Americans had the power to stop the Obama deficit juggernaut in its tracks now, the economy would collapse and Obama would be run from the White House with pitch forks and torches. But clearly government tools in charge will do everything to stop this for as long as they can.

So yes, I do draw a distinction between THEM and US right now – because 70% of all Americans opposed TARP, and nearly as many opposed the $787 billion stimulus package. We have wanted out of Iraq since 2006 when the the Dems were swept into power in Congress (and they REALLY listened to voters, didn’t they?). Americans may have been complicit in the making of this disaster, but their voices are now being ignored when it comes to fixing it.

[quote=patientrenter]If we lived in an old-fashioned kingdom under an absolute monarch, or some other top-down political system, then the right people to blame would be the few people at the very top. But we live in a democracy, imperfect as it is. Our politicians’ actions reflect, mostly, what we the voters demand.[/quote]

Exactly how do you figure that our politicians’ actions reflect, mostly, what we the voters demand? As far as I can tell – be it the Iraq War, TARP, or a litany of other issues – the government tools have simply checked out at this point. They don’t give a s*** what we think or what we want, and I’d love for you to provide proof to the contrary. Because from where I stand, this place is starting to look a lot less like a democracy and a lot more like something I’m not familiar with. Christ, we’re following the Prom King and Queen to a taxpayer-funded date night in NYC! It’s starting to look and smell a lot like the UK monarchy to me 😉

There’s nothing sexy going on here, PR. This is all about the politics of power preservation. Bob said above that we welcomes an increase in interest rates and hyperinflation – if only to stop the jokers in Washington in their tracks and run the socialists out of town. I think there are more Americans than you can count who feel exactly the same way – and I happen to be one of them.

Voters want to stop Obama, but they are powerless to do so now. That die was cast on November 7. Now all we can do is stand by and watch the looting, plundering and pillaging as the goons give away what’s left until 2012. And if anything is still left at that point, they’ll loot some more. After that. they’ll probably be done with us.

[partypup]

[quote=patientrenter]partypup, you make it sound like some little cabal of upper-echelon US bankers and policy administrators are selling out the US. In a way, that is happening. But they are simply trying to find ways for the American people – you know, that huge mass of innocence and goodness and light – to continue to do what they insist on doing. What do they insist on? Investing without saving, spending without earning. House prices and stock prices going up forever, and borrowing without end.

What’s going on between Geithner and Hu and all the other leaders is not THEM, it’s US. Blaming THEM is just compounding our failure to act responsibly by not even taking responsibility in the first place.

I realize conspiracy theories are a lot sexier, but they end up letting the people who are really irresponsible off the hook.[/quote]

Unfortunately, this isn’t even a conspiracy theory. These shenanigans are being perpetrated in broad daylight!

I do agree with you, PR, that for years the government tools have been doing their best to preserve the myth that Americans seemed to want to buy into, but here’s where I disagree with you: all that has changed now. Americans have just been bitch-slapped, and their tune has changed dramatically.

if Obama got on TV and leveled with Americans (not scaring them to death with no real plan, which is what he has been doing so far), I believe Americans would make the right choice:

OBAMA: My fellow Americans, as I told you last week, we’re OUT of money. This is a situation that we all share some responsibility for. You all were greedy, and so were we. So here we are. Now, we’ve really only got two choices, because a world of pain is coming no matter what we do. The question is, what kind of American do YOU want to live in when the pain is finally over?

We can continue to prop up our dollar, which we know is going to collapse in the near future if we keep spending, but that will require kissing so much Chinese ass that by the time a recovery comes, we’ll have a collapsed dollar AND no real assets (we’ll have to give those to the Chinese to “buy time” – we don’t need Hummers, Yellowstone, our NASA program anyway, right?); or we can pull the plug now, stop the bailouts, stop the insane borrowing, let interest rates rise, let the markets crumble and allow capitalism to work the way we have always trusted that it will: efficiently. The strong will eat the weak – and there will undoubtedly only be a few strong left to make the recovery – but when the smoke clears, we’ll have a sound currency and we will also have the fundamental structure in place to come back.

It’s your choice, America. Which will it be?

PR, if it were laid out like this to Americans, they would demand what they have been demanding for the last year: an end to our pointless and insane spending, and an end to the Chinese funding of our pointless and insane spending. Americans have learned their lesson, IMO, and just want this nightmare to be over with.

But Obama won’t do this, and neither will his party (or the GOP, for that matter) because they have one goal: to keep the Titanic floating until the next election. Period. If Americans had the power to stop the Obama deficit juggernaut in its tracks now, the economy would collapse and Obama would be run from the White House with pitch forks and torches. But clearly government tools in charge will do everything to stop this for as long as they can.

So yes, I do draw a distinction between THEM and US right now – because 70% of all Americans opposed TARP, and nearly as many opposed the $787 billion stimulus package. We have wanted out of Iraq since 2006 when the the Dems were swept into power in Congress (and they REALLY listened to voters, didn’t they?). Americans may have been complicit in the making of this disaster, but their voices are now being ignored when it comes to fixing it.

[quote=patientrenter]If we lived in an old-fashioned kingdom under an absolute monarch, or some other top-down political system, then the right people to blame would be the few people at the very top. But we live in a democracy, imperfect as it is. Our politicians’ actions reflect, mostly, what we the voters demand.[/quote]

Exactly how do you figure that our politicians’ actions reflect, mostly, what we the voters demand? As far as I can tell – be it the Iraq War, TARP, or a litany of other issues – the government tools have simply checked out at this point. They don’t give a s*** what we think or what we want, and I’d love for you to provide proof to the contrary. Because from where I stand, this place is starting to look a lot less like a democracy and a lot more like something I’m not familiar with. Christ, we’re following the Prom King and Queen to a taxpayer-funded date night in NYC! It’s starting to look and smell a lot like the UK monarchy to me 😉

There’s nothing sexy going on here, PR. This is all about the politics of power preservation. Bob said above that we welcomes an increase in interest rates and hyperinflation – if only to stop the jokers in Washington in their tracks and run the socialists out of town. I think there are more Americans than you can count who feel exactly the same way – and I happen to be one of them.

Voters want to stop Obama, but they are powerless to do so now. That die was cast on November 7. Now all we can do is stand by and watch the looting, plundering and pillaging as the goons give away what’s left until 2012. And if anything is still left at that point, they’ll loot some more. After that. they’ll probably be done with us.

[partypup]

[quote=patientrenter]partypup, you make it sound like some little cabal of upper-echelon US bankers and policy administrators are selling out the US. In a way, that is happening. But they are simply trying to find ways for the American people – you know, that huge mass of innocence and goodness and light – to continue to do what they insist on doing. What do they insist on? Investing without saving, spending without earning. House prices and stock prices going up forever, and borrowing without end.

What’s going on between Geithner and Hu and all the other leaders is not THEM, it’s US. Blaming THEM is just compounding our failure to act responsibly by not even taking responsibility in the first place.

I realize conspiracy theories are a lot sexier, but they end up letting the people who are really irresponsible off the hook.[/quote]

Unfortunately, this isn’t even a conspiracy theory. These shenanigans are being perpetrated in broad daylight!

I do agree with you, PR, that for years the government tools have been doing their best to preserve the myth that Americans seemed to want to buy into, but here’s where I disagree with you: all that has changed now. Americans have just been bitch-slapped, and their tune has changed dramatically.

if Obama got on TV and leveled with Americans (not scaring them to death with no real plan, which is what he has been doing so far), I believe Americans would make the right choice:

OBAMA: My fellow Americans, as I told you last week, we’re OUT of money. This is a situation that we all share some responsibility for. You all were greedy, and so were we. So here we are. Now, we’ve really only got two choices, because a world of pain is coming no matter what we do. The question is, what kind of American do YOU want to live in when the pain is finally over?

We can continue to prop up our dollar, which we know is going to collapse in the near future if we keep spending, but that will require kissing so much Chinese ass that by the time a recovery comes, we’ll have a collapsed dollar AND no real assets (we’ll have to give those to the Chinese to “buy time” – we don’t need Hummers, Yellowstone, our NASA program anyway, right?); or we can pull the plug now, stop the bailouts, stop the insane borrowing, let interest rates rise, let the markets crumble and allow capitalism to work the way we have always trusted that it will: efficiently. The strong will eat the weak – and there will undoubtedly only be a few strong left to make the recovery – but when the smoke clears, we’ll have a sound currency and we will also have the fundamental structure in place to come back.

It’s your choice, America. Which will it be?

PR, if it were laid out like this to Americans, they would demand what they have been demanding for the last year: an end to our pointless and insane spending, and an end to the Chinese funding of our pointless and insane spending. Americans have learned their lesson, IMO, and just want this nightmare to be over with.

But Obama won’t do this, and neither will his party (or the GOP, for that matter) because they have one goal: to keep the Titanic floating until the next election. Period. If Americans had the power to stop the Obama deficit juggernaut in its tracks now, the economy would collapse and Obama would be run from the White House with pitch forks and torches. But clearly government tools in charge will do everything to stop this for as long as they can.

So yes, I do draw a distinction between THEM and US right now – because 70% of all Americans opposed TARP, and nearly as many opposed the $787 billion stimulus package. We have wanted out of Iraq since 2006 when the the Dems were swept into power in Congress (and they REALLY listened to voters, didn’t they?). Americans may have been complicit in the making of this disaster, but their voices are now being ignored when it comes to fixing it.

[quote=patientrenter]If we lived in an old-fashioned kingdom under an absolute monarch, or some other top-down political system, then the right people to blame would be the few people at the very top. But we live in a democracy, imperfect as it is. Our politicians’ actions reflect, mostly, what we the voters demand.[/quote]

Exactly how do you figure that our politicians’ actions reflect, mostly, what we the voters demand? As far as I can tell – be it the Iraq War, TARP, or a litany of other issues – the government tools have simply checked out at this point. They don’t give a s*** what we think or what we want, and I’d love for you to provide proof to the contrary. Because from where I stand, this place is starting to look a lot less like a democracy and a lot more like something I’m not familiar with. Christ, we’re following the Prom King and Queen to a taxpayer-funded date night in NYC! It’s starting to look and smell a lot like the UK monarchy to me 😉

There’s nothing sexy going on here, PR. This is all about the politics of power preservation. Bob said above that we welcomes an increase in interest rates and hyperinflation – if only to stop the jokers in Washington in their tracks and run the socialists out of town. I think there are more Americans than you can count who feel exactly the same way – and I happen to be one of them.

Voters want to stop Obama, but they are powerless to do so now. That die was cast on November 7. Now all we can do is stand by and watch the looting, plundering and pillaging as the goons give away what’s left until 2012. And if anything is still left at that point, they’ll loot some more. After that. they’ll probably be done with us.

[partypup]

[quote=patientrenter]partypup, you make it sound like some little cabal of upper-echelon US bankers and policy administrators are selling out the US. In a way, that is happening. But they are simply trying to find ways for the American people – you know, that huge mass of innocence and goodness and light – to continue to do what they insist on doing. What do they insist on? Investing without saving, spending without earning. House prices and stock prices going up forever, and borrowing without end.

What’s going on between Geithner and Hu and all the other leaders is not THEM, it’s US. Blaming THEM is just compounding our failure to act responsibly by not even taking responsibility in the first place.

I realize conspiracy theories are a lot sexier, but they end up letting the people who are really irresponsible off the hook.[/quote]

Unfortunately, this isn’t even a conspiracy theory. These shenanigans are being perpetrated in broad daylight!

I do agree with you, PR, that for years the government tools have been doing their best to preserve the myth that Americans seemed to want to buy into, but here’s where I disagree with you: all that has changed now. Americans have just been bitch-slapped, and their tune has changed dramatically.

if Obama got on TV and leveled with Americans (not scaring them to death with no real plan, which is what he has been doing so far), I believe Americans would make the right choice:

OBAMA: My fellow Americans, as I told you last week, we’re OUT of money. This is a situation that we all share some responsibility for. You all were greedy, and so were we. So here we are. Now, we’ve really only got two choices, because a world of pain is coming no matter what we do. The question is, what kind of American do YOU want to live in when the pain is finally over?

We can continue to prop up our dollar, which we know is going to collapse in the near future if we keep spending, but that will require kissing so much Chinese ass that by the time a recovery comes, we’ll have a collapsed dollar AND no real assets (we’ll have to give those to the Chinese to “buy time” – we don’t need Hummers, Yellowstone, our NASA program anyway, right?); or we can pull the plug now, stop the bailouts, stop the insane borrowing, let interest rates rise, let the markets crumble and allow capitalism to work the way we have always trusted that it will: efficiently. The strong will eat the weak – and there will undoubtedly only be a few strong left to make the recovery – but when the smoke clears, we’ll have a sound currency and we will also have the fundamental structure in place to come back.

It’s your choice, America. Which will it be?

PR, if it were laid out like this to Americans, they would demand what they have been demanding for the last year: an end to our pointless and insane spending, and an end to the Chinese funding of our pointless and insane spending. Americans have learned their lesson, IMO, and just want this nightmare to be over with.

But Obama won’t do this, and neither will his party (or the GOP, for that matter) because they have one goal: to keep the Titanic floating until the next election. Period. If Americans had the power to stop the Obama deficit juggernaut in its tracks now, the economy would collapse and Obama would be run from the White House with pitch forks and torches. But clearly government tools in charge will do everything to stop this for as long as they can.

So yes, I do draw a distinction between THEM and US right now – because 70% of all Americans opposed TARP, and nearly as many opposed the $787 billion stimulus package. We have wanted out of Iraq since 2006 when the the Dems were swept into power in Congress (and they REALLY listened to voters, didn’t they?). Americans may have been complicit in the making of this disaster, but their voices are now being ignored when it comes to fixing it.

[quote=patientrenter]If we lived in an old-fashioned kingdom under an absolute monarch, or some other top-down political system, then the right people to blame would be the few people at the very top. But we live in a democracy, imperfect as it is. Our politicians’ actions reflect, mostly, what we the voters demand.[/quote]

Exactly how do you figure that our politicians’ actions reflect, mostly, what we the voters demand? As far as I can tell – be it the Iraq War, TARP, or a litany of other issues – the government tools have simply checked out at this point. They don’t give a s*** what we think or what we want, and I’d love for you to provide proof to the contrary. Because from where I stand, this place is starting to look a lot less like a democracy and a lot more like something I’m not familiar with. Christ, we’re following the Prom King and Queen to a taxpayer-funded date night in NYC! It’s starting to look and smell a lot like the UK monarchy to me 😉

There’s nothing sexy going on here, PR. This is all about the politics of power preservation. Bob said above that we welcomes an increase in interest rates and hyperinflation – if only to stop the jokers in Washington in their tracks and run the socialists out of town. I think there are more Americans than you can count who feel exactly the same way – and I happen to be one of them.

Voters want to stop Obama, but they are powerless to do so now. That die was cast on November 7. Now all we can do is stand by and watch the looting, plundering and pillaging as the goons give away what’s left until 2012. And if anything is still left at that point, they’ll loot some more. After that. they’ll probably be done with us.

[patientrenter]

Why do I think the pols are mostly following the voters’ wishes? Do I have any examples?

Yes, house prices. Most people want house prices to be higher. Who benefits the most? If a home goes up by $500,000, who gets most of that? The homeowner. Yes, the real estate agents make 6% of that $500,000 more ($30,000), and the mortgage broker makes 2% ($10,000), and the banker makes another few %, and so on. But $400,000 or more goes to the owner. So sure, the RE and banker types really want the bubble reflated, but the bulk of the dollars go to homeowners, and the homeowners will scream if the pols don’t make every effort to let them hold onto the benefits they expect from past and future inflation of their house prices.

Banks would be perfectly happy with a solution that dropped house prices and forgave debts, as long as they got bailed out. But notice how the primary effort has actually been to pour truly vast amounts into more cheap and easy (<5% rate, 3.5% down, tax credits...) loans to buy homes - to keep the prices high. That's for voters.

[patientrenter]

Why do I think the pols are mostly following the voters’ wishes? Do I have any examples?

Yes, house prices. Most people want house prices to be higher. Who benefits the most? If a home goes up by $500,000, who gets most of that? The homeowner. Yes, the real estate agents make 6% of that $500,000 more ($30,000), and the mortgage broker makes 2% ($10,000), and the banker makes another few %, and so on. But $400,000 or more goes to the owner. So sure, the RE and banker types really want the bubble reflated, but the bulk of the dollars go to homeowners, and the homeowners will scream if the pols don’t make every effort to let them hold onto the benefits they expect from past and future inflation of their house prices.

Banks would be perfectly happy with a solution that dropped house prices and forgave debts, as long as they got bailed out. But notice how the primary effort has actually been to pour truly vast amounts into more cheap and easy (<5% rate, 3.5% down, tax credits...) loans to buy homes - to keep the prices high. That's for voters.

[patientrenter]

Why do I think the pols are mostly following the voters’ wishes? Do I have any examples?

Yes, house prices. Most people want house prices to be higher. Who benefits the most? If a home goes up by $500,000, who gets most of that? The homeowner. Yes, the real estate agents make 6% of that $500,000 more ($30,000), and the mortgage broker makes 2% ($10,000), and the banker makes another few %, and so on. But $400,000 or more goes to the owner. So sure, the RE and banker types really want the bubble reflated, but the bulk of the dollars go to homeowners, and the homeowners will scream if the pols don’t make every effort to let them hold onto the benefits they expect from past and future inflation of their house prices.

Banks would be perfectly happy with a solution that dropped house prices and forgave debts, as long as they got bailed out. But notice how the primary effort has actually been to pour truly vast amounts into more cheap and easy (<5% rate, 3.5% down, tax credits...) loans to buy homes - to keep the prices high. That's for voters.

[patientrenter]

Why do I think the pols are mostly following the voters’ wishes? Do I have any examples?

Yes, house prices. Most people want house prices to be higher. Who benefits the most? If a home goes up by $500,000, who gets most of that? The homeowner. Yes, the real estate agents make 6% of that $500,000 more ($30,000), and the mortgage broker makes 2% ($10,000), and the banker makes another few %, and so on. But $400,000 or more goes to the owner. So sure, the RE and banker types really want the bubble reflated, but the bulk of the dollars go to homeowners, and the homeowners will scream if the pols don’t make every effort to let them hold onto the benefits they expect from past and future inflation of their house prices.

Banks would be perfectly happy with a solution that dropped house prices and forgave debts, as long as they got bailed out. But notice how the primary effort has actually been to pour truly vast amounts into more cheap and easy (<5% rate, 3.5% down, tax credits...) loans to buy homes - to keep the prices high. That's for voters.

[patientrenter]

Why do I think the pols are mostly following the voters’ wishes? Do I have any examples?

Yes, house prices. Most people want house prices to be higher. Who benefits the most? If a home goes up by $500,000, who gets most of that? The homeowner. Yes, the real estate agents make 6% of that $500,000 more ($30,000), and the mortgage broker makes 2% ($10,000), and the banker makes another few %, and so on. But $400,000 or more goes to the owner. So sure, the RE and banker types really want the bubble reflated, but the bulk of the dollars go to homeowners, and the homeowners will scream if the pols don’t make every effort to let them hold onto the benefits they expect from past and future inflation of their house prices.

Banks would be perfectly happy with a solution that dropped house prices and forgave debts, as long as they got bailed out. But notice how the primary effort has actually been to pour truly vast amounts into more cheap and easy (<5% rate, 3.5% down, tax credits...) loans to buy homes - to keep the prices high. That's for voters.

[Arraya]

If you wanted to teach the lesson that overspending is bad, you’d deflate. The pain of debt repayment is proportionate to (Interest rate – inflation rate). So increase interest rates and/or deflate, not inflate.

They have been trying to inflate for over a year now with no luck. Then after EVERYTHING failing that they have tried, they started buying our own debt to keep interest rates down. Which is inflationary, but really does not solve a thing except to keep rates down for an ever dwindling pool of buyers to buy over priced assets. This does not stop the job and wage deflation which is the problem. This did however catch the attention of the world and made them lose faith as apparent by all the jawboning about finding another currency. Ok, but we are still deflating. So what is next? Buy more debt? When is this inflation coming that you are talking about? How is printing money to buy debt going to solve the massive credit contraction going on that is causing the job and wage deflation? Which has a negative multiplier effect. Do you see the problem? They are impotent. They have no more tools and the problem is too much debt. The are in a sense, insane.

Now, Hyperinflation is a currency event due to non-confidence in the implied economy vis-a-vis it’s currency. All past hyperinflations have started in the trough of a deflationary trend. Wiemar actually had two troughs, a double bottom, and then it was a hockey stick to irrelevancy. Hyperinflations are actually better termed hyperdevaluations. Which is the obvious next step when the world gives up on the US.

All they are doing is pouring gas on a fire and the only OBVIOUS conclusion is destruction of the currency via no confidence.

Why? Because you cannot inflate your way out of a deflationary depression caused by too much lending.

[Arraya]

If you wanted to teach the lesson that overspending is bad, you’d deflate. The pain of debt repayment is proportionate to (Interest rate – inflation rate). So increase interest rates and/or deflate, not inflate.

They have been trying to inflate for over a year now with no luck. Then after EVERYTHING failing that they have tried, they started buying our own debt to keep interest rates down. Which is inflationary, but really does not solve a thing except to keep rates down for an ever dwindling pool of buyers to buy over priced assets. This does not stop the job and wage deflation which is the problem. This did however catch the attention of the world and made them lose faith as apparent by all the jawboning about finding another currency. Ok, but we are still deflating. So what is next? Buy more debt? When is this inflation coming that you are talking about? How is printing money to buy debt going to solve the massive credit contraction going on that is causing the job and wage deflation? Which has a negative multiplier effect. Do you see the problem? They are impotent. They have no more tools and the problem is too much debt. The are in a sense, insane.

Now, Hyperinflation is a currency event due to non-confidence in the implied economy vis-a-vis it’s currency. All past hyperinflations have started in the trough of a deflationary trend. Wiemar actually had two troughs, a double bottom, and then it was a hockey stick to irrelevancy. Hyperinflations are actually better termed hyperdevaluations. Which is the obvious next step when the world gives up on the US.

All they are doing is pouring gas on a fire and the only OBVIOUS conclusion is destruction of the currency via no confidence.

Why? Because you cannot inflate your way out of a deflationary depression caused by too much lending.

[Arraya]

If you wanted to teach the lesson that overspending is bad, you’d deflate. The pain of debt repayment is proportionate to (Interest rate – inflation rate). So increase interest rates and/or deflate, not inflate.

They have been trying to inflate for over a year now with no luck. Then after EVERYTHING failing that they have tried, they started buying our own debt to keep interest rates down. Which is inflationary, but really does not solve a thing except to keep rates down for an ever dwindling pool of buyers to buy over priced assets. This does not stop the job and wage deflation which is the problem. This did however catch the attention of the world and made them lose faith as apparent by all the jawboning about finding another currency. Ok, but we are still deflating. So what is next? Buy more debt? When is this inflation coming that you are talking about? How is printing money to buy debt going to solve the massive credit contraction going on that is causing the job and wage deflation? Which has a negative multiplier effect. Do you see the problem? They are impotent. They have no more tools and the problem is too much debt. The are in a sense, insane.

Now, Hyperinflation is a currency event due to non-confidence in the implied economy vis-a-vis it’s currency. All past hyperinflations have started in the trough of a deflationary trend. Wiemar actually had two troughs, a double bottom, and then it was a hockey stick to irrelevancy. Hyperinflations are actually better termed hyperdevaluations. Which is the obvious next step when the world gives up on the US.

All they are doing is pouring gas on a fire and the only OBVIOUS conclusion is destruction of the currency via no confidence.

Why? Because you cannot inflate your way out of a deflationary depression caused by too much lending.

[Arraya]

If you wanted to teach the lesson that overspending is bad, you’d deflate. The pain of debt repayment is proportionate to (Interest rate – inflation rate). So increase interest rates and/or deflate, not inflate.

They have been trying to inflate for over a year now with no luck. Then after EVERYTHING failing that they have tried, they started buying our own debt to keep interest rates down. Which is inflationary, but really does not solve a thing except to keep rates down for an ever dwindling pool of buyers to buy over priced assets. This does not stop the job and wage deflation which is the problem. This did however catch the attention of the world and made them lose faith as apparent by all the jawboning about finding another currency. Ok, but we are still deflating. So what is next? Buy more debt? When is this inflation coming that you are talking about? How is printing money to buy debt going to solve the massive credit contraction going on that is causing the job and wage deflation? Which has a negative multiplier effect. Do you see the problem? They are impotent. They have no more tools and the problem is too much debt. The are in a sense, insane.

Now, Hyperinflation is a currency event due to non-confidence in the implied economy vis-a-vis it’s currency. All past hyperinflations have started in the trough of a deflationary trend. Wiemar actually had two troughs, a double bottom, and then it was a hockey stick to irrelevancy. Hyperinflations are actually better termed hyperdevaluations. Which is the obvious next step when the world gives up on the US.

All they are doing is pouring gas on a fire and the only OBVIOUS conclusion is destruction of the currency via no confidence.

Why? Because you cannot inflate your way out of a deflationary depression caused by too much lending.

[Author]

Posts