[LuckyInOC]

[quote=4plexowner]
In order to buy our bonds, the Chinese would print up yuan on their printer – this caused inflation IN CHINA because the only new currency created in this scenario was yuan (ie, we exported our inflation to China)
[/quote]

4plexowner, I don’t think China has to print any yuan. They just use our dollars from the trade deficit to buy those bonds or come over here and buy US property. Japan did the same thing in the ’70’s & ’80’s before their collapse.

As I see it, the FED is trying to pump enough money in to the system to make up for all the mortgages, stock market, and derivatives loses. I don’t think they will know when to or even can stop at the right time and will over shoot the mark.

The difference is between credit inflation and money inflation. All past US bank panic’s before and after the FED have been started due to credit inflation (also read ‘over speculation’) in land, stock market, or some other commodity. Banks or the US Govt over-leveraged the system with easy credit. It spilled over into the general economy.
When that speculation cycle ended, the economy collapsed as well.

The problem is most don’t think you can have too much of a good thing (gluttony). Over-speculation is the cause of a later collapse. The bigger the speculation, the bigger the collapse. We need to devise a system to identify and control over-speculation.

Lucky In OC

[LuckyInOC]

[quote=4plexowner]
In order to buy our bonds, the Chinese would print up yuan on their printer – this caused inflation IN CHINA because the only new currency created in this scenario was yuan (ie, we exported our inflation to China)
[/quote]

4plexowner, I don’t think China has to print any yuan. They just use our dollars from the trade deficit to buy those bonds or come over here and buy US property. Japan did the same thing in the ’70’s & ’80’s before their collapse.

As I see it, the FED is trying to pump enough money in to the system to make up for all the mortgages, stock market, and derivatives loses. I don’t think they will know when to or even can stop at the right time and will over shoot the mark.

The difference is between credit inflation and money inflation. All past US bank panic’s before and after the FED have been started due to credit inflation (also read ‘over speculation’) in land, stock market, or some other commodity. Banks or the US Govt over-leveraged the system with easy credit. It spilled over into the general economy.
When that speculation cycle ended, the economy collapsed as well.

The problem is most don’t think you can have too much of a good thing (gluttony). Over-speculation is the cause of a later collapse. The bigger the speculation, the bigger the collapse. We need to devise a system to identify and control over-speculation.

Lucky In OC

[LuckyInOC]

[quote=4plexowner]
In order to buy our bonds, the Chinese would print up yuan on their printer – this caused inflation IN CHINA because the only new currency created in this scenario was yuan (ie, we exported our inflation to China)
[/quote]

4plexowner, I don’t think China has to print any yuan. They just use our dollars from the trade deficit to buy those bonds or come over here and buy US property. Japan did the same thing in the ’70’s & ’80’s before their collapse.

As I see it, the FED is trying to pump enough money in to the system to make up for all the mortgages, stock market, and derivatives loses. I don’t think they will know when to or even can stop at the right time and will over shoot the mark.

The difference is between credit inflation and money inflation. All past US bank panic’s before and after the FED have been started due to credit inflation (also read ‘over speculation’) in land, stock market, or some other commodity. Banks or the US Govt over-leveraged the system with easy credit. It spilled over into the general economy.
When that speculation cycle ended, the economy collapsed as well.

The problem is most don’t think you can have too much of a good thing (gluttony). Over-speculation is the cause of a later collapse. The bigger the speculation, the bigger the collapse. We need to devise a system to identify and control over-speculation.

Lucky In OC

[LuckyInOC]

[quote=4plexowner]
In order to buy our bonds, the Chinese would print up yuan on their printer – this caused inflation IN CHINA because the only new currency created in this scenario was yuan (ie, we exported our inflation to China)
[/quote]

4plexowner, I don’t think China has to print any yuan. They just use our dollars from the trade deficit to buy those bonds or come over here and buy US property. Japan did the same thing in the ’70’s & ’80’s before their collapse.

As I see it, the FED is trying to pump enough money in to the system to make up for all the mortgages, stock market, and derivatives loses. I don’t think they will know when to or even can stop at the right time and will over shoot the mark.

The difference is between credit inflation and money inflation. All past US bank panic’s before and after the FED have been started due to credit inflation (also read ‘over speculation’) in land, stock market, or some other commodity. Banks or the US Govt over-leveraged the system with easy credit. It spilled over into the general economy.
When that speculation cycle ended, the economy collapsed as well.

The problem is most don’t think you can have too much of a good thing (gluttony). Over-speculation is the cause of a later collapse. The bigger the speculation, the bigger the collapse. We need to devise a system to identify and control over-speculation.

Lucky In OC

[LuckyInOC]

[quote=4plexowner]
In order to buy our bonds, the Chinese would print up yuan on their printer – this caused inflation IN CHINA because the only new currency created in this scenario was yuan (ie, we exported our inflation to China)
[/quote]

4plexowner, I don’t think China has to print any yuan. They just use our dollars from the trade deficit to buy those bonds or come over here and buy US property. Japan did the same thing in the ’70’s & ’80’s before their collapse.

As I see it, the FED is trying to pump enough money in to the system to make up for all the mortgages, stock market, and derivatives loses. I don’t think they will know when to or even can stop at the right time and will over shoot the mark.

The difference is between credit inflation and money inflation. All past US bank panic’s before and after the FED have been started due to credit inflation (also read ‘over speculation’) in land, stock market, or some other commodity. Banks or the US Govt over-leveraged the system with easy credit. It spilled over into the general economy.
When that speculation cycle ended, the economy collapsed as well.

The problem is most don’t think you can have too much of a good thing (gluttony). Over-speculation is the cause of a later collapse. The bigger the speculation, the bigger the collapse. We need to devise a system to identify and control over-speculation.

Lucky In OC

[LuckyInOC]

Willens must be Rip Van Winkle and just woke up from his nap…

Senate Republicans brake rush to tax AIG bonuses
By Laurie Kellman and Sephen Ohlemacher,
Associated Press Writers
Sat Mar 21, 5:35 am ET

http://news.yahoo.com/s/ap/20090321/ap_on_go_co/aig_bonuses

…

Robert Willens, a corporate tax lawyer in New York, said the Senate bonus tax bill would still allow bailout beneficiaries to negotiate higher salaries with employees to compensate for lost bonuses. The Senate bill authorizes the Treasury to issue regulations preventing firms from masking bonus payments as salaries, but it does not prevent firms from handing out raises.

“If the vast majority of bonuses become fixed salaries that would harm the institutions because they would have higher fixed costs,” Willens said. “What happens if the bank suffers through a poor year? It has all these fixed obligations they have to meet. That’s the beauty of the bonuses.”

Although the premise is correct, the application is horrible to say the least. I would think that one would get a 100% concurrence that AIG is having a ‘poor year’, YA THINK… Could AIG be having a extremely terrible year?

One would think, this could be why people are upset.

Maybe we should start a ‘Worst Quotes of the Banking Crisis’ thread.

BTW, I think this is a diversion to keep the masses from the real stories.

Lucky In OC

[LuckyInOC]

Willens must be Rip Van Winkle and just woke up from his nap…

Senate Republicans brake rush to tax AIG bonuses
By Laurie Kellman and Sephen Ohlemacher,
Associated Press Writers
Sat Mar 21, 5:35 am ET

http://news.yahoo.com/s/ap/20090321/ap_on_go_co/aig_bonuses

…

Robert Willens, a corporate tax lawyer in New York, said the Senate bonus tax bill would still allow bailout beneficiaries to negotiate higher salaries with employees to compensate for lost bonuses. The Senate bill authorizes the Treasury to issue regulations preventing firms from masking bonus payments as salaries, but it does not prevent firms from handing out raises.

“If the vast majority of bonuses become fixed salaries that would harm the institutions because they would have higher fixed costs,” Willens said. “What happens if the bank suffers through a poor year? It has all these fixed obligations they have to meet. That’s the beauty of the bonuses.”

Although the premise is correct, the application is horrible to say the least. I would think that one would get a 100% concurrence that AIG is having a ‘poor year’, YA THINK… Could AIG be having a extremely terrible year?

One would think, this could be why people are upset.

Maybe we should start a ‘Worst Quotes of the Banking Crisis’ thread.

BTW, I think this is a diversion to keep the masses from the real stories.

Lucky In OC

[LuckyInOC]

Willens must be Rip Van Winkle and just woke up from his nap…

Senate Republicans brake rush to tax AIG bonuses
By Laurie Kellman and Sephen Ohlemacher,
Associated Press Writers
Sat Mar 21, 5:35 am ET

http://news.yahoo.com/s/ap/20090321/ap_on_go_co/aig_bonuses

…

Robert Willens, a corporate tax lawyer in New York, said the Senate bonus tax bill would still allow bailout beneficiaries to negotiate higher salaries with employees to compensate for lost bonuses. The Senate bill authorizes the Treasury to issue regulations preventing firms from masking bonus payments as salaries, but it does not prevent firms from handing out raises.

“If the vast majority of bonuses become fixed salaries that would harm the institutions because they would have higher fixed costs,” Willens said. “What happens if the bank suffers through a poor year? It has all these fixed obligations they have to meet. That’s the beauty of the bonuses.”

Although the premise is correct, the application is horrible to say the least. I would think that one would get a 100% concurrence that AIG is having a ‘poor year’, YA THINK… Could AIG be having a extremely terrible year?

One would think, this could be why people are upset.

Maybe we should start a ‘Worst Quotes of the Banking Crisis’ thread.

BTW, I think this is a diversion to keep the masses from the real stories.

Lucky In OC

[LuckyInOC]

Willens must be Rip Van Winkle and just woke up from his nap…

Senate Republicans brake rush to tax AIG bonuses
By Laurie Kellman and Sephen Ohlemacher,
Associated Press Writers
Sat Mar 21, 5:35 am ET

http://news.yahoo.com/s/ap/20090321/ap_on_go_co/aig_bonuses

…

Robert Willens, a corporate tax lawyer in New York, said the Senate bonus tax bill would still allow bailout beneficiaries to negotiate higher salaries with employees to compensate for lost bonuses. The Senate bill authorizes the Treasury to issue regulations preventing firms from masking bonus payments as salaries, but it does not prevent firms from handing out raises.

“If the vast majority of bonuses become fixed salaries that would harm the institutions because they would have higher fixed costs,” Willens said. “What happens if the bank suffers through a poor year? It has all these fixed obligations they have to meet. That’s the beauty of the bonuses.”

Although the premise is correct, the application is horrible to say the least. I would think that one would get a 100% concurrence that AIG is having a ‘poor year’, YA THINK… Could AIG be having a extremely terrible year?

One would think, this could be why people are upset.

Maybe we should start a ‘Worst Quotes of the Banking Crisis’ thread.

BTW, I think this is a diversion to keep the masses from the real stories.

Lucky In OC

[LuckyInOC]

Willens must be Rip Van Winkle and just woke up from his nap…

Senate Republicans brake rush to tax AIG bonuses
By Laurie Kellman and Sephen Ohlemacher,
Associated Press Writers
Sat Mar 21, 5:35 am ET

http://news.yahoo.com/s/ap/20090321/ap_on_go_co/aig_bonuses

…

Robert Willens, a corporate tax lawyer in New York, said the Senate bonus tax bill would still allow bailout beneficiaries to negotiate higher salaries with employees to compensate for lost bonuses. The Senate bill authorizes the Treasury to issue regulations preventing firms from masking bonus payments as salaries, but it does not prevent firms from handing out raises.

“If the vast majority of bonuses become fixed salaries that would harm the institutions because they would have higher fixed costs,” Willens said. “What happens if the bank suffers through a poor year? It has all these fixed obligations they have to meet. That’s the beauty of the bonuses.”

Although the premise is correct, the application is horrible to say the least. I would think that one would get a 100% concurrence that AIG is having a ‘poor year’, YA THINK… Could AIG be having a extremely terrible year?

One would think, this could be why people are upset.

Maybe we should start a ‘Worst Quotes of the Banking Crisis’ thread.

BTW, I think this is a diversion to keep the masses from the real stories.

Lucky In OC

[LuckyInOC]

I sure does look like this is happening by Irving Fisher’s debt-deflation theory numbers:

1. Debt liquidation and distress selling
2. Contraction of the money supply as bank loans are paid off
3. A fall in the level of asset prices
4. A still greater fall in the net worths of business, precipitating bankruptcies
5. A fall in profits
6. A reduction in output, in trade and in employment.
7. Pessimism and loss of confidence
8. Hoarding of money
9. A fall in nominal interest rates and a rise in deflation adjusted interest rates.

So…

are we at #4
– or –
are at #6 and moving to #7 about now.

Though they seldom invoke Fisher, policymakers in America are applying his ideas. In academia Ben Bernanke, now the chairman of the Federal Reserve, sought to formalise Fisher’s debt-deflation theory.

http://www.economist.com/finance/displaystory.cfm?story_id=13104022

LuckyInOC

[LuckyInOC]

I sure does look like this is happening by Irving Fisher’s debt-deflation theory numbers:

1. Debt liquidation and distress selling
2. Contraction of the money supply as bank loans are paid off
3. A fall in the level of asset prices
4. A still greater fall in the net worths of business, precipitating bankruptcies
5. A fall in profits
6. A reduction in output, in trade and in employment.
7. Pessimism and loss of confidence
8. Hoarding of money
9. A fall in nominal interest rates and a rise in deflation adjusted interest rates.

So…

are we at #4
– or –
are at #6 and moving to #7 about now.

Though they seldom invoke Fisher, policymakers in America are applying his ideas. In academia Ben Bernanke, now the chairman of the Federal Reserve, sought to formalise Fisher’s debt-deflation theory.

http://www.economist.com/finance/displaystory.cfm?story_id=13104022

LuckyInOC

[LuckyInOC]

I sure does look like this is happening by Irving Fisher’s debt-deflation theory numbers:

1. Debt liquidation and distress selling
2. Contraction of the money supply as bank loans are paid off
3. A fall in the level of asset prices
4. A still greater fall in the net worths of business, precipitating bankruptcies
5. A fall in profits
6. A reduction in output, in trade and in employment.
7. Pessimism and loss of confidence
8. Hoarding of money
9. A fall in nominal interest rates and a rise in deflation adjusted interest rates.

So…

are we at #4
– or –
are at #6 and moving to #7 about now.

Though they seldom invoke Fisher, policymakers in America are applying his ideas. In academia Ben Bernanke, now the chairman of the Federal Reserve, sought to formalise Fisher’s debt-deflation theory.

http://www.economist.com/finance/displaystory.cfm?story_id=13104022

LuckyInOC

[LuckyInOC]

I sure does look like this is happening by Irving Fisher’s debt-deflation theory numbers:

1. Debt liquidation and distress selling
2. Contraction of the money supply as bank loans are paid off
3. A fall in the level of asset prices
4. A still greater fall in the net worths of business, precipitating bankruptcies
5. A fall in profits
6. A reduction in output, in trade and in employment.
7. Pessimism and loss of confidence
8. Hoarding of money
9. A fall in nominal interest rates and a rise in deflation adjusted interest rates.

So…

are we at #4
– or –
are at #6 and moving to #7 about now.

Though they seldom invoke Fisher, policymakers in America are applying his ideas. In academia Ben Bernanke, now the chairman of the Federal Reserve, sought to formalise Fisher’s debt-deflation theory.

http://www.economist.com/finance/displaystory.cfm?story_id=13104022

LuckyInOC

[LuckyInOC]

I sure does look like this is happening by Irving Fisher’s debt-deflation theory numbers:

1. Debt liquidation and distress selling
2. Contraction of the money supply as bank loans are paid off
3. A fall in the level of asset prices
4. A still greater fall in the net worths of business, precipitating bankruptcies
5. A fall in profits
6. A reduction in output, in trade and in employment.
7. Pessimism and loss of confidence
8. Hoarding of money
9. A fall in nominal interest rates and a rise in deflation adjusted interest rates.

So…

are we at #4
– or –
are at #6 and moving to #7 about now.

Though they seldom invoke Fisher, policymakers in America are applying his ideas. In academia Ben Bernanke, now the chairman of the Federal Reserve, sought to formalise Fisher’s debt-deflation theory.

http://www.economist.com/finance/displaystory.cfm?story_id=13104022

LuckyInOC

[Author]

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