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TheBreeze
Participant[quote=SD Realtor]Please take a look at the items that you were very specific on mentioning. In any of those items does it imply that Bush was urging lenders to lend to people who could not qualify? I would agree that yes, a tax credit and down payment assistance is nothing that can help someone who cannot afford a home…
[/quote]I’m not sure that I’m understanding what you are saying here. Are you saying that DPA isn’t something that can be used to help a previously unqualified borrower get a mortgage? If so, I would disagree because lack of a downpayment was something that would have previously prevented a borrower from being able to get an FHA mortgage.
[quote=SD Realtor]
…I do not seriously believe that Bush did nearly as much damage as the other cast of characters I mentioned. You seem to conveniently omit them 100%. Furthermore you seem to conveniently NOT acknowledge the efforts made by Bush to implement reform on the GSEs.Did that never happen. Did you see ANY of the people I mentioned above EVER try to implement reform in the GSEs or is that conveniently lost in your argument. [/quote]
I watched the YouTube clip. The Democrats shown in the clip were arguing for looser underwriting standards and less regulation of the GSEs while the Republicans shown appeared to be arguing for the opposite. I get it. However, what is not clear to me is who has (or had) the actual power to control what the GSEs did/do.
As near as I can tell, there seem to be 2 big issues with the GSEs: (1) capital cushion and (2) underwriting standards. As I understand it, the capital cushion merely affects how much capital the GSEs can use to buy mortgage-backed securities. The capital cushion does not limit the number of loans that the GSEs can guarantee. Thus, I feel that the underwriting standards are the most important issue in regards to the GSEs.
As Maxine Waters said in the clip, the GSEs were buying and guaranteeing 100% stated-income mortgages. In my opinion, this practice, and other lax underwriting standards, is what caused the world-wide housing bubble collapse. Once the GSEs started guaranteeing and buying these crappy loans, it meant that anyone (from Bear Stearns to Indymac to Countrywide to all of those smaller outfits that have already gone BOOM!) could write crappy mortgages and either sell them to the GSEs or get a GSE (government) guarantee. I don’t believe this housing bubble could have grown as large as it did without the GSEs standing behind so many dubious mortgages.
Who had the power to control the underwriting standards? Was it OFHEO? Since the OFHEO director is appointed by the President, if it was OFHEO who had the power to control GSE underwriting standards, then, in my opinion, the blame for this entire housing bubble can be laid at the feet of the President. If Congress had the power to control the GSEs’ underwriting standards, then the Congress (including all those Democrats shown in the clip) are to blame.
I’ve done some Web searches in an attempt to see if OFHEO has control over the GSEs underwriting policies, but I couldn’t find a clear answer.
Participant[quote=SD Realtor]Please take a look at the items that you were very specific on mentioning. In any of those items does it imply that Bush was urging lenders to lend to people who could not qualify? I would agree that yes, a tax credit and down payment assistance is nothing that can help someone who cannot afford a home…
[/quote]I’m not sure that I’m understanding what you are saying here. Are you saying that DPA isn’t something that can be used to help a previously unqualified borrower get a mortgage? If so, I would disagree because lack of a downpayment was something that would have previously prevented a borrower from being able to get an FHA mortgage.
[quote=SD Realtor]
…I do not seriously believe that Bush did nearly as much damage as the other cast of characters I mentioned. You seem to conveniently omit them 100%. Furthermore you seem to conveniently NOT acknowledge the efforts made by Bush to implement reform on the GSEs.Did that never happen. Did you see ANY of the people I mentioned above EVER try to implement reform in the GSEs or is that conveniently lost in your argument. [/quote]
I watched the YouTube clip. The Democrats shown in the clip were arguing for looser underwriting standards and less regulation of the GSEs while the Republicans shown appeared to be arguing for the opposite. I get it. However, what is not clear to me is who has (or had) the actual power to control what the GSEs did/do.
As near as I can tell, there seem to be 2 big issues with the GSEs: (1) capital cushion and (2) underwriting standards. As I understand it, the capital cushion merely affects how much capital the GSEs can use to buy mortgage-backed securities. The capital cushion does not limit the number of loans that the GSEs can guarantee. Thus, I feel that the underwriting standards are the most important issue in regards to the GSEs.
As Maxine Waters said in the clip, the GSEs were buying and guaranteeing 100% stated-income mortgages. In my opinion, this practice, and other lax underwriting standards, is what caused the world-wide housing bubble collapse. Once the GSEs started guaranteeing and buying these crappy loans, it meant that anyone (from Bear Stearns to Indymac to Countrywide to all of those smaller outfits that have already gone BOOM!) could write crappy mortgages and either sell them to the GSEs or get a GSE (government) guarantee. I don’t believe this housing bubble could have grown as large as it did without the GSEs standing behind so many dubious mortgages.
Who had the power to control the underwriting standards? Was it OFHEO? Since the OFHEO director is appointed by the President, if it was OFHEO who had the power to control GSE underwriting standards, then, in my opinion, the blame for this entire housing bubble can be laid at the feet of the President. If Congress had the power to control the GSEs’ underwriting standards, then the Congress (including all those Democrats shown in the clip) are to blame.
I’ve done some Web searches in an attempt to see if OFHEO has control over the GSEs underwriting policies, but I couldn’t find a clear answer.
Participant[quote=SD Realtor]Please take a look at the items that you were very specific on mentioning. In any of those items does it imply that Bush was urging lenders to lend to people who could not qualify? I would agree that yes, a tax credit and down payment assistance is nothing that can help someone who cannot afford a home…
[/quote]I’m not sure that I’m understanding what you are saying here. Are you saying that DPA isn’t something that can be used to help a previously unqualified borrower get a mortgage? If so, I would disagree because lack of a downpayment was something that would have previously prevented a borrower from being able to get an FHA mortgage.
[quote=SD Realtor]
…I do not seriously believe that Bush did nearly as much damage as the other cast of characters I mentioned. You seem to conveniently omit them 100%. Furthermore you seem to conveniently NOT acknowledge the efforts made by Bush to implement reform on the GSEs.Did that never happen. Did you see ANY of the people I mentioned above EVER try to implement reform in the GSEs or is that conveniently lost in your argument. [/quote]
I watched the YouTube clip. The Democrats shown in the clip were arguing for looser underwriting standards and less regulation of the GSEs while the Republicans shown appeared to be arguing for the opposite. I get it. However, what is not clear to me is who has (or had) the actual power to control what the GSEs did/do.
As near as I can tell, there seem to be 2 big issues with the GSEs: (1) capital cushion and (2) underwriting standards. As I understand it, the capital cushion merely affects how much capital the GSEs can use to buy mortgage-backed securities. The capital cushion does not limit the number of loans that the GSEs can guarantee. Thus, I feel that the underwriting standards are the most important issue in regards to the GSEs.
As Maxine Waters said in the clip, the GSEs were buying and guaranteeing 100% stated-income mortgages. In my opinion, this practice, and other lax underwriting standards, is what caused the world-wide housing bubble collapse. Once the GSEs started guaranteeing and buying these crappy loans, it meant that anyone (from Bear Stearns to Indymac to Countrywide to all of those smaller outfits that have already gone BOOM!) could write crappy mortgages and either sell them to the GSEs or get a GSE (government) guarantee. I don’t believe this housing bubble could have grown as large as it did without the GSEs standing behind so many dubious mortgages.
Who had the power to control the underwriting standards? Was it OFHEO? Since the OFHEO director is appointed by the President, if it was OFHEO who had the power to control GSE underwriting standards, then, in my opinion, the blame for this entire housing bubble can be laid at the feet of the President. If Congress had the power to control the GSEs’ underwriting standards, then the Congress (including all those Democrats shown in the clip) are to blame.
I’ve done some Web searches in an attempt to see if OFHEO has control over the GSEs underwriting policies, but I couldn’t find a clear answer.
Participant[quote=SD Realtor]Please take a look at the items that you were very specific on mentioning. In any of those items does it imply that Bush was urging lenders to lend to people who could not qualify? I would agree that yes, a tax credit and down payment assistance is nothing that can help someone who cannot afford a home…
[/quote]I’m not sure that I’m understanding what you are saying here. Are you saying that DPA isn’t something that can be used to help a previously unqualified borrower get a mortgage? If so, I would disagree because lack of a downpayment was something that would have previously prevented a borrower from being able to get an FHA mortgage.
[quote=SD Realtor]
…I do not seriously believe that Bush did nearly as much damage as the other cast of characters I mentioned. You seem to conveniently omit them 100%. Furthermore you seem to conveniently NOT acknowledge the efforts made by Bush to implement reform on the GSEs.Did that never happen. Did you see ANY of the people I mentioned above EVER try to implement reform in the GSEs or is that conveniently lost in your argument. [/quote]
I watched the YouTube clip. The Democrats shown in the clip were arguing for looser underwriting standards and less regulation of the GSEs while the Republicans shown appeared to be arguing for the opposite. I get it. However, what is not clear to me is who has (or had) the actual power to control what the GSEs did/do.
As near as I can tell, there seem to be 2 big issues with the GSEs: (1) capital cushion and (2) underwriting standards. As I understand it, the capital cushion merely affects how much capital the GSEs can use to buy mortgage-backed securities. The capital cushion does not limit the number of loans that the GSEs can guarantee. Thus, I feel that the underwriting standards are the most important issue in regards to the GSEs.
As Maxine Waters said in the clip, the GSEs were buying and guaranteeing 100% stated-income mortgages. In my opinion, this practice, and other lax underwriting standards, is what caused the world-wide housing bubble collapse. Once the GSEs started guaranteeing and buying these crappy loans, it meant that anyone (from Bear Stearns to Indymac to Countrywide to all of those smaller outfits that have already gone BOOM!) could write crappy mortgages and either sell them to the GSEs or get a GSE (government) guarantee. I don’t believe this housing bubble could have grown as large as it did without the GSEs standing behind so many dubious mortgages.
Who had the power to control the underwriting standards? Was it OFHEO? Since the OFHEO director is appointed by the President, if it was OFHEO who had the power to control GSE underwriting standards, then, in my opinion, the blame for this entire housing bubble can be laid at the feet of the President. If Congress had the power to control the GSEs’ underwriting standards, then the Congress (including all those Democrats shown in the clip) are to blame.
I’ve done some Web searches in an attempt to see if OFHEO has control over the GSEs underwriting policies, but I couldn’t find a clear answer.
ParticipantSo tell me again how the Republicans weren’t able to stop the housing bubble?
I’ll answer my own question. It looks like both Obama and McCain blame a 1999 bill that was signed by Bill Clinton as the reason for the current economic debacle:
John McCain and Barack Obama’s presidential campaigns are pointing fingers at each other’s political camps over who were the architects of a 1999 banking deregulation bill many cite as reasons for the current financial and mortgage lending mess on Wall Street.
The 1999 Gramm-Leach-Bliley Act broke down barriers between banks, securities firms, mortgage lenders and insurance companies. That deregulation repealed Great Depression-era bank regulations with the approval of former president Bill Clinton.
The Gramm bill encouraged lending during the strong housing market but has put banks, investment houses and insurance companies in peril since the housing bust which started two years ago. The measure allowed those lending money to sell off those loan portfolios to other companies, thus disconnecting the lending risk.
http://www.bizjournals.com/phoenix/stories/2008/09/15/daily81.html
If you read the article, it looks like both parties had members who supported the bill.
However, while the bill above may have opened the loophole, it looks like it was Bush who exploited it and certainly played a major role in the housing debacle:
# Expanding Homeownership. The President believes that homeownership is the cornerstone of America’s vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America’s Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. President Bush’s initiative to dismantle the barriers to homeownership includes:
* American Dream Downpayment Initiative, which provides down payment assistance to approximately 40,000 low-income families;
* Affordable Housing. The President has proposed the Single-Family Affordable Housing Tax Credit, which would increase the supply of affordable homes;
* Helping Families Help Themselves. The President has proposed increasing support for the Self-Help Homeownership Opportunities Program; and
* Simplifying Homebuying and Increasing Education. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeowners.http://www.whitehouse.gov/news/releases/2004/08/20040809-9.html
It’s interesting that the housing bubble started at about the same time that Bush issued his America’s Homeownership Challenge. I suppose that is just a coincidence?
ParticipantSo tell me again how the Republicans weren’t able to stop the housing bubble?
I’ll answer my own question. It looks like both Obama and McCain blame a 1999 bill that was signed by Bill Clinton as the reason for the current economic debacle:
John McCain and Barack Obama’s presidential campaigns are pointing fingers at each other’s political camps over who were the architects of a 1999 banking deregulation bill many cite as reasons for the current financial and mortgage lending mess on Wall Street.
The 1999 Gramm-Leach-Bliley Act broke down barriers between banks, securities firms, mortgage lenders and insurance companies. That deregulation repealed Great Depression-era bank regulations with the approval of former president Bill Clinton.
The Gramm bill encouraged lending during the strong housing market but has put banks, investment houses and insurance companies in peril since the housing bust which started two years ago. The measure allowed those lending money to sell off those loan portfolios to other companies, thus disconnecting the lending risk.
http://www.bizjournals.com/phoenix/stories/2008/09/15/daily81.html
If you read the article, it looks like both parties had members who supported the bill.
However, while the bill above may have opened the loophole, it looks like it was Bush who exploited it and certainly played a major role in the housing debacle:
# Expanding Homeownership. The President believes that homeownership is the cornerstone of America’s vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America’s Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. President Bush’s initiative to dismantle the barriers to homeownership includes:
* American Dream Downpayment Initiative, which provides down payment assistance to approximately 40,000 low-income families;
* Affordable Housing. The President has proposed the Single-Family Affordable Housing Tax Credit, which would increase the supply of affordable homes;
* Helping Families Help Themselves. The President has proposed increasing support for the Self-Help Homeownership Opportunities Program; and
* Simplifying Homebuying and Increasing Education. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeowners.http://www.whitehouse.gov/news/releases/2004/08/20040809-9.html
It’s interesting that the housing bubble started at about the same time that Bush issued his America’s Homeownership Challenge. I suppose that is just a coincidence?
ParticipantSo tell me again how the Republicans weren’t able to stop the housing bubble?
I’ll answer my own question. It looks like both Obama and McCain blame a 1999 bill that was signed by Bill Clinton as the reason for the current economic debacle:
John McCain and Barack Obama’s presidential campaigns are pointing fingers at each other’s political camps over who were the architects of a 1999 banking deregulation bill many cite as reasons for the current financial and mortgage lending mess on Wall Street.
The 1999 Gramm-Leach-Bliley Act broke down barriers between banks, securities firms, mortgage lenders and insurance companies. That deregulation repealed Great Depression-era bank regulations with the approval of former president Bill Clinton.
The Gramm bill encouraged lending during the strong housing market but has put banks, investment houses and insurance companies in peril since the housing bust which started two years ago. The measure allowed those lending money to sell off those loan portfolios to other companies, thus disconnecting the lending risk.
http://www.bizjournals.com/phoenix/stories/2008/09/15/daily81.html
If you read the article, it looks like both parties had members who supported the bill.
However, while the bill above may have opened the loophole, it looks like it was Bush who exploited it and certainly played a major role in the housing debacle:
# Expanding Homeownership. The President believes that homeownership is the cornerstone of America’s vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America’s Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. President Bush’s initiative to dismantle the barriers to homeownership includes:
* American Dream Downpayment Initiative, which provides down payment assistance to approximately 40,000 low-income families;
* Affordable Housing. The President has proposed the Single-Family Affordable Housing Tax Credit, which would increase the supply of affordable homes;
* Helping Families Help Themselves. The President has proposed increasing support for the Self-Help Homeownership Opportunities Program; and
* Simplifying Homebuying and Increasing Education. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeowners.http://www.whitehouse.gov/news/releases/2004/08/20040809-9.html
It’s interesting that the housing bubble started at about the same time that Bush issued his America’s Homeownership Challenge. I suppose that is just a coincidence?
ParticipantSo tell me again how the Republicans weren’t able to stop the housing bubble?
I’ll answer my own question. It looks like both Obama and McCain blame a 1999 bill that was signed by Bill Clinton as the reason for the current economic debacle:
John McCain and Barack Obama’s presidential campaigns are pointing fingers at each other’s political camps over who were the architects of a 1999 banking deregulation bill many cite as reasons for the current financial and mortgage lending mess on Wall Street.
The 1999 Gramm-Leach-Bliley Act broke down barriers between banks, securities firms, mortgage lenders and insurance companies. That deregulation repealed Great Depression-era bank regulations with the approval of former president Bill Clinton.
The Gramm bill encouraged lending during the strong housing market but has put banks, investment houses and insurance companies in peril since the housing bust which started two years ago. The measure allowed those lending money to sell off those loan portfolios to other companies, thus disconnecting the lending risk.
http://www.bizjournals.com/phoenix/stories/2008/09/15/daily81.html
If you read the article, it looks like both parties had members who supported the bill.
However, while the bill above may have opened the loophole, it looks like it was Bush who exploited it and certainly played a major role in the housing debacle:
# Expanding Homeownership. The President believes that homeownership is the cornerstone of America’s vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America’s Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. President Bush’s initiative to dismantle the barriers to homeownership includes:
* American Dream Downpayment Initiative, which provides down payment assistance to approximately 40,000 low-income families;
* Affordable Housing. The President has proposed the Single-Family Affordable Housing Tax Credit, which would increase the supply of affordable homes;
* Helping Families Help Themselves. The President has proposed increasing support for the Self-Help Homeownership Opportunities Program; and
* Simplifying Homebuying and Increasing Education. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeowners.http://www.whitehouse.gov/news/releases/2004/08/20040809-9.html
It’s interesting that the housing bubble started at about the same time that Bush issued his America’s Homeownership Challenge. I suppose that is just a coincidence?
ParticipantSo tell me again how the Republicans weren’t able to stop the housing bubble?
I’ll answer my own question. It looks like both Obama and McCain blame a 1999 bill that was signed by Bill Clinton as the reason for the current economic debacle:
John McCain and Barack Obama’s presidential campaigns are pointing fingers at each other’s political camps over who were the architects of a 1999 banking deregulation bill many cite as reasons for the current financial and mortgage lending mess on Wall Street.
The 1999 Gramm-Leach-Bliley Act broke down barriers between banks, securities firms, mortgage lenders and insurance companies. That deregulation repealed Great Depression-era bank regulations with the approval of former president Bill Clinton.
The Gramm bill encouraged lending during the strong housing market but has put banks, investment houses and insurance companies in peril since the housing bust which started two years ago. The measure allowed those lending money to sell off those loan portfolios to other companies, thus disconnecting the lending risk.
http://www.bizjournals.com/phoenix/stories/2008/09/15/daily81.html
If you read the article, it looks like both parties had members who supported the bill.
However, while the bill above may have opened the loophole, it looks like it was Bush who exploited it and certainly played a major role in the housing debacle:
# Expanding Homeownership. The President believes that homeownership is the cornerstone of America’s vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America’s Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. President Bush’s initiative to dismantle the barriers to homeownership includes:
* American Dream Downpayment Initiative, which provides down payment assistance to approximately 40,000 low-income families;
* Affordable Housing. The President has proposed the Single-Family Affordable Housing Tax Credit, which would increase the supply of affordable homes;
* Helping Families Help Themselves. The President has proposed increasing support for the Self-Help Homeownership Opportunities Program; and
* Simplifying Homebuying and Increasing Education. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeowners.http://www.whitehouse.gov/news/releases/2004/08/20040809-9.html
It’s interesting that the housing bubble started at about the same time that Bush issued his America’s Homeownership Challenge. I suppose that is just a coincidence?
ParticipantFree-market capitalism, based on a gold standard, they’ll say, is what causes the boom-bust cycles. When it is actually fiat currency and central banking that causes these problems!
How can you base a monetary system on some arbitrary metal that exists in some arbitrary amount? I’m not saying that the fiat system is better, but a monetary system based on gold just seems like it would be totally random (although the Fed seems pretty random most of the time too).
What if the Earth were hit by a giant meteor made entirely of gold? Instant deflation? Maybe that’s what killed the dinosaurs.
ParticipantFree-market capitalism, based on a gold standard, they’ll say, is what causes the boom-bust cycles. When it is actually fiat currency and central banking that causes these problems!
How can you base a monetary system on some arbitrary metal that exists in some arbitrary amount? I’m not saying that the fiat system is better, but a monetary system based on gold just seems like it would be totally random (although the Fed seems pretty random most of the time too).
What if the Earth were hit by a giant meteor made entirely of gold? Instant deflation? Maybe that’s what killed the dinosaurs.
ParticipantFree-market capitalism, based on a gold standard, they’ll say, is what causes the boom-bust cycles. When it is actually fiat currency and central banking that causes these problems!
How can you base a monetary system on some arbitrary metal that exists in some arbitrary amount? I’m not saying that the fiat system is better, but a monetary system based on gold just seems like it would be totally random (although the Fed seems pretty random most of the time too).
What if the Earth were hit by a giant meteor made entirely of gold? Instant deflation? Maybe that’s what killed the dinosaurs.
ParticipantFree-market capitalism, based on a gold standard, they’ll say, is what causes the boom-bust cycles. When it is actually fiat currency and central banking that causes these problems!
How can you base a monetary system on some arbitrary metal that exists in some arbitrary amount? I’m not saying that the fiat system is better, but a monetary system based on gold just seems like it would be totally random (although the Fed seems pretty random most of the time too).
What if the Earth were hit by a giant meteor made entirely of gold? Instant deflation? Maybe that’s what killed the dinosaurs.
ParticipantFree-market capitalism, based on a gold standard, they’ll say, is what causes the boom-bust cycles. When it is actually fiat currency and central banking that causes these problems!
How can you base a monetary system on some arbitrary metal that exists in some arbitrary amount? I’m not saying that the fiat system is better, but a monetary system based on gold just seems like it would be totally random (although the Fed seems pretty random most of the time too).
What if the Earth were hit by a giant meteor made entirely of gold? Instant deflation? Maybe that’s what killed the dinosaurs.
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