Re: QUOTES OF THE WEEK

GreyCloud stated in post VLednWbSsrRLu3PUnZ2dnUVZ_jOdnZ2d@xxxxxxxxxxx on
4/21/09 1:05 PM:

....
The problem being that the toxic derivatives have poisoned their system.
This was brought about due to the repeal of the Glass-Steagler Act. Alan
Greenspan was for the derivatives which now has brought us a lot of
problems.

Yes. This has nothing to do with the issue that was being discussed, namely
whether the Fed putting new money into circulation necessarily causes
inflation.

It has always been demonstrated that if you increase the money supply the
dollar devalues accordingly, causing inflation.

Well, if they money supply grows faster than the growth of the economy...

Decrease the money supply, you get deflation, which is already happening now
to some extent. Having Credit tightened also causes deflation, and if done
for too long causes depression. Which is what the clowns did after 1929. The
banks refused, back then, to loan to the farmers. Did you realize that over
7,000,000 people died during the great depression due to starvation? We are
now on that same path again if they continue with this stupid,
self-destruction of our economy.

At this point the economy is pretty much trashed... *something* needs to be
done. It makes sense for the government to have a surplus when the economy
is doing well and run at a deficit when the economy is doing poorly, though
I agree that the size of the stimulus bill is over-the-top. How the heck
are we going to pay for it? When the economy was doing well, the US should
have been saving, as it was doing - at least to some extent - under Clinton.
The Reagan / Bush II years were completely out of hand - gross deficit
spending with, largely, *good* economies.

As the Senate Finance committees have tried to put a value to these toxic
derivatives, they found that no one can give them their true value.
However, the total problem is that these toxic assets, as we keep hearing
the term, are put at around $1500 trillion, which far exceed the worlds GDP.
Someone is going to lose here.

Not as much as you'd think. The vast majority of this supposed value only
ever existed on paper. As a result of the devaluation of these assets, no
actual material wealth has been destroyed. The only real structural problem
is that banks made loans under the impression that these assets were were
worth much more than they were, and now that the assets have turned out to be
worth considerably less, banks that bet heavily on these assets are woefully
undercapitalized relative to the balance of the loans they issued.

True, but how did this get started in the first place? Somewhere, there was
some mandate handed down to do so. When I went for a home loan in the 70s, my
credit was checked, my employment was verified, and my income was verified.
After 2000, the banks just took the applicants word for it and gave them the
home loan.

I purchased a home past 2000... and my income was verified. I was also
approved for a far, far bigger loan than I would ever reasonably even
consider... and I did not take it.

Worse, the media kept advertising for people to get the new cheap rates for a
home loan. So eventually, a lot of younger, vulnerable kids went and got the
home loan that they knew they soon wouldn't be able to afford. And I'm
referring to VAR loans. They should've been outlawed in the beginning. This
only goes deeper tho... now the bank turns around and sells a block of
mortgages to other larger banks or institutions for a small profit. The term
I hear is leveraging the loan. Mostly a corrupt way of doing business. But
it just boils down to toxic derivatives. Some banks leveraged mortgages at 100
to 1 in some instances, but I hear the average is about 40 to 1. Yet someone
wants to be paid because they expect it to be. In reality the whole works
should have just gone down the drain.

To make matters worse, with so many people buying homes, *of course* the
price would sky rocket. And it did. So even people who were looking to get
a home that should have been in their budget ended up spending more than
they should have... the pricing bubble effected both those who foolishly
purchased more than they should have (often at the insistence of the banks
that everyone does it so it is OK) and those who were being wise.

....
This is not actually the case. Inflation-adjusted GDP/capita is seven times
as high as it was in 1900. With the exception of housing, virtually every
other single thing Americans buy is either much cheaper or much better,
relative to people's incomes, than it was in 1900, or even 1970. In fact,
many of the things people now spend large sums of money on didn't even exist
in 1970. The reason most families have two breadwinners is because people now
maintain a *vastly higher standard of living*.


And due to the corporate advertising, which creates a phenomena of "Keeping Up
with the Jones". My family had a high standard of living and only one bread
winner. In the early 80s is was painfully obvious that he could no longer
maintain that standard of living and actually cut back. Most peoples salaries
and especially wages, do not keep up for inflation.... those governement stats
are nothing more than juggled figures and worse a big lie. Their stats will
not include the cost of gas or food. But you need both. Add that figure back
in and you'll find inflation. My grandfather was also the sole bread winner
and was never in debt, and in the beginning he only got one home loan of
$1500. It took him 5 years to pay it off and at 0% interest. He only had to
pay a $5 filing fee and that was it.

So comparing yesterday to todays system shows that debt rules and controls
peoples lives today.

Out debt as a nation is absurd... and, yes, it is largely what is killing
our economy. And you cannot escape the effects, if you stay in the US that
is.

Even most people who were alive at the time completely lose sight of just how
limited the world was in, say, 1950. No cell phones. No Internet. No cable.
No computers or iPods. One TV per household, and it was tiny and broke
frequently. One (corded) phone and one phone line per household, and long
distance calls were prohibitively expensive. One car per household
(optimistically); by modern standards inefficient, environmentally
disastrous, unreliable, and unsafe. No air conditioning. A vastly more
restricted diet. Health care technology that could do nothing for people with
diseases that are now routinely and often successfully treatable. A vastly
smaller fraction of the population receiving a college education.

Actually, those were very good days in the 1950s. No cell phones, no
computers, no internet. Nice and quiet for one to pursue more interesting
quests. I find that most kids do not get out to excercise or have a decent
childhood. They are too busy in an artificially induced virtual universe
known as computer games. That isn't living.

I agree I do not like such things... but things have always changed.
Technology does that. I suspect we will see a swing back the other way over
the next 20 years or so... people wanting to go outside and actually garden
and the like.

And for today, what is so important that one has to drive and use a cell phone
at the same time? I find all of this absurd. Health care technology has only
a few benefits to provide. If the individual instead realized that what they
are shoving in their pie hole isn't healthy, they wouldn't get sick in the
first place. The only thing good about the medical system now is when you get
into a car accident or break a bone. Other than that, I find most doctors
incompetent.

Our medical system has some amazing technology to save lives... but, yes,
many of the practitioners are either incompetent or beaten down by the
insurance system.

The list goes on, and on, and on. We've really made a vast amount of
progress, even if some people's politics don't allow them to admit it.

Uh,... I don't see any improvements at all over their so called being
"civilized". Watch how civilized these people get when social order breaks
down.

As technology increases, morality drops.

I think that is a stretch... though looking at the morality of many in COLA,
maybe you have a point. I quote someone, he denies it and says I quoted
only one word of his post, I prove him wrong by providing a link back to the
post where I quoted him ... and he reacts by calling me a "Child Molester".
The depth of immorality that is shown by that one act is beyond anything I
could ever imagine doing to *anyone*.

--
[INSERT .SIG HERE]


.

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