Re: OT: Deficits no concern?

On Tue, 16 Dec 2008 12:06:04 -0800, "John R. Carroll"
<jcarroll@ubu,> wrote:

"Ed Huntress" <huntres23@xxxxxxxxxxxxx> wrote in message

"F. George McDuffee" <gmcduffee@xxxxxxxxxxxxxxxxxxxxxx> wrote in message


What I get is that what ever happens the taxpayers and average
consumers take it in the shorts.

Unka' George [George McDuffee]

Hokay. Here we are, with the Fed's overnight rate reduced to 0 - 0.25%
today. That's a new US record and the end of the line for monetary policy.

Now we're exactly where Japan was when it went into its six-year slump.
Let's see if our new Treasury Dept. and Congress are any better at
handling fiscal policy than the Japanese were.

And for God's sake, don't everybody start saving your money, or this will
be the end of the line for most of a decade. Spend, spend, like there's no

Gunner, stock up on all the ammo and canned rations you can buy. No
Chinese ammo, now. 'Murican only. <g>

"At some point, and without knowing the timing, the Fed is going to have to
destroy all that money it is creating," said Alan Blinder, a professor of
economics at Princeton and a former vice chairman of the Federal Reserve,
said the central bank. "Right now, the crisis is created by the huge demand
by banks for hoarding cash. The Fed is providing cash, and the banks want to
hoard it. When things start returning to normal, the banks will want to
start lending it out. If that much money is left in the monetary base, it
would be extremely inflationary."

Stagflation on steroids Ed.
Mushi Mushi Anonay.


Yes, but this ignores the disappearance of many trillion of
"dollars" in home value, stocks, bonds, etc. While this "value"
was far more "spondulicks" than real money, its disappearance
still has a very significant effect on the economy and consumer

My hope is that the FRB and/or others will come up with some
other measures to control inflation than a 22% prime as this
kills the people at the bottom, who didn't cause the problem in
the first place, who took it in the shorts on the way down, and
are likely to [again] get it in the shorts on the way up.

Two thoughts are a small "Tobin" tax on all exchange
transactions. Minimal effect on "real trades," but makes day
trading and speculation unprofitable, reducing churning.

A large tax on all money/spondulicks "created" through fractional
banking and novel financial instruments [e.g. derivatives] to
discourage the virtual printing of private bank notes and
encourage the use of "real" dollars. This will limit the re
inflation of the bubbles and the creation of new ones in addition
to getting at least *SOME* control of the money supply. This in
large measure is how we got in this mess in the first place.

Unka' George [George McDuffee]
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

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