The question all americans should ask themselves.

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Thomas Hedin
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The question all americans should ask themselves.

The question all Americans need to ask themselves is, why with all the business schools, all the books on business management, that teach how to run a successful business and all management teams working to run their companies in the black, all the families that work so hard to earn a living all seeming to generate a profit which the government demands it gets about 20%.  How in the world did we get over $57 trillion in debt with only a $7.7 trillion money supply.

Thomas Hedin

Host of The Money Talk Show

http://www.themoneytalkshow.com

 

 

 

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Re: The question all americans should ask themselves.

Greed.

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Re: The question all americans should ask themselves.

Could you please give me a more detailed explanation?

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Re: The question all americans should ask themselves.

Thomas,

I don't mean to sound rude but I'm sure you have been following this whole financial disaster as I have. Thus, to me, my one word answer speaks for itself. It's also not too surprising why the word "banksters" has come into vogue.

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Re: The question all americans should ask themselves.

Can you tell me how greed has put a $57 trillion dollar interest bearing debt on our country while leaving us with only a 7.7 trillion dollar money supply?

 

I'm really curious to hear your answer.

Thomas Hedin

Host of The Money Talk Show

www.themoneytalkshow.com

 

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Re: The question all americans should ask themselves.

sub-prime, Alt-A, option ARMS, Ninja, etc.

AIG, Lehman Bros., Goldman Sachs, Bear Stearns, JPM, Citi, TARP (plus all other alphabets), Toxic assets (where are those anyway - they seemed to just fade into the background. How curious.)

If you're looking for a scholarly dissertation on the causes of our financial disaster, you've come to the wrong fellow.

If you haven't taken Dr. Martenson's Crash Course - that would be a good place to start.

If you have, then, with all due respect, I'm not sure why you're asking the question.

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Re: The question all americans should ask themselves.

I think that is an excellent question and really needs to be asked. I would just like to add to that question.

Who produced the 57 trillion dollars worth of goods and services that we still owe on? Anyone out there want to try and quantify that.  

Secondly, exactly who do we owe this money too?

 

 

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Re: The question all americans should ask themselves.
Quote:

Who produced the 57 trillion dollars worth of goods and services that we still owe on? Anyone out there want to try and quantify that.  

Nobody did.  Yet.

Just like a money is a claim on future labor, debt is an obligation of future labor.  We owe those $57 trillion in goods and services to our creditors and will have to produce the goods and services they represent or (more likely) print them.

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Re: The question all americans should ask themselves.

$57T comes from the addition of the unfunded liabilities like Social Security, Medicare, etc. to the Federal Deficit wich is currently $11.4T.

The USgov has been collecting on behalf of these entities for years and the extra income that was not needed to fund the programs at the time of collection was funneled off and used for other expenditures, like the military. I disagree with Patrick that nothing has been purchased or produced, however a significant portion of that debt is interest for which nothing was generated.

This money was also loaned to us from foreign sources like China via a trade imbalance where actual hard objects have changed hands. Treasuries are sold in order to pay for these goods and services, often sold to the nation with which the US has a trade imbalance. Think China and OPEC.

The US has been living outside of it's means for a very long time, and using debt to fund it's lifestyle. This is true both publicly and privately. Using our houses as an ATM while they are in bubble mode is just one symptom / example of a very sick economy and way of life.

We have done this to ourselves with greed, keeping up with the Jones', and expecting the future to always be bigger and better than today, and knowing that the US will be on top forever. We were wrong.

As a talk show host, I am sure you know this already... so what are you getting at? The core of all these isssues are addressed quite well in the crash course, have you viewed it?

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Re: The question all americans should ask themselves.

I reckon the point of Thomas's post is in the subject line The question all americans should ask themselves.

I reckon he wants them to "get mad as hell and not take it anymore."

Seems a noble endeavor for a talk show host.

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Re: The question all americans should ask themselves.

Thomas,

The bulk of the 57 trillion obligation is simply a present value calculation of projected benefits to be paid out for social security and medicare netted against the present value of projected revenues (taxes) to be collected for those benefits.  It is a huge number and can get much worse depending on what is used for revenue, interest and cost projections into the future.  I hope this helps.

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Get Mad As H*** and Get Moving Business

The backbone of our country is still the common business man and we are seeing so many struggling.

A little off topic but I ran into a guy who says he can increase anyone's bottom line on business.

In 4 hours of talking with him he told me his stratagies:

He mentioned McDonald's doesn't have the best hamburgers - so why are they the biggest burger joint? The answer has nothing to do with it service (could be one of the worst) or their products (which have gotten better but their burgers worse).

He uses the analogy of a race car on his website but here's what I got from the conversations -

-After getting predictable results- Increase prices (he has his methods of getting predictable results). He does it by "singularity" - it answers the question: "What are we selling?" in 3 sec. (the time it takes for a consumer to decide they will buy something).

-Fine tune the marketing to eliminate the competition (he says there is only so much money in any given market & you have to get it all). He does this by studying the market and finding competitions weakeness. If US companies could do this - at least to the point of getting the US sales moving . .  there's more details on his site but he says he can increase the bottom line on just about anything.

His site is on: http://corporatestrategist.com/

I'm not promoting him (yet - until I know his methods are as good as I hope) but his website says a bit about his methods . . not the best website, but interesting and mixed content. A few of his tips increased our web hits by 10xs so we'll see if that translates into $

EGP

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It's just a question, folks. . . . . .

 

Tom's question seems a perfectly valid one, and though it may seem a little naive to those of us who have been watching this mess closely from the Martenson perspective, I think it would be appropriate to give him direction without condescension.  I, for one, am not clear about what exactly he is asking . . . . . Perhaps he is looking for specific information, and is having trouble framing his question . . . . . . . Imperious behavior is unlikely to help him do so . . . . . . .

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Re: The question all americans should ask themselves.

Speaking of McDonalds,

"Given that, consider this story of an interview a business consultant conducted with Ray Kroc, the founder of McDonald's. In the interview, the consultant asked Mr. Kroc the simple question, "What business are you in?"

You see, the business consultant wanted to know if Mr. Kroc thought he was in the restaurant or fast food or service or hamburger business. Imagine his surprise when Mr. Kroc's answer was "the real estate business"! "

http://www.accessabundance.com/ezone/articles-transformbiz.html

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Re: The question all americans should ask themselves.

I don't think greed is responsible as much as negligence.  We've been running trade and Federal deficits for a very long time.  I, like I imagine most folks, took note whenever these deficits were reported in the msm, and had some transitory thoughts that they might not be sustainable.  But, I went on living my life in a reasonably financially responsible manner and assuming that the economic masters of the universe knew what they were doing.  That was way above my paygrade.  When I shopped I looked at prices and quality and made choices that I could afford.  My income increased over time and consequently my standard of living increased too.  I never had much debt, so I thought I was doing the right things.  Of course I realized that the things I bought increasingly came from overseas, but I suppose I rationalized it all by depending on the capitalist notion that the most efficient producers who could sell for the lowest prices would take market share away from those who produced frequently inferior goods for higher prices.  I felt no particular allegiance to US industry as they were moving their production overseas anyway.  And, I assumed that the burgeoning Federal debt was largely owed to Americans who bought government securities.  So the money wasn't really leaving the country.

In other words, I was largely ignorant of the global economic forces that continue to catch up with the number one economy in the world, the US.  And, lets face it, The size of our economy still gives us some serious advantages.  Grumbling aside, the USD is still king and isn't likely to be displaced for a while.  But, even this level of understanding didn't penetrate the financial fog I lived in for a lot of years.  I lived my life feeling rather secure in the notion that I was doing things the way I grew up believing in and life was going ok.  I suspect the majority of Americans lived not that much differently than I did.  Most of us aren't greedy, we just want to improve our standard of living however we measure that.

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Get businesses moving again . . Thanks GregRoberts
gregroberts wrote:

Speaking of McDonalds,

"Given that, consider this story of an interview a business consultant conducted with Ray Kroc, the founder of McDonald's. In the interview, the consultant asked Mr. Kroc the simple question, "What business are you in?"

You see, the business consultant wanted to know if Mr. Kroc thought he was in the restaurant or fast food or service or hamburger business. Imagine his surprise when Mr. Kroc's answer was "the real estate business"! "

http://www.accessabundance.com/ezone/articles-transformbiz.html

YES!! More info to get businesses moving! Thanks! EGP

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Re: The question all americans should ask themselves.
SamLinder wrote:

Greed.

Darn Sam, I finished reading the question and said the exact same thing however let us add just a bit more.

Greed, with the false feeling of grandeur (might I even say narcissism). 

I hope we are done patting ourselves on the back long enough to actually realize what is going on and get to the job of changing things.

 

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Re: The question all americans should ask themselves.

Thomas,

Great question - and I think the answer to this question may be the solution to our economic crisis.  First, I would suggest that we don't own any paper money - none.  Instead we have tokens of debt that we "rent" from banks.

Here's another question - what would happen if everyone in America decided tomorrow to cash in all of their paper money for coins?  Remember, coins are directly issued by the Treasury - it is the only money we have that is not a token of debt.

And what would happen if you went to the bank to borrow $10,000 - and requested it in coins? 

Larry

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Re: The question all americans should ask themselves.

The Achille's Heel of any debt based monetary system is lack of restraint or a sense of fiscal responsibility - generally people today establish their standard of living buy what they can finance, not what they can afford.

And as far as the government is concerned - it is far easier to loan $57T into existence than it is to observe sound fiscal practice and fund what is needed, instead of what is wanted.

Which goes to prove that Ivy League MBAs adorning the walls of our elected "leadership" and captains of industry aren't worth the paper they are printed on - unless you roll them up and hang them on the wall in your bathroom.

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Re: The question all americans should ask themselves.

From Back to School,

From Other People's Money

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Re: The question all americans should ask themselves.

Thomas -

Bill Fleckenstein's article that expands on Sam's answer of "Greed" and the hints at 'incompetence" from other posters.  I think greed and incompetence about covers it.

Article link -

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/blame-reagan-for-our-financial-mess.aspx

Blame Reagan For Our Financial Mess?

Noted economist and New York Times columnist Paul Krugman says yes, but that's just nonsense. The seeds of today's crisis were planted before the Gipper even took office.

By Bill Fleckenstein

MSN Money

This week . . . a rant.

First of all, let me say that I almost never read Paul Krugman's New York Times column, as I noticed several years ago that he has an uncanny ability to understand a problem but totally misdiagnose the cause.

During the "W." years, Krugman would frequently outline an economic problem, then go out of his way to blame the president. A lot of poor decisions did flow from George W. Bush, as he was basically in over his head. But this Nobel Prize-winning economist was a Johnny-one-note when it came to W.

But I did read Krugman's May 31 column because of its headline: "Reagan did it" (registration required). I thought, wow, I need to see what this is all about. Here goes:

The devil in deregulation

Krugman wants us to believe that all of our financial ills can be traced directly back to the presidency of Ronald Reagan and deregulation. As usual, he finds the source of trouble -- almost. He identifies a specific piece of legislation that he claims started us on the path to so much financial trouble: the deregulatory Garn-St. Germain Depository Institutions Act of 1982.

Close but no cigar. The actual offending cancerous legislation that kicked off the move toward extra reckless lending did involve then-Rep. Fernand St. Germain, a Rhode Island Democrat. But the problem legislation was the Depository Institutions Deregulation and Monetary Control Act of March 31, 1980.

It's important to note that the law was enacted two years before the act Krugman cites -- and nearly a year before Reagan took office. The earlier legislation contained a provision that increased the limit for deposit insurance from $40,000 to $100,000 at a time when $100,000 was a lot more money than it is today.

Tracing the roots of reckless lending

Believe it or not, I felt in 1980 that it was a bad law that would lead to recklessness. That's because the excessive increase became an incentive for depositors to be less disciplined regarding the health of their depository institutions.

I made this very point at the height of the tech mania in a speech titled "Spinning Financial Illusions: The Story of Bubblenomics," which I gave at the Contrary Opinion Forum on Oct. 1, 1999:

The seeds of this bubble were sown way back in 1980 when Congress passed the Depository Institutions Deregulation and Monetary Control Act, calling for the phasing out of Regulation Q, which allowed financial institutions to compete with money market funds. A piece of that legislation was financial cancer: raising the insured deposit maximum to $100,000.

That seemingly innocuous change (thank you, Fernand St. Germain) spawned "brokered deposits," the primary driver of the reckless lending practices of the 1980s. Money sought out the highest bidder with no regard as to how it might be used.

As a result, we witnessed the funding of overleveraged LBOs and the overbuilding of real estate long after the 1986 Tax Act made it uneconomical to speculate in property. It is hard to overstate the significance of this legislation in creating the excesses of the 1980s, which set the stage for the even greater excesses of the 1990s.

(The entire speech can be found in my column of Oct. 14, 2002.)

Back to Krugman's column: He wraps up his indictment with a statement that demonstrates his utter lack of understanding about what has transpired over the past quarter-century: "There's plenty of blame to go around these days. But the prime (my emphasis) villains behind the mess we're in were Reagan and his circle of advisers -- men who forgot the lessons of America's last great financial crisis, and condemned the rest of us to repeat it."

That is just nonsense. The person to blame for the increase in deposit insurance was none other than St. Germain, who saw to it that the deposit insurance increase was put into place.

The Greenspan factor

Besides, does anyone really think Reagan is more culpable than former Federal Reserve chief Alan Greenspan? Greenspan deserves the lion's share of the blame, and Reagan had essentially nothing to do with it (other than having had the bad judgment to appoint Greenspan).

It's ironic that Krugman doesn't even understand the fallacy of his own argument.

Boosting the cap by 150% took away market discipline as depositors dropped their guard about what the wild men running the savings and loans were doing with their money. In fact, that change of regulation -- i.e., fiddling with the deposit insurance limit in the deregulation legislation -- is precisely what started the lax-lending-standards problem that ballooned into "too big to fail" and ultimately morphed into "too big to bail out" in 2008.

If the remote cause of our current troubles was an unwarranted increase in deposit insurance, the immediate cause was Greenspan's incompetence -- in the form of monetary policy and "leading" the Fed's own inept effort at regulation, the twin drivers of this debacle.

Greenspan personally helped give deregulation a bad name through his wrongheaded cheerleading -- an example of this being his advocating (in 1999) that the remnants of the Glass-Steagall banking regulations be repealed in the wake of the collapse of Long-Term Capital Management in 1998!

(Although I happen to be generally in favor of deregulation, that doesn't mean I favor deregulation always and everywhere.)

Perpetrators on parade

However, even that poorly thought-out idea would not have been as disastrous as it has been had the Securities and Exchange Commission possessed the common sense not to allow financial companies to essentially leverage themselves to infinity.

Also culpable are other "government-sponsored" bodies, such as ratings agencies and the Financial Accounting Standards Board. They helped perpetrate the illusion of safety while the country attempted to speculate its way to prosperity, from whence we blew up.

Deregulation didn't cause this disaster. Incompetence and greed did. The implication from Krugman's article, that regulation or re-regulation would solve the problem, is nonsense. What must happen is for people in positions of regulatory authority to do their jobs.

But the Fed, the Office of the Comptroller of the Currency, the Office of Thrift Supervision and some congressional committees -- aka the "regulators" that Congress entrusted with powers of oversight -- did nothing as our financial problems built and built in plain sight. (All along the way, as these excesses built, many of us pointed them out in real time.)

More rules for regulators to ignore?

New rules won't solve anything and will cost businesses and individuals more money, which they can ill afford to spend. A classic example: the Sarbanes-Oxley accounting reforms of 2002, which caused a huge increase in paperwork and costs but did nothing to help prevent the financial system from nearly vaporizing.

No, Mr. Krugman, Reagan didn't do it. Greenspan did it, aided and abetted by almost everyone in the regulatory apparatus who abdicated their responsibility.

 

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Re: The question all americans should ask themselves.

I'm going to say something sightly different here.

Bad management and stupidity...

As an individual I'm expected to make sure that my incomings and outgoings are at absolute minimum parity, that is that if all my outgoings are more than my incoming finances I'm headed into big problems, and this should be avoided at all costs ideally I want to be above parity so I can save some money for a rainy day. It's not called balancing the books for nothing. It doesn't just apply to the individual either it also applies to small business, medium business, and most corporations. They cannot for an extended period run at a deficit without having to take drastic measures to reduce or eliminate that deficit, just ask GM.

Unfortunately it appears that the bankers, and Federal Government (and to a degree state and city governments) do not believe in this simple rule. Greed is a factor (in the Words of Gordon Gekko, greed is good), Bretton Woods is another factor too, being the international reserve currency I suspect gave people the perspective that the dollar "could not be allowed to fail", it's the international reserve currency after all. So this led to growing deficits in the US with an "in real terms" weakening of the Dollar, but this was supported for a time by the rest of the IMF members until its gradually become apparent that this is untenable.  Dislocation from any fixed standard is of course part of the problem, since there is no backing to the currency.

Obviously the deficit is powered by the internal markets, where "cheap" credit, and Jumbo Mortgages have allowed people to refinance and spend home equity, or at least buy something that they currently cannot afford on credit, likely imported leading to an higher outflux of currency and higher trade deficits. Add in offshoring of jobs, where again there is a net outflux of dollars (since this reduces the internal dollars paid to US workers, and obviously lower individual tax collections, even though it can lead to higher Company profits). So as easy as 1-2-3 we have lower internal revenue, higher trade deficits, and risky investment schemes that were like paint over rust, looks good on the surface, but give it a poke, and your finger will punch through into space, but allowed low risk investments to invest in them by apparently reducing the risk (CDO laundering). Of course all of this including the CDO's rely on people paying, both the principle and the interest (nothing is free) when people began to default because of various issues, like the collapsing housing bubble, which was powered by cheap credit in the first instance, then CDO's began to look more risky, 401k, and IRA's began to take a skeptical view of them, and withdraw from those scheme's, increasing pressure on the underwriters of those schemes. Overall we build a financial house of cards, and the wind blew...

Of course since laundered CDO's were "low risk" investments this made them open to investment from Social Security, IRA's 401k's etc. So when they began to collapse this added to the load on the Social Security system, both because of 401k's and IRA's that no longer could supply income as they used to (since they had a huge investment hole returning pennies on the dollar), but also as a double whammy the Social Security investment portfolio has a huge hole in it from that collapse, when incomes for retiree's dropped to levels where they qualified for Social Security payments. Of course the Social Security system is an upside down pyramid now anyway as boomers retire and the remaining Boomers, GenX and GenY are needed to fund (and now refund) a gradually aging population using Social Security, Medicare etc. So the income and outgoings are themselves in the red. The Federal Government have committed to supporting these schemes so that increases taxation (since the government has no money, except what it can take in tax, which will need to increase) reducing money in circulation, and will be making it more difficult for those currently just in the Black to pay their debts back, leading to more defaults, which impacts the credit companies, and eliminates chunks of money from circulation.

All of this is remarkably predictable and if people asked the right questions at the right times, avoidable, but the people didn't ask the questions, like why are there fewer BBB- to C tranches than there are AAA as CDO's everything can't be a AAA CDO by it's very definition.

In answer to your question,

Thomas Hedlin wrote:

why with all the business schools, all the books on business management, that teach how to run a successful business and all management teams working to run their companies in the black, all the families that work so hard to earn a living all seeming to generate a profit which the government demands it gets about 20%.  How in the world did we get over $57 trillion in debt with only a $7.7 trillion money supply.

Bad management and stupidity, business schools teach rules, not everyone follows, and unfortunately not everyone is a Warren Buffett or Donald Trump (and even they aren't what the seemed to be 5 years ago) who are the rebels known for not always following the rules. A lot of smart people got caught up in the "glister of gold" and totally missed the lava pit between them and it, blithely wandering into it.

Of course that answers some questions as to the symptoms of why it's heppening now, but it was ultimately doomed when we established the fractional reserve system... It was just a matter of time.

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Re: The question all americans should ask themselves.
Thomas Hedin wrote:

The question all Americans need to ask themselves is, why with all the business schools, all the books on business management, that teach how to run a successful business and all management teams working to run their companies in the black, all the families that work so hard to earn a living all seeming to generate a profit which the government demands it gets about 20%.  How in the world did we get over $57 trillion in debt with only a $7.7 trillion money supply.

Thomas Hedin

Host of The Money Talk Show

http://www.themoneytalkshow.com

 

Churning. False debt "owed" to the private bankers.

 

I say, we owe it to NO ONE. The Federal government could tell the federal reserve bank...... to go pound sand. Yes, they could. The country belongs to us. We only lack the political will to make it happen.

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Re: The question all americans should ask themselves.

I think the answer is the "school" of "thought" they're using.

Keynesian Economy is inherantly self-destructive, and arguably facilitates the "Malthusian Catastrophe".
As Sam mentioned, this is elaborated on in the Crash Course, how the combination of Fractional Reserve Lending, a Debt Based Money System and investment practices that not only rely, but are foundationally predicated upon endless expansion create an ultimately unwinnable set of circumstances for the taxpayer.

The banking institutions are basically using us as a petrie dish to make money, and when we get out of control, they can pack up, leave and find more fertile grounds.

My opinion is that if we were promoting and teaching Ludwig Von Mises instead of Keynes, we would be having a different conversation right now.

Cheers!

Aaron

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Re: The question all americans should ask themselves.

Thomas, I am still curious for your feedback as to where you are going with this? I expect you have your own thoughts on this, so I would like to hear what brought this to life in the first place... Are you seeing some deeper meaning than what we are getting at?

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Re: The Answer is Simple. Achieving the Answer is NOT Simple

Hello Aaron & Ready and All,

Maybe Thomas is testing those of us whom have been regulars (I've been coming to this site almost daily since October '08 but only became a subscriber in March) on this site to find out if we have learned anything at all from the CC and from ALL of the SO MANY forum discussions.  Because the answer is actually quite simple.  I am surprised that DrKrbyLuv didn't state the answer.  After all, it's partly in his moniker.  And Aaron almost states it.  

The correct answer is, it's because of the existence of the Federal Reserve System or any other central banking system.  Sam's answer is correct too since it is greed and the thrust for power that led men to create central banking systems, including our very own Fed.

Because I had a broken leg when I was about 10, I had a school tutor come to my home to teach me.  One day she showed me a compass and asked me to tell her what it looked like.  In my mind, I wanted to tell her it looked like a watch but I thought that was too obvious of an answer so I began to say all kinds of other complicated things searching for the sophisticated answer to her question.  Finally she said, "No No No.  Don't you see it looks like a watch".  I said yes but wasn't that too obvious?  Didn't she want a better answer?

So the Fed is the elephant in the room.  We all know this but keep looking for those sophisticated answers or we go back to other explanations that we have already dismissed for other reasons.

I wrote this in the thread  "George Carlin was exactly 'right on the money'!  http://www.peakprosperity.com/forum/george-carlin-was-exactly-right-money/19644   "I am amazed at how many people I know, whom after making a discovery of some magnitude, go back the next day or the next week to using old and proved false foundations in dealing with their everyday reality.  Then I must point out why their conclusion or objective position on the subject matter is incorrect because of the actual truths that they just recently discovered (Peak Oil for example).  It's like they forgot OR didn't want to look at reality that way and the impact to their own lives due to their everyday political choices and consumer decisions.  Or maybe other aspects of what has been so ingrained in their personal psychology are so powerful that they keep slipping back to old habits and do I dare say "old tricks".  Bad influences are often hard to overcome.   

Finally, if you haven't seen this article yet, I suggest you read it.  It's not the only article or book that I have read on the subject but it is the most recent article that I have come across (today).  The Case Against the Fed  http://mises.org/story/3480  Aaron will appreciate from where this article comes.

Broadspectrum

 

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Re: The question all americans should ask themselves.

 

Entitlement Programs and the insane Fiat money system.  only 3-5 % of money is in physical circulation.  

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Re: The question all americans should ask themselves.

*****Bill Fleckenstein's article that expands on Sam's answer of "Greed" and the hints at 'incompetence" from other posters.  I think greed and incompetence about covers it.******

May I add one more ingredient? Greed is right on, incompetence is right on....But the other ingredient is ideology: i.e. Everyone is entitled to the America dream of owning a home......Health insurance is a right, not a privilege......etc.

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Ready
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Joined: Dec 30 2008
Posts: 917
Re: The question all americans should ask themselves.

Broadspectrum,

The Fed may be the pusher in this drug-like debt addiction we have in the US, but the core problem lies with the addiction, not the dealer. It's too easy to blame the Fed for all of our problems. Monetary policy made credit loose, but were we forced or coerced to use it to buy the Hummer and the McMansion? My opinion, of course.

Please do not misunderstand me to be a supporter of the Fed.

If you look at a cross section the millionaires in the US, you will find the vast majority of them live frugally as a rule, and are basically unaffected by what has happened thus far. I wish I had a link for this but I can't remember where I read that off the top of my head.

 

I believe Thomas will be getting back to us on this late this evening, so we will see where this takes us.

Rog

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jneo
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Re: The question all americans should ask themselves.

 

 

If you really think about it.  If the People were not TAXED to death i.e. income, property and many more they could afford this insane economy, but the assHo$es in D.C. and the FED construct our system so we come depended on Credit Cards and loans and so on.  I do not blame the consumer I blame D.C.  The real Crooks.  

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Doug
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Posts: 3124
Re: The question all americans should ask themselves.

Broadspectrum got me thinking about what the real elephant in the room is that no one is noticing.  I think i have it.  It's the sheer size of the US economy.  The US GDP is still nearly three times a large as the next largest economy (Japan or China).  That goes a long way toward explaining many of the things that have happened the past year that many of us didn't expect, or didn't happen that we did expect.  The USD is still the world's reserve currency.  No inflation, let alone hyperinflation.  Gold is staying below $1,000.  US markets have been rebounding beyond most expectations.  Other nations are still snapping up our supposedly worthless Federal securities.

Like it or not, the US is still the gravitational center around which the rest of the world orbits.  We spend as much money on our military as the next 10 largest militarys.  When the nation's (and world's) largest financial institutions were about to collapse they were rescued by throwing trillions of USDs at them.  Big means something in this world and the US economy is still really big.

Of course, it ain't over til it's over.  There's still a lot of deleveraging to go and we may still have a serious leg down.  But I think that if that size thing isn't taken into consideration, we may still be guessing wrong about what's to come.  FWIW

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