What is Digg?337 Comments
- EarlOfLade, on 04/15/2008, -7/+51The problem is that Americans don't want to pay the price.
As the economy gets worse, there will be no other options and the pain will be much greater than it would be today. Decades of "USA #1!" has basically lulled them into a false sense of invulnerability and now they fail to recognize the tell tale signs. There will be a lot of foreclosure and repossession over the coming years, the amount of people living in poverty will increase and I have no doubts about the number of uninsured when it comes to health insurance, will double in the next five to ten years.
Dire times ahead. - StingingNettle, on 04/15/2008, -6/+44Pay attention, this comes from a German site. They got to experience hyperinflation a couple of times first hand..
- techmonk, on 04/15/2008, -7/+41Madness? This is Americaaaaaaaaaa.
- Quick2822, on 04/15/2008, -13/+46Already knowing I'll be dugg down for mentioning his name, I still can't help but ask how come when it was Ron Paul speaking out against the Fed, people laughed and called him names. Think what you want about his other policies, he is spot on when it comes to economics.
But now, every few days an article shows up on Digg regarding the evil Fed, and if you follow the other news sites you will see the same thing, and they are worded as if it is all news to us that the Fed has been the cause of many issues, including the current financial situation the country (and the world) are in.
Oh well. - stienster, on 04/15/2008, -4/+28that's exactly what he IS doing
- kingmanic, on 04/15/2008, -5/+251. work hard
2. accrue money
3. damage your health
4. lose money
5. lose health
6. go into debt because of health
7. die penniless - MrErr, on 04/15/2008, -3/+22And he did this by using tax payers money bail out companies which made choices and let their CEO's and other top brass keep their millions.
- chanop, on 04/15/2008, -1/+20Can you give me a good bratwurst recipe?
- pgoetz, on 04/15/2008, -2/+17you forgot to add "despite his best efforts to do so".
- 0mnio, on 04/15/2008, -10/+24A lesson from Ghandi: "What you consume is what enslaves you" - It is why China is untouchable by the US.
- bc289, on 04/15/2008, -2/+16No, we're nowhere near hyperinflation, and even on a historical level we've got relatively low inflation.
I understand what the article is saying - that we're trying to fix the problem by worsening it - but to be honest I do not see the alternative. Raise interest rates? That'd make this upcoming recession even deeper. I don't see this credit crisis so much a result of the fed as it is a result of mortgage lenders, banks, and businesses not doing their due diligence. No matter what the interest rate is, you should never offer loans to someone who isn't likely to pay it. I don't see that as Bernanke's fault. - tattertech, on 04/15/2008, -3/+14So you're pissy because he suggested that economists who might have closely monitored a situation personally might actually be bothered to understand it?
- rootfiend, on 04/15/2008, -0/+11It's because people like to talk a lot but when it comes to actually changing they run with their tails between their legs. Now that Ron Paul is essentially out everyone can talk about the problems without having to deal with the possibility of actually changing.
- MrErr, on 04/15/2008, -6/+17Americans don't want to pay the price? Lets face it, the ones at the bottom of this society are paying the price, even those of us in the middle class. The ones at the top who benefitted the most from this moentary mess are not paying the price.
- FutureGuy, on 04/15/2008, -1/+12I am not a finance expert by any means and not great with numbers either but I didn't need this article to know that the US economy is heading for a train wrack. Basic economics and common sense tells us that if an entity (be it a household or a country) can't sustain spending more then it makes, US trade deficit is not sustainable, the country is piling up debt and more and more of tax dollars are going to service debt. I cannot understand how these so called economy experts like Bernanke can allow this, may be all they f-ing care about is to somehow keep things going till then end of their term by piling on more debt so when it hits the fan the impact would be that much worse. What they are doing to the country is worse then espionage.
- galeninjapan, on 04/15/2008, -3/+13Cant we just drop money from a helicopter?
- Quick2822, on 04/15/2008, -1/+11What is bad about his solutions? To allow competing currency? To give some sort of backing to the dollar?
I don't understand how either of those are bad. - Tommyhawk, on 04/15/2008, -3/+13My guess is that you know nothing about economics yourself and so it is easier for you if you just sit back and hope to god Bernanke knows what he's doing.
- rizla420, on 04/15/2008, -1/+10Trust us, we're experts.
Did you trust Bush when he told you we were under imminent threat by the terrists. Seriously, i "trust" people as far as I can throw them. Experts are not infallible. healthy skepticism is always a good thing. - sgglynn, on 04/15/2008, -8/+17While I don't really like what the fed is doing, they could be doing worse.
Banks need money to continue lending. If they stopped lending, most people wouldn't be able to buy a home that's currently for sale. If people can't get a loan to buy houses for sale, houses going into foreclosure wouldn't be bought, supply would continue to increase. If supply increases, prices fall further, banks lose more money from the bad loans they gave out and collapse. If banks collapse, the only rescue is an all out central banking system, which we don't want.
No one wants to deal with inflation/stagflation, but no one wants to deal with a banking collapse either. By the way, enough of the ***** cat puns, we get the reference already. - BESTenemy, on 04/15/2008, -0/+9The trade deficit has been under-reported. The trade numbers are announced in the US dollar and are not adjusted for inflation. If they were, the real number would've been about 14%. Likewise with employment. The government is constantly adjusting statistics to paint a brighter picture.
As for the FED board of directors - the do not care. They risk nothing and they loose nothing. Credit meltdown allows them to absorb banks for pennies on the dollar and all the collateral that credit organizations had been accumulating for them.
The lender of currency no longer cares what's coming, cause it knows population is broke. All it has to do is to pump liquidity (print money) like there's no tomorrow to confiscate the remaining crumbs of valuables before auctioning them off to whoever becomes the next economic superpower.
How can they allow this? They're the ones that invented "the bubble" They're the ones profiting. They've given us a way to live beyond our means and we applauded them. Now the time came to pay off the credit card and we have no one to blame but ourselves. - oldhick, on 04/15/2008, -1/+10No, one is about religious faith and how it relates to earth sciences. Having a grasp on monetary policy has nothing to do with either. But nice try.
- j0ew00ds, on 04/15/2008, -0/+9Doesn't the Real Bills doctrine rely on the value of the collateral? -- Serious question, I don't fully understand it.
I don't believe that suddenly introducing a quantity, such as $2 Billion, of money into the market at the flip of a switch DOESN'T cause inflation. - yoshimaroka, on 04/15/2008, -0/+9Here's another economic scholar and former Fed chairman saying Bernanke is wrong:
http://www.globeinvestor.com/servlet/story/GAM.200 ... - Y0tsuya, on 04/15/2008, -0/+9Making it too easy for Joe Deadbeat to buy houses was one of the main causes of this mess. People with good credit, sizable downpayment, and demonstrated ability to service the mortgage can still buy houses. This is the way it should be.
- d03boy, on 04/15/2008, -0/+7Sigfried & Roy were experts at taming tigers.
Point: You can be an expert at a losing game. - Cerebron, on 04/15/2008, -0/+7I think EarlOfLade got it backwards. RP's politics would make life worse for the small percentage of people that are making obscene amounts of money.
- Hangly, on 04/15/2008, -0/+7No, banks that make bad investments need to fail. Thats how the free market works.
- Hangly, on 04/15/2008, -0/+7Returning to any kind of sound money would mean deflating the massive money bubble the Fed and the banks have created. So yes, in the short term it would be bad. In the long term though it would prevent a complete collapse and ensure it would never happen again.
So yes, a Ron Paul reform would be ugly in the same way coming off heroin is ugly. - andy3109, on 04/15/2008, -19/+26I'm not saying Bernanke is right...but I certainly know that he has alot more data than Gabor Steingart (whoever the ***** that is), the writer of this article and us on Digg do. Bernanke is an economic scholar who has dedicated his life to the topic. Digg me down all you want...but he knows much much more than us laymen about economics.
- Meekus, on 04/15/2008, -0/+7I might suggest EarlOfLade look up Milton Friedman and his economic theories and their impact on both India and China. Not to mention he won the Nobel in 1976. Likewise look up F Hayek and his economic theory, and the nobel he won. Ron Paul comes from the same Austrian Economics school of thought as they.
The problem is the evaluation of current economics often only answers half the question. For instance, you will hear "experts" talk about the effects of the Great Depression. But seldom do you get an accurate depiction of "why". - Gerz1219, on 04/15/2008, -2/+9But all evidence suggests that the last time the Fed tried to cushion the blow by slashing interest rates, way back in 2001, they created a housing bubble which now threatens a global economic meltdown. Why should we think that the exact same policy will work this time, instead of simply staving off the meltdown until 2015?
- BESTenemy, on 04/15/2008, -2/+9Wiemar Republic era - the period of 300 trillion percent hyperinflation is a walk in the park, compared to the risk of our upcoming crisis. The cause for theirs was relatively simple - primarily the attempt to pay off World War 1 retribution debts denominated in Deutsch Marks through inflation of the monetary supply. Today the US is the world's greatest debtor. As our failing foreign policy is causing runaway inflation, the domestic credit markets are collapsing.
We no longer live in the world where markets are driven by the relationship between supply and demand. The modern growth rests upon the ability to produce and absorb credit. Our monetary system is reliant on credit expansion. The moment that credit surpasses the amount of collateral left in circulation, the system collapses. Banks will own everything and you will own nothing. - Tehrab, on 04/15/2008, -0/+7Another point to consider is that the dollar is not a fiat currency in the purest sense but one with an indirect backing. If John Perkins is to be believed, and there is little reason to suspect he is lying, then the dollar is backed indirectly by Saudi oil. The conflagration in Iraq was, in large part, to further shore up the backing of the dollar by insuring that Iraqi oil reserves remain on the market and traded for US Dollars. Incidentally, the plan to take on Iran was in large part motivated by Iran's threats (now a reality) to transition from selling oil for US Dollars to selling oil for Euros. The only other player to make such a move? You guessed it, Venezuela.
So, back to the point, so long as the US Dollar is the currency du jour for oil trading (a policy OPEC thought better than to revise after we invaded Iraq), the total collpase of the US Dollar and the global economy is unlikely. This financial crisis will likely worsen, for sure, but I would be surprised if we realize any of the nightmare scenarios that get dugg up day after day. That said, even if we don't see a nightmare scenario, there are countless scenarios short of the nightmare that would amount to suffering for a large portion of the US population. - CiXeL, on 04/15/2008, -3/+10thats because the country has been hijacked by foreignors. many of the rich who run and own this country now are not americans, don't live here and don't care what happens to us.
- tattertech, on 04/15/2008, -1/+7So... Economists in your country don't study conditions that occurred in your country with first hand sources?
- inactive, on 04/15/2008, -1/+7Prepare and educate yourself so you don't need to 'Hope' these humans know what they are doing.
- Tommyhawk, on 04/15/2008, -2/+8I read a little of that and have some big problems with his basic assumptions. For instance... he says "Some implications for monetary policy are that the issue of money is not inflationary as long as the money is adequately backed, and that there is no justification for using tight money policies to control inflation." Well, therein lies the problem... our money ISN'T adequately backed. He goes on to say that IOU's aka bonds are adequate backing but this is a faulty assumption. IOU's are only as good as the promise to pay. If that promise is broken then all of a sudden you have a whole lot of money without adequate backing and that is inflationary.
- sacxnz, on 04/15/2008, -1/+7The problem is, it's not working. The Fed keeps reducing rates but the banks aren't biting, mortgage rates aren't coming down. What they are achieving is a deflated dollar and as a result higher commodity prices.
- FecalHurler, on 04/15/2008, -0/+6You're right, but we don't have to economics majors to see the very basic principles being played out here. And this did begin with the Fed, many years ago, and their impossibly low interest rate. It has to start somewhere, and that's the first place to look. Also, the banking and loans industry is one of the most publically scrutinized in this country. The Feds knew people were getting loans they could never pay back, at sub-prime rates. Now the bill is due and they can't pay. Instead of weeding out those who messed up, the Fed lowers the interest rates and borrowing continues. It's like putting more air into a ballon with a hole. Inflation is rising and the most beautifully simplistic truth is: there is no money backing it up. That's the whole issue right there. So the Feds started this chain, and now prolong it. There is going to be a recession, and by lowering the interest rates all they are doing is delaying the inevitable. You can't make something from nothing.
- Nerys, on 04/15/2008, -0/+5THEY PRINT IT. Taxpayer money COMES from them. Where have you been?
- JettaMan, on 04/15/2008, -0/+5Solution: Ron Paul.
- Gloogle, on 04/15/2008, -0/+5Cheese?
- dpazar2, on 04/15/2008, -3/+8We need credit right now...actually do some research to see whats causing this "gloom and doom"...its due to a credit crunch. Once people start purchasing houses again (legitimately) it will start to reverse this. P.S. economic outlook on the dollar in Q3 & Q4 is quite optimistic against the euro. Now take two deep breaths and step back into reality before you have an aneurysm.
- BESTenemy, on 04/16/2008, -0/+5Well, most of the perpetual wealth plans offered by expansion of credit that does not actually generate any wealth in itself, sound too good to be true. Don't have to be an economist to see that the numbers don't add up. Cutting taxes while expanding social programs? I can hardly think of a politician with a different platform getting into the office. We reward what we enjoy - the ability to spend while delaying the re-payment. We put the debt out of mind. We know it's there, but as long as we're being lied to, we're fine with it. Being a victim seems to be less threatening than being in control, but also carrying the responsibility.
As for the electric industry - good point. I think it's a patent system issue other than that of economics. The reason car manufacturers and oil companies are holding patents and are investing into inefficient hydrogen technology is because it best resebles the existing oil counterpart. They want us to keep going to the gas station for re-fueling. The idea of us being able to adopt a new method of energy distribution scares them. They're dinosaurs, just like the solid-media music and film distribution companies. They care not that the hydrogen economy is a lot more wasteful. It's the consumer that always bears the cost. They just want the thing to be different for as long as they remain the same, profit-structure-wise.
We are the ones that are supposed to be running the country, but we've grown so lazy, I don't think the majority is capable of making informed decisions anymore. The nation has been dumbed down, the attention span reduced down to the point where the mind refuses to process anything longer than a couple of sentences. The loss came about over the course of many generations. I don't think we can just go back to business as usual. I think the process will be painful and stretch for decades. We might come to an era of new enlightment, or we might end up as Communist China, or something worse - like survailance-crazy Britain. - omgTHEPATRIOTS, on 04/15/2008, -1/+6I demand the recipes to your finest triple-bocks!
- Y0tsuya, on 04/15/2008, -1/+6What prediction? It's already happening.
- JCPahl, on 04/15/2008, -1/+6Hard evidence? How about the price of gold, oil, and other commodities?
- AcidPhysx, on 04/15/2008, -0/+5I guess mentioning Ron Paul is now taboo. But anyway, I guess a guy with an economic background could help us at least a little bit.
- inactive, on 04/15/2008, -4/+8"they have the health of the American economy as their best interest."
you are a total naive and ignorant fool. -
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