What is Digg?117 Comments
- genetrosper, on 09/30/2008, -2/+41It's nice to see that people are finally waking up to the realization that central banking is more a curse than a blessing.
- fancypantscz, on 09/30/2008, -5/+32I watched this very interesting video a year or two a ago but I unfortunately dismissed it as libertarian propaganda.
Money as Debt http://video.google.com/videoplay?docid=-905047436 ...
It explains how money is created by our banks who use your promise to repay debt with interest as if it were money itself.
Well... I as I have turned to reading as much as possible about the economy in order to educate myself about this time of great economic unrest, alarmingly I have found the central theme of Money as Debt to really make a lot of sense out of all this mess.
With a fiat currency, a fractional reserve system, and hyper competitive massive nontransparent brokerages all governed by a Federal Reserve that is actually a private corporation with relatively little or no real reserves, it is no wonder we are at the brink. It was only ever a matter of time.
I really hope people already know or soon realize and communicate to their representatives that any bailouts are fundimentally flawed at best and probably just out and out corruption. We stopped them once and we must do it again!
On the other side of the coin, its also important to realize that capitalism and free markets are not themselves broken. Taking 'Money as Debt' to its logical conclusion one realizes that it is our particular system of money and banking that is fundimentally defective. Could we ever increase production fast enough to out grow the exponentially increasing interest we owe on our debt? Not on a planet with limited resources or without a free limitless energy source...
Believe it or not, life will go on after this current meltdown. I say, now that the wheels have fallen off, its time to look under the hood and make some real changes. It is probably a once in a lifetime opportunity. Are a lot of people going to go broke? Some for sure. But not everyone. If you are not heavily invested in financial stocks, don't mind staying in the market for the long hall, have significant real estate or are simply a tiny fish like me with very little investment to speak of, it is definitely in your best interests to address the root causes of all this NOW. Not doing so now means that pretty much any wealth you ever accumulate for yourself will eventually be used to pay off the debt we created to 'solve' this meltdown. - austin356, on 09/30/2008, -4/+30Also - the bailout is not dead! Lets make sure our elected officials know it should be!
http://notrashforcash.org - PeppermintPig, on 09/30/2008, -2/+27Do I believe my ears, the WSJ is rejecting the status quo? I wonder how long that will last. Probably waiting for new, different, bolder, better central bankers to show up....
The Federal Reserve bailed out their friends anyways. So much for Congressional rulings. - richmomz, on 09/30/2008, -4/+29Now everyone is beginning to realize why the Founding Fathers insisted on an asset-backed currency. Every 'fiat' monetary system that ever existed has ended in hyperinflationary failure.
- triclipse, on 09/30/2008, -3/+26The WSJ is finally catching up to Thomas Jefferson, eh?
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
- Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802) - shanajk, on 09/30/2008, -3/+23Let's hope Congress will listen to economists like this.
- tk121, on 09/30/2008, -0/+13"Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out."
- Andrew Jackson, the seventh president of the United States, said these words to a delegation of bankers in 1832 - Ratteler, on 09/30/2008, -1/+12This is simple.How much of the $1.3 Trillion loss yesterday, was yours.
For more than half of this country, the answer was NONE!!!
"401K's and Money Markets" you'll hear them cry. If you're like more than half of America, you'll loose less than $250.
Debt... is only a winning game for bankers and brokers. The rest of are just at it's mercy.
We are on the verge of GETTING OFF DEBT, like getting off heroine. It's going to be cold turkey, and it's going to hurt like hell. But we can get clean.
We can get back to an economy based on real goods, and real work, traded at a fair market value to consumers.
And the good part is, that for more than half of us, things suck so badly... we will barely notice.
The people who will pay the hardest are the people who have been systematically robbing us for generations.
VOTE NO ON THE BAILOUT. VOTE NO ON THE RESCUE.
If America gets off the debt addiction we will have another benefit. The rest of the world is still hooked. - Arkons24, on 09/30/2008, -2/+11Awesome article.
- odigity, on 09/30/2008, -1/+9The Creature from Jekyll Island - A Second Look at the Federal Reserve by G Edward Griffin
http://video.google.com/videoplay?docid=-848491157 ...
Money As Debt
http://video.google.com/videoplay?docid=-905047436 ...
Money, Banking and the Federal Reserve - Mises
http://video.google.com/videoplay?docid=-466210540 ...
FIAT EMPIRE - Why the Federal Reserve Violates the U.S. Constitution
http://video.google.com/videoplay?docid=5232639329 ...
The MoneyMasters Part 1 of 2
http://video.google.com/videoplay?docid=-158315456 ...
The MoneyMasters Part 2 of 2
http://video.google.com/videoplay?docid=-733684576 ...
Please, take the time and watch these. The most important thing for Americans to understand is money and banking. More than anything. - Hangly, on 09/30/2008, -1/+9Who believed in the omniscience of central bankers in the first place? They're just people for crap's sake.
- kemp34, on 09/30/2008, -1/+7The international gold standard (see "Bretton Woods System") was abandoned in 1971!
It is hardly correct to believe that surviving 37 years somehow indicates long term stability! - rementis, on 09/30/2008, -3/+9Buy gold and silver and guns. You won't need any of them, but they're really cool.
- inactive, on 09/30/2008, -0/+5The central bank printed so much money and credit, they've ***** us over for years to come.
- kemp34, on 09/30/2008, -0/+5Would it be easier to produce gold or print paper/press computer keys?
Value is subjective, yes, but to argue that fiat currency somehow has an inherent value near gold is nonsensical. - inactive, on 09/30/2008, -1/+6HR 2755
HR 2755
HR 2755 - odigity, on 09/30/2008, -0/+5Gold has intrinsic value, based on demand and supply. Nothing to do with faith.
In the defense of fiat paper currency, paper does have some intrinsic value. But then they ***** that up by writing all over it with green ink. - Jasuus, on 09/30/2008, -3/+7I wish I understood this better.
- odigity, on 09/30/2008, -1/+5http://www.campaignforliberty.com/blog/?p=629
- inactive, on 09/30/2008, -1/+5Gold held its value during the depression. Which would you want? A piece of gold, a scarce mineral, or a piece of paper, that's created on a press?
- odigity, on 09/30/2008, -0/+4Modern economics is a grab-bag of whatever ideas serve the Establishment - politicians and bankers.
If you want some truth, try the Austrian school of economics. Hayek, Mises, Rothbard, etc:
http://mises.org/
There's a reason government-funded schools never mention these guys. That's what you get when you let government be involved with education - propaganda. - odigity, on 09/30/2008, -0/+4I love that man. Possibly the greatest American president. When asked what his greatest accomplishment was, he said "I killed the banks!". I've heard it's the epitaph on his tombstone as well.
- austin356, on 09/30/2008, -4/+8I really like their graphic - its snazzy. :)
- korvan504521, on 09/30/2008, -0/+3On the other hand, if you're newly retired, or about to retire, or worked for any sort of financial institution, you're pretty much screwed.
Oh, and if you don't already own a home, forget about buying one for the next twenty years. - DiggsOnlyJew, on 09/30/2008, -0/+3http://en.wikipedia.org/wiki/Bretton_Woods_system# ...
Not exactly a viable system... - uncleosbert, on 09/30/2008, -0/+3here's some background i found helpful...
"There was a time, not too long ago, when Washington did regulate banks. The Depression triggered the creation of government bank regulations and agencies, such as the Federal Deposit Insurance Corporation, the Federal Home Loan Bank System, Homeowners Loan Corporation, Fannie Mae, and the Federal Housing Administration, to protect consumers and expand homeownership. After World War II, until the late 1970s, the system work. The savings-and-loan industry was highly regulated by the federal government, with a mission to take people's deposits and then provide loans for the sole purpose of helping people buy homes to live in. Washington insured those loans through the FDIC, provided mortgage discounts through FHA and the Veterans Administration, created a secondary mortgage market to guarantee a steady flow of capital, and required S&Ls to make predictable 30-year fixed loans. The result was a steady increase in homeownership and few foreclosures.
In the 1970s, when community groups discovered that lenders and the FHA were engaged in systematic racial discrimination against minority consumers and neighborhoods -- a practice called "redlining" -- they mobilized and got Congress, led by Wisconsin Senator William Proxmire, to adopt the Community Reinvestment Act and the Home Mortgage Disclosure Act, which together have significantly reduced racial disparities in lending.
But by the early 1980s, the lending industry used its political clout to push back against government regulation. In 1980, Congress adopted the Depository Institutions Deregulatory and Monetary Control Act, which eliminated interest-rate caps and made sub-prime lending more feasible for lenders. The S&Ls balked at constraints on their ability to compete with conventional banks engaged in commercial lending. They got Congress -- Democrats and Republicans alike -- to change the rules, allowing S&Ls to begin a decade-long orgy of real estate speculation, mismanagement, and fraud. The poster child for this era was Charles Keating, who used his political connections and donations to turn a small Arizona S&L into a major real estate speculator, snaring five Senators (the so-called "Keating Five," including John McCain) into his web of corruption...
The stable neighborhood S&L soon became a thing of the past. Banks, insurance companies, credit card firms and other money-lenders were now part of a giant "financial services" industry, while Washington walked away from its responsibility to protect consumers with rules, regulations, and enforcement. Meanwhile, starting with Reagan, the federal government slashed funding for low-income housing, and allowed the FHA, once a key player helping working-class families purchase a home, to drift into irrelevancy.
Into this vacuum stepped banks, mortgage lenders, and scam artists, looking for ways to make big profits from consumers desperate for the American Dream of homeownership. They invented new "loan products" that put borrowers at risk. Thus was born the sub-prime market.
In 2000, Edward M. Gramlich, a Federal Reserve Board member, repeatedly warned about sub-prime mortgages and predatory lending, which he said "jeopardize the twin American dreams of owning a home and building wealth." He tried to get chairman Alan Greenspan to crack down on irrational sub-prime lending by increasing oversight, but his warnings fell on deaf ears, including those in Congress.
As Rep. Barney Frank wrote recently in The Boston Globe, the surge of sub-prime lending was a sort of "natural experiment" testing the theories of those who favor radical deregulation of financial markets. And the lessons, Frank said, are clear: "To the extent that the system did work, it is because of prudential regulation and oversight. Where it was absent, the result was tragedy...
Only a decade ago, sub-prime loans were rare. But starting in the mid-1990s, sub-prime lending began surging; these loans comprised 8.6 percent of all mortgages in 2001, soaring to 20.1 percent by 2006. Since 2004, more than 90 percent of the sub-prime mortgages came with exploding adjustable rates.
With interest rates low, housing prices on a steady rise, and practically no government regulation, mortgage finance companies devised high-interest, high-fee schemes to entice families to take out loans that traditional savings banks would not make. Many of the lenders were legitimate operations providing a market for credit-risky people. But there also were huge corporations, such as Household Finance, that sought extraordinary profits through unsavory means, called predatory loans. Not subject to government regulation, they bent the rules, lowering normal banking standards.
Mortgage brokers, the street hustlers of the lending world, often used mail solicitations and ads that shouted, "Bad Credit? No Problem!" "Zero Percent Down Payment!" to find people who were closed out of homeownership, or homeowners who could be talked into refinancing. They seduced millions of people into signing on the dotted line. Although sub-prime lending has been concentrated in minority and low-income urban areas, it has spread to the middle-class suburbs.
The sub-prime lenders didn't hold on to these loans. Instead, they sold them -- and the risk -- to investment banks and investors who considered these high interest rate, sub-prime loans a goldmine. By 2007, the sub-prime business had become a $1.5 trillion global market for investors seeking high returns...
Predatory loans sometimes involve a conspiracy between loan agents and unscrupulous home-improvement contractors, as well as appraisers who inflate the value of a house so that families will borrow more than the houses are really worth. Predatory mortgages often include last-minute, hidden second mortgages. Using bait-and-switch tactics, predatory lenders tout low interest rates in ads targeting the elderly and residents of low-income, working-class, and minority neighborhoods, without explaining the actual interest rates or that adjustable-rate mortgages mean that the rates will increase.
Borrowers are enticed with deals that require them to pay little or nothing down. The unscrupulous lenders approve borrowers for loans even if they've recently been bankrupt or don't have sufficient income to keep up the payments. These lenders don't document an applicant's ability to pay back a loan. They often just accept the borrower's word about his income and expenses. "You could be dead and get a loan," a mortgage broker told Holden Lewis of Bankrate.com, a leading Web source for financial rate information."
http://www.prospect.org/cs/articles?article=the_co ... - fuzzmeister, on 09/30/2008, -1/+4This is an opinion piece, and not one of the editors.
- DiggsOnlyJew, on 09/30/2008, -2/+5Fiat currencies are compared to gold all the time and when we were on the gold standard, the dollar/gold value ratio was often changed and the value of the dollar still decreased. It doesn't matter how hard it is to produce gold or paper, the paper created is managed and not mass produced. Gold has no intrinsic or inherent values, it is as useful as a rock on the ground or a piece of paper and it's current value is backed by faith. If a news report came out which indicated that demand for gold will go down because people don't like the way it looks, then the commodity value of gold will decrease, just like if demand for the dollar goes down, the value goes down, how is the value of either based on anything other than faith?
- uncleosbert, on 09/30/2008, -2/+5"To quote British economist Ely Devons, “If economists wished to study the horse, they wouldn’t go and look at horses. They’d sit in their studies and say to themselves, ‘What would I do if I were a horse?’ The problem has never been one of irrelevance—there are plenty of economic “horses” to study—but one of academic methodology, and this problem is deep and widespread. In fact, the prevalence of economics in political and popular discourse makes any autism all the more dangerous. In the extreme but common case, theoretical economists work in their offices, scribbling and running regressions, writing papers that play with variations on different mathematical equations. So, an economist’s theoretical work on industrial production likely involves tinkering with functions that convert variables labeled “labor”, “inputs,” and “capital” into “output.” His research will not involve trips to the factory. The vicious cycle of economic education helps keep this method alive by training them for exactly this kind of work."
http://www.hippolytic.com/0107/postautistic_econom ... - DiggsOnlyJew, on 09/30/2008, -1/+4"Through nearly a dozen hearings, we were frankly trying to fix something that wasn’t broke. Mr. Chairman, we do not have a crisis at Freddie Mac, and particularly at Fannie Mae, under the outstanding leadership of Franklin Raines."
"Under the outstanding leadership of Mr. Frank Raines, everything in 1992 has worked just fine. In fact, the GSEs have exceeded their housing goals. What we need to do today is to focus on the regulator, and this must be done in a manner so as not to impede their affordable housing mission, a mission that has seen innovation flourish from desktop underwriting to 100% loans."
Spoken by Maxine Waters (Rep [D] California) in 2004
Member of:
Committee on Financial Services
* Subcommittee on Housing and Community Opportunity (Chair)
* Subcommittee on Financial Institutions and Consumer Credit
* Subcommittee on Oversight and Investigations
* Subcommittee on Domestic and International Monetary Policy, Trade, Technology - danielyso, on 09/30/2008, -0/+3i have never supported the gold standard before, but this has got to be the most well thought out, lucid argument supporting it that i have ever read.
delusion free, histrionic free. just good common sense.
I'm going to ask my professors about it tomorrow. - vi0letruby, on 09/30/2008, -0/+3These are excellent...am glad someone posted the links. Thanks.
- PhantomRogue, on 09/30/2008, -1/+4You do realize that people with that mindset are what started this ***** way back after Jefferson and Washington had their terms in the White House...
Central Bank is based off of our Debt to other nations. To become "a power we had to go in debt to prove we are worthy of their money." The Federal Reserve (as a GOLD RESERVE) is fine and dandy, BUT, the power granted the Federal Reserve is a slap in the face of what our Founding Fathers wanted from their new Government. As soon as the currency became backed by something other than a tangible good (be it gold, dildo's or wheat) there is no stopping the creation of money.
The bigger the Government, the greater the possibility and probability there is for corruption. - fuzzmeister, on 09/30/2008, -3/+6Even if you went to the gold standard, you would still hold a piece of paper, and there is always the likelihood that the government will not fulfill its promise to back that up with gold. So, in a crisis like that, neither is worth much.
- Vodd9, on 09/30/2008, -0/+3Gold has proven itself a dependable currency throughout history, all the way back to ancient Greece. Like said before, we've stopped using money backed by gold for only 37 years. I think there's a noticeable difference here.
- inactive, on 09/30/2008, -0/+2" It's value is easier to manipulate than any fiat currency." That is the most insane comment I've ever read. It has intrinsic value! Why do we buy Swiss Francs? Why do we buy silver dimes? They kept their value for so ***** long it's amazing.
- inactive, on 09/30/2008, -0/+2So you guys admit their is value in gold, unlike the original poster. Gold backed bills are certainly better than nothing backed bills. You guys are insane if you think fiat money is better than gold. Fiat...declared, printed out of thin air. Diamonds are based on speculation based on artificial scarcity.
- logandurand, on 09/30/2008, -0/+2No amount of oversight can sufficiently prevent the collapse of a fiat monetary system. There always is always the danger of creating money faster than the economy can use it, something our current government has no issue doing. Hard assets, while not infallible, can never be created out of thin air.
- teddarling, on 09/30/2008, -0/+2Loved the video. It is so true. But it is taking our current economical crisis in the US for others to see this. I've already sent the video on to most of the people I know. I hope that others will do the same.
- OldSkoolSlacker, on 09/30/2008, -0/+2Gold has no objective, intrinsic value. This is true. Human beings give it value simply because it his glittery and rare. This is likely a byproduct of evolution where natural selection rewarded with survival any species that valued, and thus horded, precious resources when they proved to be in short supply. If for some reason gold suddenly became as readily available tomorrow as so many grains of sand in the desert, yes, it's value would plummet. Humans would no longer value it the same way. The only differences between gold and fiat money is the fact that gold is rare - and will always be rare compared to the availability of paper and ink - and because of this, gold has a natural regulator largely outside of human control (and perversion). It's true that we might find new gold deposits that would effect the overall value of gold and in turn devalue the currency, but the fiat people never admit how limited, difficult and rare that occurrence is compared to the ease of printing fiat currency on demand.
- fuzzmeister, on 09/30/2008, -1/+3Swiss francs are a fiat currency, just FYI.
- silverharbinger, on 09/30/2008, -0/+2I respect your opinion, and I have investments that have taken some big hits too, but the fed is going to keep doing these bailouts and likely driving up inflation with or without congressional (aka. the people's) approval. The central banks already proved that when they put another $630 billion dollars in easy credit out there for the banks yesterday:
http://www.bloomberg.com/apps/news?pid=20601087&si ...
If (and personally I believe when) their tactics fail and we're in even worse straits economically, there is going to be a lot of finger pointing going on. The government's and many people's reckless spending habits will be a huge factor in it all, but I will not give my approval to bailing out the greedy and the irresponsible and become one of those who deserves the blame just because I am afraid of what it might cost me to stand on that principle.
The truth is, I am not afraid of suffering some financial hardships if it gets us back on the road to being a more prudent and productive society. It's definitely a gamble to do nothing and to "let nature take it's course" to use a phrase, but it's also a gamble to tinker with the market, our money supply, and become increasingly socialist in an attempt to somehow sustain a way of spending that has not worked in the hopes that somehow it will start working. - phathead, on 10/01/2008, -0/+2Those economists you mention are wrong!
What has the government done with our Money?
http://mises.org/money.asp
Case against the fed.
http://mises.org/books/fed.pdf - odigity, on 09/30/2008, -3/+5Well, for the last 95 years, they've been raping the whole country while being treated as the wisest, most prestigious, and most benevolent people in the country. Most of the country fell for it, while the few who knew that it was the biggest scam in history, and that these people were more evil than Hitler (because they were the ones who funded him), could do nothing but be called conspiracy theorists for trying to explain the inner workings of international banking.
So, it's nice to see the information finally getting out. Sigh. - Ebacherville, on 10/01/2008, -0/+2no you don't have 6months, many forecast, October 7th to be a major date that will start the very fast collapse.
- phathead, on 10/01/2008, -0/+2You are a fool, but sort of right... The context of events matters and you as a consumer is not always objective.
What has the government done with our Money?
http://mises.org/money.asp
Case against the fed.
http://mises.org/books/fed.pdf
The Austrian's did predict it! And U didn't listen!
http://www.youtube.com/watch?v=7UrQsvsKHoM&feature ... - uncleosbert, on 09/30/2008, -0/+2that doesn't make any sense. the dopey democrats haven't been able to pass much legislation until after 2006, when this problem was already getting lots of press. if you think this crisis is really due to fannie and freddie, i have some interesting things to show you:
"Problem is, half of the subprime loans came from mortgage companies with no CRA involvement at all. Another 25%-30% came from companies with very little CRA exposure. For those who left their abacus at home, that's 80% of the loans which were fully or largely outside CRA jurisdiction. More than that, the non-CRA mortgage firms made subprime loans at twice the rate of CRA-covered firms."
http://economistsview.typepad.com/economistsview/2 ...
no one forced banks to lend money to people. in fact, if you think that is a problem, you should read this:
"In late 2006, as economists warned of an imminent housing market collapse, housing Secretary Alphonso Jackson repeatedly insisted that the mounting wave of mortgage failures was a short-term "correction." He pushed for legislation that would make it easier for federally backed lenders to make mortgage loans to risky borrowers who put less money down. He issued a rule that was criticized by law enforcement authorities because it could increase the difficulty of detecting and proving mortgage fraud."
http://www.salon.com/politics/war_room/2008/04/14/ ...
you keep believing that the dopey democrats are to blame... - olafcore, on 09/30/2008, -0/+2quit flaming
- odigity, on 10/01/2008, -0/+2I never said he was perfect. Pretty much all the presidents have been *****. (Thomas Jefferson may be the only notable exception.) I'm sure he did terrible things.
But he KILLED THE BANKS. Do you have any idea how much courage and patriotism that required? He could have benefited from just working with them, like all the other presidents since 1913 have (except Kennedy towards the end, and look what happened to him). But he didn't sell out.
The central bank (Federal Reserve) is the greatest enemy of America. For that, I take my hat off to Andrew Jackson. -
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