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- Heysal, on 03/17/2008, -35/+235The FED IS the biggest scam ever perpetrated on a people. Time to take it back and go with gold backed currency again so we can stop this hostile corporation before many of us die of them.
- TheRealToma, on 03/17/2008, -19/+121While were at it, lets get rid of K-Fed too. Hes such a douche.
- sotopheavy, on 03/17/2008, -19/+106Down with Fed, Up with mini-skirts!
***** You FRank (Federal Reserve Bank)! - brad3378, on 03/17/2008, -21/+95There's just no way we could go back to a Gold Standard now.
Our government is already $9,400,000,000,000 in debt (today we crossed the $31,000 per citizen mark) and we don't have the resources to acquire enough gold to support a fractional reserve system with a mere 1% Gold backing for all of the cash in circulation........let alone 10%
Add that to the fact that gold prices would rise even higher if the government introduced a buy-back program to buy back thousands of tons of gold. It's a no win situation at this point. We never should have abandoned the gold standard to begin with.
In summary, we're *****. Amero here we come. - timla, on 03/17/2008, -9/+72If the federal government is bailing out a corporation, then there ought to be someone going to jail.
- sgiffy, on 03/17/2008, -17/+78This is not really a bailout. The company is done. It was bought up by JPM. What the Fed did is exactly what they are there to do. They lent Bear money through JP so that it would not collapse. In essence, they provided liquidity. Remember it was a lack of liquidity in financial institutions that helped give us the Great Depression.
Bear had to put up collateral, with a pretty big haircut. Meaning that the collateral is much more valuable then the amount being lent. The money lent sprung into existence when it was lent, it did not come form taxes, and when it is repaid, likely by whoever buys bear, the money will disappear.
The problem was not that Bear was worthless, but that it had no cash. This makes it impossible for them to honor their contracts with others and do what companies like them do. Had nothing been done and they had defaulted, many more would follow, and countless people would lose their jobs, retirement, and savings. That's a recipe for pretty severe financial disaster. Not to mention that because deposits in brokerage accounts are insured, the government would have to replace the lost value and that would cost the taxpayers a lot. - Boshow, on 03/17/2008, -5/+51You can blame everyone for this:
1. People - Buying ***** you can't afford. Refinancing your mortgages for the 4th time. Having car loans out on cars you don't even have anymore. Basically, not being fiscally responsible.
2. Lenders - Giving out too many risky loans. Not telling people that their interest rates will go up and cost them more than they can afford. Not being fiscally responsible.
3 The FED - Putting a bandaid on a open wound. Cutting rates so more money can be borrowed.
If any one of the three acted with our future in mind, this could have been avoided. It's one big circle-jerk. In other words, we're boned. - Dumbledorito, on 03/17/2008, -11/+49Ah, the "invisible hand" at work, again.
Corporations ensure there's no such thing as a free market, and they get their gov't cronies to pick up the pieces when their houses of cards collapse. - GhostyBoy, on 03/17/2008, -8/+45Liberty dollar attempted to create a gold backed currency, but just before they could send their first shipment they were raided by the FBI.
The money changers don't take *any* chances on control of the money supply, so trying to take it back from them is risky business. It would have to be an independent move, because the government will *never* give permission for such an endevour, and the gold would likely have to be seriously defended, because the FBI, CIA and IRS will likely come heavy in order to take it down.
This is serious business. Presidents get shot over this. - GeorgeClayton, on 03/17/2008, -9/+45When an individual has poor financial planning, they lose their car.
When small businesses don't plan properly or just plain "***** happens" they die.
When BANKS have poor business practices, we just bail them out.
why? No risk business? - Peko, on 03/17/2008, -3/+30Ok, actual serious question. I know a little about the entire "Let's get back to the gold standard" thing. What's an actual plan to implement a return to the gold standard? There are serious obstacles and "political hurdles" to overcome in any achievement like returning to the gold standard and I'd be curious if there are some semi-intelligent diggers who might have some ideas.
(And when I say "return to the gold standard" you can insert any methodology of non fiat currency as you see fit, just let me know what you're up to) - inactive, on 03/17/2008, -6/+32ignore what eyesurgery says - read "The Case Against the Fed" by Murray Rothbard to answer your question.
- apc3161, on 03/17/2008, -4/+29There was a famous Nobel winning economist named Friedrich Hayek who talked about how to best implement this. He came up with the idea of dual currencies.
http://en.wikipedia.org/wiki/Friedrich_Hayek
The idea being that if you had a fiat currency and a competing currency. People would slowly adopt the stronger currency. In this case, that currency would be a gold backed currency. People would slowly choose to convert their savings into this currency and ask to be paid in that currency. It's the basic free market principle, when everyone is inherently looking out for their own well being, society as a whole will benefit. The weaker currency will slowly phase itself out of existence.
This is actually a very simple system for the government to implement. Just get rid of the laws that say only U.S dollars can be used as currency in this country. People will slowly start using other forms of currency. Gold backed, Euros, Silver backed, British Pounds, who knows. But eventually a consensus will be reached as to what the alternative currency will be. It will be the currency that people believe best suits them by retaining its value. The government wouldn't even need to regulate it theoretically. Just get rid of the laws that currently make this illegal, and I can promise people will take actions that best suit them.
If the government wants us to continue using dollars, they can do so simply, they would only need to stop deflating the value of the dollar on purpose.
Competition in almost all sectors of life is good, why doesn't this apply to currencies as well? Of course the very wealthy already know this. Hence they majority of their savings are in stocks, bonds, commodities, real estate etc. They don't invest by holding dollars. However, those who don't have as much spare cash or who don't know better, don't have this privilege. Dual currencies would put them in a better position as it would quickly become common knowledge which currency is stronger and which currency will retain its value. So the poor and those trying to save whatever they can would really benefit.
This was one of the things that made me start to like Ron Paul. I heard someone on the TV say, "Have you ever heard of Friedrich Hayek?" and RP responded with, "Freedom to Serfdom is one of my favorite books" - Homerr, on 03/17/2008, -5/+27I thought Republicans hated big government bailouts...
- XmenArt, on 03/17/2008, -3/+23Nice to see that the desperate banks and investment groups losing their homes are finally getting the bailout they need...wait what?
- 1gunners4, on 03/17/2008, -3/+22Which is why they shouldn't bail out the banks, as they also took the risk. The banks didn't force people to take out ridiculous loans, that was all on them.
- inactive, on 03/17/2008, -2/+21I wonder if Bear Stearns wishes it could get back the $165 million dollar exit package they gave to Warren Spector for leaving in Aug. '07?
- kingmanic, on 03/17/2008, -2/+20Buy Canadian Dollars: It's like US dollars except it's not crashing like Amy Winehouse at 10 am. Comes in Assorted colours.
- samjam, on 03/17/2008, -4/+21Be scared not angry - so now the Federal Reserve can foreclose and own all your houses?
The oldest incidence of this I know of is from Josephus account in Antiquities of the Jews where Joseph (of Technicolor Dream-coat fame) gets the starving egyptians to trade all their property and finally their houses and land to Pharaoh in exchange for wheat.
Pharoah let them stay in their property but charged them yearly for it.
One way to buy the whole world is to use interest so that people owe more than they can pay, but inflated property prices is a quicker way to do it.
I don't know if this is the plan, I merely note the re-occurance.
Sam - mariod505, on 03/17/2008, -11/+28Dugg down for inaccuracy.
Bear Stearns wasn't bailed out at all. That is demonstrated by the fact that shareholders (including the executives) now own shares worth $2 (purchased at $150 one year ago). There was no government paid plan. JP Morgan was only loaned money to secure the counterparties of Bear's outstanding trades and their client's investment accounts (yup - that's your money being secured by action of the Fed). The Fed has agreed to provide JP Morgan very short term loans (as they normally do) to allow banks to clear multi-day transactions (that is their job). The change was that those loans can now be backed up by Asset Backed Securities, the upper limit is raised, and the loan duration was widened to 3 months. THEY ARE NOT ACCEPTING MORTGAGE BACKED SECURITIES AS COLLATERAL.
The FED is doing the right thing. They let Bear Stearns die for its sins while protecting its clients and partners, preventing a global run on banks, which would have otherwise crushed many other banks today (remember, banks are usually leveraged 30:1).
The US banking system needs better mechanisms to provide better valuation of assets and transparency - but this "rescue" by the Fed was the reason today won't go down in history as Black St. Patrick's Day. - swrostmore, on 03/17/2008, -2/+17This is from BBC news -
"The irony of CCC's problems is that the measures brought in to help ease the global credit crunch, may actually have exacerbated the situation.
Earlier this week, the US Federal Reserve, the Bank of England, the European Central Bank and other central banks said they would pump $200bn into financial markets to stimulate lending.
As part of their plan, they would allow lenders to put up the problematic mortgage-backed securities as collateral for the new central bank-backed loans they were offering.
However, instead of underpinning the mortgage-backed securities market, it seems to have had the opposite effect, giving lenders an opportunity to dump the risky asset.
**"The Fed's new lending emergency lending facility allows the banks to swap mortgage-backed debt for Treasury Bills in a way that Carlyle could not do," said the BBC's business editor.**
"So it would be rational for the banks to take Carlyle's assets and exchange them for top-quality, liquid US government bonds, rather than leave loans in place to a business, Carlyle, whose assets remained highly illiquid."" - GhostyBoy, on 03/17/2008, -4/+18If anyone is interested in protecting their assets you could always just buy your own gold and silver coins. Even if the dollar is inflated to absolute worthlessness gold will still have value. You don't need the governments permission to return *yourself* to the gold standard.
- timbofirstblood, on 03/17/2008, -3/+16How? We don't have enough gold to do that, and no one is going to let us buy gold with dollars if we're going to use it to replace dollars; that would be like them giving it away. What is going to happen to all of my dollars when we switch over? I don't get it.
- bromac, on 03/17/2008, -1/+14Anti-semetic? WTF? There's no mention at all of Jews or Israel.
It's Anti-fed, which I'm for. I have no clue if the executives of the Fed are jewish, and I really don't care. What they're doing is wrong if they were hindu, christian or Pastafarian. - inactive, on 03/17/2008, -0/+12"The bottom line is our currency is more stable today than it has ever been in recorded history. " Not true. Inflation is proof that our currency is not stable. Have you looked at the price of gas, housing, food, anything made out of commodities (ignore the offset caused by the falling cost of labor due to outsourcing) lately?
- Spektr4, on 03/17/2008, -1/+13It's a catch-22. If some of these big banks fail, they can take down the economy with them. So it's damned if you do, damned if you don't.
- rholland356, on 03/17/2008, -7/+19Gold standard talk is utter troglodyte rubbish. The source of the problem today, as it has ALWAYS been in financial crises past (and fallen empires as well) is human greed. This time the greed of the wealthy schemed with the greed of those hoping to beat the odds and buy a home of their own, and the greed of homeowners looking to make a quick buck on overpriced real estate.
Until the day that people are excluded from making the rules they live by, greed will continue to drive periods of fiscal disaster. - thechitowncubs, on 03/17/2008, -1/+11Screw the common good, let the mother f'ers burn who leveraged their money WAY TOO FAR.
- swrostmore, on 03/17/2008, -1/+11Spitzer's hotel takeout check was written out of his own pocket - the mortgage bailout is taken out of ours.
- domokunt, on 03/17/2008, -1/+11privatize the profits, socialize the losses.
- blindhammer, on 03/17/2008, -5/+15That's your analysis. The Austrian School of economics thinks that Great Depression was caused by rabid credit spending and inflation.
- MemeWarrior, on 03/17/2008, -3/+13Don't be an idiot. It would be a gold backed currency, not a currency made of gold.
- XanderDee, on 03/17/2008, -2/+12JFK did it before he died but it was reversed... Executive order 11110, look it up.
- 4degrees, on 03/17/2008, -2/+12not banks taking the time to not loan money to people they KNOW are unable to pay? Why is predatory lending being ignored here?
- rick02840, on 03/17/2008, -11/+21This is another clear example of the hypocracy of Republicans/Conservatives. They are happy to do bailouts as needed, even though government bailouts are non-free-market. Yet talk about government regulation that might have prevented the catastrophe to begin with? No way, that would anti-free-market.
- NelsonR, on 03/17/2008, -1/+10Amazing, the government is not of the people, it's a government of our elite. The Fed didn't accept bad collateral every American now is part owner of this bad debt, you just got screwed to pay for fat cats to sit on their lazy asses and think about new ways to screw the little guy again. Here's a way to get back at them, now that your house is devaluing and if it is worth less than appraisal, or nearing it, give the fat cats the home back, walk away. They have ways to screw you, payback can be rewarding. Besides, if you can't pay for a house why have that ball and chain, in other words servitude or slavery leading your daily life. Our financial institutions and their outrageous payscales are out of sync with Americans and even when they are caught in corruption and fraud jail time is infrequent and at a Holiday Inn incarceration. Enough is Enough.
- Donwangugi, on 03/17/2008, -12/+21Okay, I really, really, really wish people would take a history lesson and read the article. The Fed here is trying to fix the problem, by doing the opposite of what they did during the Great Depression. When the Great Depression rolled around the same scenario was present. Money was in short supply because banks made loans to people and could not pay it back (because they all blew it on the stock market, which crashed. Similar to the present situation as arm's push up their mortgage payments and banks do not get their money back). When the Fed decided, initially, "hey we'll let you guys figure this one out." Money supply shrunk by a third. And deflation actually occurred, because no one had money. Everyone went to the banks and asked for money, so many banks fell. By the time the Fed stepped in it was too late. The Fed is trying to prevent this, by buying up bank debt and flooding the market with money. As a result, there WILL be inflation. Now this combined with high gas prices and fewer jobs may actually be a problem. But that part is NOT the Fed's fault. They are trying to fix the problem in the only way they know. They want to contain the debt and prevent a Depression, perhaps allowing a small recession. If anyone can contain bank debt, it is the central bank. You act as if this is silly, but other country's central banks are doing the same for their corporate banks who were sold American debt during the boom of the housing market.
The gold standard is silly, especially now as the dollar falls and gold becomes increasingly valuable as an investment tool. (Because gold never looses its values, even if a country fails.) Our dollars would never buy enough gold to support our currency. - inactive, on 03/17/2008, -1/+10You don't go back to the gold standard overnight. You allow competing currencies in the banking system and let people choose which ones they want to work for or spend. If I had to choose between 2 jobs, and only 1 offered to pay me in silver or gold, that employer would have a serious advantage.
- bc289, on 03/17/2008, -10/+19Please stop with the gold-backed currency crap. Gold's value fluctuates like crazy as well, just look up a 20 year chart of its price to see that. Second of all, we have already tried a gold-backed currency and it failed. It's called the Bretton-Woods system. When we were on a gold standard, we saw depressions, not recessions. When other countries were on a gold-backed standard, they saw currency crises and speculative attacks. This gold-backed currency has historically sucked, but I don't expect many diggers to have known this anyway since it is never mentioned in Zeitgeist or Ron Paul blogs.
- thbt, on 03/17/2008, -0/+9Ironic that I'm seeing an ad here for LowerMyBills.com... "Fed Funds Rate Dropped to 3% on January 30... $180,000 mortgage for $699/mo!"
- mediaspree, on 03/17/2008, -8/+16They seem to know more than those running the show. All Bush can say is the FED is doing a heckuva job.
- inactive, on 03/17/2008, -0/+8Bear got burnt by bad paper.
Loans made to subprime borrowers (i.e., people with bad credit ratings due to poor payment histories) were bundled up into paper that was represented as collections of loans made to people with good credit. This was fraudulent. - Ouze, on 03/17/2008, -4/+12silly you. Jail is for poor brown people who sell tiny bags of crack cocaine worth less then a medium latte, not for the miillionaires who bilk millions of investors out of their savings and pensions. Remember, priorities!
- loggia, on 03/18/2008, -1/+9Hmmm... let's see. Is it the fault of 20 or so major financial institutions that have billions of dollars, hundreds of thousands of employees, decades of experience in finance, massive amounts of statistical data and computer models on loans and defaults, market experts and lavishly rewarded CEOs...
Or a guy named Bud who never had a mortgage and had crappy credit?
Hmm.... gee, who should we blame??? - allowners, on 03/17/2008, -1/+9I'm Fed up.
- bendru, on 03/17/2008, -2/+9So what you're saying is that once the thing of real value (gold in your example) disappears then the money is worthless? Isn't that what we've got today?
- inactive, on 03/17/2008, -0/+7have we met?
- Hangly, on 03/17/2008, -0/+7Yes, we all get that. But "injecting liquidity" here is just a euphemism for "creating 200 billion dollars out of thin air." That doesn't solve anything, it just moves the liability around. This way the dollar will be taking the hit. (i.e. us.)
There is no such thing as a free lunch, no matter what hocus pocus equations economists try to throw at you. Shell games like this don't create stability or wealth, they only postpone the inevitable and will probably make things worse. - bentaisan, on 03/17/2008, -3/+10The Fed is not a government agency.
- GhostyBoy, on 03/17/2008, -1/+8Funny, my family is Jewish.
I'm pretty sure you just reached for that conclusion. Nothing I said implied Judaism in the slightest. -
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