It's amazing how the money debate began from the beginning of this country. War has long been the catalyst for many of our needs. Even to this day many of our technological advances are a direct result of man's need to make war more efficiently. Now here we are in the internet age which began as a defense department program. We have traveled so far....the need to finance the weapons of war are being refocused into plowshares. The world is moving ahead faster than ever and we are experiencing prosperity because peace has broken out in the world. Our prosperity is spreading the world over....I believe the faster the better since so many human beings are extremely poor by our standards. So the demand is great....how can our growth rate be too fast for a nation? If Microsoft was growing at 6% we wouldn't invest a dime in it! Do you think the richest man in the world would take steps to slow his companies growth rate to 3% to ensure long term prosperity....of course not. Our economy is not overheating, the companies that are expanding at incredible rates ARE creating new products and services. We don't need to worry about a tight labor market within our borders...there are no more borders....the world is truly a global market place/ work place....you may be reading this post from anywhere on the globe. The world is now a virtual world of real ideas and commerce of intellectual content as well as goods. Real estate is finite...in a virtual world there is no inflation. The business services that are being created is not air and will not evaporate...there is need/demand for this creation of ideas. Innovation is not inflation. Because the demand is high more assets are employed to fulfill the need. Now if I suddenly say I will finance my product to you, you say fine.....but as a banker I want 8% return on capital....but in 6mos I require 8.75% you have a legitimate reason to know why you have to pay more? Where does this additional cost of money come from? It's not inflation! I'm just charging you more.
This is not about debt...it's not about costs, it's about greed and taxation....if a company/country expands it increases revenues as well as expenses. Profitability has many factors. This country is not going bankrupt because it's growing too fast. Our citizens do not require our government to show a 10% sequential profit quarter over quarter. If we did....we would not have income taxes? Interest rates are a form of taxation which eat away at our discretionary cash. It's money we are forced to pay on top of our debt. Bankers want a fee for you to borrow money, that's only fair. If the need is higher than the supply you pay more. This is the problem Jefferson and others have had with bankers....you put up gold/land for paper....paper is worthless. The fed prints paper and charges you their rate....it's the printing of more of this money that is INFLATIONARY....( the Fed has been removing money from the system since Y2K, therefore the supply is less while the economy and demand is increasing)(it's the same thing OPEC has done with the oil supply)now, when you go to a banker for a loan they want collateral to insure their risk. This new business economy deals with assets that these old economy bankers do not understand and have a hard time placing a value on. Internet companies don't need real estate! They don't need buildings! They create revenues with intellectual content and services out of thin air<g> Now, the FED is attempting to tighten lending by reducing the amount of printed money and raising the costs of borrowing it. Well, the problem is, Wall street is providing all these companies all the money they want and need and more! We're loaning them our money for a return on our investments...we're taking the risks! we're effectively cutting into the bankers business! Those of us who have been investing in this new economy have grown to understand the assets and have seen and are using the technological benefits everyday....we have learned to see the value...the whole world is learning the about the intangible asset that direct free access to information has brought to the world....it's tangible virtual wealth! Efficiency/productivity through the saving of time, the ability to respond instantly to this written word has value! The transmission of thoughts and ideas at the speed of light has blown the old ideas of the industrial age out of existence. Our productivity has resulted from this efficiency....and it should continue, because of scale alone. The market is far from saturation. This expansion/creation of wealth is real!!! Any form of taxation is the stealing the fruits of your labors.
sorry to be so long winded...that's how I see it.
William Jefferson Jordan....my friends call me Bill<g>
Perhaps Mr.Jefferson could have stated it better for me...perhaps he did? Below:
Jefferson had a lot to say....
"I sincerely believe... that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale." --Thomas Jefferson to John Taylor, 1816. ME 15:23
"Certainly no nation ever before abandoned to the avarice and jugglings of private individuals to regulate according to their own interests, the quantum of circulating medium for the nation -- to inflate, by deluges of paper, the nominal prices of property, and then to buy up that property at 1s. in the pound, having first withdrawn the floating medium which might endanger a competition in purchase. Yet this is what has been done, and will be done, unless stayed by the protecting hand of the legislature. The evil has been produced by the error of their sanction of this ruinous machinery of banks; and justice, wisdom, duty, all require that they should interpose and arrest it before the schemes of plunder and spoilation desolate the country." --Thomas Jefferson to William C. Rives, 1819. ME 15:232
"If the debt which the banking companies owe be a blessing to anybody, it is to themselves alone, who are realizing a solid interest of eight or ten per cent on it. As to the public, these companies have banished all our gold and silver medium, which, before their institution, we had without interest, which never could have perished in our hands, and would have been our salvation now in the hour of war; instead of which they have given us two hundred million of froth and bubble, on which we are to pay them heavy interest, until it shall vanish into air... We are warranted, then, in affirming that this parody on the principle of 'a public debt being a public blessing,' and its mutation into the blessing of private instead of public debts, is as ridiculous as the original principle itself. In both cases, the truth is, that capital may be produced by industry, and accumulated by economy; but jugglers only will propose to create it by legerdemain tricks with paper." --Thomas Jefferson to John W. Eppes, 1813. ME 13:423
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