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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: mishedlo who wrote (97132)4/29/2009 2:25:42 PM
From: Elroy Jetson3 Recommendations  Read Replies (2) of 116555
 
Sorry, but your post is total nonsense. .

Greenspan's refusal to enforce "prudent banking ratios and standards" is the very heart of our problems.

When banks can operate with their own preferred capital ratios, rather than with enforced prudent banking ratios, credit expansions drive interest rates down, instead of driving them up as naive students of supply and demand would expect.

Ignoring prudent banking ratios and standards may or may not be libertarian, but inquiring minds will discover that many hundreds of years of banking history have show it to be the direct route to banking system failures.

The person who believes banks can operate in a "free-market manner" without regulations to restrain irresponsible behavior is the same person who believes all laws should be eliminated because the free-market will eliminate crime and bad personal behavior. This is the sort of belief system held by spoiled children with no real world experience.

Greenspan's shocking lack of interference in bank behavior is the cause, not a bold new road to a cure. Market rates for money, over the short-term - such as half of a human lifetime, exist only when banking capital standards are enforced.

In the long-run we're all dead. And that's a sorry period to wait in order to be an ideologically pure spoiled child.
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