Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: arun gera who wrote (74173)	11/27/2010 10:59:03 PM
From: Maurice Winn	2 Recommendations Read Replies (2) of 74559

Arun, it wasn't simply the debt, it's the spending by governments and planned spending [which is what debts are in terms of expected pensions, medical payments and continued employment of hordes of government people]. The cause of the problem was bad financial management not loose monetary policy. <The blowups are happening because of loose monetary polices that have been sending false signals to governments, companies, and individuals. > That's like blaming beer brewers for alcoholism and opium merchants for opium smoking. You can lead a horse to beer but you can't make it drink. See "I am a mindless Zombie" stream from way back in 2002 where I discussed this very issue of mindless people blaming not just their supplier for lending them money but the inventor of the money [the Federal Reserve]. That's like blaming the inventor of inches, feet and miles for having to walk too far home. "If you'd done it in kilometres, it would have seemed further and I wouldn't have died of thirst on the way". People do have minds, which it is to their considerable advantage to use. If a bank says "Go on, borrow this money" and Big Ben says "Go on, there's heaps of the stuff and BTW take the adjustable rate for a discount", the borrower considering the loan doesn't actually have to take it. Mqurice

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