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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: bruiser98 who wrote (109995)11/5/2013 1:34:05 PM
From: Elroy Jetson1 Recommendation

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ggersh

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I cannot recommend your post highly enough.

Endogenous money supply can and should be controlled by the Fed or other banking regulators through prudent lending regulations.

Alan Greenspan did not believe in enforcing prudent lending standards, leaving it to lenders to regulate themselves. Of course this resulted in a collapse of the banking system, which has happened historically every time prudent lending standards are not enforced.

Greenspan professed surprise that real estate loans made for 100% of value, without income or asset verification, and the option to skip 36 payments, could have possibly gone awry.

Yet money lent to anyone regardless of ability to repay, and without significant personal consequence, predictably increased endogenous money growth in exactly the way the White House felt they needed to keep the economy bubbling along after 9/11 - one month prior to the rapid growth in endogenous money supply.

Certain fatuous economists claim the rapid endogenous growth in lending, due to the lack of enforcement of prudent lending laws, was merely a function of the free market rather than a deliberate government policy.

It was similar to a free-market increase in crime if the police were to suddenly decide it's no longer their role to enforce laws.
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