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Politics : Ask Michael Burke
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To: Ilaine who wrote (42211)1/5/1999 9:49:00 AM
From: Mike M2  Read Replies (1) of 132070
 
CB, the only thing we learn from history is that we fail to learn from history- Santayana hohoho In March 1929 Paul Warburg -who played a major role in the establishment of the Federal Reserve System in the U.S. said : " History, which has a painful way of repeating itself, has taught mankind that speculative over-expansion invariably ends in over-contraction and distress. If a stock exchange debauch is quickly arrested by prompt and determined action, it is not too much to hope that a shrinkage of inflated stock prices may be brought about without seriously affecting the wider circle of general business. If orgies of unrestrained speculation are permitted to spread too far, however, the ultimate collapse is certain not only to affect the speculators themselves, but to also bring about a general depression involving the entire country." ..." When the savings of the masses are deposited as margins for Stock Exchange speculations, and when the extravagant use of funds for speculative purposes absorbs so much of the nation's credit supply that it threatens to cripple the country's regular business , then there does not seem to be any doubt as to the direction in which the Federal Reserve System ought to exercise its influence quickly and forcefully. People who express fear that increase in the Federal Reserve Bank's rediscount rates might hurt business overlook the far greater hurt the country will have to suffer if their advice to permit the situation 'to work itself out' were followed...." IMO the time for preventative action has long since past and there is no way to avoid the tough love in store for all. Look to SEA and Japan - their Central Bank policies have done little to mitigate the damage brought on by the bursting of their bubbles. Mike
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