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Pastimes : THE SLIGHTLY MODERATED BOXING RING -- Ignore unavailable to you. Want to Upgrade?

To: Lazarus_Long who wrote (13985)	6/3/2002 4:02:06 PM
From: goldworldnet	Read Replies (1) \| Respond to of 21057

The Federal Reserve is not perfect or entirely honest, but it has been the world's most successful banking system for the past century. Also, prior to its inception there were serious problems. Bankers control the monetary supply and take their due. The current system has been the least destructive to the masses. * * *

To: Lazarus_Long who wrote (13985)	6/3/2002 8:55:29 PM
From: Dayuhan	Read Replies (1) \| Respond to of 21057

So we tax poor Americans to pay rich banks? The whole issue of 3rd world debt is a little more complicated than is often admitted. In the 1970's a system was devised whereby banks in developed nations could lend money to private companies in developing nations. Since the banks couldn't repossess assets in these countries, the borrowing companies had to get guarantees from the governments, meaning that if the companies defaulted, the governments would assume responsibility for the loans. Since everybody knew that governments don't default (yeah, right), the banks considered themselves protected, and loaned heaps of money to very dubious companies. The IMF was supposed to police the governments and make sure they didn't issue irresponsible guarantees. Of course the cronies of the various 3rd world dictators started borrowing money and slipping a percentage to the dictator in return for a guarantee. The money went to Switzerland. The companies defaulted, and the national debts exploded. The odd thing was that the IMF, in most cases, never stepped in and lowered the boom. The reason was simple: without a continued flow of money to keep their boys happy, the dictators would fall, and many of them were regarded as essential to the battle against communism. The IMFs sponsors refused to let them shut down the flow of money to their boys, even though they knew full well what was going on. The banks knew too, but as long as the debt was covered by some patchwork restructuring plan, it could be counted as an asset, and the short-term books looked fine. The cold war bureaucrats used our savings accounts to do what they were no longer permitted to do with our tax dollars: subsidize the dictators that they myopically believed were vital weapons against communism (they generally were anything but that). The real losers are the 3rd world taxpayers, who not only had to suffer the ravages of the dictators, but after the dictators were gone, were expected to pay back the cost of keeping the dictators in power. What we pay out in foreign aid is a tiny fraction of the net capital flow that debt service brings out of the developing world. Much of the debt being serviced was loaned in full knowledge that the money was not being invested in profitable activities, but instead was being stolen by non-elected dictators and their cronies. One wonders if the "moral hazard" really ought to be borne so largely by the third world poor? Of course they will continue to bear it, being the least influential of the players involved....