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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (9064)	11/9/2002 12:08:59 AM
From: jjkirk	Read Replies (1) \| Respond to of 89467

Thanks, Ork...He don't mince words...jj

To: orkrious who wrote (9064)	11/9/2002 12:28:36 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

some nuggets from Noland no solutions offered perhaps no solutions other than a massive cleansing from a deep deep recession one where politicians label a depression as simply "an ongoing difficult recession" I call it a ModernDay Depression in the midst of interventionists but one point to keep in mind ALL GOVT ACTION PROLONGS AND DEEPENS THE RESOLUTION PAIN "Recent “debate” is increasingly reminiscent of the late 1920s and early 1930s, to the point of being eerie. Regrettably, the earlier wrangling about prices, markets, and monetary management was anything but satisfactorily resolved. In the end, the Monetarists won and history (and curriculums) was revised to blame the Depression on a shortage of money and liquidity. They got it absolutely wrong. Amazingly, virtually no one is today willing to admit that Federal Reserve policy has been an unmitigated disaster..." ....... "It is my view that the post 9/11 aggressive rate cuts (and consequent blow-off in mortgage finance and Credit market speculative excess) were an even greater mistake than the post-Russia/LTCM cuts and “reliquefication” that fueled the fateful technology/stock market speculative blow-off. And, amazingly, no one will step up and admit we have set course for financial disaster. Sure, ultra-easy money stimulated unprecedented household borrowings, with a spike in home and auto sales. We will now pay the price for artificially inflating housing and auto demand. It was absolutely irresponsible monetary policy to actively stimulate consumer over-borrowing and spending in this manner – a desperate attempt to Sustain Unsustainable boom-time demand. It’s been little more than a dangerous monetary gamble with great risk and NO possibility for success." ....... "The impairment to system stability from overheated leveraged speculation is simply much too great. There were critical lessons not learned from the 1927-1929 experience and the Great Depression (and further motivation to fight historical revisionism “tooth and nail”)." ....... "The inflationary regime worked magically when financial asset prices were inflating and speculative juices were flowing, but buckled in inoperability in reverse." ....... "But the issue is not the level of bank capital, but the quality of system debt, distorted asset prices, and a maladjusted economy. Yes, the Fed could have printed money and replaced the banking system’s lost capital in the early Thirties. Yet the $5 billion would have quickly proved irrelevant and impotent in sustaining inflated asset prices, tens of billions of non-productive debt created during the manic stages of the boom, and the insatiable Credit appetite of a maladjusted economy. Yes, a recapitalized banking system could have fed the Bubble awhile longer, but there was no changing the harsh reality that it was a Bubble. No amount of “money” was going to right the system, only extend the wrong." ....... "the Fed can easily “print” but the Trillions that the U.S. financial sector must create From Here On Out. The Credit system has Bubble binge consumption (with $500 billion current account deficits) to sustain. The Credit system has inflated (in many cases, especially California, grossly inflated) real estate prices to keep levitated. The Credit system has unfathomable quantities of non-productive debt whose value rests on the continued issuance of massive quantities of non-productive debt." ....... "The issue is a massive Credit Bubble that has likely reached the point of being inoperable in reverse. There came a point when Nick Leeson’s losing trade spiraled completely out of control, and the marketplace figured out as much. We think we may be approaching a similar crossroads for the Fed’s trade – “The Great Experiment” - gone terribly awry. And to think the inflationists are giddy to continue betting as if the stakes were only an unlimited number of green chips."