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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: UncleBigs who wrote (58267)	4/15/2006 10:30:38 AM
From: Tommaso	Read Replies (1) \| Respond to of 110194

>>> how exactly do you see the debt and speculation gets cleansed and the imbalances corrected without a depression? <<< That's a rhetorical question that implies that there is no other way out. "Cleansed" is a moralizing expression. To start with, the Federal Reserve can continue its policy of gradual tightening until interest rates reach a level where many people start to choose to save instead of borrowing. This need not lead to a 1930's extreme preference for holding cash, when burying a jar of money in the back yard and then digging it up three years later meant that the owner of the cash had about 30% more purchasing power than when he buried it. Beyond that, it's for the professional economists and bankers to try to figure out. In any case, what we do not need is a revanchist spirit: Andrew W. Mellon was nominated by President Harding to be the 49th Secretary of the Treasury. He was retained by President Coolidge and President Hoover, serving the three Administrations from March 4, 1921 until February, 1932. Secretary Mellon demonstrated financial ability early in life by starting a successful lumber business at the age of 17. He joined his father’s banking firm, T. Mellon & Sons, two years later and had the ownership of the bank transferred to him in 1882 at the age of 27. In 1889, he helped organize Union Trust Company and Union Savings Bank of Pittsburgh. He also branched out from banking into industrial activities, and built a great personal fortune from oil, steel, shipbuilding, and construction… Through the prosperous 1920’s, Mellon was a popular individual, but the onslaught of the depression affected his standing. Mr. Mellon was recognized by his contemporaries as a brilliant and compassionate American policymaker, businessman, philanthropist and statesman. Yet economic historians – not unjustifiably so – deride him for his most famous "tough love" approach to the "roaring twenties" hangover: "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. … It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people."