Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: russwinter who wrote (69450)	9/7/2006 11:37:17 AM
From: mishedlo	Read Replies (2) \| Respond to of 110194

So what's the bottom line to all this all too familiar "through the looking glass" argument of yours (and other Ministry of Truth rectifiers and Pig Man enablers), over the last several years? Should the Wizards start printing even more money up, now that restaurants are feeling pressures? If so, you fit my definition of a flat earther, just entered on my Winterism definitions: The bottom line is that the Fed is doing relatively little printing. However we have seen over the past 10 years an explosion in credit/debt fueled by GSEs and other lending. I suspect that coming out of the next depression (or series of recessions) someone will figure out this model does not work (probably when massive bankruptcies on this extended credit start blowing up in lenders faces). But back to your question, no the wizards do not need to print any more money but that is not where the problem is or even started. What we need is a washout of credit, massive bankruptcies, and an end to speculative lending in the belief the Fed will bail everyone out. The problem is creation of credit by GSEs, fractional reserve lending and other things. If it was up to me I would require checking accounts to be 0% lent out. Obviously that can not happen all at once, but 10% a year for 10 years ought to do it. And it is not up to the Fed but I would eliminate GSEs and I would also for that matter get rid of the Fed and let the market set interest rates. Mish