Sorry I haven't been participating much lately. I have enjoyed reading the latest commentaries from Phil, Hyrum and Paul.
Please take a look at my new website, last night I also added a video sample on the home page. Go to the issues page and read about the federal reserve. Please give me some feedback about my website: www.teachconstitution.org
I just heard the house rejected the bail-out plan with a bare majority. Our congressman, Bilbray, voted no. Here is a copy of my e-mail to him last night:
Congressman Bilbray,
Please vote NO on the $700 billion bail out package. The federal reserve system is deeply flawed; it is simply a form of legalized counterfeiting that debases the currency. The recessionary period is inevitable; it is a natural consequence of the unstable system we have. Printing more "counterfeit" money to bail out the banks will only make it worse in the long run.
If you vote against the bail-out we have to deal with one evil (a period of economic adversity); if you vote for it we will have to deal with three evils (a period of economic adversity, a debased currency and a nationalized financial system). A nationalized financial system is worst of all; it will be a big step towards a socialist state. PLEASE VOTE NO ON THE PACKAGE TO SALVAGE OUR REPUBLIC!!!!!
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3 comments:
I like the new revised website. I think it looks nice. Only one suggestion: I don't know if you can make the video in a different format, Firefox won't run it at all, and IE requires a plug in.
I agree with your analysis of the financial bailout. I've heard one economist compare the situation to a fire. He said that a fire has started, and whoever has to do it, or whatever has to be done, it must be put out.
The problem is, that if you extend the fire analogy, the government dumping $700 billion into the system would be like creating a monstrous tidal wave to put out the fire. In the long run, it will just cause more damage and be even worse.
I try not to laugh when I hear them promise that the money will be paid back once the worthless assets they buy increase in value. Social Security is one of many examples that has showed us what the government does when there is "surplus" money coming in. That money will dissapear just as soon as it comes back, and the current president will get lots of praise for whatever it is he spends it on.
Hopefully, the fire is small enough now that is will fizzle out in a few years, if we let the market run it's natural course of ups and downs. I fear that if we keep preventing the inevitable, the fire will grow unquenchable.
It’s interesting how the majority of Americans and politicians including McCain and Obama think that this mess is due to lack of regulation.
Let’s examine the catalyst for the “financial meltdown” as the media likes to call it, unreasonable subprime mortgages. In the free market loans are naturally balanced by two things: greed and fear. Let’s pretend for example that I went to the bank and wanted to borrow $5 million and that I wanted the money so bad that I was willing to pay a high interest rate. Even though the bank could make a lot of money from this loan they know that I would probably default so of course they wouldn’t loan me the money. Now let’s say that the government wants them to make me the loan so that I can have the money to spend and thus stimulate the economy. They can set up a government subsidized loan company (Fanny Mae and Freddie Mac) that will buy my risky loan from the bank so that the fear factor is gone. Now the bank can be greedy and underwrite as many risky loans as they want and simply sell them to the government without fear. In order to stimulate the economy and help people that couldn’t afford houses buy them the government encouraged banks to make loans to make debt easier to finance. The result is the subprime crisis. I find it hilarious that after the government encouraged the banks to make risky loans the politicians now rebuke the banks for their greed.
Now that the banks are failing because people are in too much debt the government has decided to print more money and give it to the banks so that they can make more loans and debt spending can once again save our flailing economy. Perhaps an infusion of cash is now needed to prop up banks from failing, but the cost will be inflation. Out of the frying pan, and into the fire we go.
Very insightful, good explanation. Thanks for the comment Sparrow.
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