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SineNomine
Saturday, October 18th, 2008, 08:43 PM
For the first time since 1960, the cost of living will start to shrink next year, in a worrying parallel of the Japanese "disease" of the 1990s, according to new research.

The news comes amid growing speculation that the Bank of England will soon be forced to cut borrowing costs to 2pc or below, taking them to their lowest level since it was founded in 1694.

The Monetary Policy Committee last week unexpectedly cut rates by a half percentage point to 4.5pc in the face of the financial crisis. However, there is also growing evidence that inflation, which has risen above 5pc in recent months, is set for a dramatic fall. The Retail Price Index – the most comprehensive measure of UK high street prices, will drop at an almost unprecedented rate to -2pc by the second half of next year, according to new research from Fathom Consulting.

It said the fall was largely due to the drop in mortgage costs and house prices, which together form a large part of the RPI. However, lower food and energy prices would also play an important role. Since modern comparable records began in 1956, the RPI has dropped into negative territory only once, in the late 1950s and early 1960s, but it only dropped as far as a rate of -0.5pc.

Andrew Brigden, economist at Fathom Consulting, said: "This does have worrying implications – particularly if it heralded a general period of deflation. The risk is we have a rerun of Japan because you simply can't [cut interest rates] to below zero."

Japan suffered almost a decade of deflation and falling economic growth in the 1990s after its debt-fuelled economic bubble burst with painful consequences. Despite cutting official interest rates to zero and pumping cash into the economy, the Bank of Japan was unable to pull prices back up into positive territory for years. However, Fathom predicts RPI will drop below zero for only a few months.

Good. I hope they learn a lesson from Japan.


Whereas high inflation tends to encourage borrowing, deflation encourages saving and, as a result, discourages companies from investing and spending today what they could save for tomorrow.

Sheer nonsense. He's correct on the fundamentals, but what is implicit here is that borrowing is unqualifiedly good. No, it isn't. Not if there is no saved wealth to borrow from. So yes, saving will be encouraged and investment disencouraged, but that is necessary for an economy to heal.


Fathom's prediction is based on the assumption that the Bank of England cuts interest rates to 2pc within a year. Although markets anticipate borrowing costs falling to only 3.5pc, a growing cohort of economists think it will be forced into taking more drastic action. Mr Brigden said if oil prices came back below $70 a barrel and house prices fall at an even faster rate, the level of RPI inflation could fall as low as -3pc and remain in negative territory for a year.

IOW: We can't possibly let the peasants have affordable food! How dare they even think such a thing!


Although Fathom does not expect the Consumer Price Index – the measure targeted by the Bank's MPC – to drop into negative territory, Prof Peter Spencer, of the Ernst & Young Item Club, said such an eventuality was not out of the question.

"This time next year we're looking at all of these huge increases in bills coming out of the index, and then potentially falling," he said. "CPI will go viciously negative – it's looking increasingly likely that it drops below target. It could easily go into negative territory, along with RPI."

Bottom line: had it not been for the financial (http://online.wsj.com/article/SB122428279231046053.html#) shenanigans (http://mises.org/story/3128) of the US, UK and other associated countries, there would be no "problem" right now. Now the consequences of their actions are beginning to hit them, they're realizing the usual "magic" no longer works, so they're scuttling around like worried beetles. There will be hard times if these predictions materialize. Lower prices are not part of it though.

SineNomine
Saturday, October 18th, 2008, 10:20 PM
Relatedly, see this (http://online.wsj.com/article_email/SB122428776277746551-lMyQjAxMDI4MjE0ODIxODg3Wj.html).

SwordOfTheVistula
Sunday, October 19th, 2008, 09:31 AM
Yeah, that's the problem with having an economy based on debt: it forces prices up (inflation), and when it comes time for them to fall back down-how do people pay off their mortgage, car loan, student loans, and credit cards if they are making less money than before? There's no easy way out at this point

Agrippa
Sunday, October 19th, 2008, 10:36 AM
Yeah, that's the problem with having an economy based on debt: it forces prices up (inflation), and when it comes time for them to fall back down-how do people pay off their mortgage, car loan, student loans, and credit cards if they are making less money than before? There's no easy way out at this point

Not to forget: The money they have to pay is much more valuable: Thats good for the creditor and bad for the debitor, never forget THAT!

Asking how some plutocrats of the financial made their great fortune at times: Partly by deflation!

Its quite interesting, now a small percentage of the population accumulated a lot of financial wealth and a deflation is coming: This means the bankruptcy of many and the wealth of a few, the country will be sold out and falling in a recession if there would come a lasting deflation.

Deflation is in fact the worst, even worse than inflation and its not bad for the financial oligarchy, even on the contrary.

Be careful with your wishes I might say to some here... :thumbup

The only way out would be a financial reform, but guess what, some guys dont want that, because it would mean a potential real democracy or other form of government for the people which is not dependent from their artificial money.

Fiat money is the only way for a modern economy which wants to grow, but it should be given out by state after rules made up by the community and not like in the USA by a private bank under the control of the financial oligarchy.

As for Britain, they should learn that the Liberalcapitalistic approach is the wrong way for the country and its people, but it seems they are unable too and will go down the drain as a bastardised country of impoverished masses and a small wealthy upper class which tries to controll the rest of the world together with the very same kind of people overseas in the US of A.

OneEnglishNorman
Sunday, October 19th, 2008, 11:15 AM
Fiat money is the only way for a modern economy which wants to grow, but it should be given out by state after rules made up by the community and not like in the USA by a private bank under the control of the financial oligarchy.

In what substantive sense is the Federal Reserve a private bank? It was created by the Federal Reserve Act and is in practice a central bank like any other. The Chairman is appointed by the President and rubber-stamped by the Senate. This is money imposed by government upon the citizenry, a government racket. There's no fixing the system, fractional-reserve fiat money systems are always prone to bouts of rampant inflation and easy credit, the boom with mis-allocation of investment, followed by recession (which is when the economy heals itself).

Also, gentle deflation took place in the 19th Century and is nothing to be scared of.

Agrippa
Sunday, October 19th, 2008, 12:22 PM
In what substantive sense is the Federal Reserve a private bank? It was created by the Federal Reserve Act and is in practice a central bank like any other.

Thats for sure a great argument. It was created by an act, therefore its not private or what? If the government is corrupted and gives away what should be in the hands of the public and state to private bankers in an act, this doesnt make the private bank, even if there are certain obligations, a nationalised state-central bank.

The Federal Reserve System was created by the US-Congress in 1913, but it is not part of the government, its driven by private stockholders and owned by the 16 federal reserve banks, who decide whats going to happen. These private stockholders and bankers are mainly members of the old plutocratic oligarchy which came from the Netherlands to Britain and from the isles to the US of A. Among those are Jews and non-Jews, but Jews played a prominent role like Warburg.

The way this "great act" passed through is another remarkable "American success" story - for the plutocratic oligarchy.

The average citizen of the USA has to pay more than once for this system, with the income tax and other taxations, with the inflation and in a way also with his base rates - for everything he bought with a credit. Of all this, the greatest benefits go to the private bankers who one the FED, they are in this way like parasites and at the same time they can manipulate the whole economy.

This system being not under the democratic control or any other DIRECT state control, under which it should be, because you can privatise many things without losing control, but you should never give away the power to create money to non-legitimate people, especially not those foreign people which might not act in your interest.

The whole degeneration of the USA can be at least partly explained by the control of two important sectors by elements which dont act for people:
The financial system and the media system, both being, obviously, since the latter needs a lot of money, closely intermingled on the higher level.


The Chairman is appointed by the President and rubber-stamped by the Senate.

The chairman is, the board not, the owners not, and the chairman only insofar, as the president can chose from the candidates the bankers offer him. So you get your handful of handchosen chosen people with a Liberalcapitalistic outlook and can chose which one you prefer. What a great choice that is!

Who has more power, the one chosing the candidates or the one chosing one of them. I know for sure what I would prefer if its about a presidential candidate to give and example, and interestingly a similar kind of mechanism works for the USA in general, since money and media make up "candidates", a herd of bloking voters which can, like the president, chose from the dishes they become offered but they can't change the menu.

So if you can chose from eating 10 different forms of shit you will eat shit no matter for which of the 10 options you vote...

And we all should know how much the president really decides in the USA if its about the FED. The presidential candidates as well as the members of congress need the support of the big money and media system, which means they have to be, in a way, menials of the plutocractic oligarchy and speaking as well as acting in their interest, which means little to nothing real control of the common people over this system.


This is money imposed by government upon the citizenry, a government racket.

As it should be, but in the interest of the public and not the plutocratic oligarchy.


There's no fixing the system, fractional-reserve fiat money systems are always prone to bouts of rampant inflation and easy credit, the boom with mis-allocation of investment, followed by recession (which is when the economy heals itself).

Well, one could question this form of creating money as a whole, though this is a complicated matter and so far, with this kind of system, we deal with cycles indeed, manipulated cycles, but yes...

Your believe in market mechanisms is astonishing, even more so because this kind of "healing" impoverishes your people and making the English decline even faster...


Also, gentle deflation took place in the 19th Century and is nothing to be scared of.

"Gentle deflation"...nice spoken, but if looking at the end-19th century recession in Germany and beyond this was nothing of "gentle" but oh well, its probably all related to the own definitions.

One great difference then was that the manipulation was more limited and the means of exploitation too, something which cannot be said these days.

Anti-trust laws in Britain being annulled because of political pressure in the situation of "the crisis" and of course, the market being cleaned from competitors in the West by some obvious winners - winners so far at least and among those the "usual suspects".

Jäger
Sunday, October 19th, 2008, 12:38 PM
There's no fixing the system, fractional-reserve fiat money systems are always prone to bouts of rampant inflation and easy credit, the boom with mis-allocation of investment, followed by recession (which is when the economy heals itself).
So when was the last time the FED declined a loan to the state?


Well, one could question this form of creating money as a whole, though this is a complicated matter and so far, with this kind of system, we deal with cycles indeed, manipulated cycles, but yes...
The state shouldn't have the monopoly on money, basically turning commodities into money should be possible for everyone in a market environment, the state still should hand out fiat money though, which will most likely be the main money, because of it's advantageous nature, but there will be some room for dodging the money then, if really necessary.

SineNomine
Sunday, October 19th, 2008, 03:54 PM
Fiat money is the only way for a modern economy which wants to grow, but it should be given out by state after rules made up by the community and not like in the USA by a private bank under the control of the financial oligarchy.
What qualifies you to make this statement, exactly? And the FED is not a private bank. Please stop peddling nonsense. Oh yes, I forget, labels matter more than reality to some.

SineNomine
Sunday, October 19th, 2008, 04:01 PM
The Federal Reserve System was created by the US-Congress in 1913, but it is not part of the government, its driven by private stockholders and owned by the 16 federal reserve banks, who decide whats going to happen. These private stockholders and bankers are mainly members of the old plutocratic oligarchy which came from the Netherlands to Britain and from the isles to the US of A. Among those are Jews and non-Jews, but Jews played a prominent role like Warburg.
Okay. Now please explain how this shows it's "private" as opposed to an arm of the state, without thereby rendering the labels meaningless. Also explain how a "private" organization is appointed a government chairman. Yeah. Go on.



The chairman is, the board not, the owners not, and the chairman only insofar, as the president can chose from the candidates the bankers offer him. So you get your handful of handchosen chosen people with a Liberalcapitalistic outlook and can chose which one you prefer. What a great choice that is!
Oh yes, here we go with this bogeyman again: "liberalcapitalistic". Not even a real English word. Yeah, bailing out failing firms. How very liberalcapitalistic.



Your believe in market mechanisms is astonishing, even more so because this kind of "healing" impoverishes your people and making the English decline even faster...
Are you serious? Your belief in socialism is what is astonishing. And I want to know what knowledge you have of economics, other than appeals to your alleged authority.


"Gentle deflation"...nice spoken, but if looking at the end-19th century recession in Germany and beyond this was nothing of "gentle" but oh well, its probably all related to the own definitions.
Ah right, so we must drug the horse even more, until it finally dies of overdose. Good game. When this system comes crashing down I will remember this "wisdom" of yours. What you do not seem to realize is that even if the central banks wished to do something, they cannot. They are prone to a situation similar to Japan, wherein no matter how low the interest rate was dropped it had zero effect on the economy. It was too late, they had messed things up just that badly.


Anti-trust laws in Britain being annulled
Oh boo-hoo.

Agrippa
Sunday, October 19th, 2008, 05:49 PM
Okay. Now please explain how this shows it's "private" as opposed to an arm of the state, without thereby rendering the labels meaningless. Also explain how a "private" organization is appointed a government chairman. Yeah. Go on.

The president and congress just nod to the vote, otherwise he have little to say and finally, as pointed out, the vote for which they have nod is without any real choice.

The state has a very limited influence on the policy of the FED which is a profit-oriented private company as much or even more responsible to the private banks who form it and the private stockholder which have their shares than to the public, the people of the state.

So what is this? Its no Federal organisation, the name itself is deceptive.


Oh yes, here we go with this bogeyman again: "liberalcapitalistic". Not even a real English word. Yeah, bailing out failing firms. How very liberalcapitalistic.

Ok, lets put it that way, its a very specific form of Capitalism which identifyable by an orthodox Liberal economic mantra and certain Liberal social values in the foreground, but with a financial oligarchy which controls the economy and finally the whole state in the background, the plutocrats.

Since they control the state from the background, they can use the state if they need it and prefer to preach idiotic Liberal orthodox economics to the stupid people they want to deceive. As its very funny how long they spoke in the US of A about why a public health insurance for all isnt possible, while taking away from the common people with the income tax, other taxations, the inflation and now the bailouts many billions of dollar - the form of money they control and own in a certain way, with which they can make slaves out of the people. But yes, one has to be American to accept that I guess and one must be a very corrupted politician to say yay and amen to it.


Are you serious? Your belief in socialism is what is astonishing. And I want to know what knowledge you have of economics, other than appeals to your alleged authority.

I might or might not have socialist ideals for certian social and economic areas, but might you be so friendly to tell me where you read it out of my text now? I'm not against a limited free market anyway, but the control over the currency should be in public hands, limited by legitimated individuals which work for the nation and common people.

People like Greenspan and Bernanke are Jews, they are all members of the "plutocrats & co. corp." and they dont act for the people, neither in the US of A or beyond.

Same goes for the great winner of this whole rochade, JP Morgan Chase, of course they are not all Jews, but it is a very limited circle of people like that of Rothschild, Rockefeller, Warburg, Morgan etc. which were and are the puppet masters of at least the Western financial system.


Ah right, so we must drug the horse even more, until it finally dies of overdose. Good game. When this system comes crashing down I will remember this "wisdom" of yours. What you do not seem to realize is that even if the central banks wished to do something, they cannot. They are prone to a situation similar to Japan, wherein no matter how low the interest rate was dropped it had zero effect on the economy. It was too late, they had messed things up just that badly.

They didnt messed up, they just followed the path which was prescribed. Now we just experience the end of this financial fiasco born out of compound interests which follows such a circle some decades, sooner or later, depending on the exact economic parameters and financial policy in a debt based currency system.

But obviously, if not being that stupid, what they aren't, the plutocratic oligarchy can anticipate this events and they will take advantage of it in various ways, among others, they can buy out the whole world with worthless dollars until the de facto creditors dont accept them any more, they can get rid of various competitors and they can pass through the legislation "reforms" in their interests, because the public is panicked.

Ever thought about how much money the average taxpayer has to give away for discharge of public debts alone? And why this is even necessary given the possibilities of a fiat currency system? Why a lot of this money goes directly in the hands of private bankers which exploit a weak people and political world?

If its ok for you to be a slave of the plutocratic financial oligarchy, then be it, but this is the greatest treachery of all and its the reason for the decline of the European people. The foundation of the Bank of England was a treachery to begin with and this evil was transmitted over the Atlantic to the US of A with all the consequences we face today. 1913 is a historical date and it was the beginning of the end of an independent European people in the West.


Oh boo-hoo.

So the formation of trusts and monopolies of private companies and individuals is no problem to you? My fault.

Bridie
Sunday, October 19th, 2008, 06:34 PM
Yeah, that's the problem with having an economy based on debt: it forces prices up (inflation), and when it comes time for them to fall back down-how do people pay off their mortgage, car loan, student loans, and credit cards if they are making less money than before? There's no easy way out at this pointOn a personal level, I have no sympathy at all for those who foolishly lived beyond their means for so many years, and are now having their greed and stupidity come back to bite them on the bum.

The proportion of common people blaming subprime lenders and other such financial institutions for consequences that stem from their own decisions is just pathetic. It's as if much of the developed world is now populated by a bunch of spoiled brats who think that they shouldn't have to take responsibility for their own actions anymore.

Not only was this as many are saying "the financial crisis that had to happen"... I think it could possibly be a positive turning point. Positive for the mentality of the people in general. :) I'm optimistic. :)

Agrippa
Sunday, October 19th, 2008, 07:16 PM
On a personal level, I have no sympathy at all for those who foolishly lived beyond their means for so many years, and are now having their greed and stupidity come back to bite them on the bum.

The proportion of common people blaming subprime lenders and other such financial institutions for consequences that stem from their own decisions is just pathetic. It's as if much of the developed world is now populated by a bunch of spoiled brats who think that they shouldn't have to take responsibility for their own actions anymore.


They were forced to go into dept because an acceptable life standard in Great Britain and the USA was not affordable for too many any more without taking credits, about which risks they were not properly elucidated neither.

Furthermore on the real estate market again, people were forced to pay too high prices for a new home, to finance it on credit if they didnt want to be homeless or living in a substandard and now, after the real estate market implosion, they still have this huge credit with just unfair interests and a house and ground which is probably worth just a third of it. If now losing their job or similar too, they are struck down and thats the logic of the system and can't be said to be just individual failure alone.

Æmeric
Sunday, October 19th, 2008, 07:26 PM
On a personal level, I have no sympathy at all for those who foolishly lived beyond their means for so many years, and are now having their greed and stupidity come back to bite them on the bum.

The proportion of common people blaming subprime lenders and other such financial institutions for consequences that stem from their own decisions is just pathetic. It's as if much of the developed world is now populated by a bunch of spoiled brats who think that they shouldn't have to take responsibility for their own actions anymore.

The politicians do bear some blame. Through regualtions & tax laws, along with entitlements, they have created societies where people have become to believe they have a right to a certain standard of living. There was no logic to the financial shenanigans of the 20th century. Eventually it would have to come crashing down, we have ran out of real money. In the US & UK, the manufacturing sectors of the economy have been sacrificed to greedy trade unions & globalization. Both nations now have service economies. The driving force of these economies were the real estate sector & financial services. Nothing is made anymore, assets, or paper representing alleged assets, are swapped & the bankers & brokers charge commissions on these trades. Huge commissions. That was the economy of the US.


Not only was this as many are saying "the financial crisis that had to happen"... I think it could possibly be a positive turning point. Positive for the mentality of the people in general. :) I'm optimistic. :)I've been saying this for a long time. I think the big losers will be the Asians. They sold all that stuff to the US for decades, accumalated massive amounts of US$ based securities... the dollar is facing hypereinflation over the next few years, due to the massive amount of dollars (created out of nothing) that are being pumped into the banking system. The real value of hard assets is going to continue to fall, regardless of their hyperinflated prices in the coming years. And whoever wins the White House, the US is going to become more socialistic then at any point in it's history before it turns to the right. The US banking sector has been nationalized in all but name, this will give the politicos in Washington more powers then they have ever had before, even more then FDR had during the Great Depression & WWII or Lincoln in the Civil War. Marx & Lenin must be smiling up proudly at the morons in DC.

Agrippa
Sunday, October 19th, 2008, 09:16 PM
Æmeric, while I can agree with your analysis:


And whoever wins the White House, the US is going to become more socialistic then at any point in it's history before it turns to the right. The US banking sector has been nationalized in all but name, this will give the politicos in Washington more powers then they have ever had before, even more then FDR had during the Great Depression & WWII or Lincoln in the Civil War. Marx & Lenin must be smiling up proudly at the morons in DC.

What do you mean with "Socialism" and while Neoliberalism is stamped, if its about social policy, by a combination of dogmatic cultural Marxism and Liberal "values" the same time, in the economic sector this has little to do with "Socialism". So with the exception of a very deformed version of cultural marxism, M & L would have little to laugh about.

Might I also remind you, that if its about the indoctrination with cultural marxism and "liberal values", the West was FAR AHEAD of the former Communist states even! Actually they kept a much more natural and European character culturally in many regards than the Western states which went on, on the way of degeneration and manipulation.

The Eastern part of Europe had its bad developments too of course, but in comparison to the West, they were in many ways much healthier when the berlin wall broke down.

Are this programs made up for the people? No they aren't, they are made up for the bankers in fact. And probably the main reason for those international financial oligarchy to introduce an even higher state quote and influence is keep up the war warmachine and financial administration center for some time and action to come.

The state - politics - economy will always be intermingled, thats not the point and nor the core of the problem, the problem comes from the exact sector and people giving orders in which interest. Today the orders come from the bankers, a minority of greedy people, greedy for profits, power and control over the people.

A government for the people should start in the USA with nationalising the FED, afterwards some banks and the kicking out some of those which acted against the interests of the majority.

But this will never happen I'm afraid, which is why I at least dont want the same kind of corruption to further spread to Europe and where it is already, getting rid of it here.

Æmeric
Sunday, October 19th, 2008, 09:44 PM
What do you mean with "Socialism" and while Neoliberalism is stamped, if its about social policy, by a combination of dogmatic cultural Marxism and Liberal "values" the same time, in the economic sector this has little to do with "Socialism". So with the exception of a very deformed version of cultural marxism, M & L would have little to laugh about.
It's socialism in the sense that the federal government is taking over ownership or taking ownership stakes in the largest financial institutions in the US. The new board of directors of the largest financial companies in the US - the ones that matter - will be the US Congress & the President. The financial sector has always been privately own, but with varying degrees of regulation/oversight through the decades. Now we have outright ownership & like any government owned entity, it will be used to provide goodies to the constituents of the congressmen who can gain the most influence in the committees that will oversee the bank holding of the US Government. What has happened under a Republican president, with the approval of the Republican nominee, is the greatest economic concentration of power in Washington, except perhaps during WWII. To Conservatives in the US this is socialism. Yes, we already have varying degrees of socialism here, even if we don't use that word. But the actions of the government over the last month to contain the financial crisis (a crisis caused by government meddling) has gone much further then anything seen since FDR & whether we end up with the Marxist-Leninist Obama or the Neocon McCain, both of them will take advantage of the situation to further intervene in the free market & in effect attempt to impose a command economy on the US. What is being imposed will not be a utopian socialist society, but an unworkable society like Britain had in the late 70s, after decades of Socialism.

As for the Federal Reserve it does need to be abolished. It's purpose is to serve the needs of the big banks. The Secretary of the Treasury can take over the duties of issuing & maintaining the integrity of the currency, something the Federal Reserve has not done over the last 95-years.

OneEnglishNorman
Sunday, October 19th, 2008, 09:48 PM
A government for the people should start in the USA with nationalising the FED,

How will nationalising the regional FedReserve banks be a panacea? It is a central bank already. What monetary policy do you propose? How should the chairman and board be elected? Etc.

Just saying "democratise it, make it work for the people" is vague.

Jäger
Sunday, October 19th, 2008, 09:58 PM
It's as if much of the developed world is now populated by a bunch of spoiled brats who think that they shouldn't have to take responsibility for their own actions anymore.
Eh, this is the very essence of our democratic system. :|

SineNomine
Monday, October 20th, 2008, 12:46 AM
The president and congress just nod to the vote, otherwise he have little to say and finally, as pointed out, the vote for which they have nod is without any real choice.
Yeah, except the US government relies on it to fund its wars, its social programmes &c. &c. It has a vested interest in the continued existence of the FED.


The state has a very limited influence on the policy of the FED which is a profit-oriented private company as much or even more responsible to the private banks who form it and the private stockholder which have their shares than to the public, the people of the state.
Why exactly does it enjoy a monopoly on the issue and control of the currency then? What kind of "private" firm enjoys such a privilege?


So what is this? Its no Federal organisation, the name itself is deceptive.
As deceptive as the label "private" is in this connection.



Ok, lets put it that way, its a very specific form of Capitalism which identifyable by an orthodox Liberal economic mantra and certain Liberal social values in the foreground, but with a financial oligarchy which controls the economy and finally the whole state in the background, the plutocrats.
Then how about we just call it, oh I don't know, socialism for the rich?



Since they control the state from the background, they can use the state if they need it and prefer to preach idiotic Liberal orthodox economics to the stupid people they want to deceive.

Keynesian/neo-Keynesian economics is not "liberal". You must mean Friedman's garbled monetary theories, which pretty much collapsed monumentally, much as Keynes's did. There's nothing "liberal" about financial economics.


But yes, one has to be American to accept that I guess and one must be a very corrupted politician to say yay and amen to it.
One must be an idiot, that is what. And there is plenty of them in the world, including outside of the US.


I'm not against a limited free market anyway, but the control over the currency should be in public hands, limited by legitimated individuals which work for the nation and common people.
Yeah, "legitimated" individuals, sure. Custodians. Philosopher-Kings. Whatever. Now explain how, exactly, they're supposed to handle this currency.


People like Greenspan and Bernanke are Jews, they are all members of the "plutocrats & co. corp." and they dont act for the people, neither in the US of A or beyond.
No, I'm pretty sure they do. Greenspan definitely acted consistently with Bush's desire to make the US a nation of homeowners... Bernanke is a trained monkey, doing what he was taught to do best: rely on mathematical models. And right now he is doing what he thinks is necessary to prevent the entire system from collapsing.


But obviously, if not being that stupid, what they aren't, the plutocratic oligarchy can anticipate this events and they will take advantage of it in various ways, among others, they can buy out the whole world with worthless dollars
And how will they do that, pray tell?


Ever thought about how much money the average taxpayer has to give away for discharge of public debts alone?
Yeah.



If its ok for you to be a slave of the plutocratic financial oligarchy, then be it, but this is the greatest treachery of all and its the reason for the decline of the European people.
What a misleading way to put it. No, I have no trust either of fiat money or the "private" organizations given monopolies over controlling it. Or, for that matter, "public" organizations in such a capacity.


So the formation of trusts and monopolies of private companies and individuals is no problem to you? My fault.
Were anti-trust laws any more than bludgeons used to crush competitors, perhaps that'd be so.

Angelcynn Beorn
Monday, October 20th, 2008, 03:41 AM
They were forced to go into dept because an acceptable life standard in Great Britain and the USA was not affordable for too many any more without taking credits, about which risks they were not properly elucidated neither.

That's utter nonsense. I've been unemployed before and lived on a fraction of the average British wage without having to resort to borrowing money and living off of credit. People have been living off of credit because of greed and naivety and little else. And frankly, if somebody was so naive they didn't realise that if they continuously borrowed money that sooner or later they would have to pay it back, then i have very little sympathy for them.

SwordOfTheVistula
Monday, October 20th, 2008, 06:41 AM
Regarding the US Federal Reserve, as I understand it, the way it works is that it creates money out of thin air and then loans it to private banks. The banks then can loan money either to private individuals and institutions, or to the government by purchasing US Treasury Bonds-which can also be sold to private individuals and institutions, or foreign countries.


They were forced to go into dept because an acceptable life standard in Great Britain and the USA was not affordable for too many any more without taking credits, about which risks they were not properly elucidated neither.

The problem is that what is considered an 'acceptable standard of living' has been elevated to a level that doesn't match the productive capacity of society. On one level, you have middle/working class people wanting to 'maintain a certain lifestyle', going out to eat of out to the bar 2-3 times per week or more, buying a new car every few years, overseas vacations, designer clothes. On the other level, we had a whole host of new 'necessities' added: no longer just food and shelter, but now health care, education, electricity and other utilities became considered 'necessities' and provided to everyone in society regardless of whether or not they gave anything back to society. This, of course, made it easier for people to coast by in life just collecting 'necessities' from the government without doing anything productive.


Furthermore on the real estate market again, people were forced to pay too high prices for a new home, to finance it on credit if they didnt want to be homeless or living in a substandard

Nobody held a gun to their head and made them buy these houses. They bought them because they thought the value of the houses would keep going up by 10-20%/year indefinitely. Anyone can, or should be able to, figure out that nothing goes up in price infinitely, and that sooner or later prices would have to come back down after going up so much. Rents were very stable in this period because many people bought houses as 'investments' and rented them out.


Deflation looks unlikely anyways:
http://news.yahoo.com/s/ap/20081019/ap_on_bi_ge/sticky_prices

Worries over a global recession have pushed the price of oil to its lowest in over a year. Don't expect the same for a bottle of beer, a tube of toothpaste, or a box of cereal.

You can blame "sticky" prices.

That's what analysts call it when companies slap higher prices on products and keep them there even though the rationale for the price hikes — such as soaring oil prices — is gone.

The falling cost of oil could help companies pad their profit margins as they pay less to make and transport goods. But it won't mean a break on the average grocery bill.

The price of consumer goods typically lags behind the price of key inputs like oil and wheat, said Chris Lafakis, an economist with Moody's economy.com.

"Consumer prices don't change near as fast, because they are set by companies," Lafakis said. "Commodity prices are set every day on an open market."

The opposite is also true: Companies hesitate to hike prices because it might push consumers to into the arms of a competitor, or to cheaper alternatives.

Meat companies like Tyson Foods Inc., for example, have swallowed losses this year as ingredient costs rose because executives were fearful consumers would abandon their products if prices jumped too fast. Tyson's profit plunged 92 percent in the third quarter and the company said it didn't expect a rebound soon.

But once a price hike is in place, it virtually never goes away, Lafakis said. The one factor than can drive prices down is a drastic drop in demand, but few economists expect the global economic downturn to be so severe it would cause widespread deflation, he said. More likely is that inflation will slow or possibly flatten.

That was the case last month, when consumer prices were essentially flat, even as oil prices plunged.

The core Consumer Price Index, which eliminates food and energy prices, rose 0.1 percent, according to U.S. Labor Department figures. That was only about half the jump economists had expected, but it still lagged far behind the drop in oil prices. Crude oil has plunged more than 53 percent from its record high of $147.27 between July and October.

Companies also tend to price their products based on what their competitors are charging and not necessarily on what it costs to make them, said Lars Perner, assistant professor of marketing at the University of Southern California's Marshall School of Business.

Coca-Cola is more interested in what Pepsi is charging for a six-pack than the cost of its ingredients, such as high fructose corn syrup, he said. Neither Coca-Cola Co. nor Pepsico Inc. would comment on possible price cuts in the future.

That means consumers are in a fix these days. Prices have been going up broadly across whole categories of products, meaning competitors have been hiking prices in unison. For example, both Anheuser-Busch Cos. Inc. and SABMiller's U.S. unit have been raising the price for beer, with neither one too worried that the price hikes will push customers to their competitor.

"They may be upset about it, but you really have fairly limited options as a consumer," Perner said.

For prices to drop, consumers have to hope that companies' competitive juices start flowing again. The drop in oil and ingredient prices is creating a high-stakes game of chicken in the shopping aisle, Perner said.

If companies keep their prices at current levels, they can reap higher profit margins. But if one company starts cutting prices to lure customers away from competitors, it could start a price war.

"As soon as the first (company) in a category reduces prices, the others will follow suit. But they're all hoping the other one doesn't" cut prices, Perner said.

Nobody wants to be first, for reasons made in clear in 1996.

That's the last time cereal makers broadly reduced prices, prompted by a 20 percent price cut by Post cereal. When competitors were forced to follow suit, it hurt profitability across the sector and reduced sales, according to a recent research note by Deutsche Bank analyst Eric Katzman.

Kellogg responded to Post's move by slashing prices 19 percent, and the company's profits tumbled 8 percent to $502 million in 1998, and another 33 percent to $338 million in 1999. Kellogg launched the Country Inn Specialties line of higher-end cereals to try and create a niche market, and hiked domestic cereal prices nearly 3 percent in 1998 and later returned to growth.

"It took many years until profit levels for cereal players returned to the level once enjoyed before Post's actions," Katzman wrote. "With this historical precedent, we highly doubt manufacturers will lower prices on the back of lower agricultural commodities."

That's certainly the case with Omaha-based ConAgra Foods Inc., which makes a variety of products from Chef Boyardee soups to Banquet frozen dinners and Orville Redenbacher's popcorn.

Food makers like ConAgra are hardly out of the woods when it comes to paying more for ingredients and transportation, said spokeswoman Stephanie Childs. ConAgra paid an extra $190 million for inputs last quarter when compared to the same period a year before. The company expects that figure to be smaller during the current quarter — but costs will still be up, Childs said.

The same is true for General Mills Inc., said Chief Executive Ken Powell.

General Mills hiked prices this year on products like Cheerios, Pillsbury and Betty Crocker dessert mixes to compensate for the high commodity costs — up 7 percent last year and an expected 9 percent this year.

Last year net pricing was up 2.5 percent and though commodities are moderating, those prices won't be coming back down because the company expects this new era of inflation to stay.

"We think we're in for a period of moderate inflation and that's the scenario we've got to be ready for," Powell said.

Indeed, core wholesale prices rose 0.4 percent in September, about twice what analysts had expected, according to Department of Labor figures. The so-called producer price index reflects what companies must pay for their inputs and goods. When oil and food prices were included in the index, overall wholesale prices fell 0.4 percent.

There will be a bright spot for consumers this season as retailers offer selected, high-profile discounts to lure hesitant shoppers, said retail consultant George Whalin.

The motivation to cut prices was reinforced Wednesday when the U.S. Commerce Department reported overall retail sales dropped 1.2 percent in September, about twice the drop expected by analysts. The decline helped heighten fears the economy was headed into a deeper recession than many economists had already been expecting.

Retailers are expecting one of the most dismal holiday seasons in years, Whalin said, and are promoting big sales, such as Wal-Mart Stores Inc.'s decision to cut the price of 10 hot holiday toys to $10 each.

But the big promotions don't mean that retail prices will fall across the board, Whalin said. Most retailers ordered their current merchandise three months ago. With their costs locked in, they will keep most prices as high as they can to recoup as much profit as possible from the slower customer traffic.

"With consumer confidence being shattered, retailers are going to look for ways to continue to be profitable, so I doubt that we are going to see any significant drop in prices in the next three to four months," Whalin said.

In the same vein, airlines are hesitant to give back any of the several fare increases put into place over the last year, said Bob Harrell, president of Harrell Associates travel consultant agency.

Overall air fares are up about 15 percent in September compared to the year before, with small price hikes being phased in incrementally over 2008, Harrell said. There could be some easing in price increases this fall, Harrell said, because business travel is expected to drop along with the slowing economy.

But that doesn't mean fare prices will drop back to levels where they were before the spike in oil prices.

"They never give (price increases) back if they can avoid it," Harrell said.

Agrippa
Monday, October 20th, 2008, 11:51 PM
It's socialism in the sense that the federal government is taking over ownership or taking ownership stakes in the largest financial institutions in the US. The new board of directors of the largest financial companies in the US - the ones that matter - will be the US Congress & the President. The financial sector has always been privately own, but with varying degrees of regulation/oversight through the decades. Now we have outright ownership & like any government owned entity, it will be used to provide goodies to the constituents of the congressmen who can gain the most influence in the committees that will oversee the bank holding of the US Government. What has happened under a Republican president, with the approval of the Republican nominee, is the greatest economic concentration of power in Washington, except perhaps during WWII. To Conservatives in the US this is socialism. Yes, we already have varying degrees of socialism here, even if we don't use that word. But the actions of the government over the last month to contain the financial crisis (a crisis caused by government meddling) has gone much further then anything seen since FDR & whether we end up with the Marxist-Leninist Obama or the Neocon McCain, both of them will take advantage of the situation to further intervene in the free market & in effect attempt to impose a command economy on the US. What is being imposed will not be a utopian socialist society, but an unworkable society like Britain had in the late 70s, after decades of Socialism.

As for the Federal Reserve it does need to be abolished. It's purpose is to serve the needs of the big banks. The Secretary of the Treasury can take over the duties of issuing & maintaining the integrity of the currency, something the Federal Reserve has not done over the last 95-years.

Then call it Stamocap (state monopolised capitalism) or the like, but not Socialism, because it has nothing to do with Socialism.
Its as much "Socialism" as a mafia state in which a few families own everything or a monarchy even or similar forms of state. Its anything else but Socialism and the American propaganda of calling everything Socialism is ridiculous.

One should call things by its real name and properly defining it.


How will nationalising the regional FedReserve banks be a panacea? It is a central bank already. What monetary policy do you propose? How should the chairman and board be elected? Etc.

Just saying "democratise it, make it work for the people" is vague.

Well, it should be under the control of politically legitimised people acting for the nation. This is hardly possible as long as the president and congress are close to being employess of the plutocratic oligarchy.

But if assuming, just for a moment, that a different presidential candidate and congress would be possible in the USA, they should designate, directly and from their ranks, the chairman as well as the board. The bank itself should be owned by the state.

I'm not saying I have the perfect solution, nor that I'm an expert on the matter, but I know enough for saying that this system, as it is, is inacceptable.


Yeah, except the US government relies on it to fund its wars, its social programmes &c. &c. It has a vested interest in the continued existence of the FED.

How do you think some of the great Jewish banker families made their fortune in Europe? Did Friedrich der Große own the Jewish bank he had to beg for money? The common people in the US pay even the interest rates for the state depts to the FED and its owners, the government is in dept of the FED, even for domestic projects, for which a state owned bank could just put out the money with the only backup being the productivity of the nation.


Then how about we just call it, oh I don't know, socialism for the rich?

Explained above. This sentence alone says a lot about your ignorance on the matter.


That's utter nonsense. I've been unemployed before and lived on a fraction of the average British wage without having to resort to borrowing money and living off of credit. People have been living off of credit because of greed and naivety and little else. And frankly, if somebody was so naive they didn't realise that if they continuously borrowed money that sooner or later they would have to pay it back, then i have very little sympathy for them.

I'm not saying they were great people, but if looking at the contracts they got, which shouldnt be legal in the first place, you might understand why they came into this situation in the first place.

And you can't compare different personal situations 1:1, although I won't ignore personal responsibilities, its clear that the policy in the US is neither social nor just for the great majority of working people and in many cases much worse than in Europe and in Europe different from nation to nation of course. Many things to consider and no easy judgement possible if being honest, but one thing is clear, there was a systematic and structural failure - as well as exploitation - at work. Its not just the individual you can make responsible in too many of the cases.


Regarding the US Federal Reserve, as I understand it, the way it works is that it creates money out of thin air and then loans it to private banks. The banks then can loan money either to private individuals and institutions, or to the government by purchasing US Treasury Bonds-which can also be sold to private individuals and institutions, or foreign countries.

You see the perversion of this? This money out of thin air goes for practically nothing to the banks of the privileged class which can loan it to common people for unfair interest rates or for buying US Treasury Bonds. With which value do they do that? With "money" they made out of thin air because they got the right to do so, by the FED act of 1913.

So they can buy out everybody else, making the whole state and all individuals debtors, but adding nothing of value to the system. This is a circle the state could control itself, without the plutocratic intervention! The only problem those creditors can get is, if the their debtors can't pay any more, which is the situation, after compound interests and the destruction of the domestic economy for even greater profits and more power in the whole ("globalised") world for this plutocrats, we face in the USA today.

The USA being bled out by this parasitic structures. But now the undead warrior has to keep the world down and under control, for being infected by the same virus as well. Thats the story in short. Because for this system to work, it has to grow and it has to eliminate competing systems. The next steps will lie in a world financial system and in a not so distant future, in a monetary reform, because the Dollar will be then so bloated, that you can use 10 dollar notes on the toilet.

The only reason the world is buying that worthless crap lies in the economic interconnections the "globalisation" made and the fact, that there is still the "undead warrior" with the greatest arsenal of destructive weapons the world has ever seen.


Nobody held a gun to their head and made them buy these houses. They bought them because they thought the value of the houses would keep going up by 10-20%/year indefinitely. Anyone can, or should be able to, figure out that nothing goes up in price infinitely, and that sooner or later prices would have to come back down after going up so much. Rents were very stable in this period because many people bought houses as 'investments' and rented them out.

You know why? There is no good pension scheme and many middle class people thought, what the ads are telling them, "the best pension is a house and a field". So they invested at a time the speculation was going up, many plutocrats made an even greater fortune then (similar things happened at the stock market!). But now, like with the bailouts, who had to pay the bill, the overpriced houses, often bought with unfair credits at inacceptable (variable!) interest rates - with money out of thin air, but very real value for the common people? Guess what.

And now blaming the citizens, which had to pay more than three times to the same exploiters is...mhm...lets say unfair?

They were all deceived! Not all of course, some might have really just spend more than they could earn or had no choice, because the wages were too low, but for many it happened exactly like I said AND ALL OF THEM had to pay too much, really too much from their small pockets because of the speculation, because the already bloated dollar had to go somewhere, had to trade with real values.

Just imagine oil and other ressources wouldnt be traded with dollars any more, but with Euros or another currency, where would the dollar go? But that didnt happen, because the "undead warrior" made clear that this is not allowed, made it clear for Iraq and Iran.

Yes, deflation is unlikely on the big scale and at the moment. I'm not saying anything else, but I just answered to the comments which even praised deflation, which is - lets say naive if being friendly.

This dollar-bubble can't be corrected with deflation by the way, if it would be "corrected" with deflation, you would have a downgoing world wide economy for many years and in the USA for decades to come! That won't happen, it would be insanity no matter which political group is in charge.

A currency reform might be, on the longer run, inevitable, but as we know who will make it, we should also know it will be nothing good...

SwordOfTheVistula
Tuesday, October 21st, 2008, 10:54 AM
Then call it Stamocap (state monopolised capitalism) or the like, but not Socialism, because it has nothing to do with Socialism...One should call things by its real name and properly defining it.

If it's state monopolized, it's not 'capitalism', it's 'socialism'. That's just the definitions of those words:

http://dictionary.reference.com/browse/capitalism
an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth.

http://dictionary.reference.com/browse/socialism
a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.
'community as a whole' always translating to political control of said community, and thus the state, and thus naturally a 'monopoly' unless somehow multiple states or 'communities as a whole' can be contrived to exist simultaneously in the same territory.






But if assuming, just for a moment, that a different presidential candidate and congress would be possible in the USA, they should designate, directly and from their ranks, the chairman as well as the board. The bank itself should be owned by the state.

Isn't that the same thing? 'The state owns the bank', or 'the bank owns the state', the same two institutions are owned by the same people and used in conjunction to support eachother.

I'm not saying I have the perfect solution, nor that I'm an expert on the matter, but I know enough for saying that this system, as it is, is inacceptable.


I'm not saying they were great people, but if looking at the contracts they got, which shouldnt be legal in the first place

Why should the contracts be illegal? Should it be illegal to be a dumbass? Who can predict with certainty who is a dumbass and who is a genius?



Many things to consider and no easy judgement possible if being honest, but one thing is clear, there was a systematic and structural failure - as well as exploitation - at work. Its not just the individual you can make responsible in too many of the cases.

Are not systems comprised of individuals? If the system is at fault, then those who participated in said system must also be at fault.




many middle class people thought, what the ads are telling them, "the best pension is a house and a field". So they invested at a time the speculation was going up

Maybe they shouldn't have just done whatever the ads told them?


And now blaming the citizens, which had to pay more than three times to the same exploiters is...mhm...lets say unfair?
They were all deceived!

Well, if they fell prey to some sort of deception, is that not foolish? Are they not to blame for being foolish? Both sides, lender and borrower, were making big bucks off this scheme for a while, both were equally responsible.


Not all of course, some might have really just spend more than they could earn or had no choice, because the wages were too low, but for many it happened exactly like I said AND ALL OF THEM had to pay too much, really too much from their small pockets because of the speculation, because the already bloated dollar had to go somewhere, had to trade with real values.

Low wages or bloated dollar? Did people have too much money or too little?

Agrippa
Tuesday, October 21st, 2008, 05:58 PM
If it's state monopolized, it's not 'capitalism', it's 'socialism'. That's just the definitions of those words:

http://dictionary.reference.com/browse/capitalism
an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth.

http://dictionary.reference.com/browse/socialism
a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.
'community as a whole' always translating to political control of said community, and thus the state, and thus naturally a 'monopoly' unless somehow multiple states or 'communities as a whole' can be contrived to exist simultaneously in the same territory.

STAMOCAP can also refer to a system in which privately owned corporations, private individuals, which are NO MEMBERS of the state and it organs have the control over most areas of the state and the state is too often not more than a tool for those plutocrats.

Which is the case in the USA.

Socialism means a form of policy or state in which the main socio-economic goals are defined by social justice and social balancing. For example equal chances for all group members, an acceptable standard of living, affordable goods for the workers, the limitation of the power of "the rich" and the like. So in almost every respect the exact opposite of what we can see in the USA today.

Socialism means that the politics look to control the economy for the wellbeing of the people, the economic goods are, as you said yourself, owned by the community as a whole in a way. Now the form of Capitalism at work we see in the USA is, even in detail, the exact opposite, because the plutocratic oligarchy uses the state AGAINST THE PEOPLE, to prevent people, which are no members of the oligarchy, to change the system or having any substantial influence, to prevent the people from fighting for their rights and fair share of the fruits of this economy.

To call this "Socialism" is perverted, because this form of state-economy amalgamation has only the purpose to secure the profits and power of the few people in the plutocratic oligarchy, to defend their privileges and to keep every fundamental opposition down.


Isn't that the same thing? 'The state owns the bank', or 'the bank owns the state', the same two institutions are owned by the same people and used in conjunction to support eachother.

Are you kidding? Of course its not the same, because as I pointed out, the bank is not led by legitimated people acting for the community.

The Wikipedia entry for the FED is very euphemistic, but some quotes from this very positive and one sided presentation of the FED-system might be helpful, as they are enough food for thought:

Aldrich fought for a private bank with little government influence, but conceded that the government should be represented on the Board of Directors.

That was deception, a wrong label with a little bit of alibi-action.


Centralized banking was met with much opposition from politicians, who were suspicious of a central bank and who charged that Aldrich was biased due to his close ties to wealthy bankers such as J.P. Morgan and his daughter's marriage to John D. Rockefeller, Jr.

Interesting isnt it, because he had close ties to some of the most important plutocratic clans which were not Jewish, though they were close to some like Warburg and Rothschild, namely Morgan and Rockefeller.

Look at the bank sector today, their institutions and families are still in charge and have too much power for people without any higher legitimation, the anti-Trust intermezzos didnt change that.

But now coming to the result:

Agrarian and progressive interests, led by William Jennings Bryan, favored a central bank under public, rather than banker, control. But the vast majority of the nation's bankers, concerned about government intervention in the banking business, opposed a central bank structure directed by political appointees. The legislation that Congress ultimately adopted in 1913 reflected a hard-fought battle to balance these two competing views and created the hybrid public-private, centralized-decentralized structure that we have today.

http://en.wikipedia.org/wiki/Federal_Reserve

This "compromise" still meant a large overweight of the private central bank dogma and had the negative results we know of for the majority, but made up great possibilities for those banker dynasties and plutocrats in the background.

About the money issuing power:

United States Congressman Dennis Kucinich, at the 2005 Monetary Reform Conference[107], raised the question of why the Federal Reserve should have the power to issue the United States' currency. He stated:

...and it's going to be my pleasure...to take this discussion to Capitol Hill, because Washington needs to understand how we are mired in debt and how we are staying there with the help of this fractional-reserve banking. Washington needs to understand that questions must be raised about why in effect did we give up our control of this asset, this ability to be able to issue money. Why did we give it to the Federal Reserve? We need to look at that again. It's not as though this country should be headed for bankruptcy or our people for destitution. The money's there. We need the will there, to begin to look at America in a new way and look at our potential to create material wealth in a new way

Kucinich has also questioned the idea that the Federal Reserve should be independent. He suggested that it should be "accountable" instead. He was asked, "You mentioned the Federal Reserve. Do you think it should not be independent, that it should be answerable to...", to which he immediately responded:[108]

Well, of course it should be answerable. This idea of an independent Federal Reserve, what actually happened from 1913 on is a privatization of the money supply. Now, you know, right now, we have to look at the Federal Reserve, with two cuts in the interest rates recently, they're creating winners and losers. People have to look at the implications of this for Wall Street. I think that the Federal Reserve -- they have to be accountable. And I'm one of the few people who have been able to bring someone from the Federal Reserve to talk about the crisis in subprime loans, to ask about their responsibility. The Fed has a responsibility here.



http://en.wikipedia.org/wiki/Federal_Reserve#Money_issuing_power


Why should the contracts be illegal? Should it be illegal to be a dumbass? Who can predict with certainty who is a dumbass and who is a genius?

If its obvious that a contract is misleading and exploiting, it should be illegal, its fraud.


Are not systems comprised of individuals? If the system is at fault, then those who participated in said system must also be at fault.

Well, not if a few planned it exactly that way, whereas those "participating" have no other choice. It doesnt matter whether you accept the dollar as a currency and mean of payment, if you live there, you have little alternatives if you have a job, are a business man or when its time to pay your bills and taxes.

Of course, we can't speak of the same kind of force for credits, but sometimes it comes close and if a system is planned by a privileged few which add nothing of value to the whole community, while exploiting the majority from their privileged position, its clear who is primarily responsible.


Maybe they shouldn't have just done whatever the ads told them?

Thats true, but you can see it from the other side as well, if you were more intelligent but still just one of those without privileges, not a member of the plutocratic oligarchy, you will bleed with them anyway, because the whole system means exploitation and it would be wrong to blame those who suffered even more, even because they were ill-informed, too stupid or risk-taking, before those who made up this fraud.


Well, if they fell prey to some sort of deception, is that not foolish? Are they not to blame for being foolish? Both sides, lender and borrower, were making big bucks off this scheme for a while, both were equally responsible.

In the background, there were others looking at the scene and taking profit from it, even now they taking profits from it. The bank should have intervened, as it being written:

Each Federal reserve bank shall keep itself informed of the general character and amount of the loans and investments of its member banks with a view to ascertaining whether undue use is being made of bank credit for the speculative carrying of or trading in securities, real estate, or commodities, or for any other purpose inconsistent with the maintenance of sound credit conditions; and, in determining whether to grant or refuse advances, rediscounts, or other credit accommodations, the Federal reserve bank shall give consideration to such information. The chairman of the Federal reserve bank shall report to the Board of Governors of the Federal Reserve System any such undue use of bank credit by any member bank, together with his recommendation. Whenever, in the judgment of the Board of Governors of the Federal Reserve System, any member bank is making such undue use of bank credit, the Board may, in its discretion, after reasonable notice and an opportunity for a hearing, suspend such bank from the use of the credit facilities of the Federal Reserve System and may terminate such suspension or may renew it from time to time.


Whoever knowingly makes any false statement or report, or willfully overvalues any land, property or security, for the purpose of influencing in any way...shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

http://en.wikipedia.org/wiki/Federal_Reserve#Government_regulation_an d_supervision

Government regulation failed fully. There were definitive illegal acts at work here, many people abused their power at the expense of the deptors and on the long run of the economic stability, even after current law.

There is reason to think of this happening with purpose, as the business crime investigators of the FBI being reduced in the time before the crisis, as well as some suspicious actions from government side.

German source:
http://www.spiegel.de/wirtschaft/0,1518,585003,00.html

The government tried to distract the public interest as well as FBI-investigations from the real issue, the business crime, to the exaggerated constructed "threat" of "Terrorism", with which they can control the common people - rather than having to justify themselves and their actions in the USA as well as abroad!


Low wages or bloated dollar? Did people have too much money or too little?

Well, they had too little purchasing power as well as wages, which didnt go up parallel with the inflation as a whole. So the numbers of dollars as a unit of account went through the roof with M3, whereas the real purchasing power of the common worker and middle class individual went constantly down.

Now I could argue about the cheap Chinese products bought with worthless dollars and the downgrading of the US-production sector with the exception of the military and related industries, but this could go and on...

Oswiu
Wednesday, October 22nd, 2008, 12:20 AM
And frankly, if somebody was so naive they didn't realise that if they continuously borrowed money that sooner or later they would have to pay it back, then i have very little sympathy for them.
Then you have little sympathy for the vast majority of our countrymen. They were deceived, and are presently being dumbed down so that it won't even be necessary to put any real effort into deceiving them any more. Do they deserve this? The fault lies with those who are capable of changing things.

The foundation of the Bank of England was a treachery to begin with.
I would like to read about this. I am no great expert on such matters, and don't normally intrude in threads on them, but do like to follow as best I can. I would comment on the curious fact that the only figure from our history that the people in charge at the Bank of England saw fit to put on the highest denomination note - the Fifty Pound Note - was their own predecessor, Sir John Houblon, who founded the institution.

Sir John Houblon 1632-1712
http://www.bankofengland.co.uk/images/banknotes/current/50/houblon.jpg

Sir John Houblon was the first Governor of the Bank of England; he was appointed to this position in July 1694. In 1696 he was re-elected by a General Court of Proprietors and continued in office until July 1697.

John Houblon was born on 13 March 1632 and was strictly raised in the Protestant faith and in the family business. An older brother, also called James, together with their father are frequently mentioned in the diaries of Samuel Pepys together with increasing references to another brother who, it seems probable, was the young John. Most of the interaction between Pepys and the Houblons concerned shipping and it was commonplace for Pepys to hire the ships that were clearly owned by the family. But the relationship extended beyond business transactions, the diaries recording many social occasions; when Pepys was imprisoned in the Tower, in 1679, on suspicion of being a Papist, it was the Houblons who bailed him out.

John Houblon married Marie, the daughter of Isaac Jurin, a Flemish refugee and during their lives together raised five sons and six daughters. Only two sons, John and Samuel, survived their father. John acquired the lease on a house in Threadneedle Street, the site of the present Bank, in 1671. His fame as a merchant, the fair and responsible way in which he conducted his business and his public spiritedness ensured that, with time, his standing in the London community grew. He became the Sheriff of London between 1689-90 and was Alderman from 1689 until 1712. He was knighted in 1689 and served as the Master of the Grocers’ Company in 1690-91 and as a Commissioner of the Admiralty between 1693 and 1699. Sir John became Lord Mayor of London in 1695 and was elected the member of Bodmin in three Parliaments. So it was then, that when finally the Bill for the foundation of a national Bank was approved in Parliament that the Houblons, and Sir John in particular, were among those merchants both investing monies and being instrumental in creating the managing structure. Three brothers, Sir John, Sir James and Abraham were there at the very start; James and Abraham as Directors and John as Governor taking up this position on Tuesday, 10 July 1694. By the terms of the Charter he held the position until 25 March 1696 when he was re-elected by a General Court of Proprietors and continued in office until July 1697.

Sir John died on 10 January 1712 and was buried in the church of St Christopher-le-Stocks.
http://www.bankofengland.co.uk/banknotes/current/houblon.htm

At the time, I interpreted this in the same vein as the new British passports, which are decorated with pictures of British birds, rather than any national symbols. I supposed that it was a political thing move to remove our patriotic symbols from official life. But perhaps the financial oligarchy were just getting too cocky about their own importance (and wanting a precedent for their own faces going on the notes a century on!).

Angelcynn Beorn
Wednesday, October 22nd, 2008, 04:45 PM
Then you have little sympathy for the vast majority of our countrymen. They were deceived, and are presently being dumbed down so that it won't even be necessary to put any real effort into deceiving them any more. Do they deserve this?

To be brutally honest, yes. It's the sort of wake up call that people need every now and then to snap them out of the fairytale belief that everyone else should be looking after them.

As i mentioned before i have been unemployed for periods before. The way i adapted was to minimise my spending. I walked or cycled everywhere that i could, and where i couldn't i used public transport. I bought cheaper foods. I went to the pub less often. I didn't go for package holidays, etc. It didn't kill me, and when i got a job again i appreciated the ability to be able to spend money without worrying over every pound even more.

On the other hand i know someone who has run up over £12,000 in loans and on credit cards, despite being in what many would consider a well paying job. She uses credit to buy many things, especially clothes. Gets cabs everywhere. Eats out as often as she can, and just generally burns through money at an impressive rate. The only reason she's not more in debt at the moment is because she hasn't brought her own house yet. Another lady i know recently brought her ex boyfriend out of his half of a house they'd bought together, at great personal expense to herself. She did this just at the time the housing market was crashing because she didn't believe that house prices would drop, despite what the media and everyone else was telling her.

They're lovely people, but at the end of the day it's nobody elses fault but their own if they are in debt now.


The fault lies with those who are capable of changing things.

I will agree that there are many faults with this government that need solving, but i don't consider a lack of socialism being one of them. Socialism has been tried many times, and found wanting.

Agrippa
Wednesday, October 22nd, 2008, 07:05 PM
Then you have little sympathy for the vast majority of our countrymen. They were deceived, and are presently being dumbed down so that it won't even be necessary to put any real effort into deceiving them any more. Do they deserve this? The fault lies with those who are capable of changing things.

I would like to read about this. I am no great expert on such matters, and don't normally intrude in threads on them, but do like to follow as best I can. I would comment on the curious fact that the only figure from our history that the people in charge at the Bank of England saw fit to put on the highest denomination note - the Fifty Pound Note - was their own predecessor, Sir John Houblon, who founded the institution.

http://www.bankofengland.co.uk/banknotes/current/houblon.htm

At the time, I interpreted this in the same vein as the new British passports, which are decorated with pictures of British birds, rather than any national symbols. I supposed that it was a political thing move to remove our patriotic symbols from official life. But perhaps the financial oligarchy were just getting too cocky about their own importance (and wanting a precedent for their own faces going on the notes a century on!).

The most interesting aspect of the banker schemes is, that they deceive and manipulate the people, corrupt the political leadership and dont even provide what they promised, as little as it was.

F.e. they didnt came up with enough money for the Bank of England, but bought the bank on credit and paid their share back with the profits from the Bank, which came directly from the common people.

But for the start I strongly recommend to watch this movie, which is, though being far from perfect, a good introduction, food for thought and further discussions:

http://video.google.de/videoplay?docid=-515319560256183936

If you didnt watch it so far, because you I posted it in this thread already:
http://forums.skadi.net/showthread.php?p=860324

One could also argue, that one reason for the English success was the hate of the Jewish bankers for the Spanish, which they fought first from the Netherlands and later from Britain. They Jews were banned from England, to only come back some generations later with a revolution they supported (Cromwell) and the story of William (III.) of Orange is also quite interesting in this context...

SwordOfTheVistula
Thursday, October 23rd, 2008, 06:15 AM
Socialism means a form of policy or state in which the main socio-economic goals are defined by social justice and social balancing. For example equal chances for all group members, an acceptable standard of living, affordable goods for the workers, the limitation of the power of "the rich" and the like.

That's exactly the type of mentality that caused this financial crisis. Everyone should have a house! Affordable loans for all! Bad credit? No problem-anything else would be discriminatory!

Banks didn't used to make these type of loans because they were worried that they wouldn't be paid back, but thanks to laws mandating that they 'offer equal access to loans' to poor/minorities and the creation of the federally backed Fannie Mae/Freddie Mac entities in order to buy these loans as part of a social policy to increase home ownership amongst the lower echelons of society, these loans started to be made.

The other half of the problem is the federal reserve continually keeping interest rates low in order to facilitate the issuance of more mortgages, credit cards, etc in order to record 'economic growth' statistics for political reasons.



to prevent the people from fighting for their rights and fair share of the fruits of this economy.

Rights and a fair share would be you get out what you put in, and nobody takes it away from you. How does taking everything and putting it into one pot and handing it out based on 'need' equate to fairness or protection of rights?



Well, not if a few planned it exactly that way, whereas those "participating" have no other choice....if you live there, you have little alternatives if you have a job, are a business man or when its time to pay your bills and taxes.

That's what socialism is. At least in this past instance with the houses and credit cards, you had to the choice to not buy a house with a subprime mortgage, or not take our credit cards, if you didn't want to.




if you were more intelligent but still just one of those without privileges, not a member of the plutocratic oligarchy, you will bleed with them anyway, because the whole system means exploitation and it would be wrong to blame those who suffered even more, even because they were ill-informed, too stupid or risk-taking, before those who made up this fraud.

If people shouldn't be allowed to bleed because there were ill-informed, stupid, or risk-taking, how are we supposed to discourage people from making ill-informed, stupid, and risky decisions?

As for 'fraud', the only 'fraud' which was performed in these subprime mortgages is that many people falsely claimed income which they did not have. Under previous, more purely capitalist system, this fraud did not work, because banks checked to verify that this income was actually being earned, in order to avoid losing money on a loan which would not be repaid. If you told a bank you made $90k/yr as a regional manager for Burger King, the bank would demand pay stubs to prove this and then call up Burger King to make sure you actually made this amount of money, check to see how long you were employed, check to see that you had a history of paying your rent and other bills, etc. Some banks still do this (and these banks are not in financial trouble), others didn't care about borrower fraud for the following reasons:

1. Pressure from the government to avoid such 'discriminatory' practices. If Juan Gonzalez says he makes $90k/yr with his landscaping business, then you had better believe him. If Fred Weber the regional manager gets a loan and Juan Gonzalez the landscaper doesn't, the bank is in huge trouble and gets investigated by the feds for 'discriminatory practices'. Contrary to claims, there were in fact many federal regulators keeping an eye on the banks, the thing is they were coercing the banks to issue subprime loans to risky borrowers rather than preventing them from doing so.

2. Fannie Mae and Freddie Mac, government created/backed entities, were instructed to buy up these subprime loans and direct a certain percentage of their business to poor/minority homebuyers (ie, risky loans) for political and social engineering reasons. Many of the loans were made by 'mortgage companies' who issued and serviced the loans but sold them off to Fannie Mae and Freddy Mac. Why would they care if the loans are likely to be defaulted on, if Fannie Mae and Freddie Mac are going to buy them?

3. Some people really did make that amount of money which they claimed. Illegal aliens for one, but with all the regulations and taxes we now have many native born Americans work 'off the grid', particularly skilled tradesmen in the construction trades.



The bank [federal reserve] should have intervened, as it being written:

The federal reserve did intervene-it lowered interest rates in order to keep the housing market going up. It did this for political reasons at the behest of politicans.




Government regulation failed fully. There were definitive illegal acts at work here

The main fraud came from government-backed entities, Fannie Mae and Freddie Mac. Since their operations were directed in part with socialist political motives (increase house ownership amongst poor/minorities) their operations were not profitable. The fraudsters running them made it look like they were, but this was allowed to continue by the government who wanted to use Fannie Mae and Freddie Mac to advance social policies.


the business crime investigators of the FBI being reduced in the time before the crisis

The business crime investigators of the FBI were out there alright-forcing the banks to make these bad loans. One recent example:

http://www.usdoj.gov/opa/pr/2008/September/08-crt-864.html

WASHINGTON - The Justice Department announced today that it has reached a settlement with First Lowndes Bank in Lowndes County, Ala., resolving allegations that the bank engaged in a pattern or practice of discrimination against African-American customers by charging them higher interest rates on manufactured housing loans, in violation of the Fair Housing Act (FHA) and Equal Credit Opportunity Act (ECOA).

The Department’s complaint, filed in the U.S. District Court for the Middle District of Alabama, also alleges that First Lowndes Bank charged African-American customers higher interest rates than similarly situated white customers during at least 2004 and 2005.

Under the agreement, First Lowndes Bank will pay up to $185,000, plus interest, to compensate African-American borrowers who were charged higher interest rates. In addition, the bank has agreed to implement procedures to prevent discrimination in setting interest rates. The bank also will provide enhanced equal credit opportunity training to its officers and employees who set rates for housing loans.

"We are pleased that today’s lawsuit and settlement will help African-American borrowers," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "The Department will continue to vigorously pursue cases alleging racial discrimination."

The settlement is in the form of a consent order, and is subject to court approval. Under the terms of the agreement, First Lowndes Bank is prohibited from discriminating against customers on the basis of race in its home mortgage lending and is subject to the jurisdiction of the court, should the terms of the agreement be violated in the future.

This case resulted from a referral by the Federal Deposit Insurance Corporation. A copy of the consent order between the United States and First Lowndes Bank, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department Web site at http://www.usdoj.gov/fairhousing.

Oddly enough, the First Lowndes Bank was not one of the banks which got in financial trouble and went under or needed a bailout, even after paying all these fines.

Jäger
Thursday, October 23rd, 2008, 06:26 AM
That's exactly the type of mentality that caused this financial crisis. Everyone should have a house! Affordable loans for all! Bad credit? No problem-anything else would be discriminatory!
It was more like "more provisions for everyone".


Banks didn't used to make these type of loans because they were worried that they wouldn't be paid back, but thanks to laws mandating that they 'offer equal access to loans' to poor/minorities and the creation of the federally backed Fannie Mae/Freddie Mac entities in order to buy these loans as part of a social policy to increase home ownership amongst the lower echelons of society, these loans started to be made.
Obviously they were not "backed".


The other half of the problem is the federal reserve continually keeping interest rates low in order to facilitate the issuance of more mortgages, credit cards, etc in order to record 'economic growth' statistics for political reasons.
What about the very essence of how loans are handled? Loans were traded, and speculated on, the ones who granted loans were not the ones who took the risk, they just cashed in provisions.


Rights and a fair share would be you get out what you put in, and nobody takes it away from you. How does taking everything and putting it into one pot and handing it out based on 'need' equate to fairness or protection of rights?
It is a form to pay the plebs to keep quite, I agree that this is not just though.


If people shouldn't be allowed to bleed because there were ill-informed, stupid, or risk-taking, how are we supposed to discourage people from making ill-informed, stupid, and risky decisions?
I agree, but right now, the fact is they are not the only ones that will bleed.

And I agree with the rest of your post. :)

SwordOfTheVistula
Thursday, October 23rd, 2008, 07:17 AM
Obviously they were not "backed".

The stock in them was not, but the bonds created from repackaged mortgages bought by Fannie Mae/Freddie Mac have been backed by the government at the expense of $200 billion, possibly much more. So if you bought stock in one of these entities, you lost your money, but if you bought bonds from them based on a repackaging of mortgages which are now bad, the government is paying the difference.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/2795803/US-Government-stages-world%27s-biggest-bail-out.html

It represents a potential liability of £2,900 billion. The move was welcomed by mortgage experts in the UK, who said it should inject some confidence into the British housing market, which is suffering from the steepest fall in prices since the 1930s.

Fannie Mae and Freddie Mac guaranteed about half of all of the home loans sold in the United States, but had run into severe difficulties as a result of the plunging American housing market which had seen hundreds of thousands of American home owners default on their mortgages.

Shares in both companies had fallen by more than 80 per cent in the last six months. The US government announced it would take control of the two companies, wiping out the value any shares that shareholders owned in the company.

However, holders of its mortgage-backed bonds should see their investments guaranteed.



What about the very essence of how loans are handled? Loans were traded, and speculated on, the ones who granted loans were not the ones who took the risk, they just cashed in provisions.

Yes, that's definitely a problem. The companies who granted loans in some cases probably did go along with fraud perpetrated by borrowers, since they could sell a loan based on fraud just as easily as one which wasn't. The whole system was ripe for fraud and inefficiency, since as you say a derivatives trader in New York lacks the ability to personally examine whether a loan made in Cleveland is a good loan or not. The whole system should have been allowed to collapse, the traders and speculators made to eat their losses, and then the market would have shifted the banking system back towards local and regional banks instead of massive entities that have no clue what is going on with the individual loans.

Agrippa
Thursday, October 23rd, 2008, 11:18 AM
To begin with, one can recognise your American heritage unfortunately. Its always bad to see for me, how so many Germans who came to the US of A changed their mentality and shifted away from the European base in general and the German in particular.


That's exactly the type of mentality that caused this financial crisis. Everyone should have a house! Affordable loans for all! Bad credit? No problem-anything else would be discriminatory!

That was at no time the crucial point for those in charge, you can be sure about it.


Banks didn't used to make these type of loans because they were worried that they wouldn't be paid back, but thanks to laws mandating that they 'offer equal access to loans' to poor/minorities and the creation of the federally backed Fannie Mae/Freddie Mac entities in order to buy these loans as part of a social policy to increase home ownership amongst the lower echelons of society, these loans started to be made.

No, no, of course they had to keep them down with some credits for that they can have at least a decent life going after the lowest standards in the US of A, but the real reason was that they had to blow up the bubble for the US economy and the profits of the banks.

The USA was going down with a dying production sector and a strong dependence on imported goods from Asia already, but the great powers, partly directly (corrupted regimes in Europe) and indirectly (Chinese growing economy and Japanese export) supported the dollar-based imperialistic system and delivered their goods. But how to let the US-economy grow out of nothing? Well, just give those which wouldnt have the ability to buy consumer goods en masse credits with foul dollars out of thin air, only backed up by the financial oligarchy, controlled by the Western plutocrats and defended by the "Undead Warrior" of the US-military complex.

Like you said:

The other half of the problem is the federal reserve continually keeping interest rates low in order to facilitate the issuance of more mortgages, credit cards, etc in order to record 'economic growth' statistics for political reasons.

Thats not "the other half", its the only reason. There are no philanthropic people in the FED with "a heart for poor minorities", if you believe that, you are just naive, they only use and abuse those if they need them against the Euro-Americans as voters and for their ideological control, or as cheap labour force and consumers - as a labour force also against the Euro-American working and middle class.


Rights and a fair share would be you get out what you put in, and nobody takes it away from you. How does taking everything and putting it into one pot and handing it out based on 'need' equate to fairness or protection of rights?

Well, if corrupted politician sold the pot which should belong to the community, its not right and no fair share.

Example for that being the oil production in a country, of which f.e. public projects should be at least partly paid with, since the ressources are in a way a common good of the country, like it happened in Norway or the Near East - Venezuela too for that matter. If talking about Socialism, at least partial Socialist actions took place in Venezuela which is one of the few countries opposing the plutocratic control, even though I dont agree on the ideology of a Chavez and the like in general.


That's what socialism is. At least in this past instance with the houses and credit cards, you had to the choice to not buy a house with a subprime mortgage, or not take our credit cards, if you didn't want to.

Again that has nothing to do with "Socialism".

If the state tattoos you a number or implants you a RFID chip under the skin for a total control, so that you can't buy anything without being recognised and anybody could turn off your creditworthiness in a second, if you said "something wrong" or "dangerous" for the oligarchy, this is no "Socialism" neither, but a dictatorship of the rich, which is the opposite form of state control.

Are you damned brainwashed to call that "Socialism"? Stop that crap.


If people shouldn't be allowed to bleed because there were ill-informed, stupid, or risk-taking, how are we supposed to discourage people from making ill-informed, stupid, and risky decisions?

If they get a proper free education and realistic information, have other acceptable alternatives to live a decent life, all which can't be said about the US of A in general and many regions of it in particular, THEN we can blame them much more directly and with the full consequences of their actions. As things are, you can't.


As for 'fraud', the only 'fraud' which was performed in these subprime mortgages is that many people falsely claimed income which they did not have.

As I said, you dont know for sure under which conditions they needed the credit.


Under previous, more purely capitalist system, this fraud did not work, because banks checked to verify that this income was actually being earned, in order to avoid losing money on a loan which would not be repaid. If you told a bank you made $90k/yr as a regional manager for Burger King, the bank would demand pay stubs to prove this and then call up Burger King to make sure you actually made this amount of money, check to see how long you were employed, check to see that you had a history of paying your rent and other bills, etc. Some banks still do this (and these banks are not in financial trouble), others didn't care about borrower fraud for the following reasons:

1. Pressure from the government to avoid such 'discriminatory' practices. If Juan Gonzalez says he makes $90k/yr with his landscaping business, then you had better believe him. If Fred Weber the regional manager gets a loan and Juan Gonzalez the landscaper doesn't, the bank is in huge trouble and gets investigated by the feds for 'discriminatory practices'. Contrary to claims, there were in fact many federal regulators keeping an eye on the banks, the thing is they were coercing the banks to issue subprime loans to risky borrowers rather than preventing them from doing so.

2. Fannie Mae and Freddie Mac, government created/backed entities, were instructed to buy up these subprime loans and direct a certain percentage of their business to poor/minority homebuyers (ie, risky loans) for political and social engineering reasons. Many of the loans were made by 'mortgage companies' who issued and serviced the loans but sold them off to Fannie Mae and Freddy Mac. Why would they care if the loans are likely to be defaulted on, if Fannie Mae and Freddie Mac are going to buy them?

3. Some people really did make that amount of money which they claimed. Illegal aliens for one, but with all the regulations and taxes we now have many native born Americans work 'off the grid', particularly skilled tradesmen in the construction trades.

That check didnt happen because it was turned off and the interest rates were very low. Now if you go up with the interest rate again, you start the crisis willingly, this is something which you have to keep in mind, also for the future to come.

Additionally, low interest rates from the FED just means cheap money for the banks, it doest have to mean cheap credits FROM the banks for the people, which, I would assume, varied a lot if comparing contracts, especially with forms in which the deptor had little to pay in the first years and has rising interest rates later, which must result, if even giving those foul contracts to people which won't be able to pay it back, in a crisis afterwards IF NOT assuming rising prices in the real estate market. This was a "pyramid game" for the investors and could go on and on, as long as the real estate prices were rising, which couldnt go on forever of course, because its illogical, even if foreign powers pay and pay for that "big nothing". If the prices would have gone up and up, the banks would have get their interest rates, rape the deptors and sell the real estate. This would make up a good profit for the creditor, even if the deptor can't pay back the full depth.

The prices shouldnt have gone through the roof to begin with and this would have resulted in smaller credits, which, with fair contracts, would have been affordable by much more people - this is a vicious circle which was only allowed because some planned with such a real estate bubble. And of course, the market doesnt always regulate itself properly for the greater good, in this case as well in others.

And of course, as I said, the contracts in detail were fraud too, with complicated and exploiting mechanisms in it, tailored for people which are no experts, no advocates nor graduated in economy. And, I think its not wrong to assume that, they also were not properly informed about their contract when they subscribed it.

I would assume that even the riskier banks knew that a lot of credits would be foul, and made conditions up for those which could pay, which would partly balance that out. This means people might be partly unable to pay it back, because of the unfair contract they got, not because they generally earned not enough for bigger credit in general.

And I heard about statistics in the state of California f.e., in which a huge real estate market was established, with so many employees, so many estate agents alone, that they all had to push things forward, to keep this "business" alive and running. Or all sectors depending on their success, like construction business and all workers in this fields. The that this real estate bubble exploded doesnt just affect the deptors and banks, but the whole economy DIRECTLY - not to speak of all indirect effects worldwide.

One of the reasons for this bubbles is, that there is not too much else left for good jobs and further economic growth than short- and midtime bubbles in the USA, with some administrative and scientific or military exceptions, of which most being paid with foul dollars and at the expense of the client states or dependent economies abroad.


The federal reserve did intervene-it lowered interest rates in order to keep the housing market going up. It did this for political reasons at the behest of politicans.

Would that have been a problem in itself if the contracts would have been controlled and fair? Only to those which earned enough money to pay the credit back?


The main fraud came from government-backed entities, Fannie Mae and Freddie Mac. Since their operations were directed in part with socialist political motives (increase house ownership amongst poor/minorities) their operations were not profitable. The fraudsters running them made it look like they were, but this was allowed to continue by the government who wanted to use Fannie Mae and Freddie Mac to advance social policies.

That should be proven by you and of course, I explained that pattern above.


The business crime investigators of the FBI were out there alright-forcing the banks to make these bad loans. One recent example:

http://www.usdoj.gov/opa/pr/2008/September/08-crt-864.html

WASHINGTON - The Justice Department announced today that it has reached a settlement with First Lowndes Bank in Lowndes County, Ala., resolving allegations that the bank engaged in a pattern or practice of discrimination against African-American customers by charging them higher interest rates on manufactured housing loans, in violation of the Fair Housing Act (FHA) and Equal Credit Opportunity Act (ECOA).

The Department’s complaint, filed in the U.S. District Court for the Middle District of Alabama, also alleges that First Lowndes Bank charged African-American customers higher interest rates than similarly situated white customers during at least 2004 and 2005.

Under the agreement, First Lowndes Bank will pay up to $185,000, plus interest, to compensate African-American borrowers who were charged higher interest rates. In addition, the bank has agreed to implement procedures to prevent discrimination in setting interest rates. The bank also will provide enhanced equal credit opportunity training to its officers and employees who set rates for housing loans.

"We are pleased that today’s lawsuit and settlement will help African-American borrowers," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "The Department will continue to vigorously pursue cases alleging racial discrimination."

The settlement is in the form of a consent order, and is subject to court approval. Under the terms of the agreement, First Lowndes Bank is prohibited from discriminating against customers on the basis of race in its home mortgage lending and is subject to the jurisdiction of the court, should the terms of the agreement be violated in the future.

This case resulted from a referral by the Federal Deposit Insurance Corporation. A copy of the consent order between the United States and First Lowndes Bank, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department Web site at http://www.usdoj.gov/fairhousing.

Oddly enough, the First Lowndes Bank was not one of the banks which got in financial trouble and went under or needed a bailout, even after paying all these fines.

Well, if I read this:


to compensate African-American borrowers who were charged higher interest rates.

It means they did what I blamed above as a reason for the bankruptcy of some deptors, namely too high interest rates. What this company might have done is, to let those colored pay higher interests which could afford it, for those who couldnt.
In the latter case, they shouldnt have given those such credits in the first place and it was an unfair practise to let the colored as a whole pay higher interest rates.

If someone is having a too low income, you have to prove which credit he could pay back and not raise the interest rate, which is exploitation and fraud. That it happened in this case to colored people is secondary, since its a generally unfair practise.

Can you prove that an institution was forced to give credits - not just individual cases, but en masse - to people for which a general check would have made clear that they were not able to pay it back at low interest rates in a forseeable future?


then the market would have shifted the banking system back towards local and regional banks instead of massive entities that have no clue what is going on with the individual loans.

The important figures all knew whats going on, they just refused to act, because they made an advantage out of it and still do!

And the government couldnt say "lets go it down the drain", because it would have gone down the drain with the system. The politicians are being all paid and funded by the plutocratic oligarchy directly and indirectly. They can't say from one day to the other, "oh, we detected the great fraud of the people, now we say the truth and reform the system", because they are part of it. Some just know more, others less, but all of them at least overlook deliberately various defects of the FED-system and its RELATED parts.

Not to forget, without the plutocratic oligarchy, which made the whole state and people of the US of A a dependent object, the US economy would fully crumble and not recover in decades, if ever. They can't act differently, because they have no choice, thats how things are and is the reason why the US of A with its current system must go down the drain, before anything better can grow again on this soil.

SwordOfTheVistula
Friday, October 24th, 2008, 07:39 AM
As regards 'socialism':

http://dictionary.reference.com/browse/socialism
Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.

So, the federal reserve, Fannie Mae/Freddie Mac, and bailing out banks with several hundred billion dollars in return for part ownership of said banks are in fact 'socialism'



And of course, as I said, the contracts in detail were fraud too, with complicated and exploiting mechanisms in it, tailored for people which are no experts, no advocates nor graduated in economy. And, I think its not wrong to assume that, they also were not properly informed about their contract when they subscribed it.

It's not that hard to comprehend the concept of 'variable interest rates', interest rates that can change, that can go up. Assuming they didn't in fact understand the contract terms, they should have hired a lawyer to go over the contract for them. You wouldn't attempt to install electrical wiring or perform surgery on yourself if you don't know how, the same applies to contracts. If you don't have the knowledge, hire someone who does. If you can't afford a few grand for a lawyer, you probably can't afford a few hundred grand for a house.


I would assume that even the riskier banks knew that a lot of credits would be foul, and made conditions up for those which could pay, which would partly balance that out.

Well yeah, that's the way lending works. They aren't psychic, so some people are going to get loans that they will not pay back. The banks establish interest rates to compensate for the risk of not being paid back. If they estimate 1/5 people won't pay them back, they charge enough interest so that the other 4/5 people cover the loss. If they estimate 1/10 people won't pay them back, they charge enough interest so that the other 9/10 people cover the loss.



Can you prove that an institution was forced to give credits - not just individual cases, but en masse - to people for which a general check would have made clear that they were not able to pay it back at low interest rates in a forseeable future?

Banks aren't voluntarily going to make loans to people who they know won't pay them back. There's a lot of posts in several other threads over the past year on this subject, here is a good summary of what happened:
http://www.nypost.com/seven/09292008/postopinion/opedcolumnists/os_dangerous_pals_131216.htm?page=0

THE seeds of today's financial meltdown lie in the Community Reinvestment Act - a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades.

CRA was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now) to abuse the law by forcing banks to make hundreds of millions of dollars in "subprime" loans to often uncreditworthy poor and minority customers.

Any bank that wants to expand or merge with another has to show it has complied with CRA - and approval can be held up by complaints filed by groups like ACORN.

In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America's financial institutions.

Banks already overexposed by these shaky loans were pushed still further in the wrong direction when government-sponsored Fannie Mae and Freddie Mac began buying up their bad loans and offering them for sale on world markets.

Fannie and Freddie acted in response to Clinton administration pressure to boost homeownership rates among minorities and the poor. However compassionate the motive, the result of this systematic disregard for normal credit standards has been financial disaster.

ONE key pioneer of ACORN's subprime-loan shakedown racket was Madeline Talbott - an activist with extensive ties to Barack Obama. She was also in on the ground floor of the disastrous turn in Fannie Mae's mortgage policies.

Long the director of Chicago ACORN, Talbott is a specialist in "direct action" - organizers' term for their militant tactics of intimidation and disruption. Perhaps her most famous stunt was leading a group of ACORN protesters breaking into a meeting of the Chicago City Council to push for a "living wage" law, shouting in defiance as she was arrested for mob action and disorderly conduct. But her real legacy may be her drive to push banks into making risky mortgage loans.

In February 1990, Illinois regulators held what was believed to be the first-ever state hearing to consider blocking a thrift merger for lack of compliance with CRA. The challenge was filed by ACORN, led by Talbott. Officials of Bell Federal Savings and Loan Association, her target, complained that ACORN pressure was undermining its ability to meet strict financial requirements it was obligated to uphold and protested being boxed into an "affirmative-action lending policy." The following years saw Talbott featured in dozens of news stories about pressuring banks into higher-risk minority loans.

IN April 1992, Talbott filed an other precedent-setting com plaint using the "community support requirements" of the 1989 savings-and-loan bailout, this time against Avondale Federal Bank for Savings. Within a month, Chicago ACORN had organized its first "bank fair" at Malcolm X College and found 16 Chicago-area financial institutions willing to participate.

Two months later, aided by ACORN organizer Sandra Maxwell, Talbott announced plans to conduct demonstrations in the lobbies of area banks that refused to attend an ACORN-sponsored national bank "summit" in New York. She insisted that banks show a commitment to minority lending by lowering their standards on downpayments and underwriting - for example, by overlooking bad credit histories.

By September 1992, The Chicago Tribune was describing Talbott's program as "affirmative-action lending" and ACORN was issuing fact sheets bragging about relaxations of credit standards that it had won on behalf of minorities.

And Talbott continued her effort to, as she put it, drag banks "kicking and screaming" into high-risk loans. A September 1993 story in The Chicago Sun-Times presents her as the leader of an initiative in which five area financial institutions (including two of her former targets, now plainly cowed - Bell Federal Savings and Avondale Federal Savings) were "participating in a $55 million national pilot program with affordable-housing group ACORN to make mortgages for low- and moderate-income people with troubled credit histories."

What made this program different from others, the paper added, was the participation of Fannie Mae - which had agreed to buy up the loans. "If this pilot program works," crowed Talbott, "it will send a message to the lending community that it's OK to make these kind of loans."

Well, the pilot program "worked," and Fannie Mae's message that risky loans to minorities were "OK" was sent. The rest is financial-meltdown history.



If talking about Socialism, at least partial Socialist actions took place in Venezuela which is one of the few countries opposing the plutocratic control

And they can't even keep the lights on, as their socialist policies prevent proper investment in generation infrastructure:
http://news.yahoo.com/s/nm/20081023/wl_nm/us_venezuela_electricity

SAN FELIX, Venezuela (Reuters) – Despite having some of the world's largest energy reserves, Venezuela is increasingly struggling to maintain basic electrical service, a growing challenge for leftist President Hugo Chavez.

"With so much energy in Venezuela, how can we be without power?" asked Fernando Aponte, 49, whose slum neighborhood of Las Delicias in San Felix spent 15 days without electricity -- leading him to block a nearby avenue with burning tires in protest.

Just next door, Carmen Fernandez, 82, who is blind and has a pacemaker, says she has trouble sleeping through sultry nights without even a fan to cool her.

Experts say Venezuela for years has skimped billions of dollars in electrical investments, leaving generation 20 percent below the level necessary for a stable power grid and increasing the risk of national outages. Officially Venezuela has a capacity of 22,500 megawatts for a population of 28 million people, but a sizeable proportion is not working, analysts say.

But to keep up with demand, Venezuela needed to add 1,000 megawatts of new generation capacity every year for at least the last five years, but instead it has installed only about 350 MW a year.

Agrippa
Friday, October 24th, 2008, 09:39 AM
As regards 'socialism':

http://dictionary.reference.com/browse/socialism
Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.

So, the federal reserve, Fannie Mae/Freddie Mac, and bailing out banks with several hundred billion dollars in return for part ownership of said banks are in fact 'socialism'


Your Libertarian way of argumentation is totally perverted. But lets be clear about "the details" on the matter:
Socialism refers to a broad set of economic theories of social organization advocating state or collective ownership and administration of the means of production and distribution of goods, and the creation of an egalitarian society.


Socialists mainly share the belief that capitalism unfairly concentrates power and wealth among a small segment of society that controls capital, and creates an unequal society.

http://en.wikipedia.org/wiki/Socialism

What do we have in the US of A? A massive concentration of capital and the ability to create money in the hands of a few from the financial and plutocratic oligarchy. This is an example of monopolised Capitalism going out of control, its probably closest to the concept of STAMOCAP but has zero to do with "Socialism".

The latter obviously doesnt happen in the US of A and to give an example which even you should comprehend and hopefully accept because I'm fed up with your crap would be like that:
A socialist policy on the housing market would mean that the state intervenes directly and indirectly to give those people which dont own their own houses
a) The houses for free or a very low and fix value, so that their homes being quasi state financed
and/or
b) They give them a interest-free loan and state subsidies.

This didnt happen. The people had to pay much too high prices for their homes and to pay back credits which were made up by market oriented banks and if they couldnt pay all the interests, usually constantly rising ones, back, their house went back to the bank.

Thats nothing - in any way or of any sort, which has anything to do with "Socialism".


It's not that hard to comprehend the concept of 'variable interest rates', interest rates that can change, that can go up. Assuming they didn't in fact understand the contract terms, they should have hired a lawyer to go over the contract for them. You wouldn't attempt to install electrical wiring or perform surgery on yourself if you don't know how, the same applies to contracts. If you don't have the knowledge, hire someone who does. If you can't afford a few grand for a lawyer, you probably can't afford a few hundred grand for a house.

Again, you think in a very typical way. Rather the state and some sort of "lawyer for the people" should check such contracts and the way they being made with the customer, punishing those abusing common people for fraud.

As if someone who has a hard time to finance his home and family wants to give his money to another overpriced thing, a lawyer for every greater contract.

You can be sure that in most of the sales talks their was no proper clarification of the potential risks for the deptors and of course: What if in your region just creidts of that kind were promoted? Many of the victims might just have needed a credit and got an unfair one.

In fact, the state or public organisation should give interest free loans to those people which want to buy their first house and prove their ability to pay the credit back. That would be in a way a "Socialist influenced" policy for the housing market and I'm all for it. It could be paid without any problems, from a state owned central bank.


Well yeah, that's the way lending works. They aren't psychic, so some people are going to get loans that they will not pay back. The banks establish interest rates to compensate for the risk of not being paid back. If they estimate 1/5 people won't pay them back, they charge enough interest so that the other 4/5 people cover the loss. If they estimate 1/10 people won't pay them back, they charge enough interest so that the other 9/10 people cover the loss.


Well yeah, that's the way lending works. They aren't psychic, so some people are going to get loans that they will not pay back. The banks establish interest rates to compensate for the risk of not being paid back. If they estimate 1/5 people won't pay them back, they charge enough interest so that the other 4/5 people cover the loss. If they estimate 1/10 people won't pay them back, they charge enough interest so that the other 9/10 people cover the loss.

Thats the theory, nothing new but still unfair for the individual and in most cases the interest rates are much higher than what would be needed if a fair bank organisation would be a fact.


Banks aren't voluntarily going to make loans to people who they know won't pay them back. There's a lot of posts in several other threads over the past year on this subject, here is a good summary of what happened:
http://www.nypost.com/seven/09292008/postopinion/opedcolumnists/os_dangerous_pals_131216.htm?page=0

THE seeds of today's financial meltdown lie in the Community Reinvestment Act - a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades.

CRA was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now) to abuse the law by forcing banks to make hundreds of millions of dollars in "subprime" loans to often uncreditworthy poor and minority customers.

Any bank that wants to expand or merge with another has to show it has complied with CRA - and approval can be held up by complaints filed by groups like ACORN.

In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America's financial institutions.

Banks already overexposed by these shaky loans were pushed still further in the wrong direction when government-sponsored Fannie Mae and Freddie Mac began buying up their bad loans and offering them for sale on world markets.

Fannie and Freddie acted in response to Clinton administration pressure to boost homeownership rates among minorities and the poor. However compassionate the motive, the result of this systematic disregard for normal credit standards has been financial disaster.

ONE key pioneer of ACORN's subprime-loan shakedown racket was Madeline Talbott - an activist with extensive ties to Barack Obama. She was also in on the ground floor of the disastrous turn in Fannie Mae's mortgage policies.

Long the director of Chicago ACORN, Talbott is a specialist in "direct action" - organizers' term for their militant tactics of intimidation and disruption. Perhaps her most famous stunt was leading a group of ACORN protesters breaking into a meeting of the Chicago City Council to push for a "living wage" law, shouting in defiance as she was arrested for mob action and disorderly conduct. But her real legacy may be her drive to push banks into making risky mortgage loans.

In February 1990, Illinois regulators held what was believed to be the first-ever state hearing to consider blocking a thrift merger for lack of compliance with CRA. The challenge was filed by ACORN, led by Talbott. Officials of Bell Federal Savings and Loan Association, her target, complained that ACORN pressure was undermining its ability to meet strict financial requirements it was obligated to uphold and protested being boxed into an "affirmative-action lending policy." The following years saw Talbott featured in dozens of news stories about pressuring banks into higher-risk minority loans.

IN April 1992, Talbott filed an other precedent-setting com plaint using the "community support requirements" of the 1989 savings-and-loan bailout, this time against Avondale Federal Bank for Savings. Within a month, Chicago ACORN had organized its first "bank fair" at Malcolm X College and found 16 Chicago-area financial institutions willing to participate.

Two months later, aided by ACORN organizer Sandra Maxwell, Talbott announced plans to conduct demonstrations in the lobbies of area banks that refused to attend an ACORN-sponsored national bank "summit" in New York. She insisted that banks show a commitment to minority lending by lowering their standards on downpayments and underwriting - for example, by overlooking bad credit histories.

By September 1992, The Chicago Tribune was describing Talbott's program as "affirmative-action lending" and ACORN was issuing fact sheets bragging about relaxations of credit standards that it had won on behalf of minorities.

And Talbott continued her effort to, as she put it, drag banks "kicking and screaming" into high-risk loans. A September 1993 story in The Chicago Sun-Times presents her as the leader of an initiative in which five area financial institutions (including two of her former targets, now plainly cowed - Bell Federal Savings and Avondale Federal Savings) were "participating in a $55 million national pilot program with affordable-housing group ACORN to make mortgages for low- and moderate-income people with troubled credit histories."

What made this program different from others, the paper added, was the participation of Fannie Mae - which had agreed to buy up the loans. "If this pilot program works," crowed Talbott, "it will send a message to the lending community that it's OK to make these kind of loans."

Well, the pilot program "worked," and Fannie Mae's message that risky loans to minorities were "OK" was sent. The rest is financial-meltdown history.

Well, thats funny to read:

However compassionate the motive, the result of this systematic disregard for normal credit standards has been financial disaster.

As if that would have been the main motive...

But ok, it seems you could be right that this part of the credit and real estate policy was the result of this change and political pressures. Though this is for sure not the main factor, if looking at very different regions of the US of A and the way the real estate prices were going up. There was a lot of speculation and misled middle class investment involved.


And they can't even keep the lights on, as their socialist policies prevent proper investment in generation infrastructure:
http://news.yahoo.com/s/nm/20081023/wl_nm/us_venezuela_electricity

SAN FELIX, Venezuela (Reuters) – Despite having some of the world's largest energy reserves, Venezuela is increasingly struggling to maintain basic electrical service, a growing challenge for leftist President Hugo Chavez.

"With so much energy in Venezuela, how can we be without power?" asked Fernando Aponte, 49, whose slum neighborhood of Las Delicias in San Felix spent 15 days without electricity -- leading him to block a nearby avenue with burning tires in protest.

Just next door, Carmen Fernandez, 82, who is blind and has a pacemaker, says she has trouble sleeping through sultry nights without even a fan to cool her.

Experts say Venezuela for years has skimped billions of dollars in electrical investments, leaving generation 20 percent below the level necessary for a stable power grid and increasing the risk of national outages. Officially Venezuela has a capacity of 22,500 megawatts for a population of 28 million people, but a sizeable proportion is not working, analysts say.

But to keep up with demand, Venezuela needed to add 1,000 megawatts of new generation capacity every year for at least the last five years, but instead it has installed only about 350 MW a year.

Might I remind you on the electrical breakdowns in the US of A and the fact that a lot of people can't afford electricity and proper heating any more?

As for the problems of Venezuela:

But to keep up with demand, Venezuela needed to add 1,000 megawatts of new generation capacity every year for at least the last five years, but instead it has installed only about 350 MW a year.

This means they have a growing economy and consumption. As all countries, they fact problems with which has to be dealt with, with some they cope better than others...some not.

If you would post similar articles about every 3rd world country in the world, you could post on for years! As if Venezuela has now greater structural problems than before because of the Socialist policy, this is ridiculous and worthless propaganda. But ok, if they dont find anything else, it must run pretty good.

SwordOfTheVistula
Friday, October 24th, 2008, 02:17 PM
What do we have in the US of A? A massive concentration of capital and the ability to create money in the hands of a few from the financial and plutocratic oligarchy.

That's what socialism is: concentration of wealth and control of the economy in government hands. The only difference between socialism and this 'stamocap' you came up with is that socialism only has one entity in control of everything as opposed to a mere 'few', and the banks lack the legal authority to shoot dissidents as in a more true socialist state.




A socialist policy on the housing market would mean that the state intervenes directly and indirectly to give those people which dont own their own houses
a) The houses for free or a very low and fix value, so that their homes being quasi state financed
and/or
b) They give them a interest-free loan and state subsidies.


That wouldn't work in the US, because it would be a too obvious form of socialism and rejected by the people. Instead they did things in stealth and spread ig out over a period of years, but in the end the result was the same: the middle/working class was forced to pay, via taxes and higher bank rates, to subsidize housing for the lower classes. There was also a concurrent, more directly socialist scheme called 'section 8' in which taxpayers' money was used to subsidize 80%+ of the rent of nonworking/low income people.

More on 'Section 8' here:
http://forums.skadi.net/showpost.php?p=849926&postcount=16




Again, you think in a very typical way. Rather the state and some sort of "lawyer for the people" should check such contracts and the way they being made with the customer

Who pays the salary of these 'lawyers for the people?' Why should people who are not utilizing these 'lawyers for the people' be forced to pay for them? Since the legal system relies on lawyers being advocates of those who employ them, wouldn't this corrupt the legal system, to have lawyers who are supposed to represent one party but their paycheck comes from another party-who will they really represent?


punishing those abusing common people for fraud.

If it's written in the contract, and someone is too lazy/dumb to read it, that's not fraud. Fraud is writing one thing in the contract and doing another, which is not what happened in this mortgage meltdown.



As if someone who has a hard time to finance his home and family wants to give his money to another overpriced thing, a lawyer for every greater contract.

It's a necessity. If they can't afford a lawyer, they sure can't afford to buy a house, better to keep renting in these peoples' cases.


You can be sure that in most of the sales talks their was no proper clarification of the potential risks for the deptors and of course

Of course not. People need to do their own research for their point of view. To not do so is stupid. Should a society orient itself towards policies that most benefit the stupid?



What if in your region just creidts of that kind were promoted? Many of the victims might just have needed a credit and got an unfair one.

That's not what happened. Anyone with a halfway decent income and a history of paying off their bills could obtain a standard fixed rate mortgage. The people who got the screwy mortgages that they couldn't pay off either had no/little income, a history of not paying their bills, or were trying to beat the system by taking out a loan to buy the house and then 'flip' it for quick massive profit.


In fact, the state or public organisation should give interest free loans to those people which want to buy their first house and prove their ability to pay the credit back. That would be in a way a "Socialist influenced" policy for the housing market and I'm all for it. It could be paid without any problems, from a state owned central bank.

Where's this state owned central bank going to get the money to loan to people? Take money away from people who earned it via taxes? Print it out and devalue the money already in circulation? How are you going to pay the salaries of the people who work at this central bank and administer it? What happens if they think someone can pay the credit back, and for whatever reason they don't? Where does the money to cover that loss come from? How does this bank determine who they think can and can't pay back the credit? Who pays the salaries of the people who determine this, since apparently the bank is generating no interest income?



Might I remind you on the electrical breakdowns in the US of A

What? Hurricanes and ice storms? Not from lack of generating capacity.


and the fact that a lot of people can't afford electricity and proper heating any more?

You've got to be pretty broke to not afford that. My monthly combined electric and gas bill is about $50-90 per month, the minimum wage here is $8/hr, so with the wages of at most 11 hours of work (not counting taxes) one can pay the electric and gas bill, most people earn more than the minimum wage.





As for the problems of Venezuela:

This means they have a growing economy and consumption. As all countries, they fact problems with which has to be dealt with, with some they cope better than others...some not.

If you would post similar articles about every 3rd world country in the world, you could post on for years!

Why doesn't someone build more power plants, and borrow money on the capital market to do so on the basis of expected revenue from collecting money from electric bills? If their economy is truly growing, surely someone would build new power plants and borrow money from those who invest in this vibrant economy? Oh, that's right, there are no capital markets or financing of projects on the basis of expected return on investment in socialist countries.

More on this 'growing economy':
http://www.abqtrib.com/news/2007/nov/23/long-food-lines-signal-problems-venezuelas-economi/

CARACAS, Venezuela — The lines formed at dawn and remained long throughout the day — hundreds upon hundreds of Venezuelans waiting to buy scarce milk, chicken and sugar at state-run outdoor markets staffed by soldiers in fatigues.

President Hugo Chavez's government is trying to cope with shortages of some foods, and the lines at state-run "Megamercal" street markets show many Venezuelans are willing to wait for hours to snap up a handful of products they seldom find in supermarkets.

"You have to get in line and you have to be lucky," said Maria Fernandez, a 64-year-old housewife who was trying to buy milk and chicken on a recent Sunday.

The lines for basic foods at subsidized prices are paradoxical for an oil-rich nation that in many ways is a land of plenty. Shopping malls are bustling, new car sales are booming and privately owned supermarkets are stocked with American potato chips, French wines and Swiss Gruyere cheese.

Yet other foods covered by price controls — eggs, chicken — periodically are hard to find in supermarkets. Fresh milk has become a luxury, and even baby formula is scarcer nowadays.

The government's price controls are also "totally divorced" from reality — in some cases below production costs — making it unprofitable for suppliers to sell their products at official prices, said economist Pedro Palma of the Caracas consulting firm MetroEconomica.

More investment is needed in agriculture, but the government's agrarian reform effort — assuming control of vast farmlands and offering them to poor farmers — has made traditional producers reluctant to invest, he said.

Importers also face hurdles. Currency exchange controls imposed in 2003 require state approval to obtain dollars at the official rate. Those without it turn to the black market, buying dollars for about three times the fixed rate.

"I arrived at 6 in the morning to get in line," said Doris Bastida, 32, a mother of four who wheeled an infant son in a stroller. She had been waiting for about four hours when she reached the entrance.

"What am I going to do? I don't have anywhere else to go," she said.

Agrippa
Friday, October 24th, 2008, 03:20 PM
That's what socialism is: concentration of wealth and control of the economy in government hands. The only difference between socialism and this 'stamocap' you came up with is that socialism only has one entity in control of everything as opposed to a mere 'few', and the banks lack the legal authority to shoot dissidents as in a more true socialist state.

Socialism doesnt just mean a form of control over the economy, but also a specific political ideology, which has to have certain common goals, which cannot be seen in the USA.

Furthermore Socialism can appear in many forms, but usually it has to be some sort of political movement. But the US of A are not controlled by a political movement in the first place, but by the plutocratic financial oligarchy which controlls the banking system and directly, but mostly indirectly, other parts of the state for gaining more power over and profits from the people in the US of A and beyond.

You can clearly distinguish any form of even just potential Socialism (like Cuba, Venezuela etc.) from STAMOCAP (USA).


That wouldn't work in the US, because it would be a too obvious form of socialism and rejected by the people. Instead they did things in stealth and spread ig out over a period of years, but in the end the result was the same: the middle/working class was forced to pay, via taxes and higher bank rates, to subsidize housing for the lower classes. There was also a concurrent, more directly socialist scheme called 'section 8' in which taxpayers' money was used to subsidize 80%+ of the rent of nonworking/low income people.

More on 'Section 8' here:
http://forums.skadi.net/showpost.php?p=849926&postcount=16

Well, we all know of the negative effects of "affirmative action" and many minority programs, but you have to consider one thing:
This minority problem isnt allowed to be solved, because it largely distracts the public and you can get vote for either Social Liberal as well Neoconservative/Neoliberal candidates by playout out the state spending and public financing issue. This distracts people, like you, from the real problem, namely the bankers and media tycoons in the background which just want things going on as they were, just with weakened communities and dependent people which went into dept.

Libertarian reforms won't bring a predominantely Euro-American population and culture back to the US of A, nor being able to reverse the effects of negative Liberal/Libertarian and cultural Marxist indoctrination. For this a more radical change must be proposed which in the first place means to end the plutocratic oligarchy, their money issuing power and their grip on the media as well as politicians. You need educated and enlightened people which stand up for their rights and this means also social rights, but not in the context of cultural Marxism or an perverted idea of economic and individual freedom in Liberterianism, but a will to fight for the greater good of the individuals as well as the collective, communities as a whole.


Who pays the salary of these 'lawyers for the people?' Why should people who are not utilizing these 'lawyers for the people' be forced to pay for them? Since the legal system relies on lawyers being advocates of those who employ them, wouldn't this corrupt the legal system, to have lawyers who are supposed to represent one party but their paycheck comes from another party-who will they really represent?

Well, the concept is that of lawyers who help those who can't pay the private lawyers and stand up for the rights of the "small people", going after the law.

Of course, for such a thing to work, the law has to be good which is a problem in itself for all Western states today, the US of A in some areas more than in others and for the FRG similar things can be said, but crucial is that everybody should have the right to defend his case properly and it is a great injustice if individuals, just because they own more money, can manipulate the system or exploit it.

Even a Libertarian must aknowledge the fact that the state should be independent and giving the people the same rights in the sense of same basic chances in front of the law and state.

If one would say, like I do, that the communities should be largely homogeneous, f.e. German and occidental in culture, or for the US of A Euro-American and Christian-occidental to give an example, one has to think about how to make up communities as well as citizenship, but one shouldnt allow manipulation and inequality through wealth, which will in any case result in great corruption, low identification and high criminal rates - as well as an unhealthy and perverted form of culture, like we can observe it in the US of
A.

In theory one doesnt need lawyers at all, because if a business man did something wrong and the individual goes to the government - f.e. a fraud with a covered credit contract - the good government and law would act immediately, punishing the perpetrator and helping the victim, making it a example to the public and warning all others.


If it's written in the contract, and someone is too lazy/dumb to read it, that's not fraud. Fraud is writing one thing in the contract and doing another, which is not what happened in this mortgage meltdown.

Well, it was intended fraud AT LEAST and of course, I can't prove whether the talks were fair or not and I doubt one can generalise on this, but there happened a lot of manipulation, of the real estate market, the investors, the house owners and the tax payers - and this manipulation, nothing than a big fraud, still goes on and the government as well as the FED did nothing, even if, like I quoted, they would have had the duty to act, going AFTER EXISTING LAW - since the bloated character of the real estate market was a long known fact for many, must have been so for insiders and officials even much longer, but nobody acted accordingly.


It's a necessity. If they can't afford a lawyer, they sure can't afford to buy a house, better to keep renting in these peoples' cases.

Which might be not much cheaper on the longer run by the way, nor can one conclude from this to the other. It was risky for many, sure, but from their perspective not even the necessity to use a lawyer came to mind for most of them, I'm quite sure.

And you, being somewhat better informed and talking about AFTER THINGS happened, since all of this started years ago, can play the "clever guy" in front of this victims with ease, but whether thats fair or not is another matter.


Of course not. People need to do their own research for their point of view. To not do so is stupid. Should a society orient itself towards policies that most benefit the stupid?

Well, there are not just stupid and intelligent, but also bad and well informed people. And some well informed and intelligent people are worse than the most stupid ones, because they in fact make up a policy eliminating in every generation the more intelligent and group oriented individuals by manipulating the whole society.

So should society benefit those which are just deceptive fraudsters and corrupted enemies of the community? Surely not, the law shouldnt be on their side, but in the US of A it mostly is...


That's not what happened. Anyone with a halfway decent income and a history of paying off their bills could obtain a standard fixed rate mortgage. The people who got the screwy mortgages that they couldn't pay off either had no/little income, a history of not paying their bills, or were trying to beat the system by taking out a loan to buy the house and then 'flip' it for quick massive profit.

This means they had no other choice for securing their home and living. Well, doesnt make things nice neither, but I'm quite sure that such credit models were and are much more widespread and they were simply sold effectively to "the customer" = ill informed deptor.


Where's this state owned central bank going to get the money to loan to people? Take money away from people who earned it via taxes? Print it out and devalue the money already in circulation? How are you going to pay the salaries of the people who work at this central bank and administer it? What happens if they think someone can pay the credit back, and for whatever reason they don't? Where does the money to cover that loss come from? How does this bank determine who they think can and can't pay back the credit? Who pays the salaries of the people who determine this, since apparently the bank is generating no interest income?

Well, basically the state guarantees the value of the money by his own productive potential and the goods of the nation, other than that, the only regulation comes from the amount of money it lets out into the economy, based on specific economic standards. In theory, there are two options, inflation or taxes to use for a growing economy and for financing the public sector.

There are little alternatives to that two options, but lets look at whats happening in the US of A:
The people pay taxes, they also got the inflation and they finally have to pay their depts back at high interest rates and their communities and the wealth of the nation being sold much to low to the very same people which got most of the profits from all this actions - those controlled the financial system, the plutocratic oligarchy.

So while a state owned bank would get back the ressources it needs much more directly from the people and all profits would go back to the people, the FED-system means that the people being plundern in many ways, at least 4 ways and get nothing back than depts they can never pay back and a direct dependence on the system of the bankers, on the public and state level (public dept and corrupted politicians) as well as on a personal level (companies in dept and individual dept).

This means that a small number of plutocratic oligarchs finally controls and exploits the average American system on various levels, whereas the state owned bank under a proper political control means that it finally does what the legitimated political representatives and people want it too and that their is no various-level exploitation of the people by a corrupted financial system, prone to crisis and manipulation.

There is simply no conclusive advantage of this current system in the US of A, but for the minority of plutocratic oligarchs using and abusing it.


What? Hurricanes and ice storms? Not from lack of generating capacity.

Well, the whole structures in many states of the US of A are totally aged, they are even as worse as in many 3rd world countries if considering the potential it should have. This resulted in electric blackouts more than once in various states, the latest was just some years ago, but I dont remember the exact position. This can happen in other countries too of course, since its more or less accidental, though provoked by inefficiencies and aged, failure-prone constructions.


You've got to be pretty broke to not afford that. My monthly combined electric and gas bill is about $50-90 per month, the minimum wage here is $8/hr, so with the wages of at most 11 hours of work (not counting taxes) one can pay the electric and gas bill, most people earn more than the minimum wage.

I just wonder how it can be so cheap - do you have such a small flat/house, are that frugal/economic or is the energy in your area still so much cheaper? I just wonder because here it wouldnt be enough even for a smaller flat most of the time and if having the cheapest tariffs...


Why doesn't someone build more power plants, and borrow money on the capital market to do so on the basis of expected revenue from collecting money from electric bills? If their economy is truly growing, surely someone would build new power plants and borrow money from those who invest in this vibrant economy? Oh, that's right, there are no capital markets or financing of projects on the basis of expected return on investment in socialist countries.

From what I know, thats surely not true, but I mainly used him as an example and good politician if its about to oppose the US-plutocracy, on the other hand he has many aspects of his heritage and policy which are absolutely not mine and made great mistakes too of course, though never comparable with what the US presidents did...

SwordOfTheVistula
Saturday, October 25th, 2008, 10:29 AM
Socialism doesnt just mean a form of control over the economy, but also a specific political ideology, which has to have certain common goals, which cannot be seen in the USA.

In general, no, but the aspects which caused this problem are. Low income tax rates and lack of a universal government health care system did not cause the financial crisis. Forcing housing loans to be made to the poor/bad credit, lowering interest rates, and giving a trillion dollars to banks did, and these are socialist programs. A pure capitalist system would not have coerced these banks to make the loans in the first place, not bailed them out if they did.


Libertarian reforms won't bring a predominantely Euro-American population and culture back to the US of A, nor being able to reverse the effects of negative Liberal/Libertarian and cultural Marxist indoctrination.

European derived people were firmly in charge up until the mid-20th century when socialist policies began to be put in place.



Of course, for such a thing to work, the law has to be good which is a problem in itself for all Western states today, the US of A in some areas more than in others and for the FRG similar things can be said, but crucial is that everybody should have the right to defend his case properly and it is a great injustice if individuals, just because they own more money, can manipulate the system or exploit it.

Even a Libertarian must aknowledge the fact that the state should be independent and giving the people the same rights in the sense of same basic chances in front of the law and state.

That is a problem, but it largely results from the huge amount of laws on the books in the first place. If laws were simplified down to not much more than a disallowal of physical violence and appropriation or destruction of property without the permission of the owner, there wouldn't be a need for expensive court proceedings to determine whether someone violated section 23896 (B) (445) of the tax act.



allow manipulation and inequality through wealth

Unless everyone is exactly equal in ability and drive to work, they're not going to be equal in wealth. The only way to achieve 'equality in wealth' is a centralized re-distribution system, which tends to discourage wealth creation and concentrate power in those in charge of the re-distributing.


In theory one doesnt need lawyers at all, because if a business man did something wrong and the individual goes to the government - f.e. a fraud with a covered credit contract - the good government and law would act immediately, punishing the perpetrator and helping the victim, making it a example to the public and warning all others.

That's the way it is in the US right now. The financial crisis didn't result in lenders perpetrating some kind of fraud on the borrowers, or they would long ago have been shut down. There was fraud often on the part of the borrowers, people claiming income they didn't have, but the state tends not to prosecute poor people in these cases, and in many cases they were illegal aliens who can't be found anyways.



the FED did nothing, even if, like I quoted, they would have had the duty to act, going AFTER EXISTING LAW - since the bloated character of the real estate market was a long known fact for many, must have been so for insiders and officials even much longer, but nobody acted accordingly.

They did act-they kept interest rates low in order to prop up housing prices. The FED doesn't have any duty, and follows whatever the elected political officials want it to do.


from their perspective not even the necessity to use a lawyer came to mind for most of them, I'm quite sure.

Signing a legal document one doesn't fully understand is incredibly stupid. Who would sign something they didn't understand? Anyways, the problem was not that they didn't understand the contract, but that they didn't understand the economy. The people in this situation thought that since real estate prices had risen at a large rate in the previous few years, then they would continue to rise at a large rate infinitely. This assumption of course is idiotic, and now these people are unable to pay their mortgages as a result of their own greed and stupidity.


And you, being somewhat better informed and talking about AFTER THINGS happened, since all of this started years ago, can play the "clever guy" in front of this victims with ease, but whether thats fair or not is another matter.

Not just me, but established economists have been warning about this for years, but nobody paid any attention to it. I knew better than to buy a house in the early part of the decade, and didn't. Some people's greed and stupidity got the better of them, and they should not expect to be bailed out by those who didn't go into the scheme.


Well, there are not just stupid and intelligent, but also bad and well informed people. And some well informed and intelligent people are worse than the most stupid ones, because they in fact make up a policy eliminating in every generation the more intelligent and group oriented individuals by manipulating the whole society.

A system more commonly known as 'socialism'.



This means they [people who took out subprime loans] had no other choice for securing their home and living.

They could rent or live with family. Also, they had the choice to not place them selves in such a situation in the first place, they could choose not to default on credit cards and other bills, or to get a job which paid a higher income.




In theory, there are two options [for funding banks], inflation or taxes to use for a growing economy and for financing the public sector.

Inflation makes the cost of living more expensive for everyone, and taxes both deprive people of money they have earned and discourage wealth creation generally. Why are these superior to a private banking system in which people voluntarily contribute their money in exchange for earning interest?


The current federal reserve system I think we can both agree is a clusterfuck and should be eliminated.



So while a state owned bank would get back the ressources it needs much more directly from the people and all profits would go back to the people

How is it going to make profits with interest free loans? When you add up the costs to administer the lending system and pay the employees, and the amounts of loans that people default on, the money has to come from somewhere. If it's by inflation which increases the cost of living for everyone, or forcibly taking wealth via taxes, the benefits are certainly not going to the people, in fact the bank is being a burden on the people as a whole. With private banks giving interest-bearing loans, the costs are confined to those who voluntarily subject themselves, and who are also getting the benefit of being given the loans.



Well, the whole structures in many states of the US of A are totally aged

Thanks to environmental regulations preventing the construction of new nuclear power plants and imposing new harsh restrictions on the coal powered plants. There isn't any roadblock with the funding, since the companies are able to get loans from the capital market based on their ability to repay them with revenues derived from utility bills. With a state-run system, there are these funding roadblocks, since it becomes a political issue whether to build the power plant, and the system is not self-financing as in the capitalist/private bank scenario.

Regarding power charges here:
Generation: .0944 Euros/KiloWatt Hour
Transmission: .0062 Euros/KiloWatt Hour
Taxes: .0282 Euros/KiloWatt Hour

Not sure how that compares to other/more socialist countries?

Agrippa
Saturday, October 25th, 2008, 05:18 PM
In general, no, but the aspects which caused this problem are. Low income tax rates and lack of a universal government health care system did not cause the financial crisis. Forcing housing loans to be made to the poor/bad credit, lowering interest rates, and giving a trillion dollars to banks did, and these are socialist programs. A pure capitalist system would not have coerced these banks to make the loans in the first place, not bailed them out if they did.

There is no "pure Capitalist" system and cannot be, as this would mean civil war and in the end some sort of plutocratic autocracy, forming a new state control, any way.

The whole crisis in the US has many reasons of which this real estate-credit bubble is just one part, probably the one which started it.


European derived people were firmly in charge up until the mid-20th century when socialist policies began to be put in place.

You had never ever a really Socialist policy in the US of A.

What happened is that from the early 20th century the plutocrats began to change the society as a whole and supported new ideological concepts which they could use and abuse against the interests of the people.

It began with people like Boas and became virulent with the Frankfurt School and related ideologists. These fled from Germany when the NSDAP and Hitler overtook Germany, but were welcomed by the USA and got their rapidly much more influence than they ever had in Germany.

They were sent back after WW2 and so began a forth and back of such ideological concepts over the Atlantic. Crucial is, that they were Marxists, not generally Socialists and they mainly spread CULTURAL MARXISM, which was, unlike economic Marxism, supported by the plutocratic oligarchy, both the Jewish and largely the non-Jewish one too (one has to think about Rockefellers position towards racial segregation!).

They combined in the US the worst aspects of the both ideological concepts which were so harmful in European history, Libertarianism/Liberalism and Marxism. The economic doctrines and social exploitation as well as manipulation from the Libertarians, the abuse of state structures, education and culture in general, from Marxism, better defined as the Western cultural Marxism, BECAUSE:
In Eastern Europe as well as in many other much more Marxist states, officially Marxist oriented regimes, there was no such extreme form of cultural Marxism at all!

In Romania f.e. Ceaucesuc, which made many mistakes of course, ordered in some regions free abortions and similar measures for Gypsies, but banned abortion in general, for Romanians/Europeans primarily.

Various parts of Eastern Europe followed the classic anthropological tradition, without any sort of further "political correctness". Eugenicists worked officially in various institutions, they were only bawled when there came "political pressure" from the foreign countries, from cultural Marxists in Germany and elsewhere, which said that such ideas are "Fascistic" and "Racist".

Therefore the worst aspects of Cultural Marxism were born in the Western States, so called "democratic states", mainly by Jewish and related intellectuals from the bourgeoisie!

Additionally there is not just the Marxist concept with its extreme form of general egalitarianism and radical economic approach, which can be called "'Socialist", but there are many other forms of Socialist ideas too, though this was intentionally ignored by the Anti-Communist propaganda, which also worked against non-Communist social revolutionary groups in the USA; whereas Cultural Marxism was spread with the help of the establishment and financed by the plutocratcy and state!

Therefore you still have Euro-Americans without fair wages and no health insurance, but laws for "the equality of the sexes, sexual orientation and races", with the period of affirmative action and all the crap which stems from it.

You didnt find that in the same way in the Eastern European, really Marxist states even! They were in comparison more nationalist and traditional in various ways, but one, religion, which was exploited in the US of A too, though that is another matter.


That is a problem, but it largely results from the huge amount of laws on the books in the first place. If laws were simplified down to not much more than a disallowal of physical violence and appropriation or destruction of property without the permission of the owner, there wouldn't be a need for expensive court proceedings to determine whether someone violated section 23896 (B) (445) of the tax act.

Well, again one could ask whether some of those confusions were produced purposely, in some cases I'd say yes.


Unless everyone is exactly equal in ability and drive to work, they're not going to be equal in wealth. The only way to achieve 'equality in wealth' is a centralized re-distribution system, which tends to discourage wealth creation and concentrate power in those in charge of the re-distributing.

First: My concept only means that there is a minimum standard for all group members, at least those which show good will, no sort of equality in wealth, THATS A HUGE DIFFERENCE and
Secondly: That wasnt even what I was talking about, because I spoke about the equality in front of the law and state, for the ability of every citizen and group member to defend his rights equally despite being poor or rich.


That's the way it is in the US right now. The financial crisis didn't result in lenders perpetrating some kind of fraud on the borrowers, or they would long ago have been shut down. There was fraud often on the part of the borrowers, people claiming income they didn't have, but the state tends not to prosecute poor people in these cases, and in many cases they were illegal aliens who can't be found anyways.

There was fraud from both sides, can we agree on this?


They did act-they kept interest rates low in order to prop up housing prices. The FED doesn't have any duty, and follows whatever the elected political officials want it to do.

It doesnt because the FED has a different, non-official character as I argued for some pages ago already...


Not just me, but established economists have been warning about this for years, but nobody paid any attention to it. I knew better than to buy a house in the early part of the decade, and didn't. Some people's greed and stupidity got the better of them, and they should not expect to be bailed out by those who didn't go into the scheme.

I guess you dont have a large family dont you? Did you move alot in meantime? You are not very compassionate about your fellow countrymen I might add, since even many middle class Euro-Americans were trapped...


A system more commonly known as 'socialism'.

Rather not. But if you call a horse a donkey, its your decision, it seems I can't change that.


They could rent or live with family. Also, they had the choice to not place them selves in such a situation in the first place, they could choose not to default on credit cards and other bills, or to get a job which paid a higher income.

Well, everybody wants a job with higher income, that sort of "advice" is pure cynicism.


Inflation makes the cost of living more expensive for everyone, and taxes both deprive people of money they have earned and discourage wealth creation generally. Why are these superior to a private banking system in which people voluntarily contribute their money in exchange for earning interest?

I'm no great expert on the matter, but even in a very simplistic view on these issues, one can at least discern different forms of "inflation in the wider sense".

There is the real amount of money which can increase and there is the price index, which just means the prices going up for various common goods in the area of the currency in question.

The crucial point about a currency is always that there must be enough money supply to keep the economy going and possibly growing, the money and goods circulating in a stimulating way, with the worst what can happen being a lack of money supply - a real full scale deflation. Inflation is, especially in growing economies, a natural phenomenon, as there is also an increased amoung of real values and valorisation.

To back a currency up with gold or silver just means to be dependend on those ressources, otherwise just hocus pocus for an unenlightened public and a limitation of options for the government and economy as a whole. Those which trade gold and silver are then those in charge and those metals dont have any sort of fix value at all, since such fix values dont exist in a real world economy on the longer run, everything is relative.

And even if there is a rising price index, this is not big problem, since the wages and other prices should adapt latest at the end of the year too. So if there is no strong inflation, this is no serious problem neither.

In a private banking system the bankers soon control various parts of the economy, force it to grow unnaturally partly, because of the interest rates and therefore THEY increase real inflation, both of the amount of money as well as the price index, for sure.

A social market economy should be, in my opinion, that of free entrepreneurs, but the financial control should be in the hand of the state and government, for the greater good. Private banks are no problem neither, but just not in the way it is now, with this kind of fractional system and for sure without the ability of private banks to issue money.


How is it going to make profits with interest free loans? When you add up the costs to administer the lending system and pay the employees, and the amounts of loans that people default on, the money has to come from somewhere. If it's by inflation which increases the cost of living for everyone, or forcibly taking wealth via taxes, the benefits are certainly not going to the people, in fact the bank is being a burden on the people as a whole. With private banks giving interest-bearing loans, the costs are confined to those who voluntarily subject themselves, and who are also getting the benefit of being given the loans.

The state banks main duty is to supply the economy of the economic area with a sufficient amount money, as already explained above.

The bank itself and the employees are of course just part of the greater economy and by being paid with the same issued money, they give it back to the economy, let it circulating.

Additionally the bank gives only to those individuals free loans which are in a need for projects which are valuable for the community. If they pay no interest rate, thats like a subsidy actually, therefore only for poor people or business man for clearly defined projects in the interest of the group.

As for other forms of credits, there must be an interest rate which is minimum as high as the annual inflation, but would be usually higher depending on the risk and kind of project.

And of course, the state bank could also lend money to private banks, for which those just have to give clearer securities than they are now, for interest rates as well.

So that I spoke about free loans doesnt mean that I want to eliminate interest rates as a whole, though one could debate that too and I'm open minded.


Thanks to environmental regulations preventing the construction of new nuclear power plants and imposing new harsh restrictions on the coal powered plants. There isn't any roadblock with the funding, since the companies are able to get loans from the capital market based on their ability to repay them with revenues derived from utility bills. With a state-run system, there are these funding roadblocks, since it becomes a political issue whether to build the power plant, and the system is not self-financing as in the capitalist/private bank scenario.

This has little to do with state run or not, since both private companies as well as state owned produced similar failures, as there is always, if there is no quality control, a tendency towards "minimum investment", this being for various private companies even more true actually. And I referred to the line system and transformation stations and the like primarily.



Regarding power charges here:
Generation: .0944 Euros/KiloWatt Hour
Transmission: .0062 Euros/KiloWatt Hour
Taxes: .0282 Euros/KiloWatt Hour

Not sure how that compares to other/more socialist countries?

Well, this year it will go up to about 17,5 c/kwh if I remember correctly, so you have a lower price, but also need not too much energy it seems.

But I would have wondered if one pays more in the US, because this country has a lot of ressources and still the advantage of the dollar if its about those.

OneEnglishNorman
Monday, October 27th, 2008, 08:22 PM
They combined in the US the worst aspects of the both ideological concepts which were so harmful in European history, Libertarianism/Liberalism and Marxism. The economic doctrines and social exploitation as well as manipulation from the Libertarians, the abuse of state structures, education and culture in general, from Marxism, better defined as the Western cultural Marxism, BECAUSE:
In Eastern Europe as well as in many other much more Marxist states, officially Marxist oriented regimes, there was no such extreme form of cultural Marxism at all!

The United States was by today's standards, rather strongly libertarian up until the middle of the 19th Century. The big expansion of Federal power did not kick in until after the First World War. Thereafter the US government became increasingly aggressive to foreign states, taxed and persecuted its own citizens, made gigantic future spending commitments which cannot be fulfilled.

The United States did not need to import the seeds for this failure. Jews are not to blame. It was on this path well before. Americans of the Hamiltonian tradition eventually triumphed over the Jeffersonians.

And Jews are prominent in banking? Well so what. Jews are prominent in all commercial and scholarly fields. As for genuine real reform of the United States, drawing on the best of the American heritage - many, many of those proponents are Jewish Americans. Many are also old stock North Euro Americans. Hardly any are black or Asian; that's just the way it is.

Insofar as the United States succeeds or fails, Jews will be a part of that.



The crucial point about a currency is always that there must be enough money supply to keep the economy going and possibly growing, the money and goods circulating in a stimulating way, with the worst what can happen being a lack of money supply - a real full scale deflation.

The are four basic causes of deflation;

1) Growth deflation which stems from increased productivity and efficiency. Assuming the supply and demand for dollars does not change, an increase in the quantity of goods produced will result in falling prices. Joe Public's dollars will buy more goods today than they did yesterday. Take computers for example - the power which can be purchased today is far greater than just a few years ago. Go back 20 years and the deflation of personal computer prices has been enormous! And no panic in the PC industry. Fear of deflation is irrational. Growth deflation is a benefit of the market economy.

2) "Cash-building deflation". When demand for money increases. All things being equal, an increased demand for cash will raise the purchasing power (price) of the currency. This implies a fall in prices. This kind of deflation is also known as "hoarding" and is denigrated by Keynesians. Consumers & businesses will hold cash to satisfy their needs; usually this is economic uncertainty.

3) Bank credit deflation. Contraction or collapse of the money supply, when depositors demand their their cash en masse, usually in the face of a crisis.

4) Confiscatory deflation. Brought on by the exercise of political power, the government seeks to prevent depositors from making withdrawls on their bank accounts. A recent example would be in Argentina, where the citizens were faced with runaway inflation.



Inflation is, especially in growing economies, a natural phenomenon, as there is also an increased amoung of real values and valorisation.

To back a currency up with gold or silver just means to be dependend on those ressources, otherwise just hocus pocus for an unenlightened public and a limitation of options for the government and economy as a whole.

Limit options how? Limit the ability of governments to debase the value of their monopoly provision of money?

What "should" money be backed by? IOW what should the supply of money be? The decision should be made by the market. If money is gold then the total supply of money is the total weight of gold existing in society.



In a private banking system the bankers soon control various parts of the economy, force it to grow unnaturally partly, because of the interest rates and therefore THEY increase real inflation, both of the amount of money as well as the price index, for sure.

This is untrue. Increases in the gold stock are governed by the same causes as the changes in other goods. The stock of gold can be increased by mining or decreased by wear and tear, use in industry (electronics, dental implants etc).

Why would the market choose a commodity as money which is subject to inflation, not durable or unsuitable for any other reason? Changes in gold stock take place slowly.

A private banker could only increase the number of property titles (deposit notes) relative to property (physical reserves of gold). Unless the government steps in and intervenes, the fraudulent behaviour of the bank is limited by fear of a run on its reserves. It is likely that in a competitive private banking environment, 100% reserve accounts will be favoured by customers.

Agrippa
Tuesday, October 28th, 2008, 12:23 AM
Just short answers:

1) Growth deflation which stems from increased productivity and efficiency. Assuming the supply and demand for dollars does not change, an increase in the quantity of goods produced will result in falling prices. Joe Public's dollars will buy more goods today than they did yesterday. Take computers for example - the power which can be purchased today is far greater than just a few years ago. Go back 20 years and the deflation of personal computer prices has been enormous! And no panic in the PC industry. Fear of deflation is irrational. Growth deflation is a benefit of the market economy.

Thats only for products which production costs go down, usually this kind of "deflation" in specific areas and products being no general one, so f.e. many foods go up, as do most short time investments, whereas the bigger consumptions goods partly go down, with a now widespread technology and easier, as well as cheaper production process. Thats even more true for computers, where a certain level being reached now for many years and the price is relatively constant for a good and more or less up to date computer. Cheaper are only the second quality and out of date products - some of those are just there to get rid of.

Real growth deflation being rare as you describe it FOR THE ECONOMY.


Limit options how? Limit the ability of governments to debase the value of their monopoly provision of money?

What "should" money be backed by? IOW what should the supply of money be? The decision should be made by the market. If money is gold then the total supply of money is the total weight of gold existing in society.

Gold is cheap hocus pocus in a way, money is finally always being backed by trust and a government, bankers and economy, which know what they are doing, gold or no gold.


A private banker could only increase the number of property titles (deposit notes) relative to property (physical reserves of gold). Unless the government steps in and intervenes, the fraudulent behaviour of the bank is limited by fear of a run on its reserves. It is likely that in a competitive private banking environment, 100% reserve accounts will be favoured by customers.

But result in a ruined and static, less dynamic and effective, economy, controlled by private bankers which horde gold.

Bridie
Tuesday, October 28th, 2008, 03:18 AM
Furthermore on the real estate market again, people were forced to pay too high prices for a new home, to finance it on credit if they didnt want to be homeless or living in a substandard and now, after the real estate market implosion, they still have this huge credit with just unfair interests and a house and ground which is probably worth just a third of it. If now losing their job or similar too, they are struck down and thats the logic of the system and can't be said to be just individual failure alone.
You can blame demographics to a large extent for the over-inflated property market of the past decade or so. With such a large proportion of the population reaching the age where they can now reap the rewards of 30 or or 40 years of hard work, investment and savings, they have driven up house prices above and beyond what average younger people can afford. Hence the quest for credit among the young, and the financial institutions that took advantage of the same. Nevertheless, most of that "baby boomer" generation weren't able to afford champagne lifestyles on beer budgets when they were young either.... but then, the expectations of the young are now far higher than those of previous (less indulged as children) generations. What is considered to be "substandard" now would have been considered pure luxury not so long ago....



I've been saying this for a long time. I think the big losers will be the Asians. They sold all that stuff to the US for decades, accumalated massive amounts of US$ based securities...
Well, I wouldn't feel too sorry for the Chinese if I were you... their economy is one of the world's few that is weathering this financial crisis just fine, for various reasons, and as a result their internal growth and prosperity is continuing. (This is one of the positives for the Australian economy, as the Chinese demand for raw resources from Australia continues as their need for improved infrastructure remains consistant.)

I think we will only see that the big losers will be the USA and Western Europe. The rest of the world will be ok. (Ie, only those countries with over-inflated lifestyles will be brought back down to manageable levels... I still fail to see how this is such a negative thing though...)


The politicians do bear some blame. Through regualtions & tax laws, along with entitlements, they have created societies where people have become to believe they have a right to a certain standard of living. There was no logic to the financial shenanigans of the 20th century
In a democratic society the politicians don't bear much of the blame at all. :P But in all honesty, if looking at sociological trends, it is not through legal regulations, tax etc that mentalities (in this case, the mentality of a spoiled brat) are created among populations... rather, the only reason govt's get away with passing such laws and tax reforms in the first is because they answer a "want" in the general public.

This is one of the problems with "power to the people" (democracy) of course.

But if we are to really try to ascertain where this sort of generalised mentality originates from, one can look backwards for an example... during the Great Depression people had next to nothing, and it is common to read accounts from those days of people promising that they would give their children all that the things that they themselves could never have... come the next generation - just indulged on occasion, and brought up with a stressed importance on material wealth (as the previous generation had suffered greatly with the lack of it)... and so the next generation were indulged further as was permitted by increased economic prosperity... and so on and so forth. People came to believe that material wealth = happiness. One can even see this sort of pattern occurring among poverty stricken immigrants... the poor generation venture to a new land to seek prosperity... their over-importance placed on materialism leads to a snowball affect of later generations becoming more and more indulged, and them feeling more and more as though it is their God-given right to be so... and if they still don't feel satisfied with their indulgences they have learned that it's only because they need bigger houses and fancier cars! Of course, this is a lie.... but a lie born of human nature (instinct for survival gone wrong), not of politics....

At some point though, people have to wake up and realise that the world can't support their over-indulgence, and quite frankly, it isn't their right to have it. I'm hoping that in the developed world we're finally reaching that point...

Anyway, it seems to be down to unrestricted human nature that is ultimately responsible for much of the pain and stress we see in the world today. The problem then becomes, how to restrict and limit it. (??) Religion was doing a pretty good job for a while, but that seems to have gone out the window these days.




Nobody held a gun to their head and made them buy these houses. They bought them because they thought the value of the houses would keep going up by 10-20%/year indefinitely. Anyone can, or should be able to, figure out that nothing goes up in price infinitely, and that sooner or later prices would have to come back down after going up so much.
I don't think Agrippa was actually referring to investments in real estate previously... but nonetheless, those who were investing in property and actually knew what they were doing, would have gotten out and ran off with their (huge) profits probably sometime in early 2007 ( a bit later in Western Australia). Those who kept their properties were (unfortunately) just uneducated. But property investment is just like investment in stocks and shares... they are not meant to be kept in the long-term if you really want to make substantial profits. I still think that property is a good investment, but as with the stockmarket, you have to be informed and educated enough to know when to buy and when to sell.

SwordOfTheVistula
Tuesday, October 28th, 2008, 07:01 AM
You can blame demographics to a large extent for the over-inflated property market of the past decade or so. With such a large proportion of the population reaching the age where they can now reap the rewards of 30 or or 40 years of hard work, investment and savings, they have driven up house prices above and beyond what average younger people can afford.


In a democratic society the politicians don't bear much of the blame at all. :P But in all honesty, if looking at sociological trends, it is not through legal regulations, tax etc that mentalities (in this case, the mentality of a spoiled brat) are created among populations... rather, the only reason govt's get away with passing such laws and tax reforms in the first is because they answer a "want" in the general public.

This is one of the problems with "power to the people" (democracy) of course.

I don't think Agrippa was actually referring to investments in real estate previously... but nonetheless, those who were investing in property and actually knew what they were doing, would have gotten out and ran off with their (huge) profits probably sometime in early 2007 ( a bit later in Western Australia). Those who kept their properties were (unfortunately) just uneducated. But property investment is just like investment in stocks and shares... they are not meant to be kept in the long-term if you really want to make substantial profits. I still think that property is a good investment, but as with the stockmarket, you have to be informed and educated enough to know when to buy and when to sell.

Demographics is a large part of the problem in relation to political pressures. In the past decade there's been a lot of baby boomers who bought their house 20 years ago in what was then a sleepy town an hour or 2 outside a major metro area, then the town became a commuter suburb of the city and housing prices shot up.

For example, this shack was purchased by a waiter in 1978 in a small town outside Las Vegas, and sold for $1.2 million in 2005

http://msnbcmedia.msn.com/j/msnbc/Components/Photos/051030/051030_naked_city_hmed5p.hmedium.jpg

http://www.msnbc.msn.com/id/9870962

That's an extreme example, but houses came to be seen as an investment which would naturally appreciate-it came to be viewed as a natural fact of life that the house you bought in Roadkill Falls, NJ for $89,000 in 1989 could be sold for $750,000 in 2005 and fund your retirement to Florida. Old people and baby boomers vote, and they don't want their house that got appraised at $750,000 a couple years ago to drop down to $400,000 even if it's still an improvement over what they paid for it. Even today, politicians talk about falling housing prices as the problem, when overvalued houses were the problem in the first place.

There were of course other factors: lobbyists for the realtors' associations, banks, homebuilding contractors and unions, and the absurdity that a government backed entity is allowed to use some of its money to lobby the government (Fannie Mae/Freddie Mac), but the politicians would never have gone along with the scheme if a significant part of the population didn't think they would make money off of it.

All of which argues against having a government control the monetary supply, gold & silver have its problems too, maybe the best would be to have a useful commodity such as oil: a unit currency could be 1/100 of a barrel of oil, then there would be more of an incentive to drill more oil, or perhaps energy in general.

Bridie
Tuesday, October 28th, 2008, 08:49 AM
Demographics is a large part of the problem in relation to political pressures.
Absolutely! And not only in regards to the economy, but in regards to social policies also. Another reason to not allow the general population to have too much influence in politics.




gold & silver have its problems too, maybe the best would be to have a useful commodity such as oil: a unit currency could be 1/100 of a barrel of oil, then there would be more of an incentive to drill more oil, or perhaps energy in general.
I'm not sure of what you're talking about here. :P Resources themselves can't control monetary supply. :D And I think the last thing the world needs right now is more competition over unrenewable oil supplies. (I mean, pretty soon the US will run out of resource rich countries to bomb. :wsg)

SwordOfTheVistula
Tuesday, October 28th, 2008, 09:56 AM
I'm not sure of what you're talking about here. :P Resources themselves can't control monetary supply. :D And I think the last thing the world needs right now is more competition over unrenewable oil supplies. (I mean, pretty soon the US will run out of resource rich countries to bomb. :wsg)

Instead of a 'dollar' backed by a certain amount of gold or silver as some have proposed, a 'dollar' could be backed by a certain amount of oil. Gold and Silver are obsolete as valuation standards in my opinion, oil being a far superior contemporary source.

OneEnglishNorman
Tuesday, October 28th, 2008, 10:23 AM
Instead of a 'dollar' backed by a certain amount of gold or silver as some have proposed, a 'dollar' could be backed by a certain amount of oil. Gold and Silver are obsolete as valuation standards in my opinion, oil being a far superior contemporary source.

A currency based upon a consumable good such as oil could be highly volatile, even if the bulk of demand is transactions-based. And it's still fiat money if you cannot redeem it, which is a major advantage of precious metals over oil. Private storage of oil is highly impractical as opposed to private storage of gold.

Oil could be monetised but I think it less attractive than gold, if people are allowed to accept any money they wish, they would gravitate towards gold and silver.

OneEnglishNorman
Tuesday, October 28th, 2008, 10:49 AM
Just short answers:


Thats only for products which production costs go down, usually this kind of "deflation" in specific areas and products being no general one, so f.e. many foods go up, as do most short time investments, whereas the bigger consumptions goods partly go down, with a now widespread technology and easier, as well as cheaper production process. Thats even more true for computers, where a certain level being reached now for many years and the price is relatively constant for a good and more or less up to date computer. Cheaper are only the second quality and out of date products - some of those are just there to get rid of.

Real growth deflation being rare as you describe it FOR THE ECONOMY.

An economy with inflationary fiat money can never experience growth deflation across the entire CPI, that's stating the obvious. We only see it for certain products such as flat screen TVs, notebook computers. That's not the fault of the market, that's the fault of politicians.



Gold is cheap hocus pocus in a way, money is finally always being backed by trust and a government, bankers and economy, which know what they are doing, gold or no gold.What do you mean "cheap hocus pocus". Money developed as a medium of exchange without any government involvement. Gold and silver were found to be the most efficient moneys.

"money is finally always being backed by trust and a government"

There has been a history of independent mints and private coinage...



But result in a ruined and static, less dynamic and effective, economy, controlled by private bankers which horde gold.This also makes zero sense. Interest is the opportunity cost of gold hoarding. And nothing would stop private citizens from storing their own gold (or any other money).

SwordOfTheVistula
Tuesday, October 28th, 2008, 12:54 PM
A currency based upon a consumable good such as oil could be highly volatile, even if the bulk of demand is transactions-based. And it's still fiat money if you cannot redeem it, which is a major advantage of precious metals over oil. Private storage of oil is highly impractical as opposed to private storage of gold.

All the systems have their positives and negatives, but I still think either a controlled fiat currency of the Abe Lincoln/Hitler variety or a currency backed by some sort of useful good is the best. With a gold/silver backed currency, you have enormous incentive to mine gold&silver, which doesn't really do much good for society, but if oil was the currency this would add incentive to drill it (or energy in general) and stop oil hoarding by OPEC.


Oil could be monetised but I think it less attractive than gold, if people are allowed to accept any money they wish, they would gravitate towards gold and silver.

I dunno, I really have no use for gold or silver, I do however need oil to power my SUV and heat my house.

Bridie
Tuesday, October 28th, 2008, 12:58 PM
Instead of a 'dollar' backed by a certain amount of gold or silver as some have proposed, a 'dollar' could be backed by a certain amount of oil. Gold and Silver are obsolete as valuation standards in my opinion, oil being a far superior contemporary source.Sorry, I suppose that's what I get for not reading through the whole thread properly. :P You were referring to fiat currency v's representative money?

I would like to see a return to the Gold Standard simply because it seems to be a more tangible, stable and more easily regulated form of currency. Crude oil wouldn't be a good convertible commodity in my opinion since it's glory days are limited I would say, what with increased concerns about environmental degradation - increased interest in practical alternatives etc - and the time of peak oil production looming. The commodity can only be worth as much as it is demanded.... and oil won't be viable for much longer.

I don't see what's wrong with gold and silver... perhaps I should read over the thread again without skipping bits. :D

Bridie
Tuesday, October 28th, 2008, 02:27 PM
To back a currency up with gold or silver just means to be dependend on those ressources, otherwise just hocus pocus for an unenlightened public and a limitation of options for the government and economy as a whole.

Limit options how?
Maybe Agrippa is thinking that representative currency leads to a decrease in foreign currency liquidity?



Those which trade gold and silver are then those in charge and those metals dont have any sort of fix value at all, since such fix values dont exist in a real world economy on the longer run, everything is relative.
I can't see how those commodities having no fixed value would be a new problem, since nothing actually has fixed value... but of the commodities (including fiat currency which is traded on the Forex market) gold is one of the most stable.

SwordOfTheVistula
Wednesday, October 29th, 2008, 10:23 AM
Perhaps a currency tied to energy production in general?

One of the arguments against a debt based monetary system is that it encourages debt to be generated, which is bad for society. Gold and Silver don't really have the detriment of debt, but there isn't much societal benefit to mining gold and silver either.

Agrippa
Sunday, November 2nd, 2008, 09:54 PM
Perhaps a currency tied to energy production in general?

One of the arguments against a debt based monetary system is that it encourages debt to be generated, which is bad for society. Gold and Silver don't really have the detriment of debt, but there isn't much societal benefit to mining gold and silver either.

Even more important, you come from an dependence on money lenders to that of gold/silver traders, which are largely the same. And you limit your own states financial options to the trade of a ressource without too much real and fix value to your economy and people.

In fact, the trend to a fiat currency was a "progressive evolution" in the right direction, the problem is just, that the same people which already controlled the gold - silver trade and banks before, began to use and abuse this system too, which led to an ever greater potential for fraud and exploitation.

But the problem lies in the people controlling the money system, not in the idea of a fiat currency as such, which is the right way, since money is just a tool and backed by trust, to create trust is the duty of the state and its leadership. That it was abused for decades already, is the reason why some believe a gold standard could be an solution, but in fact, that way they dont get independent of the very same people, but even on the contrary. Who makes the gold price and maniulates the gold market, mostly from the City of London?

Only a fundamental societal, financial and economic reform can.

OneEnglishNorman
Sunday, November 2nd, 2008, 11:00 PM
money is just a tool and backed by trust, to create trust is the duty of the state and its leadership.

Fiat money is only "worth" anything from government mandate. It's not an issue of trust, citizens just have no choice but to use it. That's the problem. Monopolies go hand in hand with negative incentives.

Agrippa
Sunday, November 2nd, 2008, 11:46 PM
Fiat money is only "worth" anything from government mandate. It's not an issue of trust, citizens just have no choice but to use it. That's the problem. Monopolies go hand in hand with negative incentives.

Well, if the state is what it should be, a mean for the greater good of the group, the community, its just its right to issue the money and the people just trust in themselves and their economy so to say.

If you have state acting against your, being corrupted or doing nothing for the greater good of the people at least, things are different of course, with a state controlled by a small minority of the plutocratic oligarchy being one of the worst case scenarios.

SwordOfTheVistula
Tuesday, November 4th, 2008, 08:22 AM
Well, if the state is what it should be, a mean for the greater good of the group, the community, its just its right to issue the money and the people just trust in themselves and their economy so to say.

The problem with this is the temptation to abuse. This system worked great under exceptional, ideological, utopian nationalists like Abraham Lincoln and Adolf Hitler. However, it has caused severe problems many times, when the temptation of government is to keep printing more & more money, in order to pay off extravagant promises to the populace in order to maintain political power, but leading to extreme inflation and overall economic chaos/ruin. Zimbabwe is a current example of this problem.

OneEnglishNorman
Tuesday, November 4th, 2008, 11:23 AM
For me it is a matter of free choice; I would not trust a group of politicians to decide what equities I should buy or let them decide which car model is best suited for my needs.

Do I need them to "protect" me by only allowing the use of their money, the value of which is steadily salted away each year? No thanks!

I should have the right to decide what kind of money I sell my labour for. The person I seek to buy a fridge freezer from should have the right to accept and decline whatever money he chooses.

Jäger
Tuesday, November 4th, 2008, 03:37 PM
However, it has caused severe problems many times, when the temptation of government is to keep printing more & more money, in order to pay off extravagant promises to the populace in order to maintain political power, but leading to extreme inflation and overall economic chaos/ruin.
This is only a problem in democracies. Furthermore, when was the last time the central bank declined a loan to the state?

Agrippa
Tuesday, November 4th, 2008, 07:20 PM
The problem with this is the temptation to abuse. This system worked great under exceptional, ideological, utopian nationalists like Abraham Lincoln and Adolf Hitler. However, it has caused severe problems many times, when the temptation of government is to keep printing more & more money, in order to pay off extravagant promises to the populace in order to maintain political power, but leading to extreme inflation and overall economic chaos/ruin. Zimbabwe is a current example of this problem.

Economically speaking Zimbabwe is under attack and the mistakes the regime made are not limited to the monetary policy alone as everybody can see. Not talking about the fact that this poor 3rd world country has no means for any sort of independent policy on a large scale nor the brainpower to plan such moves...

Additionally what you say is in my opinion a faulted Liberal argument, because if you have a bad government, making bad decisions, it will ruin you one way or the other and things dont become better by giving the right to issue money to private bankers, worst people like those we can find in the current plutocratic oligarchy.

There is no other solution to this problem but to get a better government and well led state.


For me it is a matter of free choice; I would not trust a group of politicians to decide what equities I should buy or let them decide which car model is best suited for my needs.

Do I need them to "protect" me by only allowing the use of their money, the value of which is steadily salted away each year? No thanks!

I should have the right to decide what kind of money I sell my labour for. The person I seek to buy a fridge freezer from should have the right to accept and decline whatever money he chooses.

Well, be careful with your wishes, because a good political system and state works for its communities and people, whereas I wouldnt trust private bankers nor employers too much if its about money and social security actually, since they are, even if they are no "bad people" in general, under a very specific pressure, in a Liberal free market economy even more so.

So probably you dont have as much choices as you wish to and can't act politically against exploitation, which is in any case for most people and for the whole group on the long run even worse, if not talking about a totally courrupted state and leadership, like we have it now, in a, in a certain way very deregulated and largely Liberal society and economy, which would be again a political problem.