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What a mess this country is in

Discussion in 'Uncategorized Threads' started by jackaroo, Aug 21, 2007.

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  1. jackaroo

    jackaroo TS Member

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    http://www.iht.com/articles/2007/08/17/opinion/edvarzi.php
     
  2. Tripod

    Tripod Well-Known Member

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    Iowa man!!
    Just remember Tron, after January 2009, It will take a village.
     
  3. Wayne In ny

    Wayne In ny TS Member

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    This weeks article by Rep Ron Paul of Texas.


    High Risk Credit

    August 20, 2007

    As markets went on a rollercoaster ride last week, our economy is coming close to a day of reckoning for loose credit policies being followed by the Federal Reserve Bank. Simply, foreign banks we have been relying on to buy our debt are waking up to the reality of much higher default rates than predicted, and many mortgage backed securities have been reduced to “junk” ratings. Wall Street fears the possibility of tightening credit and the tightening of America’s belts. Why, they say, “if Americans spend only what they can afford, think of the ripple effects throughout the economy!” This is the cry, as the call comes for the fed to cut rates and bail out companies in trouble.

    More inflation is, however, never the answer to inflation.

    The truth is that business involves risk, and businesses that miscalculate risk should be liquidated, so their assets can be reallocated to businesses that correctly judge risk and make profits. Instead, the Fed has injected $64 billion into the jittery markets, effectively amounting to a bailout that keeps these malinvestments afloat, but eventually they will become the undoing of our economy.

    In addition to the negative reactions in financial markets, many Americans have taken on too much personal debt owing to exotic mortgage products and artificially low interest rates. Unfortunately, these families are now in the position of losing their homes in unprecedented numbers as the teaser rates expire and the real bills are coming due.

    The real answers are, and always have been, found in the principles of the free market. Let the market set the interest rates. If we had been functioning under a true and transparent free market system, we would not be in the mess we are in today. Government, like the American household, needs to live within its means to get back on stable fiscal ground.

    We’ve been headed in the wrong direction since 1971. This week marks the 36th anniversary of Nixon’s decision to close the gold window, which convinced me to seek public office to call attention to the runaway money train that would come in the aftermath of that decision. The temptation to print and spend money with impunity, like the temptation to max out lines of credit, is too strong to for government to resist. While Nixon brokered exclusivity deals with OPEC to prop up demand for the tidal wave of green pieces of paper the Fed pumped into the markets, the world is tiring of marching to the beat of our drum in order to secure their energy needs. The house of cards Nixon built is now on the verge of collapsing on our heads, and on our children’s heads.

    As the dollar weakens, it becomes ever clearer that we need a return to sound, commodity-based money for a secure future. Money based on real value, not empty promises and secretive backroom machinations, is the way to get out of the current calamity without causing even bigger problems.
     
  4. Fast Oil

    Fast Oil TS Member

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    It's Nixon's fault? Well all along this past 6 1/2 years the news media and the Dems have been telling me it's Bush's fault.

    Anyone caught by the ARM mortgage problem gets no sympathy from me. I could have got one of those low mortgage rates 4 years ago when buying my home, but it was and still is a gamble. Not less than 15 minutes ago (1pm) a fax came in, 2.6% fixed home loan for 5 years. Mice type: Restriction may apply / rates not guaranteed and are subject to change.

    You know what happened 36 years ago is now just effecting the market today? Give me a brake, "Beem me up Scottie."

    Rep. Paul is part of the problem. All politicians know how to do is tax and spend.

    Not everyone fell for the ARM, and some of us are not maxed out on our credit cards

    Scott
     
  5. atashooter

    atashooter Member

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  6. Jeff P

    Jeff P Well-Known Member

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    Amen, Scott!!

    I'm another one of those "bad" Americans...you know, us rotten bastards who live within our means, work hard at our jobs and don't fall for every gimmick that comes along and just want, generally, to be left alone. Guess I'm not doing enough to support the economy, LOL.

    The switch from fiscal policy to monetary policy was the source of all the problems in the late 70s / early 80s...we stayed the course then. It's been proven over and over that a stable, modestly growing monetary supply is the key to stable, modest economic growth. The problem in the late 90s was that, through low interest rates, too much money was allowed to circulate - and that led to a bubble in an asset class (stocks) that was corrected in 2000. THAT lead to a bubble in housing - again, through easy credit, teaser loans, etc. That bubble is just starting to pop, and it will take through 2008 for it to fully deflate. Regrettably, a lot of people will lose their jobs as the demand for new housing dries up - everyone from loggers to shingle makers to appliance manufacturers will feel the pinch. And a lot of folks are going to lose their houses...

    I read this morning that 30,000 a week are losing them now, to foreclosure.

    Oh well. Someone should have explained that it wasn't a god-given right to live in 3,000 square feet in the suburbs, AND drive a new car AND take 3 vacations a year AND drink $4 coffee every morning while you drove to your $14 an hour job.

    Now folks are gonna learn the hard way.....and that's never much fun.

    jeff
     
  7. TommyTEREX

    TommyTEREX Member

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    Right on! ,scott, and jeff, couldn`t have said it any better.

    Tom R.
     
  8. revsublime

    revsublime TS Member

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    "Rep. Paul is part of the problem. All politicians know how to do is tax and spend. "

    you're half-right....you forgot those that like to "borrow and spend".
     
  9. skeet100

    skeet100 Member

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    Problem is the Government has been invading our personal lives more and more every year.

    A Government bail out of any problem is a nice way to say "lets rob some tax paying hard working folks and give it to a dumb ass in trouble".


    It will crash HARD one day not too far off.............
     
  10. halfmile

    halfmile Well-Known Member

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    Jeff, I love it. The unfortunate part is that while I worked my ass off to pay mortgages and have rental properties paid for, the astounding amount of foreclosures that is happening now is costing me a bundle as I attempt to cash out in my declining years. Selling homes is not very easy now.

    Thanks, greedy bankers, for making responsiblility a liability.

    HM
     
  11. Brian in Oregon

    Brian in Oregon Well-Known Member

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    Deplorable Bitter Clinger in Liberal La La Land
    40+ years of liberal control of congress has ruined this country.
     
  12. Jim Pollock

    Jim Pollock TS Member

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    Living in Canada for most of the year, Arizona for some of the winter and having travelled in many area of the U.S., Europe, Asia (Turkey and China in particular) Central America and the Caribbean occassionally in the past few years has given me a perspective that colours my view of the world and how it views America. It is especially sad that the media in America provides such narrow, self centred view of current affairs that limits the ability of Americans to understand the perspective of much of the rest of the world.

    For example, there is virtually no media coverage of the disputes around the North American Free Trade Agreement and how American corporate special interest groups have effectively hijacked the agreement by forcing special protectionist tarifs on certain goods for several years now even though the World Trade Organization has evaluated the disputes and ruled against the U.S. position no less than 8 times.

    Mr. Varzi is an economist based in Tehran and much of what is printed in his article is quite appropriate. Some people may discount his opinions because he is based in the Middle East. This is a perfect example of the problem. So many in America are blind to anything other than that which is regurgitated by their politicians and media.

    Jim Pollock
     
  13. joshif

    joshif TS Member

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    I can't wait for the baloon to bust. Ammo will be more valuable than oil or gold!
     
  14. piddie

    piddie TS Member

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    I agree that good things are ahead if we ignore the bad things now.

    piddie -- ignore me and all is well...
     
  15. pendennis

    pendennis Well-Known Member

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    As has been mentioned before, the Federal Reserve, and its arcane money policies creates havoc in the market place. Just a couple of examples:

    As interest rates bottomed out, Alan Greenspan accounced that people should be taking out ARM's. With interest rates only able to go up, and with no further easing of rates. Why would anyone recommend an ARM? This is absolute lunacy.

    In April 2007, most of the sharpest financial minds knew that the Fed had tightened interest rates enough, and that an easing was in order. They should have lowered both prime rates by 50 basis points (.5 percentage points) in the next two quarters. Belatedly the Fed reduced the discount rate by that amount just last Thursday.

    Greenspan spoke out of his pay grade when he made remarks about "irrational exuberance" in the stock market. Any comments relating to the stock market should come from the chairman of the SEC, and not the chairman of the Fed.

    The Fed has frequently found inflation where none exists, especially in the areas not connected to energy and housing; and most people failed to see the spike in prices related to $75/bbl oil prices. They also failed to take into consideration the hike in consumer prices based on the energy costs throughout the economy.

    The Fed got caught up in the "irrational exuberance" of the housing market. No one who has studied housing would ever believe that housing could maintain record growth rates. They failed miserably to take apart the cozy relationship between builders and mortgage brokers. Builders, with increasing costs, and near-flat sales, managed to convince buyers that they really needed a 4,000 sq ft house, with nothing down, and an ARM which would roll over in five years.

    Markets always fill in the gaps. There can never be a spike as in the real estate and housing markets without a bear adjustment.

    Best,
    Dennis
     
  16. W.P.T.

    W.P.T. TS Member

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    The biggest problem with Politics in this country is the Politicians, and yet they get elected ... Go Figure ... WPT ... (YAC) ...
     
  17. Rico46

    Rico46 TS Member

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    HM, at least you were wise enough to own assets toward your retirement. Similiar to the lending institutions we have people out thier who believes that the "government" will bail them out because, they didn't plan thier retirements. It was that new boat, new car, new shotgun and 10 trips to the grand that took precadent over retirement savings! Admittingly, they don't have any money for retirement but they have the government as a backstop and their memories until they die..lol

    Rick
     
  18. Jeff P

    Jeff P Well-Known Member

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    Halfmile...

    You have mail.

    Piddie...LOL, there's no ignoring the bad things now. Embrace them. Profit from them, and then there are good things ahead.

    jeff
     
  19. peanut gallery

    peanut gallery TS Member

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    Keep working so i get them checks
     
  20. Hap MecTweaks

    Hap MecTweaks Well-Known Member

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    Uninformed subjects voting in those same lawyers time after time at an alarming rate is unreal. How many people vote? 1 out of 4-5 or close? No wonder politician are having their way with us today! Hap
     
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