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Guest Post: The Return Of The Money Cranks
Authored by Detlev Schlicter, originally posted at DetlevSchlichter.com,
The lesson from the events of 2007-2008 should have been clear: Boosting GDP with loose money – as the Greenspan Fed did repeatedly between 1987 and 2005 and most damagingly between 2001 and 2005 when in order to shorten a minor recession it inflated a massive housing bubble – can only lead to short term booms followed by severe busts. A policy of artificially cheapened credit cannot but cause mispricing of risk, misallocation of capital and a deeply dislocated financial infrastructure, all of which will ultimately conspire to bring the fake boom to a screeching halt. The ‘good times’ of the cheap money expansion, largely characterized by windfall profits for the financial industry and the faux prosperity of propped-up financial assets and real estate (largely to be enjoyed by the ‘1 percent’), necessarily end in an almighty hangover.
The crisis that commenced in 2007 was therefore a massive opportunity: An opportunity to allow the market to liquidate the accumulated dislocations and to bring the economy back into balance; an opportunity to reflect on the inherent instability that central bank activism and manipulation of interest rates must generate; an opportunity to cut off a bloated financial industry from the subsidy of cheap money; and an opportunity to return to sound money and, well, to capitalism. Because for all the thoughtless talk of this being a ‘crisis of capitalism’, a nonsense concocted on the facile assumption that anything that is noisily supported by bankers must be representative of free market ideology, the modern system of ‘bubble finance’, cheap fiat money and excessive debt has precious little to do with true free-market capitalism.
That opportunity was not taken and is now lost – maybe until the next crisis comes along, which won’t be long. It has become clear in recent years – and even more so in recent months and weeks – that we are moving with increasing speed in the opposite direction: ever more money, cheaper credit, and manipulated markets (there is one notable exception to which I come later). Policy makers have learned nothing. The same mistakes are being repeated and the consequences are going to make 2007/8 look like a picnic.
From ‘saving the world’ to blowing new bubbles
Of course, I was never very optimistic that the route back to the free market and sound money would be taken. At the time I left my job in finance in 2009 and began to write Paper Money Collapse, the authorities had already decided that to deal with the consequences of easy-money-induced bubbles we needed more easy money. ‘Quantitative easing’, massive bank bailouts, deficit spending and ultra-low policy rates had become the policy of choice globally. But at least the pretense was upheld for a while that these were temporary measures – ugly and unprincipled but required under the dreadful conditions of 2008 to safe ‘the system’. The first round of debt monetization after the Lehman collapse – the exchange of $1 trillion of mortgage-backed securities on bloated bank balance sheets for freshly minted bank reserves from Bernanke’s printing press under ‘quantitative easing 1.0’ (QE1) – was presented as an emergency measure to avoid bank collapses and a systemic crisis.
I never thought that this was a convincing rationale as it was clear to me that whatever the accumulated dislocations were, there was ultimately no alternative to allowing the market to identify and liquidate them. Aborting, delaying and sabotaging this essential process of economic cleansing and rebalancing would only cause new problems. Even on the assumption that these were measures to deal with extreme ‘tail events’, I could not then and cannot now support them. But it is becoming abundantly clear that these measures are neither temporary nor restricted to avoiding bank runs or systemic chaos but that now, after the public has become sufficiently accustomed to them and a cheap-money-addicted financial industry has begun to incorporate them into their business models, they constitute the ‘new normal’, that they are now the accepted ‘modern’ tool kit of central bankers. Zero interest rates, trillion-dollar open-market operations to manipulate asset prices and to ‘manage’ the yield curve are now just another day in the modern fiat money economy. Nobody talks of restraining central bank activism. Rather, the temptation is growing to use these tools to kick-start another artificial boom.
In his excellent new book The Great Deformation – The Corruption of Capitalism in America, David Stockman provides a fascinating account of how the principles of sound money, balanced budgets and small government have progressively been weakened, betrayed, undermined and ultimately completely abandoned in American politics (often by Republican politicians and even some of the alleged ‘free market heroes’ of Republican folklore), and how today’s cocktail of bubble finance and trillion-dollar deficits represents the delayed but inevitable blossoming of destructive seeds that were sown with Roosevelt’s New Deal and Nixon’s default on the Bretton Woods gold exchange standard. In a chapter on the recent crisis, Stockman argues convincingly that the shameful bailout of Wall Street in 2008, in particular of Goldman Sachs, Morgan Stanley, and a few other highly leveraged entities via the bailout of ‘insurance’ giant AIG, were sold to Congress and the wider public with exaggerated claims that the nation’s real economy was at imminent risk of collapse. From my position as an economist and a market participant at the time of these events, Stockman’s analysis and interpretation strike me as entirely consistent and correct. But even if we were willing to give more credit to the claims of the ‘bailsters’ and interventionists that the fallout for Main Street would have been substantial, that would only further underline how far the Fed’s preceding easy money policies had destabilized the economy, and the question would still remain whether it could ever be a reasonable objective of policy to sustain these large-scale dislocations against market forces.
Be that as it may, the dislocations were largely sustained and plenty of new ones added. Talk of ‘exit strategies’ – that is, of a ‘normalization’ of interest rates and shrinking of central bank balance sheets – has now pretty much died down. Super-low interest rates are now a permanent tonic for the financial industry. In fact, the nature of the debate has shifted markedly over the past 15 months as the idea is progressively gaining adherents that the new hyper-interventionist tool-kit of the central bankers that was slipped in under the cloak of avoiding financial Armageddon in 2008 should now be used pro-actively to start a new easy-money-induced credit boom, that aggressive money printing and debt monetization should be employed to generate a new growth cycle. Many economists are de facto demanding a new bubble.
In America, QE2 was already targeted at boosting the prices of government debt and thereby lowering interest rates and encouraging more lending – which naturally means more borrowing and more debt, the opposite of deleveraging and rebalancing. And QE3 – which is an open-ended $85-billion-a-month price-fixing exercise for selected mortgage- and government- securities – is even targeted officially at lowering the unemployment rate, meaning Fed officials seriously claim that they can create (profitable and lasting?) jobs by cleverly manipulating asset prices.
The resurgence of the money cranks
Rising real wealth is always and everywhere the result of the accumulation of productive capital, which means real resources saved through the non-consumption of real income, and its employment by entrepreneurs in competitive markets under the guidance of uninhibited price formation. This process requires apolitical, hard and international money. Monetary debasement always hinders real wealth creation; it does not aid it. Easy money leads to boom and bust, never to lasting prosperity. Easy money is not a positive-sum game and not even a zero-sum game. It is always and everywhere a negative-sum game.
To claim, instead, that an economy’s performance and society’s wealth is lastingly enhanced by pumping more fiat money through its financial system requires a considerable degree of economic illiteracy and, in the wake of the recent crisis, selective amnesia. Not too long ago, such assertions as to the benefit of inflation and money printing would have clearly marked its proponent as a money crank. But the cranks are now manning the monetary policy ships everywhere, and the international commentariat is either willingly complicit in spreading economic nonsense or intellectually challenged when it comes to exposing the naivete and recklessness of these policies.
Nothing confirms the renewed dominance of money crankism more than the present sad spectacle of Japan, a country that became a post-WWII economic powerhouse in no small measure thanks to the old capitalist virtues of hard work, high savings rates, strong capital accumulation, and innovative and international-minded entrepreneurship, now taking a leaf out of the policy book of Argentina and embarking on a mission of aggressive money printing, currency debasement, asset price manipulation and inflationism. Japanese savers are already losing international purchasing power by the bucket load as the Yen keeps plummeting in international markets.
The idea that currency debasement will result in lasting, self-sustained growth and rising prosperity is positively laughable. I do not doubt that Japan’s new initiative of aggressive monetization has the potential to improve the headline numbers on a number of corporate earning reports and to even give a near-term boost to GDP. Like most drugs, easy money tempts its users with the promise of an immediate but short-lived high. What is, however, absolutely certain is that whatever ‘stimulus’ is generated in the short term is bought at the price of more imbalances (most certainly higher indebtedness) that will weigh down severely on the Japanese population in the future. What is even more worrying is that Japan’s gigantic pool of government debt – held to a large extent by an aging population as a ‘pension nest egg’ and by domestic banks on highly levered balance sheets– is a veritable powder keg, and the Bank of Japan’s new inflation strategy is tantamount to playing with fire.
The deflation myth
It has become commonplace to justify Japan’s monetary ‘experimentation’ with reference to the country’s long suffering under supposedly ‘crippling’ deflation. Even otherwise respectable financial newspapers and journals lazily repeat this standard refrain. It is complete and utter nonsense. Whatever Japan’s problems are, and I am sure they are numerous and sizable, deflation is not one of them.
Firstly, there is no economic rationale for assuming that the type of moderate and ongoing deflation (secular deflation) that analysts suspect in Japan and that is the result of stable money and marginal improvements in productivity could constitute a problem for the economy’s performance. Why such deflation is harmless (and even preferable to moderate inflation) I explain in detail in chapter 5 of Paper Money Collapse. I make no claim to originality here, as this insight was widely accepted among most serious mainstream economists up to and including the first third of the twentieth century when it became sadly ‘forgotten’ rather than refuted. But if you don’t want to take my word for it or go through the argument in my book, or if you want to have ‘empirical evidence’, then you might want to listen to Milton Friedman, hardly an advocate of the gold standard, who (together with Anna Schwartz) analyzed the late 19th century economy of the United States which had both stronger growth and much more deflation (in particular after the fiat money episode of the Civil War had ended) than Japan had over the past 20-odd years, and who concluded that U.S. data “casts serious doubts on the validity of the now (1963) widely held view that secular price deflation and rapid economic growth are incompatible.”
Secondly, there is not even any deflation in Japan that deserves the name. The data (which is here) does not support it. I am sure the economists at the Bank of Japan employ massive magnifying glasses to detect deflation in their data series. What Japan has is, by any rational standard, price stability.
In February 2013, the consumer price index (CPI) stood at 99.3. Ten years earlier, in February 2003, it stood at 100.3, and ten years before that, in February 1993, at 99.6. Apart from the fact that, as with any price-index data, the methodology, accuracy and relevance of these statistics is always highly debatable, it is clear that if we do take the data at face value we see an economy that has roughly enjoyed stable prices for two decades. In fact, prices rose marginally in the late 1990s, remained stable for a few years, and have recently declined marginally.
In February of this year, the inflation rate was -0.6 percent year over year. Would any of the commentators who lament Japan’s ‘crippling deflation’ claim that an inflation rate of +0.6 percent year over year would constitute worrying inflation, or even deserve the label ‘inflation’ at all? Would it not simply be called a rounding error? – By comparison, official UK inflation stood at +2.8 percent year over year in February 2013 and has fluctuated between +1.1 percent and +5 percent over the past 4 years alone. What monetary system is more conducive to rational economic calculation and planning – Japan’s or Britain’s? (It should be worth noting that over those 4 years the British economy has NOT outperformed Japan, despite its ‘wonderful’ inflation.)
Those commentators who tell us that this ‘crippling deflation’ is hurting the economy because people postpone spending decisions in anticipation of lower prices, want us to believe that Mr. and Mrs. Watanabe don’t buy a new popup toaster for ¥3,930 this year because – at a 0.6 percent p.a. deflation rate – they can reasonably assume that it will only cost ¥3,906 to buy the same toaster next year. And they won’t even buy it next year at ¥3,906 because the year after that it will only cost ¥3,883. The Watanabes would thus be able to save ¥47 over two years by not eating any toast (and it goes without saying that they may save considerably more by never eating toast!). This is a saving of – wait for it! – $0.47 or £0.31 (at present exchange rates) for postponing the purchase of a standard consumption item for two years – 730 mornings without toast! The notion that this ‘crippling’ deflation is holding back Japanese growth is simply beyond ridiculous, yet you can hardly open a newspaper these days without seeing such nonsense presented as economic analysis. (I would recommend that these experts on consumer psychology call the people at Apple, Samsung and other providers of tablets, smartphones and various consumer technology items and tell them that they are missing a trick: it is evidently rising prices that get people buying, not falling prices!)
Funding the state
The deflation argument is so flimsy that one can only assume it is a convenient scapegoat for a different agenda: securing printing-press funding for the state. Under Japan’s new monetary debasement plan, the Bank of Japan will practically buy the entire annual issuance of new government debt and thus fund excessive public sector spending directly via the printing press. Japan is famously the world’s most highly indebted state at 230% of GDP and runs an annual budget deficit of around 10% of GDP. Even the most troubled members of EMU enjoy better funding stats.
The often-heard argument that such profligacy has evidently not been punished by markets for years and decades, so why should the day of reckoning be any nearer now, is unconvincing. For years, the Japanese public has in fact saved and has faithfully handed its private savings over to the state, which immediately wasted them on Keynesian ‘stimulus’ projects that will never bring a meaningful return (bridges and roads to nowhere, public pools, agricultural subsidies). For a long time it was to a considerable degree private frugality that funded public excess. But now the savings rate has collapsed to 2 percent and given the shrinking workforce and aging population is unlikely to ever recover. Private savings are thus no longer sufficient to fund the state’s recklessness, so now it is up to the Bank of Japan to keep the state in business and maintain a mirage of solvency. The inflationary implications of funding massive government waste through money-printing rather than voluntary savings are, of course, considerable.
The risk here is not that the policy of monetary debasement will again amount to ‘pushing on a string’ and fail to raise inflation and inflation expectations. The much riskier and likelier outcome is that this policy will ultimately ‘succeed’. The aging Japanese population sits on a massive pile of government debt that is not backed by productive capital but that the population still considers its ‘pension assets’. Debasing the purchasing power of fixed income streams that Japanese pensioners draw from this pool will ultimately dampen domestic consumption – the very component of GDP that the inflationists claim to boost with their monetary debasement. If inflation only rises from -0.6 percent to +1 percent, the entire Japanese yield curve is ‘under water’. Only very long maturity bonds will still provide a positive real yield. This will also hurt the banks which are massive (leveraged) owners of government debt. And of course, a meaningful sell-off in the bond market would quickly wipe out bank capital.
Such a sell-off may still not occur anytime soon. At the present UK inflation-rate of +2.8 percent, most of the UK’s government bonds are also trading at negative real yields. In fact, in recent months many bond investors around the world have exhibited a remarkable willingness to hold bonds at negative real returns. It appears as if many of these securities have become, in the eyes of their holders, ‘cash equivalents’, i.e. instruments that are held for reasons of safety and liquidity, not for reasons of income generation. How far the central banks can exploit this phenomenon is uncertain. Central banks cannot turn water into wine but almost any asset into (fiat) money by ‘monetizing’ them. The only limit to this operation is the willingness of the public to hold these new ‘monetized’ assets, and frankly I doubt that there is money demand in Japan to the tune of 230 percent of GDP. – We shall find out.
Money crankism will spread
‘Abenomics’ will not solve Japan’s problems; it will make the Japanese worse off and it has the potential to trigger a mighty financial crisis. Yet, what is surely inevitable might not be imminent. During the early honeymoon between ‘Abenomics’ and financial reality, the idea of printing yourself to prosperity is likely to have imitators, with the UK being a prime candidate. In terms of total indebtedness, the UK is the one industrialized country that can compete with Japan, meaning it is in the same supersized debt-pickle. Even the timid attempts by Chancellor Osborne to lower the speed at which Her Majesty’s government goes further into debt are being attacked as savage ‘austerity’ by the opposition and large parts of the media. In his latest budget he put the remaining taxpayer-chips on another housing bubble and gave the Bank of England more room to ignore inflation. Over at Thredneedle Street, the Deputy Governor of the Bank of England, Paul Tucker, openly fantasized about negative interest rates recently, outgoing Governor Mervyn King voted for more QE (overruled), and Governor-elect Mark Carney promises to be, well, – flexible.
Bottom line: desperation is spreading. Watch this place! Chances are the Old Lady is the next to throw any remaining caution and remaining vestiges of monetary sanity to the wind and – go ‘all in’.
This will end badly.
P.S.: As to ‘the exception’, the only place where money crankism is not the order of the day yet is – the Euro Zone!– Yes, I am serious. – I know, I know. This is an amalgamation of semi-socialist, semi-bankrupt welfare states that share the same politicized paper currency issued by a central bank that has already bailed out too many banks, has manipulated various government bond markets and whose balance sheet as a percent of GDP is larger than the Fed’s. However: In a global sea of monetary madness there are at least a few remaining signs of sanity and orthodox monetary discipline on display in the much derided EMU. Greece was allowed or encouraged to default on part of its debt, which meant that bond-holders had to eat losses. Cyprus’ biggest bank is being wound down, which means depositors are going to eat losses, too. There is a persistent push towards ‘austerity’. On the fiscal front, the Euro Zone easily outperforms the US, the UK and, of course, Japan. While the Fed has increased its balance sheet girth by almost $300 billion in the first three months of 2013 alone, the ECB has reduced its own by almost €400 billion over the same time. My rule is this: The more Professor Krugman is foaming at the mouth and the more apoplectic the commentary from the strategists, analysts and economists in the bailout-addicted financial industry get, the more it seems that Mrs Merkel & Co are getting a few things right.
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Thats fine. This means we get to make fun of guys like David Lerah, again.
Obozo's corrupt machine is fully prepared for the next crisis.
Fuck you muppets!
"Hey boss, what do we want this year's data to look like?"
"Default."
"You mean the same as last year's, yeah?"
"Yep. We'll switch it up to look like something from the 80s next year and they won't suspect a thing."
"Sounds good boss. Hookers and blow after work?"
"All day, err day."
From the article:
"Easy money is not a positive-sum game and not even a zero-sum game. It is always and everywhere a negative-sum game."
How are we supposed to win in this kind of a scenario? Precious metals are good for zero-sum games. Bearings aren't bad either (repairz, bitchez).
"The Return of the Money Cranks"
Paging Mr. Paul Krugman, paging Mr. Paul Krugman ....
Hey Mr. Akak - that moron is not showing up. I'm starting to think that it was either him, or a student. Perhaps he got stuck in a sewer pipe?
He's probably just having breakfast with Leo.
"...the Euro Zone" yup
-" ... In a global sea of monetary madness there are at least a few remaining signs of sanity and orthodox monetary discipline on display in the much derided EMU. " @ 'nuff oldfashioned cbs here
-" Greece was allowed or encouraged to default on part of its debt, which meant that bond-holders had to eat losses. Cyprus’ biggest bank is being wound down, which means depositors are going to eat losses, too." @ eh, but what bad PR you can get by defaults
- "There is a persistent push towards ‘austerity’. On the fiscal front, the Euro Zone easily outperforms the US, the UK and, of course, Japan. " @ After all we tax until stones bleed
- "While the Fed has increased its balance sheet girth by almost $300 billion in the first three months of 2013 alone, the ECB has reduced its own by almost €400 billion over the same time." @ and don't forget loss-soaking capacities
"My rule is this: The more Professor Krugman is foaming at the mouth and the more apoplectic the commentary from the strategists, analysts and economists in the bailout-addicted financial industry get, the more it seems that Mrs Merkel & Co are getting a few things right."@ it's a good rule
Eurosum Zone
"Imminent risk of collapse..." bullshit from the 2008 bailouts, what a crock of shit that was shoved by CONgress.
The only thing at risk of collapse was the utterly corrupt financial institutions and the gravy train their politician lackey's on both sides of the aisle ride along on.
Rather than save The People, and the nation, they sold us out to a bunch of mammon lusting money-changers and allowed the Private Corporation euphemistically called "The FED" to debauch the currency, the rule-of-law, common sense, and our children's future.
Treasonous scum who deserve hanging or better yet to be drawn and quartered.
dibs on the frontal lobe...
"I'm having a friend for dinner."
-Mr. Lechter
"deserve hanging or better yet to be drawn and quartered"
Agree. Can't find the guillotines so hdq will have to do.
blah, blah,... blah
it is said that a tiny insignificant ant can predict an earthquake within a 24 hour period?
which creature has the 'animal spirits?' to predict a stock market crash... hmmm, please present thy self-- be it a squid, insect, beast of burden, or nature's own capitulation?
It takes someone with the brain of an ant to not recognize the massive gap between promises & what those promises are worth when the rubber meets the road.
As long as this gap exists, the risk of deflationary collapse of credit is always at natire's doorstep.
If I had to pick, the Chicada...this year 17 million of 'em will be making so much noise that you will not be able to hear yourself think! They will be the warning to us all to run for the hills!
It all has to go up in smoke at the same time or Ben will rotate swaps till the cows come home so stay long till the trend line breaks
Hell even T Woods is too big to disqualify. What a joke
Isn't that ever so fucking true.
There are the 1%ers and then the especially elite within the upper crust.
What a fucking joke.
That was a clear and admitted cheating, breaking of the rules. And no, no pro makes a lapse like that. It's basic stuff.
Too Big to Fail Has Taken on A Whole New Meaning.
Purposefully.
A Clear Demonstration to the Peasantry to Not Bother to Question Authority
Don't you guys get it? You're supposed to look up to these queerass thieves and cheaters. They're your new role models!
Cheating? A player commits an infraction about which he isn't notified until after he's completed his round, and he's therefore guilty of signing an incorrect scorecard that requires disqualification?
WTF?
"Not taken and now lost"...........
WHY??
I'll fucking explain it.
http://mises.org/etexts/mises/bureaucracy.asp
Let your fucking brain breathe=?
The smart thing to do is to take any Money you have in the Bank and pay off Debt.
Then what evert is left over stash it under your Mattress. Or buy one of those fire safe Valts, bolt it to your floor and keep your Money there.
Money...
Gold and CA$H are a good combination for your safe...
As long as they can control it, a rebalancing will never be allowed to happen. Why? Because it will decimate the paper wealth of the 1%. What, do you expect the 1% to work for a living? Can you imagine the likes of Jamie Dimon trying to work as the manager of a Home Depot? If he even knows what a carriage bolt is, I would be amazed.
Japan has had price stability and it has been great. I went to Japan in 1996, and starting in 2005 go back twice a year. Since 1996 the prices in the vending machines has stayed the same. It was 100 Yen for a soda in 1996, it is 100 Yen for a soda now.
So what is wrong with that?
To the 1%, stability is the worst outcome. There is no inflation to grow paper fortunes, there are no quick busts to allow elites to consolidate power and pick up assets on the cheap. Worst of all, if there is no mega growth, how can a corproation grow into a 900 P/E valuation. The greater fool con game, really loses its effectiveness.
What is better for the economy? A guy in Tokyo that has run a shop profitably for 60 years, or a kid who starts a corporation with no business plan, and no profit, that is given a billion dollar valuation by hedge funds that watches the company go parabolic and then crash to nothing in the span of three years?
A sane person should say the little shop owner. But a 1%er who derives 100% of his wealth from the stock market would of course pick the kid without a plan. He can't make a dime off the old man sitting in his shop.
If you step back and take a look ... We lived in a closed system. If the correct cure didn't get implemented the first time then it (the problem) will hang until that solution is ripe to be implemented again and then again onto the next similar situation requiring the same solution.
On and on until finally the correct solution is implemented. There is no magic available. It's a natural closed system. All components remain within the system until they are corrected and handled.
Either suffer thru until the next opportunity or do the right thing and end the cycle or just keep repeating until the next wake-up call.
Never mistake the calculated machinations of the banksters as stupidity!
Oh, the housing crisis seed was planted far earlier than 2007, or 1995 even, as it began in 1977 with the CRA!! Truly, I say to you here and now, the Demoncrats planted the seed for the ills we have today, not that the Republicrats have no blame either. No, the law mandated (bloody communists mandate) that everyone in America deserved a house, and thus it began. Every president since pushed this meme and now here we sit - technically bankrupt, fiscally and morally. The banks were forced and coerced into NINJA loans by each administration, but Slick Willy and Cuomo did it best! Govt, corps and banks, now that is an axis of eveil my friends, oligarchy of fraud and greed. Gotta love how most folks in this country have no clue, but then the liberal halls of diseducation can be thanked for that, we've dumbed down the masses, so critical thought is no more.
I hate what has happened, and in the end, the masses will hate even worse what is to happen, I pity the fools!
There is a book of life, called the Bible, take the time to read it, and maybe you will come to an understanding of things past, present and to come. I was, I am, I will be...
Oustanding article
Yup. Well reasoned and well stated.
Obama's just got to make it past election day 2014. All stops will be pulled out.
Bill Moyers did a special about the inequality in the US and relates to the fact that it has been "designed" by big corporations. He lists 3 big companies dodging US taxes, Pfizer paid zero, Citi (the folks that use IBM Watson for their business intelligence analytics) has over $42 billion overseas in shelters and the surprising one for me at least was Microsoft diverting their money to Puerto Rico to avoid taxes...over $ 4 billion..but if you own $100 in Ohio, you may go to jail.
http://ducknetweb.blogspot.com/2013/04/bill-moyersthe-united-states-of.html
Also if you want to see why your health insurance rates are so high...it's the complexities...we pay for all thier data mining which includes Blue Cross buying our Visa and Master Card purchasing records. Their reason was pretty weak...they are looking for their members who are buying clothes a size larger. Well last time I looked being obese or overweight was pretty visual and not something well hidden...so what do we have next the diet police on every corner. We are financing all their IT infrastructure to do this with our premiums and probably more. Poor CMS can't even work well with what they send the government and the Inspector General I think out of frustration wants the insurance company CEOs to certify all the plans and information they send the government. What's the chance of that happening...more rate increases will come before that every occurs.
http://ducknetweb.blogspot.com/2013/04/not-obamacare-that-is-failing-its...
"What Japan has is, by any rational standard, price stability. In February 2013, the consumer price index (CPI) stood at 99.3. Ten years earlier, in February 2003, it stood at 100.3, and ten years before that, in February 1993, at 99.6"
How is price stability acceptable to bankers who create money at interest? More debt created money is needed to repay debt created money debt.
Rational standards are not acceptable in a debt created money world.
"Oh, the housing crisis seed was planted far earlier than 2007, or 1995 even, as it began in 1977 with the CRA!!"
Stop the CRA crap.
Greenspan wanted a housing bubble and he got one. The CRA did not create the ownership society- see Bush's speech on that subject. The housing bubble followed that speech. Put 2's and 2's together.
The FBI warned a republican congress in September of 2004, that there was massive mortgage fraud, in an attempt to head it off. What did the republican congress do about it? Is nothing the correct answer?
IBD has blamed Clinton for changing CRA rules in 1995. Who was President in 2001-2008? It wasn't Clinton. If Clinton could change the rules, gee so could Bush. I remember watching Bush signing a bunch of executive orders on TV right after he was sworn in in 2001. And a republican congress certainly had no trouble changing the bankruptcy laws in 2005 in advance of 2008 collapse. So just where is this republican impotency in the face of the all powerful CRA? Mythology?
From 1994, Greenspan had the power to regulate anyone who made mortgage loans. The purpose of a bubble is to get everyone in. In February, 2004 Greenspan told home buyers to get adjustable rate loans.
LEVERAGE came from adjustable rate loans. LEVERAGE got everyone into the game, especiallly when the lenders promoted LIAR loans, where income could be inflated beyond what it actually was, to leverage a bigger loan tha one was entitled to. The CRA did not create LIAR loans, lenders did.
Greenspan had the power and chose not to use it, simply because he wanted a housing bubble to replace the .com bubble.
"Bill Moyers did a special about the inequality in the US and relates to the fact that it has been "designed" by big corporations."
Any one here equal to Barak Obama? Do any of you have the power the President ot the U.S. has? Moyers does not mention that he is not equal to Barak Obama.