Told you. DJIA closed below 10,000 today. Incidentally the markets were down all three days the bill was voted on. I loved the media propaganda that the markets were down Monday because the House rejected the bill, but on Tuesday they were up because investors were looking foward to the Senate voting yes on the bill. Of course Wednesday rolled around and showed the media to be without credibility.

Lately I've been reading a lot of stories about bank runs (I don't have to worry about that since I don't have any money in the bank). Nouriel Roubini has written on the "Risk of the Mother of All Bank Runs." Consequently, some people here in the States are speculating a week-long banking holiday to happen this month. We shall see if they're correct or not.

I don't think it's been mentioned here before but the day the House first voted down the bailout bill, the Federal Reserve injected 630 billion in liquidity in global financial markets anyway. Another extaordinary thing the Fed has done in the past month is expand its balance sheet and in turn the monetary base to record levels:





I don't think it'll make much of a difference currently because banks are still reluctant to lend (a good thing IMO--reckless lending is what got us into this mess). However, once this credit crunch is resolved, the Fed's recent actions will turn out to be highly inflationary and probably cause another bubble. Looks like it will be much bigger too. I think the next bubble will probably be in the resource sector such as commodities, energy/alt. energy and infrastructure. If that turns out to be the case it will at least be better than the previous bubble in housing. But one can't discount the possibility of the credit crunch becoming a credit revulsion on a worldwide scale, or even a global deflationary crash, despite what central banks and governments around the world are trying to do to avert such an event.

This data makes me all the more glad I got into farming and agriculture, if the banks go south, I'll be prepared to engage in barter commerce with the local farmers and the Mennonites. I have a reasonable amount of money in a checking account, since opening a savings account with the rogue Federal Reserve Bank pulling this crap would be the pinnacle of stupidity.

You can not save in a nation of spenders and borrowers if your medium of exchange is volatile fiat currency, invest in real assets and protect your own financial security.

Or you can move out of the country.

It's funny how October 9 of last year was the record high for the Dow Jones, while we're now about 4,800 points off that record one year later.

Doesn't sound reasonable to me. Most everywhere else is being hit hard as well, and many other nations have adopted similar currencies. I'd like to see people realizing that this economic system is pecuniary slavery and hot air-filled fluff with little industrial base as we see the state and largest corporations continually merging. Furthermore, I'd very much enjoy revolution and the Fed and rest of the government being abolished for a return to form - a strictly constitutionalist minarchic government that is slowly phased out. But that's just me.

Most other people seem content with the system though, so the status quo shall likely continue for the foreseeable future.

The only place I could think of off hand where there would be a reasonable level of financial and banking security is Switzerland. But the problem is that I'd be living within close proximity of many of the same assholes who caused messes like this one, which would urk me to no end. The thought of being amongst such people makes me sick.

Incidentally, all that happened is that the bailout passed. It hasn't been implemented yet. That won't happen until the assets on the banks' books get changed, so it'll take a bit of time. I think it's a bit premature to say the bailout isn't working.

Edit: sorry that was maybe a non-sequitur...

If economic worries scared me into moving to another country, I think China would be the best option. As other posters here have pointed out, there's a big difference between nations that produce and nations that don't. Financially, I'd feel more secure living in a country that other countries depend upon, rather than a country that is dependent. Plus, China has found an interesting yet totally brazen way of avoiding many financial problems: they just keep their currency valued low. Then they tell everyone else that if they want to buy from China, they're just going to have to put up with trade deficits. It's not like anyone's got the ass to tell them to stop.

And yet they are already talking about bailing out the bail-out. I don't buy any of this nonsense for a minute. If this thing is going to take time to implement, then we obviously had time to have a real debate and assessment of what would be included in that bill. But no, we had to ramrod that piece of shit straight through despite the fact that 90% of the country did not want to bail out a bunch of usurers and banking elites.

The only thing that really matters here is that this crappy bail out bill absolved everyone involved in this debacle of any responsibility and that Treasury Secretary Paulsen basically has way too much power now. Utterly horrible.

I agree but if you're talking about the stock market, the markets have already priced in the bailout plan.

When we speculate on whether the bailout will work, we have to ask will it work at doing what? The bailout will work at exchanging bad assets for liquid assets as you said. But banks don't need reliquification so much as they need recapitalization. It doesn't work at keeping people in their homes (though there are other government programs that can do this), it doesn't work at keeping the markets high and stable--the plan is not meant to. The bigger reasons also for the bailout is to avert a systemic collapse and get credit at those high-risk banks flowing again. I don't know if this bailout will help in doing that, but it certainly won't do it all by itself, which is why you have the Federal Reserve and the Treasury as well as other countries taking extreme measures as of late.


I'd like to add, and I was reminded of this by listening to an ecomonist recently, that credit is available at least on the local level. My brother just recently got a mortgage and I didn't even think he was credit-worthy enough to get one. Small businesses are still able to get credit from banks so long as they have solid foundations and solid plans. Yes, credit is a bit tight right now, but that's how it should be. The belief that endless credit would always be there is a myth; our whole economy during the credit/housing bubble of 2002-2007 was a myth. Time to get back to reality.



I don't think a weak currency is good for the citizens of China though. They're being robbed purchasing power when they could be able to consume more of what they produce themselves and thus have a higher standard of living if they had a stronger currency.


Check out what's happened in Iceland. Some say something similar could happen here...

'Nordic Tiger' Iceland Finds Itself in Meltdown

yes exactly but the ceo's take the money and run. weeks before they said everything if fine/ They quietly begin taking the money and quiting or resigning leaving the board of directors holding the bag while they escape to their havens.

the market is supposed to allow bad businesses /banks et al to go bankrupt or out of business, this is the way of capitalism.our govermentment has stepped in to stop this which just gives other companies time to get the money out of their directors, owners customers and then split again.

they reaped the profits from the market when things were good right? did they share those profits with main stream america? nope. so why bail them out when they don't run their businesses efficiently? credit is frozen so then deal with companies who use safer and more reliable means of doing transactions. I think this is another of Bush's ploys to further destroy the middle class since most of the money comes from the working middle class and not the upper echelon rich people. Greed took hold and congress allowed it to happen. no regulations on banks and lending companies allowed this.most of the ceo's and directors boards made humonguous monies in the years prior to this collapse. where are those million/billions of dollars? huh?

The people in congress need to re think their agenda. the people did not send them to washington to become "rich" but to be the peoples voice in things that mattered to normal everyday working americans. not to get rich and have their votes be bought off by special interests groups and lobbyists. Congress needs to be fired and new one put in to place who will do thier jobs in the names of the people who voted them to represent them.

In addition to this, all of the assets of these CEOs should be frozen/confiscated, the ownership of any industrial capital by these tycoons still in the country should be nationalized, and I mean really nationalized, not this bull shit where the government creates these fake protected lands things where the bankers actually own it de facto, and then handed out to honest prospectors in the same manner that William Penn gave out land grants to small farmers.

On top of this, the Federal Reserve Bank should be shut down, all of the debt that the government owes them should be voided and all of the people on the Reserve board should be imprisoned for fraud. Granted, how all of this would be accomplished is the problem, because most people still think that our government is their friend.

On the subject of bank recapitalization, here's an interesting examination about banks in Japan during a similar financial crisis about ten years ago. It's not nearly as confusing as it looks at first sight, and the parallels are numerous.

http://www.apeaweb.org/confer/hito05/pa ... zutani.pdf

Could this lead the world to another war, I mean, worlwide proportions? Because if you make an analogy (sorry if its bad written), this it's similar to the Wall Street crash of 1929, that was one of the detonants of the WWII.
Any opinions about this?

If some fairly large, industrialized nation had something like the Treaty of Versailles levelled against them, maybe. There might be more wars over resources between developing countries, but I can't see the so-called super powers of the world warring yet. I do think that yet more corporate-government merger is in store, and that we will see a global turn toward outright authoritarianism in many governments, but world wars seem unlikely.

I wonder why you, as a self-professed libertarian, now call for the state to massively interfere with the economy, when the financial crisis was due, first of all, to a lack of regulation of the financial markets. I thought that free trade, with as little regulation as possible, was a cause traditionally espoused by libertarians? I find it odd that free-market proponents start to call on the state to do something, now that deregulation has gone wrong.

I don't think a single, standardized fiat currency, a single "quasi-" private bank controlling inflation and interest rates, and merged corporations and state, amongst many, many other entities and actions quite contrary to deregulation, would equal anything along the lines of laissez-faire capitalism.

Not full laissez-faire, to be sure, but I think it is a rather laissez-faire part (namely: deregulation of the financial markets) of recent capitalism that is responsible for the disaster. Without supervision, and without measures to force transparency of traded credit and fonds products, savers/investors are at the mercy of fonds managers who themselves can hardly see through the complicated investment products they sell, and of analysts who get it wrong half the time or more.

Also, my original criticism, not addressed in your answer, was of free-market proponents calling for the power of the state to make it right once the deregulated financial market has landed everyone in shit.

And I fail to see how even more deregulation/free trade could help here. The completely free market is a theoretical, I would say fictional and outmoded concept. It requires absolute transparency of all transactions and absolute knowledge about the product and its competition on the part of all market participants. This has never been a reality, nor can it be.

Granted. But at the same time it is safe to say that a government purchasing 250B USD in stock from the 10 largest banks is decidely not laissez-faire - or even Democratic - Capitalism.

This act makes us more like China, in that the people want free-market capitalism while depending on the government to secure transactions. The only difference (import-export topcis aside) is that they intentionally devalue their dollar in fear of encountering the same meltdown Japan encountered 10 years ago - while we actively persue a strong dollar to give our lenders more power.

That power is so demished by this action that it is almost effiminate.

Let's make one thing clear right now, what is going on in America has ZERO to do with laissez-faire, nor has any other historical occurence where business cycles like this have occured. This is pure, unadulturated fascism calling itself something that it's not, from these corrupt usurer banks who have essentially stolen trillions of dollars worth of real assets from the American people with this bail out (in truth, it was nothing more than a scam, aided by both the government and the media).

But by all means, let's give the government, which these bankers already control lock, stock and barrel, more power. Let's hand over every aspect of our economic lives to a bunch of lying, scum-infested filth who outs to be in prison rather than on a board of directors. When things really get shot to hell, we'll likely get yet another World War, and afterwards more historical revisionism to justify it as anything other than a way to eliminate the unemployed population.

In truth, the only way for Laissez-Faire to succeed, there is one area of economics where there must be complete regulation and control, and that is the currency supply. That is the one thing that has yet to truly be controlled for an extended period of time in history. Fiat currency and fractional reserve banking is a greater threat to individual liberty than any army of red flag waving communist thugs.

The conspiracy theorist in me sees the Oligarchy taking a bold step forward and turning their Shadow Government into a One-World Government. I only entertain this thought due to the coordinated action by European banks and the insane windfall profered by the IMF.

All seems too... contrived.

After seeing congress and the president here completely ignore thousands upon thousands of phone calls saying that the bail out strategy they were taking was not what they wanted, any illusion that I had about America, and now Europe, being a democracy or any form of republic vanished. Anyone who can say to me with a straight face that the people control the fate of nations is a moron, end of story. Representative democracy on the scale being professed by modern civilization is an absolute sham.

Here is a conspiracy theory for you. One share of Fortis is now worth 88 cent. 88 means heil hitler. There have also been rumours of aliens landing on Earth soon here in Belgium. Conclusion: Hitler has made a gigantic alien army and is going to take over the world. Financial crisis now is only seen in the 1930's, close to WWII...

But now to stay on topic. I totally agree with Hells_unicorn. We already knew that democracy wasn't really working out all that good, but now we see what impact capitalism has on society. Prizes for food and basically everything have gone up. Governements said they don't have the money to handle that, but when banks screw things up with our money, they suddenley bring out billions of dollars/euros to save them.

Worst part is that it seems that nobody of the big bank leaders has been punished for these acts. The only ones being punished is the average population.

The solution seems obvious - kill all the bankers and divide their assets equally amongst the masses.

A line worth waiting in, if you ask me.

Just to point (don't know if it's previously posted, but it should be) that Iceland is totally fucked up. Some greek people who live there just say that the situation is completely shit... We can only pray for the Vikings.

Also, here in Greece, not to mention that about 8/10 greeks have taken loans from the banks and they cannot pay it back, but also with that bank-fuck people really is deep in shit.

Hm, reminds me something that took place about a century ago... and lead to II world war. Should we wait for III? There are fucking many chances...

Good luck to all of you around the world guys.

An article that discusses how Milton Friedman would likely have viewed this situation.

Well, hearing that information, Hellas could be in the same situation like Iceland, banks also loaned a shitload of money to their countries population. Then again, the Hellasian state can invest money into banks so the same doesn't have to happen.

Their is a possibilty that WWIII could rise from this crisis, WWII only happend 7 years after the financial crisis (1932 end financial crisis - 19
39 invasion Poland) But still, I don't think a global war will happen that fast like in those days.

This is state capitalism at work. The state and massive corporations usurping what little power is left in the hands of the people. But as evidenced by the words of others, many still apparently believe that government is a magical, benevolent entity. That the layman still, to at least a small degree, determines the political course of this nation or others, when the blatant reality (to anyone to bothers to do a little digging and use some logic) is that this is quite contrary to the truth.

If people still wish to believe in this illusion, whether wholly or partially, they could at least do a little individual thinking and research. I can almost guarantee that one would arrive to the same conclusions as I have, but even if you don't, at least you're not a tool.

If the human race had a communication medium similar to the internet, I doubt that WW2 would have happened in the way it did. More likely, there would have been a series of internal revolutions where people like FDR, Churchill, Hitler, Mussolini and others would have been ousted from power, or would have had little or no recruits for their armies.

If every man in every house in Russia had waited with wood axes behind their doors for the coming Bolshevik and KGB thugs, Lenin would have had no army with which to claim his empire.

I don't think quite honestly it ever was a control by the people since day one in this country. It was all to keep people under wraps by leading people into believing to think they had a say. You don't have any say, it's what THEY say, and it's always been that way. They convince you that you have a voice (and while you do) you can be not only silenced, but as it proved in the past, does any sort of protesting do anything more than spread awareness? Does that really change anything? It's good to let them know you know, but does that really change anything in the long run?

In this day and age though, more people are realizing that what they have been told has been bullshit. More and more people I talk to seem to agree, no matter how conspiracy theorist it may sound. We have been lied to and it's been going on since the beginning.

I'm not disallusioned at this point though, but I was once I turned a teen and started to read other things besides what school told me to read. I'm over it. I know what they are capable of and what games they play. They play with the numbers to their advantage and then, they squeeze the middle class, just enough to put the blame on someone else and then they look like the good guy. I still believe in the Yipster theory that if the middle class fell into the lower class and there were just two classes, there could be revolution...but the gov't knows this...and will never allow it to happen. That is in part to why there was a bailout. This has been coming for some time now no doubt. I've been saying this shit for years, others may not agree with me...but it just proves true to me more and more as time moves forward.

this whole time i was wondering where americans got thier nice homes and multiple cars and money to wage wars while the rest of the world was starving...

they charged it on thier Credit Cards!


*Doing a little victory Dance with Karl Marx*

Be careful good old Karl's minions don't shoot you in the back of the head for dancing better than everyone else.

Haven't posted in this thread, but I thought I'd share something. After 30+ years of working for the local Steelworks, my father might lose his job at the end of the year. From what I can gather, there is no more work for a lot of people there, as the steel they're making is simply not being sold, because nobody is buying anymore.

I can tell he's a little worried about it, even if he hides his concern behind his smile. He mentioned that if he does lose his job, he'll have to get unemployment benefits from Centrelink. Problem is, he's 53...what company would hire him?

He has a mortgage and 2 cars to pay off, which he's doing quite comfortably, I must say, but without work, they're simply not going to be able to afford the repayments anymore. This means that, again IF he's made redundant, my brother and I will have to support our parents (our jobs seem pretty secure, for now) with our wages, which are a little less than what he makes now.

Dark times ahead....

If Marx were alive today he would be rolling several times over in his grave.

But he'd still be wrong.

Yea, yea, yea, you truly are awake. You know the ultimate truth behind the American system. So, after knowing this, what the fuck are you gonna do about it? Overthrow the government and build a better, more "pure" system. Of course not. And you say alot of people agree with you, so wheres the uprising? Where's the rebellion? Where's the motherfucking revolution?! No one is going to do it and guess what, we may be corrupted but there are places on this planet that are far worst than here. We're basically the least of the worst. So unless your motherfucking Che Guevara and your gonna actually do something about it, knowing the so-called truth won't get you anywhere. Its only when you take action where it really counts. So stop with your rant.

Hello. To understand what is going on and what is the core of the problem I recommend all to check out document Zeitgeist addendum, which is freely available on google videos.
If it has been mentioned here yet then sorry.

It has been, I think on the previous page. And for the record, it's pure rubbish. I've read Sci-Fi novels that are less far fetched than the futuristic economic system that this guy came up with, probably while extremely high I might add.

I have in mind only part about reasons of the financial crisis - making money from nothing by FED etc. It was just explanation of the reality.
If you criticise it, you should say with what actually you not agree and not to denounce it generally.

What I'm denouncing is how deceptive the movie is. It starts out with some pretty accurate stuff about the FED, then it degenerates into this absurd pseudo-communistic panasia about how using something as a medium of exchange will be overcome, and laying out a scenario where the human spirit will be reduced to a race of couch potatoes. Lord Byron gave a pretty solid retort to the futurism advocated in this film more than a century before it was ever concieved.

People who are just becoming aware about how bad fractional reserve banking actually can be are going to be led down the same road that Karl Marx took the working class with his pro-central bank/anti-private property/deceptive nonsense, a one way trip to a bloody nowhere. The guy who created this film is helping the same people that he claims to be attacking. Oh well, let's get rid of money and build a society crossing "The Matrix" with "Wally", viva la revolution.

Like I said, it can only happen if there is no more middle class and there is no bailout, which obviously there is. There is more to this than meets the eye than what is just going on the surface.

After knowing about "this" one can do a few things. Either leave, start a coalition, or use the system to their advantage. I choose to do the very latter. To understand what it is about is important though; I don't want to be blindly led by a broken system. I do believe in the original ideologies but I don't think the system is working that well anymore and there is much corruption going on.

That isn't hard to deduce though.

As far as taking action is concerned, you can look at history and realize that taking action isn't necessarily the answer unless you have everything left to lose, which in Che's case or in other revolutionaries' cases is why they take action in the first place. You don't take action just to take action, after all that's not what has ever happened in history. In most cases those revolutions are made from desperation.

If I was desperate, I don't know what I'd do. Hopefully I won't have to deal with that in my lifetime.

But as far as "stop with your rant", um no.