Dirty secret of the bailout

[hippifried]

It has to do with what can be backed up and what can not. What is it connected to or grounded in. Essentially the guarantees we make. You're right that the printing phrase is crude, but you seem like a bright guy that is aware of the actual issue here. It's these artificial gimmicks I have a problem with, they're designed to put lipstick on the pig and to keep the high valued assets in the hands of few.

Ok... I can see that this is leading up to a discussion of the "gold standard". We've never really been on it. There's never been enough gold or any other metal in the treasury to back up the fiat currency. Gold itself has no intrinsic value except as a conductor or something shiny to make trinkets out of. It's worth exactly as much as you believe it's worth.

That said: I do believe that a currency needs to have a fixed valuation to remain viable. Like the gold mystique, it's all just faith. Declare a value & that's what it is. The dollar used to be pegged to gold. 1/20 of an ounce. In the '30s, Roosevelt devalued it to 1/32 of an ounce. That's where it stayed until Nixon devalued it in 1970. The difference was that Nixon didn't reset the value. He just let it float to "find its natural level in the market" blah blah blah... You can pinpoint the start of America's hyperinflation woes to that day in 1970. He didn't really devalue the dollar. He unvalued it. It needs to be revalued. I don't see where it'd make any difference what it's pegged to. Thin air if you like, since it's all just faith anyway. It just needs some kind of declared value & to be removed from the currency market so the treasury can have control over that value again. Fuck the money marketeers. They make their living causing inflation & screwing everybody on the planet. If we pull our dollars out of that market, I think the rest of the world will follow our lead & those slimeballs will be out of business.

[trish]

We should just put a dollar bill in the Bureau of Standards and declare all dollars are worth exactly what that one's worth...problem solved

[hippifried]

We should just put a dollar bill in the Bureau of Standards and declare all dollars are worth exactly what that one's worth...problem solved

That's it. It's worth exactly what you declare it to be worth. That's all the currency marketeers are doing. Get US dollars out of that scam & inflation stops.

[lahabra1976]

Of course with all this bailout stuff and people pointing the finger to Wall Street, "dirty" CEOs....but it is the government and the democrats where it all started, as shown by quotes below

* In 1977, Carter, along with a Democrat Congress, created a worthy
project with noble intentions**The Community Reinvestment Act.** Over
strong industry objections, it mandated that all banks meet the credit
needs of their entire communities.** *

* In 1995, President Clinton imposed even stronger regulations and
performance tests that coerced banks to substantially increase loans to
low-income, poverty-area borrowers or face fines or possible
restrictions on expansion. These revisions allowed for securitization
of CRA loans containing subprime mortgages. *

* By 1997, good loans were bundled with poor ones and sold as prime
packages to institutions here and abroad. That shifted risk from the
loan originators, freeing banks to begin pyramiding and make more of
these profitable subprime products. *

By STEVEN A. HOLMES
Published: September 30, 1999
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer (and current Obama advisor) . ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market''

As you can see it was your so called democrats who are supposely for the poor and minority that were part of the mess. No wonder why they supported the bailout. You have to understand it isn't necessarily Fennie Mae, WaMu to blame, its the fact the government interfering with their business. The government wanted everyone to own houses, but this simply can't happen. They put pressure on these banks to do this. And now we are paying for that. Governments shouldn't interefer with business enterprises. We blaming the rich and Wall Street for the problem, but the poor and working class have their stake it also. Who do you think was writing and pressuring their government representatives to push these acts so the average person can "own a home." In the end, everyone as a whole is responsible for this mess, the poor for pushing the government to do this, the government for listening to them (of course, they have to, no choice), the rich and Wall Street for not telling them to "butt out."

[trish]

Don’t be an idiot. The banks are collapsing all around us not because they're being forced to give out vast numbers of bad loans against their will. Large commissions for each loan procured provided the motivation to approve loans that never should’ve past muster. People who were obvious risks were told, “No problem, you easily qualify for the loan,” not because of the law, but because of the commission. The fact that regulations were no longer in place (thanks to first to Keating, McCain et. al and later to Bush II) and there was no oversight, provided opportunity for this unscrupulous, if not criminal practice.

[El Nino]

Good points on that Trish. There are even more deeply rooted problems with the economy however.

[El Nino]

Here's some United States history that the public school systems didn't teach you.

http://posmedprod.webs.com/fractionalreservebanking.htm

[Paladin]

Of course with all this bailout stuff and people pointing the finger to Wall Street, "dirty" CEOs....but it is the government and the democrats where it all started, as shown by quotes below

* In 1977, Carter, along with a Democrat Congress, created a worthy
project with noble intentions**The Community Reinvestment Act.** Over
strong industry objections, it mandated that all banks meet the credit
needs of their entire communities.** *

* In 1995, President Clinton imposed even stronger regulations and
performance tests that coerced banks to substantially increase loans to
low-income, poverty-area borrowers or face fines or possible
restrictions on expansion. These revisions allowed for securitization
of CRA loans containing subprime mortgages. *

* By 1997, good loans were bundled with poor ones and sold as prime
packages to institutions here and abroad. That shifted risk from the
loan originators, freeing banks to begin pyramiding and make more of
these profitable subprime products. *

By STEVEN A. HOLMES
Published: September 30, 1999
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer (and current Obama advisor) . ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market''

As you can see it was your so called democrats who are supposely for the poor and minority that were part of the mess. No wonder why they supported the bailout. You have to understand it isn't necessarily Fennie Mae, WaMu to blame, its the fact the government interfering with their business. The government wanted everyone to own houses, but this simply can't happen. They put pressure on these banks to do this. And now we are paying for that. Governments shouldn't interefer with business enterprises. We blaming the rich and Wall Street for the problem, but the poor and working class have their stake it also. Who do you think was writing and pressuring their government representatives to push these acts so the average person can "own a home." In the end, everyone as a whole is responsible for this mess, the poor for pushing the government to do this, the government for listening to them (of course, they have to, no choice), the rich and Wall Street for not telling them to "butt out."

From 1995 thru 2006 we had a republican controlled congress, so they are LEAST half to blame, and since 2000 it's been a republican admin too.

This is mainly a republican sourced problem with Bill clinton getting 98% of the democrats share of the blame! :P

[hippifried]

All currency is fiat & always has been. Gold itself is fiat because its value is merely declared. Its availability for circulation is subject to hoarding. That's why it was replaced with other currency forms. The dollar was pegged to gold until 1970 or 71, over a half century after the creation of the federal reserve, but there's never been enough gold or silver reserve in the treasury to back the currency. All this gold standard stuff is a bunch of hooey & way outdated.

We just need to close down the currency markets & stop thinking of money as a commodity. Currency exchange rates should be set between central banks & national treasuries. There's no exchange medium to trade exchange mediums. The entire currency exchange today is geared to short selling. Basically, you just swap for one currency that you think might stay stable for a couple of weeks & keep swapping for the ones that you think have bottomed out, while the others are falling. It inflates the numbers, but the value per unit is lowered. Profit is made through fees because it's all done on a borrowed dime, & there's a lag between the actual depreciation of the currency in the market & the effect in the originating nation.

Our inflation woes started the day Richard Nixon depreciated the dollar & floated it to find some imaginary natural market value. Its purchasing power is less than a tenth of what it was in 1970. It's criminal. Money isn't a commodity. It's the exchange medium for trading commodities. There's no reason for it to be subject to the rules of supply & demand. We need to rethink this whole thing. All the economic theories we're working with come from the 18th & 19th centuries, before the advent of branch banking & certainly without a thought about instantaneous worldwide trading. It's pretty obvious that this shit just ain't workin'.

[El Nino]

Congress has the power to mint money. Article 1, clause 8 of the Constitution grants Congress the exclusive right to coin money, issue currency, and regulate its value.

This right was taken from Congress in 1913 and granted over to private foreign bankers (the Fed) who now print our money and loan it to our government with an interest (hence the federal income tax and the IRS body) This is what the big problem is, and this can not be debated. Put the government in control of printing our money again (as it constitutionally should anyway) and many burdens will be lifted (super inflation, excessive taxation, lifelong debt, etc). Obama or McCain don't even talk about these hardcore issues. They are hacks for the power brokers. Obama's "Change" slogan is completely disingenuous. 100% Wake up sheep boy