Chile Forum

This is to continue and move our banking conversation currently at the end of the Riots thread...

StevenDC » Fri Aug 12, 2011 8:15 pm

john wrote: The real economic issue in the UK (as in the US) is a 'demand' problem which will necessitate the implementation of further government stimulus programmes (for my British friends)in order to put people back to work. .


The "real" problem is unserviceable interest on an unserviceable debt. The "real" problem is people have awakened to the fact that "free" money must eventually be paid back... and they don't have it to pay back. The piggybank/ATM on HELOCs is now closed. The "easy" money on flipping houses to the next greater fool is gone. The 0% credit card is like so yesterday. So they stop buying and start paying debt.

What you are proposing is adding more debt to temporarily fix a debt problem, thereby exacerbating the problem when the final bill comes due. How long can you keep postponing the final payment by borrowing the current payment due?

And now the question will become - borrow from who?

john » Fri Aug 12, 2011 9:25 pm


I respectfully disagree with your analysis. The "real" issue should be about job creation not short term debt ceilings. The link below highlights this point.

Here's one of the quotes from this NYTimes article (from Bill Gross who runs the giant bond-trading firm Pimco):

"An anti-Keynesian, budget-balancing immediacy imparts a constrictive noose around whatever demand remains alive and kicking," he wrote. "Washington hassles over debt ceilings instead of job creation in the mistaken belief that a balanced budget will produce a balanced economy. It will not."

http://www.nytimes.com/2011/08/13/busin ... lobal-home

jessicak1234 » Fri Aug 12, 2011 10:25 pm
the real problem is the federal reserve printing unsound money that the government must pay interest on...how ridiculous and unconstitutional.

john » Fri Aug 12, 2011 11:08 pm


You may characterize it as ridiculous, but it is not unconstitutional.

gailwillow » Fri Aug 12, 2011 11:32 pm
John; I believe it is unconstitutional, our founding fathers, who much to many people's dismay, were actually very educated and forward-thinking men. Even though we did not have such miserable concepts as to printing money out of thin air as our federal reserve does with the full consensus of our present miserable government, they did percieve that some similar game could occur.

"No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts."

Article 1, Section 10, united States' Constitution

jessicak1234 » Sat Aug 13, 2011 12:50 am

it is unconstitutional indeed. Congress has the authority to coin money and only gold and silver should be legal tender. The notion of a central bank is contradictory to this.

john » Sat Aug 13, 2011 12:57 am

The authority for the FED to print money is the Federal Reserve Act (enacted Dec. 23, 1913) which is an act of Congress (signed into law by President Woodrow Wilson) that created and set up the Federal Reserve System and granted it the legal authority to issue Federal Reserve Notes (now commonly know as the U.S. Dollar) and Federal Reserve Bank Notes as legal tender.

okay...continue....

jessicak,

Thanks for setting up the new thread.

I realize it's a bit unusual to reply to a thread based on a monumental disinterest in the opinions originally expressed... but do please bear with me...

jessicak1234 wrote:[...] only gold and silver should be legal tender. The notion of a central bank is contradictory to this.

I think you're on a loser there. I have the impression that events may have passed you by. Things haven't been like that for a very long time: I recall a quote from a novel in the 1970s to the effect that one had to run to the bank to convert one's dollars into real currency before they were devalued (hasn't anyone here read "Shibumi"?). The US has devalued (printed more dollars... J~G, I can hardly believe Alan Greenspan said what he did in the video you quoted) with impunity since at least then.

I've lost at least 10% of my purchasing power over the past 12 months... and I've demanded a 20% increase in the dollar rate for my next contract to take account of the dollar's weakness and my inability to run quickly to the bank... it would be deja vu all over again except it's never really ended... we've all been played for fools.

FrankPintor wrote: The US has devalued (printed more dollars... J~G, I can hardly believe Alan Greenspan said what he did in the video you quoted) with impunity since at least then.

I've lost at least 10% of my purchasing power over the past 12 months... and I've demanded a 20% increase in the dollar rate for my next contract to take account of the dollar's weakness and my inability to run quickly to the bank... it would be deja vu all over again except it's never really ended... we've all been played for fools.

well f~p - will your clients take kindly to your 20% rate increase?
btw - have you ever thought of asking to be paid in Au~Ag?


whatever - as one "fool" to "another"...
g~j will thus kindly cross~link back to the video...
so others also might "hardly believe" said "impunity" proclaimed again...

In this MSNBC interview, Greenspan was asked,
"Are US Treasury bonds still safe to invest in?"
You have to listen to his answer to believe it.
Greenspan sits there and utters a single sentence that basically says what no dollar-debt holder wants to hear:
We will devalue your debt into the ground by cranking up the printing presses.

only 24 seconds - just watch~listen

http://www.youtube.com/watch?v=q6vi528gseA&feature=player_embedded