Post by looter on Nov 21, 2011 20:47:53 GMT -5
The margins were goofy on the first thread. I'll try this I guess.
What is more likely to happen is just like the 80's/90's scenario ...low raw ingredient prices and high inputs = misery index of epic proportions for most. The new crooks incharge are hell bent to destroy the whole fabric of this country and world economy. They seem to think they will become kings or something. Egypt is back to protesting and killing each other again. Can you say "dark ages" ?
These people should take a lesson from what is happining over there ...They take their leaders out and shoot/hang/behead them.
The misery index is derived from a combination of inflation and unemployment. It was high in the 1970's and very low in the 1980's and 1990's.
The present problem is the result of the institutionalization of fractional reserve lending. The inverted pyramid has been growing for a full century. No leader in the world was alive when it started. We are just along for the ride.
If you ever get a chance to learn about the 19th century market crashes, I highly reccomend making the most of it. There was some fractional reserve lending before the Fed, during the gold standard, and its as old as civilization itself.
There was a time when fractional reserve lending was strictly outlawed, and of course it happened regardless. I can guarantee members of the seedcorn industry are fractional reserve selling some corn numbers as I type this. Next spring when the run on the seedcorn warehouse bank hits, guys will be moved over to something they didn't order.... in the exact order they show up for their seed.
The only proven solution to fractional reserve lending is a rumor of it. A bank run results, and honest banks who don't lend more than it has (by a factor of 1,000) survive the bank run. The crooks go broke. The lost savings fuel the rumors of the next bank run. Like a vulture keeping the desert clean, the bank run, and only the bank run, keeps lenders honest.
Today the leverage banks use is just amazing.
I picked up a copy of "Fortune" Magazine from Dec 1999. Always good for a belly laugh. In it was a full-page ad from AIG. (Remember AIG? The outfit that insured mortgage lenders?) The ad said; "Because the biggest risk is not taking a risk at all."
BAHAHAHAHAHAHAAH!!!!!!!!!!!!!!!!!!!!
AIG took in BILLIONS every year in PMI (insurance) and they couldn't pay out enough money to insure an outhouse when it was finally claim time. They were more broke than the secretary answering the phone.
We've been told the CME could pay us if the guy on the other side of the trade couldn't. Really? How do we know the CME is AAA+
Wasn't AIG also Triple A?
Planting time is the only way to test integrity in the seed business. Deflation is good. It's the ONLY way to test solvency. For nearly a century economics proffessors taught ways to avoid deflation altogether via monetary policy. The FDIC (moral hazzard on steroids) and every aspect of economic policy spawned in the rotten 20th century was designed with a sole purpose in mind.... to defeat the inferno of deflation.
Well folks.... you can stop every forest fire for decades... but all you do is make more fuel for the inevitable firestorm. This is where we are.
A bank in Belgium speculates on Greek bonds and loses. It then can't pay Wells Fargo who lent them the money. Wells can't pay its inter-bank loans to Citi or (OneMain or whatever they call themselves) and so on so forth. The to 1,000-to-1 leverage on customer loans and another 1,000-to-1 leverage on inter-bank loans means the tiniest hiccup means nobody anywhere has any money at all.
Credit = money = faith. It could all vanish by the time you wake up. The results of the deflationary spark today make the standard 19th century bank run look like a camp fire in the middle of the Sahara. When this blows up it will be the sun itself.
People will panic, and all bailout restraint will get thrown to the wind. The Fed has an infinite firehose with infinite PSI. It will quelsh the deflationary fire, but to do so it will need complete control over money, banking, industry, and economic policy. It will get the keys to the whole works, and shell shocked citezenry will hand them over.
This is the future and only Ron Paul would know enough to stop the last part from happening. As an Austrian School economist, he believes the sole answer is to let the fire of deflation burn itself out, ridding the system of malinvestment. He wouldn't get re-elected because asset values would be close to zero after a very short period, and the call to help out folks would overwhelm.
If by some miracle he did get a second term, the recovery would be marvelous (As long as it were based on ZERO FINANCIAL REGULATIONS!!!!!) If deflation were more often/common, the fraudulent fractional reserve lending wouldn't become a threat. It would get punished early and often.
These people should take a lesson from what is happining over there ...They take their leaders out and shoot/hang/behead them.
The misery index is derived from a combination of inflation and unemployment. It was high in the 1970's and very low in the 1980's and 1990's.
The present problem is the result of the institutionalization of fractional reserve lending. The inverted pyramid has been growing for a full century. No leader in the world was alive when it started. We are just along for the ride.
If you ever get a chance to learn about the 19th century market crashes, I highly reccomend making the most of it. There was some fractional reserve lending before the Fed, during the gold standard, and its as old as civilization itself.
There was a time when fractional reserve lending was strictly outlawed, and of course it happened regardless. I can guarantee members of the seedcorn industry are fractional reserve selling some corn numbers as I type this. Next spring when the run on the seedcorn warehouse bank hits, guys will be moved over to something they didn't order.... in the exact order they show up for their seed.
The only proven solution to fractional reserve lending is a rumor of it. A bank run results, and honest banks who don't lend more than it has (by a factor of 1,000) survive the bank run. The crooks go broke. The lost savings fuel the rumors of the next bank run. Like a vulture keeping the desert clean, the bank run, and only the bank run, keeps lenders honest.
Today the leverage banks use is just amazing.
I picked up a copy of "Fortune" Magazine from Dec 1999. Always good for a belly laugh. In it was a full-page ad from AIG. (Remember AIG? The outfit that insured mortgage lenders?) The ad said; "Because the biggest risk is not taking a risk at all."
BAHAHAHAHAHAHAAH!!!!!!!!!!!!!!!!!!!!
AIG took in BILLIONS every year in PMI (insurance) and they couldn't pay out enough money to insure an outhouse when it was finally claim time. They were more broke than the secretary answering the phone.
We've been told the CME could pay us if the guy on the other side of the trade couldn't. Really? How do we know the CME is AAA+
Wasn't AIG also Triple A?Planting time is the only way to test integrity in the seed business. Deflation is good. It's the ONLY way to test solvency. For nearly a century economics proffessors taught ways to avoid deflation altogether via monetary policy. The FDIC (moral hazzard on steroids) and every aspect of economic policy spawned in the rotten 20th century was designed with a sole purpose in mind.... to defeat the inferno of deflation.
Well folks.... you can stop every forest fire for decades... but all you do is make more fuel for the inevitable firestorm. This is where we are.
A bank in Belgium speculates on Greek bonds and loses. It then can't pay Wells Fargo who lent them the money. Wells can't pay its inter-bank loans to Citi or (OneMain or whatever they call themselves) and so on so forth. The to 1,000-to-1 leverage on customer loans and another 1,000-to-1 leverage on inter-bank loans means the tiniest hiccup means nobody anywhere has any money at all.
Credit = money = faith. It could all vanish by the time you wake up. The results of the deflationary spark today make the standard 19th century bank run look like a camp fire in the middle of the Sahara. When this blows up it will be the sun itself.
People will panic, and all bailout restraint will get thrown to the wind. The Fed has an infinite firehose with infinite PSI. It will quelsh the deflationary fire, but to do so it will need complete control over money, banking, industry, and economic policy. It will get the keys to the whole works, and shell shocked citezenry will hand them over.
This is the future and only Ron Paul would know enough to stop the last part from happening. As an Austrian School economist, he believes the sole answer is to let the fire of deflation burn itself out, ridding the system of malinvestment. He wouldn't get re-elected because asset values would be close to zero after a very short period, and the call to help out folks would overwhelm.
If by some miracle he did get a second term, the recovery would be marvelous (As long as it were based on ZERO FINANCIAL REGULATIONS!!!!!) If deflation were more often/common, the fraudulent fractional reserve lending wouldn't become a threat. It would get punished early and often.