Myths ruined the economy

Is it more Wall Street propaganda that the Fed is "printing large amounts of money," or Wall Street and big banks in their daily propaganda to the media aimed at wiping you out?

When government prints large amounts of money, "monetizing the debt" like Germany after World War I, will that not inflate the money, sending prices sky-high? Or is it another outright lie? Don't they get money by borrowing, not printing?

I recently read that U.S. Treasury auctions — where U.S. government bonds, notes and T-Bills are sold — are setting records by selling over $50 billion a day in new government debt. Demand seems to be more than supply when investors are standing in lines buying at very low interest rates. This will keep their money safe. They can't do that with stock, corporate debt, bank or mutual funds. In deflation, they don't need to earn interest — just hold onto their money. As prices fall, they can buy for pennies on the dollar. I read that borrowing isn't inflationary — just the opposite, it sucks the money out of the economy, decreases the money supply, and is deflationary.

Outcome: Thieves get their bailout money, and none of it has entered the economy. Why? Banks generally lend it out again and again. The loaning multipliers go to work, and trillions of dollars leveraged (with derivatives) up to a hundred times in new debts! It's the greed of derivatives that got us into this mess. Can the financial system ever be saved, regardless of how many bailouts? It's like giving free heroin to a drug addict. Is there something wrong with an honest accounting system instead of Black-Scholes?

The English thought that Hitler was no threat. The Spanish thought the Armada was invincible. The French thought the Maginot Line would protect them. The Americans think Obama can walk on water. And if the unions run the auto company, everything will be rosy. We will pay the price for believing in myths.

We have thrown our children's wealth away due to the myth of derivatives, the housing bubble, and the myth that the stock market would not fail and we would not fall into a depression. Now we want the power-hungry Bolshevik Unions to take over. May God help us all, because we violated the basic rule of capitalism. Let these thieves go bankrupt!

Mac Cator
Lodi

Reader Feedback

Gator wrote on Jul 5, 2009 12:35 PM:

" Pat Maple, Question, what is your part in the problem and where is your accountability?? Your post is what I refer to as finger pointing, shifting
the blame.. I said every one has to carry some blame, Look in the mirror. "

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Pat Maple wrote on Jul 5, 2009 12:18 PM:

" Vote Them Out! All of them. One lie precedes another and follows the other.

If you have a duck, a duck in front of a duck and a duck behind a duck...how many ducks do you have? "

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dogs4you wrote on Jul 4, 2009 2:31 PM:

" Well said Gator, Pelosi and Reid are lost causes, but closer to home I would enjoy seeing that Bay Area liberal Jerry NcNerney`s face if and when he read your post. Perhaps he could learn allot in a short period of time since he was a supporter of Cap and Trade Legislation.

If anyone receives the Record, I encourage you to read the Letters this morning. "

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danielh wrote on Jul 4, 2009 11:36 AM:

" This guy doesn't have a clue.

He writes, "I recently read that ... "
What does he read?

He refers to derivatives.

A derivative is where I say, "I'll sell you 100 ounces of gold, and I'll hold the gold in my safe. I'll guard and protect that gold, and I promise I won't create a certificate for it again, and sell it again."

Ditto for the derivatives on stocks. "

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Gator wrote on Jul 4, 2009 9:05 AM:

" Myths ruined the economy!! Really!! Let me start with Pogo, We Have Met the Enemy and it are us!! No truer words were ever spoken…We have managed to go from the can do generation to the I can’t. We expect to be taken care of from cradle to grave by the government…We let wanton greed
put us in this mess, greed from top to bottom.. Housing bubble, flat out the result of greed. Point fingers all you want facts are facts. Living on credit,
working for wage and benefits that helped push manufacturing off shore.
No energy policy, continuing to drive gas guzzlers, it goes on and on and on!! We have gone from the Penthouse to the outhouse in some 60 years
the country has the moral values of an alley cat and an Education system
that has shot its self in the foot.. We broke it we can fix it, you just have to
Want it bad enough…Look in the mirror… "

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