Comments on: Fire Chief Bernanke

By: Don

Don — Wed, 04 Mar 2009 21:24:10 +0000

The good news is that the price of Aluminium has dropped by over 50%. It makes those tin foil hats so much cheaper for you.

By: Jon Bain

Jon Bain — Wed, 04 Mar 2009 19:50:52 +0000

Go back 40 years to the real origon of this mess : Nixon.
Since Nixon faked USA's moon landings, http://www.poseidons.net/space/moonwalker.htm - made paper worth more than gold, it also instigated numerous wars of aggression (Vietnam, drugs, Cuba, Iraq, Afghanistan (actually a drug war)), it has just been a matter of time before the cock crowed.

It has maintained an illusion of wealth by dominating media, rigging exchange rates, and international monetry organisations.

One enormous Ponzi bubble is about to go POOF!

By: How to Recover From a Depression « RedSt8r

How to Recover From a Depression « RedSt8r — Tue, 03 Mar 2009 19:27:06 +0000

[...] Fire Chief Bernanke (thx Daily Reckoning Australia). Article by Bill Bonner asking how will the economy improve? Bill asks, “What are they [assets such as houses and stocks] worth, now that the economy that created them no longer exists? That’s the big question. The U.S. economy has been expanding for the last 60 years - largely by increasing consumer spending and debt. Now, neither consumer spending nor debt is increasing.” Bill goes on to ask, “… if it is no longer an economy that grows by increasing consumption and debt…how does it grow at all?” [...]

By: Jeff Miller

Jeff Miller — Tue, 03 Mar 2009 19:16:23 +0000

I think I know how the economy will recover but it certainly won't be from government spending. See the quote below.

New Deal
In 1933, Roosevelt became President and appointed Morgenthau governor of the Federal Farm Board. In 1934, when William H. Woodin resigned because of poor health, Roosevelt appointed Morgenthau Secretary of the Treasury (an act that enraged conservatives). Morgenthau was an orthodox economist who opposed Keynesian economics and disapproved of some elements of Roosevelt's New Deal. In New Deal or Raw Deal?, Burton Folsom quotes Morgenthau, testifying before the House Ways and Means Committee in May 1939: "We are spending more money than we have ever spent before and it does not work. I want to see this country prosperous. I want to see people get a job. We have never made good on our promises. I say after eight years of this administration we have just as much unemployment as when we started and an enormous debt to boot."
(source: http://en.wikipedia.org/wiki/Henry_Morgenthau_Jr)

What scares me is that the only recovery is for demand to rise to prior levels. If we can't do that through credit anymore (and we can't) then, and this is the scary part, perhaps the only solution is time. Time for population growth to rise enough to provide the necessary demand. Thus we are talking creating a new generation of people which usually takes about 25 years. Told you it was scary.