Asbytec

The Inflation / Deflation Forces Battles On

I am of the camp the Fed cannot inflate enough. It can and has increased Fed power money, but that is merely a fraction (was less than 8%) of total global liquidity. That's the money the Fed can directly affect.

If lending picks up again, we'll see liquidity sky rocket. Equities and (newly regulated) derivatives will help and the velocity of money should pick up steam. But until then, we just cannot expect to run an economy of the 90's on the liquidity levels of today.

This also speaks to dollar strength, in my view. Less dollars are trying to close a reduced amount of global deals. It's a tricky balance.

The Inflation / Deflation Forces Battles On

I am of the camp the Fed cannot inflate enough. It can and has increased Fed power money, but that is merely a fraction (was less than 8%) of total global liquidity. That's the money the Fed can directly affect.

If lending picks up again, we'll see liquidity sky rocket. But until then, we just cannot expect to run an economy of the 90's on the liquidity levels of today.

This also speaks to dollar strength, in my view. Less dollars are trying to close a reduced amount of global deals. It's a tricky balance.

The Coming Consequences of Banking Fraud

Warm Paw, I'd argue the housing crisis was the trigger, not necessarily the root cause or the problem, setting our over extended financial system into a tail spin. Being over extended, making too much money than can be supported by our economy or consumer debt, is the problem.

Too much synthetic liquidity floating around the globe fueling unsustainable growth, especially in China. Now that the liquidity bubble has burst, we are in real trouble. The central banks simply cannot reinflate to keep up with the deflation.

I am not really a conspiracy theorist, but there does seem to be some collusion between the powerful people in the world to save the banking system. It is a source of great wealth for the oligarchs, as long as folks are employed and pay off their debt. Now that the worker can't pay off debt because of high interest rates or unemployment, the money well dries up fast, doesn't it? That's because the wealth effect is nothing like real wealth. With real wealth, the consumer doesn't need to borrow from those who really are wealthy.

Right on, Jason...I am proud of our constitution and declaration of independence. The Federal reserve act is unconstitutional, in my view. So is a fiat dollar.

Fannie Mae: Trading Derivatives...and Losing

Good for them...

AIG vs. America

Agreed. The bonus issue is a red herring and makes a great headline for the average couch potato. It's the CDS mess we are paying that should be getting everyone's goat. It get's mine.

The Difference Between TARP and TALF

Can I still get in on a CDS that guarantees me a return if Paulson turns out to be a nice guy? I'd like to bet against it.

If I understand correctly, it sounds like he's trying to short circuit the CDS failures so banks won't have to pay on bets against consumer default? What about paying out on bets they will not default? Is he ensuring someone will still have to pay? This is getting confusing.

My understanding is the banks are weighed down heavily by debt they already owe. The banking system should never engage in insurance functions and gambling. I hope the act of congress approving such activity is repealed and burned.

Man, this is a mess. Maybe another great depression is just what we need to reboot our economy.