zanardm

Recent Policy Decisions and a Greater Depression

The more debt the gov runs up, the higher yields rise, and hence interest rates. Therefore this further shuts down the housing market. Why not get debt down, yields down, and hence interest rates down for houses, cars, and consumers in general? Thus the quickest way for the economic tide to rise for all of us? But a lot of time will be required. Is this too simple a plan to advance and execute? Forgot about the big banks; most of the banking system (8000+) is stable.

Excessive Systemic Debt: The Primary Cause of Our Current Crisis

Neither Congress, new or old adm, nor the Fed, can say no to more debt, the cause, not the solution, to our current private sector deleveraging environment. The Fed is critical, and must be re-structured now as an Advisory Council of 5-7 economists in lieu of just a Fed chairman. This could be somewhat modeled after the ECB; en.wikipedia.org/wiki/... . Command and control of the money tree is too important to be entrusted to one or two. Such Advisory Council would have open voting, with the majority deciding; all minutes would be open, and dissent would be encouraged. Will Congress investigate the current Fed and it's loose actions; might even a Grand Jury be required, if all accounting is not legal etc.?

The End of the Economy As We Know It?

Can one fully deleverage without ALL bubbles deflating? As mentioned by others, is the ultimate bubble, the treasury bubble coming? Was foreigners' markedly decreased purchase of Fannie Mae and Freddie Mac securities, a harbinger of the future for treasuries? Would the resultant lack of government ability to borrow be what is required to deleverage politicians? Possible dual currencies here, like for Europe, since there is greater faith in ECB than our Fed? Possibly an attempt by U.S. to borrow in eurodollar and yen denomination securities overseas? Is this the worse case scenario? Would a U.S. budget deficit less than $1 trillion+, and other fiscal conservative measures, send the right message to creditors, both domestic and foreign? Or is it the same old spend and spend (code word for debt); what did the vote on bail out indicate? The private sector is deleveraging; but not the public sector. A generation (25 yrs) for the excesses of the last 25 yrs, to be deleveraged? Good luck to all of us.