Xorthfred

How Will This Depression Differ from Previous Ones?

I am not going to throw rocks at the inflationists or the deflationists because I feel that they could both be correct with the key variable being the timing of the advance or decline in the money supply. First comes the deflation, which would normally run its course over some indeterminable amount of time. However, the FED and fiscal policy are pushing the monetary base and velocity, thus counteracting the deflation. Milton Friedman's studies indicated that inflation follows quantitative easing by app. nine months.

Monetary easing began on Sept. 27, 2008. There was virtually no increase in the monetary based over the previous 12 months. I invite you all to do the math. The current deflation is partially the consequence of tight money from Sept. 2007 to Sept. 2008.

Why This Bailout Can't Work - And What Will

ONE REFORM WOULD REVERSE THE DEATH SPIRAL: go back to the pre-Sarbanes Oxley accounting rules. If a mortgage is performing, you shouldn't have to write it off. Period. No one should invest in any bank or insurance company until the quarterly mark to market death spiral ends with mortgages selling based on a 75%+ annual return to the buyers or mark to market accounting of performing mortgages comes to an end. It is just a matter of how heavy the hand of govt. intrusion into the markets will push this economy down!!!!!!!!1