bobomite

Is the Second Great Depression Imminent?

We should be fine... If the Federal Reserve can create trillions of dollars to give to banks in the space of 2 months, then think of all the solar panels they could buy.

Defensive Positioning in the Bailout's Absence

bonified -

The way we are currently *choosing* to create money is through debt only. (Well and the FOMC.)

The constitution authorizes congress to issue debt free currency. We (America) have a record as the longest users of debt free currency in history. But we gave that up.

It's all about choices.

Defensive Positioning in the Bailout's Absence

Great article. I totally agree - pumping up a deflating bubble makes no sense in the greater scheme of things. And I agree the stock market is inflated as well.

You know, I was talking to a friend about how things were when we grew up in the 80's. Most people didn't have credit cards, or if they did they didn't go into a constant state of debt. People would actually put things on layaway and pay for them over time before they got the goods.

We were pondering that concept and then started thinking... Society functioned pretty well then. People were happy, and didn't mind not being able to purchase $2k home entertainment systems on a whim.

House prices had ups and downs but were basically stable. People had savings accounts and actually planned how they would save. Life was lived, people were fed, things worked just fine.

So then we started wondering - what if this utter explosion of consumer debt and credit availability over the last 25 years was not a good thing at all? What if these massive asset bubbles and crashing deflations were very unhealthy for everyone except the banks at the top of the food chain?

Anyway what I see today is consumer negative savings rate, climbing credit card debt, spiraling government debt...

Kind of makes you wonder what exactly we are trying to build here - a day traders never-never land? Or a functioning country?