Liberty Forged

the State has no money of its own, so it has no power of its own. ` Nock

some notes on the economic bailout

Posted by Jesse on November 3, 2008

as far as a real solution…there are things that can be done.
true regulation means not allowing the banks to loan money they don’t have. if they do, that is a risk that they take at their own peril. this should be a well understood economic rule. profit and loss. but when the government allows this policy of loaning out almost all the money deposited, that is very dangerous. it threatens the whole structure and costs the taxpayer a lot of money. not to mention the destruction of the purchasing power of the dollar through the inflationary policy inherited with a “liquidity mentality”.

this inflation and ultimately creation of credit bubbles is why this current situation is not isolated. assets move from one sector to another. it is only spreading and deepening as the true value of all these assets and bonds become known. as marc faber says, the next big event will probably be bonds. america is the worlds largest debtor after all. the seismic shift in the global markets is a great opportunity for the other nations of the world to gain a foothold in the economic world and that is the dangerous game of geopolitics.

there is money in the world. tons of money. but investors are not confident for very good reason. credit can only be given when there is capital. and government (potential) action also influences market behavior. they are waiting to see what the fed does. the other central are following suit mostly.

i would suggest watching
“money, banking and the federal reserve”
(youtube, google, etc.)

one of the thing that makes the fed so powerful is its monopoly on money. in truth, this is the only way such institutions would exist for any significant amount of time. legal tender laws are a major prohibition to a competitive market in banking.

what people are lead to believe is that banks can’t be trusted to regulate money and loans, etc….and that only a central bank and government can perform this operation. but what is the logic behind this?

listen to soros, for example. does he identify the problem? what is his solution? one will find the causes are dubious, and the solution is unknown.

this is not a man who should be listened to in matters of peoples wealth.

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