I ‘love’ governments. They cause the problem, then wring their hands because ‘you caused it’ and then come up with a cure that is worse than the disease.
Let’s look at the current US financial quagmire.
- First Greenspan expanded the M3 to the extent that it not only assisted in the creation of a stock market bubble but led to a real estate bubble as well as a credit bubble. When the ‘s… hit the fan’,
- The FED first denied there was a long-term problem – remember that it first denied a sub-prime crisis,
- then from Bear Stearns and subsequent crises, it kept assuring us that the problem was contained.
- It solved the problem by throwing more and more money at it – reported to be 1.6T to date (and growing? since no firm final figure can be arrived at).
- This increase in the M3 will cause the CPI and inflation number to rise exponentially. I expect the first rise to occur in 2008 while ShadowStats says 2009.
- Let’s not mention the total ban on Short Selling on about 799 stocks. Like lemons the other countries have fallen into line. I wonder if the CFTC is contemplating a ban on short selling of futures?
Of course the FED is only trying to help (??). With help like that from my ‘friend’ I don’t need any enemies.
There were 3 interesting pieces along the lines I have written:
- Thank You for Your Support of Bailouts-R-Us
- Prepare to Be Robbed — It’s For Your Own Good, And Yes, Resistance IS Futile
- The Tinker Bell Treasure
All are interesting reads.