If you have time to read a similarly sad story 2000 years ago, google for “my chau trong thuy”

It’s the blame game now we see.

I think he has hit the how on the head but has left out an important why: greenspan was convinced the US was too wealthy vis a vis the rest of the world.

The Fed’s lack of concern in sustaining the country’s wealth has been a case of gross and criminal negligence.

One problem though, left me hangin:
“World financial markets would destabilize if they perceived that the dollar was about to depreciation enough to restore the US to external balance.”

What he is saying to me by not offering a way out is that:
“World financial markets *WILL* destabilize.”

Ahem.

From TheStreet.com:

“Mishkin’s absence on the Fed’s board will not prevent the central bank from taking similar action (BS rescue and TAF)in the future, due to rules enacted following the terrorist attacks of Sept. 11, 2001. Four votes are now required for such actions.”

http://tinyurl.com/4lcelg

http://www.commondreams.org/archive/2008/03/16/7721/

Kitco commentary: “Mishkin isn’t just a normal Fed governor. He is one of Ben Bernanke’s closest friends. The two served at Columbia university together and in 1997 they wrote a book together calling on central banks to make public targets for inflation. Mishkin’s views dovetail with Bernanke’s”
Kitco commentary: Mishkin argues that “the task for a central bank confronting a bubble is not to stop it but rather to respond quickly after it has burst.”

Why they create Bubbles
In a debt based economy, there needs to be a balance where they need the workforce to be so it continues to borrow. The whole economy being debt based is basically how they get their cut and how they stay in power. This is why when globalization decreased the price of everything, America started to create bubbles on purpose. Otherwise the prices of everything would sink and people wouldn’t need debt. They say the Great Depression was caused by deflation and that’s what they’re watching for, but that’s bullshit – it just means that people would need to borrow less and they wouldn’t be able to hold us in check.

Low interest rates means money is either cheap or free and encourages borrowing for the sake of investment. This and some other speculations and legislation are how bubbles are blown up for the sake of putting things out of working people’s reach thus forcing them to continue to borrow. In this economy model it is the banks which are meant to be the middle men between the consumer and assets. If the consumer was in a position to accumulate savings then the demand for banking would fall this is why their policy has been aimed at eliminating our ability to save.

Central banks can thus tweak exactly how well to do a population of a country is. Bull market, bear market, it’s all a matter of timing. There’s no such thing as free market everything is manipulated and orchestrated.

But wages for working Americans have been falling for decades. Pensions, health insurance are disappearing, and college is vastly more expensive.

The truth is, this lecture should be delivered to American elites, the top 1%, who have grabbed vastly more than their share in this highly skewed era.

Also, long term interest rates. Remember Greenspan’s ‘conundrum’? Now we know (as if this wasn’t obvious) that the peggers were driving down long term interest rates. That is part of the reason for our insane credit binge & housing bubble.

This fellow points to the global feedback loops, but there’s no info at all at how to deal with this situation. What to do? These pegs are still a problem.