The Problems as I see them

john.roberts85 · Sep 6, 2008

ViRedd said:
I would call it a depression caused by an expansion of money/credit followed by an over-reaction of monetary/credit contraction, all orchestrated by the Federal Reserve's faulty monetary policy. Kinda like the housing market today. No, not kinda like it ... exactly like it.

Paper money is the money of slaves. Gold is the money of free men. Honest money to the rescue!

Vi

I don't think we disagree much here. I'd say that Hoover deserves quite a bit of blame though. I've yet to see much of a contractionary policy by the Fed so far (actually the opposite has occured): Historical Changes of the Target Federal Funds and Discount Rates - Federal Reserve Bank of New York Scroll down and see the fantastic job Volcker (a real economist unlike Greenspan) did, too.

medicineman · Sep 6, 2008

apotsmokinsniper said:
I heard that the U.S. is gonna switch the currency to canadian money. But i think you are right on number 9, gold is the only money that holds true value and these notes that trick people into thinking it is money has just gone to shit. We need new money. Jameng

How about silver, it a hell of a lot cheaper and more available than gold. The mountains in Mexico are lined with silver.

mockingbird131313 · Sep 6, 2008

medicineman said:
How about silver, it a hell of a lot cheaper and more available than gold. The mountains in Mexico are lined with silver.

Actually, we used to have a bimetal or dual metal monetary system. And historically silver and gold floated at about a 1 to 16 ratio. As far as I know, silver bullion is still held at Ft. Knox. But, you raise a crucial point.

Silver has very little commercial value anymore. But, gold is a critical industrial resource. So holding gold bullion causes the price of thousands of goods and services to rise. We might consider adding silver bullion to our vaults. But, consider this, the national debt is what deflates the value of the currancy. If the debt were gone our greenbacks would be worth more than any other currancy in the world. No one would care about what was in the vault at Ft. Knox.

ViRedd · Sep 6, 2008

john.roberts85 said:
I don't think we disagree much here. I'd say that Hoover deserves quite a bit of blame though. I've yet to see much of a contractionary policy by the Fed so far (actually the opposite has occured): Historical Changes of the Target Federal Funds and Discount Rates - Federal Reserve Bank of New York Scroll down and see the fantastic job Volcker (a real economist unlike Greenspan) did, too.

Oh, I wasn't disagreing with you at all. I was just stating my take on the housing boom and bust.

Thanks for the link. Interesting about Volcker. He (The Fed) raised the interest rates through the moon (as your supplied chart shows) to correct the monetary policies of the Carter era and the runaway inflation that resulted. The cost was the suffering of the economy through the early 80s. I was in the real estate business in the middle and late 70s when things were booming and made tons of money. As soon as October of 1979 came, the mortgage interest rates rapidly inclined, eventually going over 18.5 percent. Needless to say, only the most creative agents survived. Those were the agents/brokers who really understood how creative financing worked ... and we STILL helped many people buy and sell homes.

Anyway, there is no secret about all of this. In my opinion, the FED doesn't create the booms and busts, as they are a natural part of the market. The FED just prolongs them through inflation and contractions of the money supply.

And by the way, IMO it really doesn't matter what the price of gold is. The higher the price, the less we would need to represent a "dollar" ... a "dollar" being nothing more than a term of measurment. And despite the input of nay-sayers, we still have plenty of gold to facilitate gold backing of our currency. All gold ever mined, except for that used for industrial purposes, is still in existence. I mean, people don't throw gold away, right? bongsmilie

Vi

The Problems as I see them

john.roberts85

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medicineman

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mockingbird131313

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ViRedd

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