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brigadecommander 02-Jul-12, 19:53 |
 Deleted by brigadecommander on 02-Jul-12, 21:57.
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Cleaning up the mess The Freddie Mac and Fannie Mae seems to have to shoulder the biggest responsibility for the depression. Even here in South Africa, what we first saw was a crash in the housing market and difficulty to obtain bond loans. (We don't have separate entities for bonds; we use the commercial banks). Therafter everything went down the drain. I am still assimilating all the information I found, so I will respond again, but it seems that the Fannie Mae and Freddie Mac deliberately borrowed money to people who definitely could not repay this money, because of political pressure. They had to assist minority groups and disadvantaged groups wholesale. The explanation I found said that money was given to immigrants who did not have a regular, steady income, to buy a house of US$ 88 000-00. However, according to the formula used, these people only qualified for a loan (bond) of between US$ 18 000 to 23 000. They... what's the word...lapsed?... defaulted?... on the repayment. This happened so many times that money was taken from other accounts or sources, to finance these lapses, an effect that just snowballed until the Fannie Mae and Freddie Mac just collapsed when a little pressure was put on the US$. Unfortunately, we need the IRS (in SA we call it SARS) to collect money from the individual for the greater good of the whole group- society. This money should be used to fund projects that individuals cannot attend to: building roads, hospitals and universities, employing teachers, cleanup of neighborhoods and so on. May I just stir a little and say that this money should not be stolen by the politicians! (Here in SA that is exactly what is happening on a very large scale). Sorry bencox1, although I agree with your sentiment, the unfortunate truth is that we cannot do without the IRS. To make you feel better, just compare your position with mine: I am at the lower end of middle income earner, and I pay 43% tax. High income earners can pay as much as 55%! We are being taxed to death here in SA, to fund social grants to people who has never been financially active, and never have and never will contribute to the social structure of South Africa. They are like leeches, sucking us dry, and 27% of the population have to support about 68%. In that regard, I also want to stop social grants. Such a system encourages a lot of people not to work; it makes them lazy. Our taxes can be lowered significantly if we stop the social grants. It is a cultural thing here, but young girls of 13 or 14- who should be going to school- rather fall pregnant and rely on social grants to raise the baby. It is a perpetual situation, because these grants are abused, so they have to fall pregnant again to qualify for a second grant to support the first child, but very soon the second baby needs more money, so they fall pregnant again.... it is not strange to see a young woman of 24 with six children, all of them being raised on social grants. By the time the woman is 30, she may have as many as eight children, with no other income but social grants, because she left school at the age of 14. |
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Cleaning up the mess Let's start with the first one, the one you seem to be so focused on - the Fed. How would financial transactions be transferred all over the globe? How would companies pay their employees that work all over the globe? What currency and coin would be recognized as the official "money" in countries? How would merchants transact business? How would you get cash to buy food? And what would be the value of the money you exchange for that food? It was because there was chaos that the Fed was created. There was no official currency or coin, no way to settle on what something cost or was worth, no way to transfer payments across the country. Money might have value one minute and mean nothing the next. And I haven't even touched on the enormity of excessive, insatiable desire for wealth or gain that would set in. But to be fair, you need to be given the chance to let us know your ideas of how the Fed would be replaced. You want to get rid of it. Logically something would have to be put in it's stead. How would you suggest replacing the Fed? |
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Cleaning up the Mess First off you say how much you think that taxes are needed as a basic income to provide for the basic services of the society but then you start comparing your position to mine and how you are paying 43% income tax. You position seems very confused but in response I just want to say that while the government needs to supply basic services for people there are other means of income for the government. www.ronpaul.com I also agree that social grants should be ended. Too many people take advantage of the welfare system and this needs to be stopped. We should end the social grants and replace it with nothing. It is the mark of a communist regime to have a kind of welfare state where the state takes care of the needs of the people. (Big Brother is watching...) What we need is freedom from the government and freedom to run our lives and not have the government dictating anything in our personal life. laissez-fairerepublic.com lupusdwb If we look at the Constitution Article I, Section 8, clause 4 it reads, "The Congress shall have power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures. " It is simple when the Federal Reserve was created in 1913 Congress gave up the Constitutional power to coin money. It is no wonder why the dollar has lost 95% of its value since 1913. www.usinflationcalculator.com We could just return the power to coin money back to Congress and limit the amount of currency printed to the amount of gold and silver in the banks. The best currency available is gold and silver because its value never diminishes. The only time gold and silver are worthless is when you are stranded on a desert island and have no food. I agree that there are limited supplies of gold and silver but that is why you print fiat currency so that "monopoly money" can be distributed abroad and still be redeemable at any bank for physical gold or silver. If we effectively ended the Federal Reserve we would just return to the Constitution and have Congress regulate our economy the way the Founding Fathers intended. I am so focused on the Fed because it is presently controlling our currency and if we have any hope at all of regaining economic freedom or repaying the massive debt in America or anywhere then we need to take control and restore prosperity abroad. (Everything I am writing are things that would take years to accomplish and are dreams and hopes that could never be accomplished over night because the shock would destroy the dollar and make economic recovery impossible to do.) |
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I think you are missing the point will go back to my original statement there is no reason we cannot right of all debt. I will reiterate I am a capitalist I do not think we need to change the system. We can give debt credit as positive and move forward from there. Having studied Adam Smith in detail there is no reason we cannot do this. |
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chrisforbes21 www.roman-empire-america-now.com |
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Adam Smith created a vision of the wealth of nations model I think it is time to revisit the philosophy of economics and create a new magna carta |
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Cleaning up the mess I read the links you provided, and I agree that the sentiment seems very good. I also feel that all governments that take personal tax are discouraging the individual's yearning to get ahead, to be better. Yes, in my personal opinion, personal tax is stealing the hard work of an individual. Sadly, I don't agree with Dr Ron Paul about abolishing personal taxes. I really would like and support it, but I don't think it is possible. Cutting back so much that the national budget equals that of 1990 seems impossible to me for various reasons; the first that comes to mind is that Money (deliberate M, meaning all currencies across the globe) has devaluated since then. There are many more reasons. We have all avoided politics before, but it seems to me that the people involved in all the links you provided are... conservative (I think that's the description I want) kind of people. Have you ever looked at the opposite view by more liberal people? Usually taxes are good for you, in the end. Suffice to say, I would like to try and quote a saying in English (if I get it wrong, the drift is the same): Only two things in this life are for sure: death and taxes. |
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Chris www.bloomberg.com Interesting concept for the Europe group now and what actually occurred the States long ago. What I've thought about is an exchange of debt ie I owe you 100, you owe me 90. We settle with I owe you 10 and debt is reduced on both sides. But then I think about those who have borrowed only, never lent, and it doesn't help them at all. So I don't think that's what you're saying. It's been interesting to read a little of Smith and realize that we really haven't come very far, have we? I guess that's what's called "history repeating itself" or possibly Smith was very observant. But I haven't found yet what Smith says about debt other than the human nature element. But I'm just on the surface. I'll keep digging. |
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"creditworthiness of advanced countries now very much in question." President of the European Central Bank President during the height of the liquidity crisis: <<What concerns him most, he says, is that “investors and savers the world over are not giving any more any privilege to any signature. That’s something entirely new.” In other words, the creditworthiness of advanced countries is now very much in question.>> {from the July 6 London Financial Times: www.ft.com? ftcamp=published_links%2Frss%2Flife- arts%2Ffeed%2F%2Fproduct&ftcamp=crm/email/201277/nbe/ArtsLeisure/product#axzz1zvCTvbX w |
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Creditworthiness of advanced countries now very much in question This is what I'm looking for. Statements by leaders who have worked, or are working, in the world arena and have insight into all countries' viewpoints. Trichet has that insight. And yes, creditworthiness has become an issue since the "crisis" started. Not only because the rating companies are being questioned about their judgments (a good thing!), but the general focus has shifted and now persons, companies and governments are asking that there be a capability to survive and repay beyond the perception of ability. They're asking questions, saying "prove it", and that is something new. In America, the rating companies - Moody's, S&P, Fitch - continue to rate companies as creditworthy, or speculative, with their A's, B's & C's. Many companies and individuals relied heavily on them before 1998. Companies and individuals still check the ratings but go further by doing their own research, making their own decisions. All the rating companies supply now is weight to what they've researched on their own. Are governments to be any less scrutinized? No, they should be more so because entire populations depend on them. In America, government budgets and annual reports, at all levels of government, are available online. I wonder how many citizens bother to find them and review them. Not many, I'm sure. It takes time and resolve to read them. They're not easy reports but they are there. It doesn't hurt to get an idea from an article or TV/radio news, then go to the source and verify. All it takes is time. |
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"My City has Gone Bankrupt—Now What?'" California: "The city of Stockton, Calif., with a population of nearly 300,000, made headlines last month by being the biggest city in the U.S. ever to declare bankruptcy. It's a painful process other cities are following as well; yesterday, the city council of San Bernardino, Caliornia, with about 210,000 residents, voted for bankruptcy. <<"Q: What has the bankruptcy announcement done for your clients? Are they suddenly more skittish? A: The atmosphere in Stockton is one of duck and cover. Entities like the fire department are kicking into high gear with trumped-up inspections and permits that will certainly cripple small businesses. Their attitude is that small businesses need to pay more, and this is a way to recover some of the revenue taken away from them by the city manager. The “situation” that Stockton is muddling into is far reaching and is alarming to businesses located within the city limits. We are all asking ourselves, “Where will we all go from here?" Capital improvements are on hold until we know how the city will fare. . . Q: We read that many cities are one step away from bankruptcy—do you agree? A: I think other cities will file for protection. The unique ability to respond to market conditions has eluded most government officials. Private entrepreneurs adapt and change with the market. Cities like Stockton did not. When the housing bubble burst, so did Stockton’s steady stream of tax revenue. Foreclosures and a high unemployment rate were the perfect formula to drive the death nail into this city.">> |
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it is madness modern age, the rules of economics we play right now will mean every country will be in debt because we measure debt in C18 terms. We cannot let this snowball continue down the hill to create an avalanche of anarchy that it will end up with, understand the causes of debt, understand the rules of economics if we do scrub the debt I would hate to be having the same conversation 10 years down the line. We can change things but there is no point changing a to b if we go back to a. |
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what the intent of this thread is all about? Are we (or were we at the start) really discussing the possibility of eliminating all current debt? Or, am I simply misunderstanding? I can see that the topic changes from person to person and over time, but I fail to see how we could really be eliminating debt. Don't get me wrong, as a debtor I kind of like that idea. But, I can not picture that ever happening or working, should it happen. Where am i going wrong? |
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world debt is right or wrong and how we could go about it |
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chris all debt (even though it would benefit me). Somebody has loaned me the money (which they do not need at this time) in order for me to buy my house (which I could not afford without a loan). I have promised to repay that loan (so they can use the money when they need it) as I can... a little at a time, over a period of the next 30 years. As thanks, I also promise to give them a little extra (interest) for allowing me to live in my own home earlier than if I had to save for 30 years to but it then. Now, if magically, somebody waves a wand and I do not have to repay that loan... what happens to the person who loaned me the money when they need it later? And, if nobody needs to repay their debts... why would anybody ever loan money again? And, since almost NO commerce can be conducted without the promise to repay a loan (credit), what do you think will happen to world commerce? |
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I may have over simplified the last comment wipe that and give the ones owed the balance (same as in quantitative easing) and then carry on trading under the same rules while we try and figure out a more modern system. You are right to do this in the consumer retail sense would not make sense. But when you have countries mortgaged to 100% and above their GDP its a downward debt spiral. This is not just a European thing this covers the Americas, Africa and Asia. |
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way out of my league here. It seems to me that if we wipe out all World National Debts, we will get the same results that we get with wiping out all debt in the consumer retail arena... except that it will apply massively, across national boundaries. I must ask the same questions: What happens to the creditor nations, how are they made whole? Why would any nations buy from nations when there is a substantial risk of not being paid? What happens to world credit? The World Bank, ITO etc. do try to stimulate economies of underdeveloped nations with loans, grants etc. and these are sometimes forgiven, but I do not see how canceling all debt will do anything other than end commerce, or at least, make it go back to the barter system. Sorry... just not understanding how your idea works. |
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Shamas, did you see this one? Now a developer can build a subdivision within a city, promise to provide utilities, infrastructure, etc from taxes on the properties as a "special tax district" and then declare bankruptcy when no one's buying your houses under Chapter 9, forgive your debts, reorganize and do it again. What will we think of next? |
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World is Experiencing the Opposite of a Sovereign Debt Crisis in the coalmine that serve as warnings to other governments of what might happen if they don't get their acts together. But the real story today is just the opposite. The world is experiencing whatever the reverse of a sovereign debt crisis is, as borrowing costs for government are plummeting EVERYWHERE. The yield on the US 10-Year Treasury is once again within a few basis points of an all-time low. You might be tempted to say, well, okay but the Fed is manipulating rates, or that the US is just the "cleanest dirty shirt" but both of these explanations fail when you look at the wide sweep of borrowing costs around the world. For the Australian 10-year, the yield is also within a hair of iits lows. France (which is thought of as a beautiful fiscal model) is seeing its 10-year borrowing costs at 2.228%. Here are the yields on some other 10-year Treasuries around the world. Japan: 0.778% Germany: 1.26% UK: 1.549% Sweden: 1.285% Finland: 1.501% Canada: 1.635% Israeli bonds are falling to multi-year lows. None of this is actually "good" news. What this essentially means is that there's a lot of money out there that sees no productive investments in the real world, and thus people are willing to stick it with entities that promise them a very meager return. But it is a good reminder that the crisis is basically the exact opposite of what so many mainstream commentators say it is. It's not about governments reaching their endgame. It's about a growth-deficient world, governments being the one place that can absorb all this money.">> --Joe Weisenthal at BusinessInsider.Com |
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the current low interest rates, and buy something like a house or a factory or an office building? What I am really saying is that I have NO clue as to what is going on in the world, or how to make any money with investments, or what is going to happen next or in the long term. Or, what does it matter? Are things getting better or worse, or does that even matter? Maybe it is an ok idea to cancel out all the debt? (Guess I have some reading to do!) |
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Long-Term Investments The best investment now is gold and silver which retain their value. |
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Softaire A good place to go is a stock market. It is easy to understand: there are two choices- buy, or sell. One person is wrong, the other is right. You make sure you are always right, and away you go, on your way to riches. |
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going back to this |
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I will explain |
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