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Old March 14th, 2008, 12:16 PM   #1
mideerslayer
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this guy said we are in major trouble

http://biz.yahoo.com/rb/080314/usa_e...tein.html?.v=1
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Old March 14th, 2008, 12:46 PM   #2
howell_jeep
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you can thank Bernanke for it...
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Old March 14th, 2008, 01:18 PM   #3
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Originally Posted by howell_jeep View Post
you can thank Bernanke for it...
?! how/why is it the fed's responsibility?

banks, and lending institutions practiced/endorsed some of the shadiest deals ever over the past 3 years, then sold off the packages to the secondary mortgage market, rinse lather and repeat.

the fed has repeatedly lowered the banks' cost to borrow, but the banks have no cash flow, huge write-downs and are tightening their credit/lending rules due to their lack of liquidity and huge write-downs which further spirals downward as businesses, and homeowners with ballooning ARMs struggle to adjust to budgets with reduced (or zero income) and spiraling higher costs/expenses. (for what it's worth commercial loans/mortgages are almost always Arms/Balloons)

if anything, greenespan attempted to ignore the signs 2+ years ago - the whitehouse also ignored signs of trouble, preferring to wage a war and other private agenda's.

bernake may be a tool as well, but our current economy can hardly be blamed on him...
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Old March 14th, 2008, 01:47 PM   #4
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Among Fed's goals are to keep full employment (growing economy) and low inflation (price stability). We are faced with both problems at the same time.
However, the Fed can only fight one battle at a time. In my opinion, Bernanke chose the wrong one. He chose to lower interest rates to stimulate the economy and save the banks and financial institutions while screwing over the rest of us by creating further inflationary pressures. We can thank him for dollar devaluation, which leads to higher gas prices. Higher energy cost spurs inflation. Banks are going to go bust anyway and we will have a recession. But now thanks to Bernanke's policy choices, we will have both, a recession and higher inflation.

In my opinion, he could not avert the recession, but he could have helped lower inflation. While you can't blame this situation on him, you can certainly see how he makes it worse.
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Old March 14th, 2008, 05:02 PM   #5
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Among Fed's goals are to keep full employment (growing economy) and low inflation (price stability). We are faced with both problems at the same time.
However, the Fed can only fight one battle at a time. In my opinion, Bernanke chose the wrong one. He chose to lower interest rates to stimulate the economy and save the banks and financial institutions while screwing over the rest of us by creating further inflationary pressures. We can thank him for dollar devaluation, which leads to higher gas prices. Higher energy cost spurs inflation. Banks are going to go bust anyway and we will have a recession. But now thanks to Bernanke's policy choices, we will have both, a recession and higher inflation.

In my opinion, he could not avert the recession, but he could have helped lower inflation. While you can't blame this situation on him, you can certainly see how he makes it worse.
overly simplified look at it. the devaluation of the dollar is also due to the overwhelmingly poor economic outlooks - spurred in part by the huge financial institution write-offs; in essence foreign and even domestic investors know that American investments are shaky, and so too is our credit risk in a sense.

as for oil/gas/energy prices - whether we like it or not we have enjoyed energy prices that are unrealistically low. now that there is truly international demand, as well as even more foreign control of the market by countries unfriendly with our international policies we're simply reaping what we've sown. for way too long policies have encouraged wanton spending, and waste including American's penchant for purchasing 10 mpg, 3 ton vehicles for one person to commute in...

bernake's actions are easily debatable - the usual argument isn't what he did, but that it was 7 months too late...
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