Why the Fed can’t lower rates

[The Outback Oracle]

Re: Why the Fed can’t lower rates

Yeah Lukester.....right!!!! (I keep wondering if you're a relation to "Cool Hand") And everything they have done so far priniting, throwing money, looking after mates, saving banks, using tax hard working family taxpayers money and not caring....has been so damned succesful. I see that Hank Paulson trying to pretend he is a genuine bloke one more time i'm literally going 'to chunder in the old Pacific Sea!'
Now, as to your sick patient bloody parable, the poor bloke is dying from Arsenic poisoning, and what is the solution? give him some more??????? As a matter of fact, not only give him some more, shove s fire hose down his bloody mouth to make sure he takes it in vast quantities whether he likes it or not The reason this solution os proffered....well who is selling the Arsenic?

My point is...no-one...quite literally no-one, is really thinking about what the problem REALLY is. (OK except maybe Finster! )
I was watching TV and lo and behold these bunch of clowns are having a bloody photo shoot (G7)...God help us!!!!! They're still more worried about how they look than doing any bloody thing...and that is a fact.
What about once...just once...in the last 50 years...we demand these b......ds do the right thing; that they act according to some deeply held values! Maybe people would have more confidence if the ptb all told them the truth.
Sure, and i know you're not a supporter of it, Bernanke can throw money from his helicopters (the computer variety). Just throw a million into every back yard in the USA! Problem totally solved...liquidity not a problem!!!!
So if that's the bloody solution...why the hell don't they do it!
Sorry...I did warn not to start me!
I just rant and rave...I've lived too bloody long with this crap going on. i've talked, ranted, worked, been involved in organisations and talked about it...for about 40 bloody years. Now, after all these years, i know bullshit. What is going on is bullshit. i've learned over a long time, that despite aoppearances to the contrary, it ALWAYS...ALWAYS pays to adhere to properly held values. There are NO ...repeat NO exceptions to this. You can't say...i'll screw everyone over now but later i'll be all virtuous! you can't say...i'll take the easy way now...and later i'll fix it! This is not a religious belief. It's just a practical piece of knowledge learned from a reasonably difficult (in Western terms) life.
Now back to the point....the solution to this DOES lie back in time. In Australia's case it lies back in 1960!!! I can't speak for the USA. What can you do now to fix something that has been brewing for 50 years?
There are no solutions now and everything that is being done so far has just made the problem worse. Buggared if i know...just hand everyone in the world 2 or 3 milolion...but ...start with me!!! As my son says..."just give me the money!"

Again Luke, sorry to rant and rave!

[Guest]

Re: Why the Fed can’t lower rates

I was watching TV and lo and behold these bunch of clowns are having a bloody photo shoot (G7)...God help us!!!!! They're still more worried about how they look than doing any bloody thing...and that is a fact.

Yeah, especially Silvio Berlusconi. Isn't he just Prince Charmin' with the $2000 dollar suits, and the pearly white teeth? (I really miss my Italy actually - dysfunctional rotating door governments, Silvio Berlusconi and all.)

What about once...just once...in the last 50 years...we demand these b......ds do the right thing; that they act according to some deeply held values! Maybe people would have more confidence if the ptb all told them the truth.

Well I agree with you about all that - but when you've got a situation where if the credit doesn't get unblocked in four or five weeks 50% of daily life's commerce simply shuts down, what do YOU propose to do about it? Think that's not a risk for us now? I do if we get a run on the banks and the banking system starts to disintegrate! And a very large part of what triggers that is psychological. Remember, what needs to be guaranteed is a flow of credit to the entire network of commerce in every small town and large city in the country. Once you let them hit the asphalt like a ripe tomato, that network gets destroyed. Then you may have taken one tiny step towards monetary sanity, but you've put 50%-60% of the country's commerce right out of business.

Without credit - micro credit, macro credit, hundreds of millions of small networked business interrelations in the country simply die. They fold up, go BK and walk away from the ruins of business some of them likely have spent 30+ years building to that point. You know as a businessman, once you close a business down, liquidate inventory, let go of leases, it takes much more capital to reestablish that business. Now multiply that event by a about 50-100 million and you've got what happens to Americas existing commercial tissue if you take your purist solution and let it simply go into freefall in a credit lockup by foregoing any Central Bank attempt at emergency liquidity maneouvers - do it your way, and in exchange, you've accomplish only ONE FIRST STEP towards sound money. Satisfied?

Sure, and i know you're not a supporter of it, Bernanke can throw money from his helicopters (the computer variety). Just throw a million into every back yard in the USA! Problem totally solved...liquidity not a problem!!!!.

Outback - I have no idea how they can issue massive, emergency credit out to all of this commercial infrastructure if our credit system locks up. But I do know beyond a shadow of a doubt, that they would be foolhardy not to at least try to. Putting aside the cronyism of Paulson's bill, the filth and ethical capitulation implicit in it, you have got to do something from the FED and from the Treasury, that's very, very agressive now, to get some even crudely improvised transmittal of credit out to this network of hundreds of millions of business activities. If that network of arteries and capillaries for daily credit locks up, we are toast one heck of a lot worse that we would be with one or two years leeway before the tsunami of inflation hits us.

It is politically agnostic TRIAGE. Right this minute you see, I don't give a damn who's been responsible. I want to see this emergency operation succeed because without it our window for any maneouver just disappeared completely. In an emergency, a really bad emergency, you always, always always have to keep some room for maneouver. If you have an unresolved problem of magnitude, and you've lost any smallest further room to maneouver, you are toast. And lest you say "well let it be so in the interests of purification", we do not yet even know what it means yet, to be toast.

Buggared if i know...just hand everyone in the world 2 or 3 million...but ...start with me!!! As my son says..."just give me the money!" Again Luke, sorry to rant and rave!!

No worries at all on the ranting and raving. You would not be a respectable Aussie Outbacker if you did not turn into a raving homicidal Tasmanian Devil vowing bloody murder against Central Banker Wankers every once in a while. (even often, actually) Stands to reason.

[The Outback Oracle]

Re: Why the Fed can’t lower rates

Lukester...I grant you all your desperate logic.
I DO NOT HAVE A SOLUTION. That's true!

I know this probably sounds dozey from your viewpoint.....I believe you underestimate the problem. Therefore you think there is a solution of some kind within the current framework of your economy and society.

Believe me I will be really happy if they can find some desperate way to pump this damned thing up one more time for my own family reasons. Furhter I really need another 9 or 12 months to really get ready, for reasons we've dealt with in other places. So yep! if you can find a way to do that, it's fine by me. I just don't think it can be done again and I KNOW it will not be a SOLUTION because there is none.
Ah i got it....damn MEGA is having the weekend off...typical...the one time in your life you need a bloody pommie and you don't have him. I was sort of thinking he might have DR Who's phone number!

[jk]

Re: Why the Fed can’t lower rates

i've learned over a long time, that despite aoppearances to the contrary, it ALWAYS...ALWAYS pays to adhere to properly held values. There are NO ...repeat NO exceptions to this. You can't say...i'll screw everyone over now but later i'll be all virtuous! you can't say...i'll take the easy way now...and later i'll fix it!

st. augustine used to pray: "lord, make me chaste..... but not yet."

Now back to the point....the solution to this DOES lie back in time. In Australia's case it lies back in 1960!!! I can't speak for the USA. What can you do now to fix something that has been brewing for 50 years?

forgiveness means giving up all hope of a better past.

[Chris Coles]

Re: Why the Fed can’t lower rates

If the FED had, instead of trying to bail out the existing bankers and instead gave, say, $10,000 to every employer for every employee as equity capital to underpin their accounts, the problem would be solved overnight. However, Outback is correct. They are trying to re-float a sinking ship by pouring more water into the holds and nothing they can do will temp anyone with an ounce of sense to believe it will work. Ergo, everyone is cashing out as fast as they can get their hands on their money.

[metalman]

Re: Why the Fed can’t lower rates

If the FED had, instead of trying to bail out the existing bankers and instead gave, say, $10,000 to every employer for every employee as equity capital to underpin their accounts, the problem would be solved overnight. However, Outback is correct. They are trying to re-float a sinking ship by pouring more water into the holds and nothing they can do will temp anyone with an ounce of sense to believe it will work. Ergo, everyone is cashing out as fast as they can get their hands on their money.

exactly. think about it... the stock market in the usa has already lost $10 trillion + in market cap. if you're a financial institution and aren't in the short line for your slice of the $700b pie, you figure at the rate things are going you're hosed. sell, sell, sell!