The Fed is Dead. Long Live The US Treasury.

[due_indigence]

Re: The Fed is Dead. Long Live The US Treasury.

It's good to hear some sagacity from a True Sage like Volcker. If only the bow-and-arrow Congressman had risen to the occasion. My guess is we have lost a certain luxury of time that the 20-30's era took for granted. The Bloomberg machine killed rumination. Traders must react before they think. There's trillions of dollars at stake you know.

In a global village everyone hears you scream. Inefficiencies have been wrung out leaving no pockets of economic activity immune to neurotic impulse. The velocity of panic will be no dullard, availing itself of broadband connectivity. Everything piles into 'sooner'. Little of import happens 'later'.

[Chris Coles]

Re: The Fed is Dead. Long Live The US Treasury.

It is not usury that has brought us to this impasse, but the mere fact that no one has written free market rules in stone on a wall ...... anywhere. What has driven this whole financial episode is the tiny, almost totally overlooked minor detail on any recent "deal" involving usury, change to the interest rate charged at some point in time AFTER the original deal was set into motion.

You buy a vehicle and no one comes back to ask for more. The vehicle loses value and no body cares one jot. But if you buy money, someone always comes back to ask for more for the money and if the value of the asset has fallen, the deal collapses.

If every one had bought finance, (with usury), but for a fixed term and fixed rate of interest; none of this would ever have happened. the asset could have lost value and who would care as long as the payments continued? But the whole system became greedy and got into the habit of asking for more downstream of the "deal", but they forgot that, every time you force a re-negotiation of the deal in finance, you have to revalue and you have to sign a new deal. And that always works so well as long as value continues to rise, but is a disaster waiting to happen when the underlying asset value declines.

In a free market, values can go up and down without any effect upon the deal. But in a market fuelled by greed, where the rules have been bent to suit the feudal financial institution, the value must always go up. Those "upwards only" lease agreements, finance agreements, the short term suicide loans, the liar loans, the grossly under capitalised Venture Capital "deals"; all of them designed without any attempt to adure to free market rules. That is what has driven the collapse. Usury in a free market is benign and quite acceptable, but when you throw away the rules, you introduce the capacity to get burnt and they set fire to their own fingertips with their own documentation.

It really is as simple as that.

[raja]

Re: The Fed is Dead. Long Live The US Treasury.

For me that is my best shot I feel. Gold, Silver, Currencies, they are all being played by others but they will all be valued by the USD. No car I have ever seen, runs well without an engine or fuel, The USA has been the main engine to get us where we are today, and the USD has been and still is the fuel. But it will work in foreign as well as US engines.

I'd have some gold, too.

While it's true, no car runs without fuel, those SUVs sitting in the used car lots are running on nothing. And all those foreclosed houses in California and Florida have zero electricity and heating bills. :eek:

What I'm saying is that demand destruction could hurt your energy investments . . . .