Monday, November 24, 2008

The Fed Is Out of Ammunition

The Wall Street Journal predicts a return to the gold standard

Startling op-ed editorial from the Wall Street Journal... not exactly a journalistic haven for "gold bug" crackpots. Seeing is believing, however:
...[T]he present crisis in the West will ultimately end up discrediting mechanical monetarism -- and with it the fiat paper-money system in general -- as the U.S. paper-dollar standard, in place since Richard Nixon broke the link with gold in 1971, finally disintegrates.
The catalyst will be foreign creditors fleeing the dollar for gold. That will in turn lead to global recognition of the need for a vastly more disciplined global financial system and one where gold, the "barbarous relic" scorned by most modern central bankers, may well play a part.
Read the full article here:

The Fed Is Out of Ammunition

Got your gold yet?


Doctor Opposite said...

Here's another great idea!

Citizens’ Economic Stimulus Plan: Stop Paying Credit Card Debt

So citizens’ can be forgiven if they simply stop paying. Many home purchasers are already doing this—turning in the keys to their homes and driving away. Who can blame them?

But the worst of the debt may be credit card debt, where the controls on interest rates and penalty charges were lifted long ago and the government stopped providing a tax deduction for interest paid. In many cases, interest on credit cards is 28 percent or more, which means that even by making the minimum required payment, consumers see their balances grow each month. That the politicians could continue to allow such evil to exist is astounding but proves who their masters are.

So until real relief is forthcoming, citizens who are in distress should simply destroy their credit cards and stop paying the monthly bills. People are already doing this. Arrearages and defaults are climbing, and credit card debt is starting to be viewed as the next bubble to burst. But so what? If people have to use a credit card, that means they can’t really afford to buy whatever it is they think they want. If they can afford it, they should use a debit card instead.

Then tell the credit card company you cannot pay. Ask them to write off some or all of the debt, and if they want to take you to court, go on your own and defend yourself. You don’t need a lawyer, and you don’t need anyone’s permission. You also don’t need to go through the horrendous “reformed” bankruptcy system the credit card companies got Congress to pass in 2005. Failure to pay credit card debt is not, thank God, a crime in this country, and there are no debtors’ prisons—yet.

Besides, if people do not pay credit card debt, that money remains in circulation. So default is actually a form of patriotism in today’s trying circumstances. And the credit card companies really don’t lose anything, since the money didn’t exist before they lent it to people who are now broke.

Rafiki said...

Ya, it is pretty wild; my brother tells me that he has a friend that has missed 3 months of payment on his home. He says that nobody has said anything - like he is proud of this!

So why doesn't (not making a payment) matter anymore. I guess I don't know if this is liberal thing or right thing or perhaps it is the result of every decision we have all made that got us here.

Where is the capitolistic punishment that was suppose to keep us all in line?

Captian America said...

What "Doctor Opposite" forget to add (as well as attribution, by using quotation marks to Cook's article.

"Where I used to live in the country in rural Virginia, the story was going around about a farmer who fell down in the pen where he was feeding his pigs, and the pigs ate him. That is what has been happening in this country. The financial industry which is now swilling at the public trough has been eating alive a nation that was once “the land of the free and the home of the brave.”

Keep context alive by reporting the entire article. Not by half-ass quotes plagarized from another author.

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