[ExI] Fwd: My Answer to the President (from Ron Paul)

[Lee Corbin]

Stathis writes

> The U.S. Federal Reserve screwed up. It should have
> *raised* interest rates when it saw the flurry of activity
> in the housing market, 

And just don't create so goddam much extra money
all the time (which is the same thing, really, as you are
saying).

> or otherwise tried to rein in the activity of the commercial
> banks it is supposed to be supervising.

But that could cause a recession (as if that were a bad thing).
When you inhale, you have to exhale too.

It's politically too difficult to have recessions or slowdowns
any time, given people's obvious experiences: when there is
a slowdown or a recession, some people get laid off as its
clear to their companies that profits are not being made.
Also, people sell off suspicious looking stocks, and the
stock market falls a little (in accordance to how much it
really ought to go down).

No, better for people to enjoy "boom times" like the late
nineties, when everybody was happily destroying great
amounts of wealth. The analogy with intoxication is very
apt.

> That's what central banks did in most other countries
> under similar circumstances, and the main problems
> those non-U.S. banks now have is exposure to U.S.
> bad loans.

Well, then in that case, the other banks have contributed
to the problem as well, right? They invest their money
here because here is where the highest and safest interest
rates can be found---all backed by the government of the
world's greatest economy. 

Why was government backing introduced? For exactly
the same reason that permeates so many of our discussion.
A yearning for complete security.

Lee