[ExI] M0 singularity... you're soaking in it

[BillK]

On Tue, Feb 3, 2009 at 7:22 AM, samantha wrote:
<snip>
> The government has bled this richest economy on earth dry.  They have put us
> into the poor house turning the US into the largest debtor nation on earth.
>  How would more of the same possibly help us?  Bring on the leeches!  Let us
> hurry to build mutant super leeches!
>


We know that you believe that the government (any government!) is the
root of all evil, but they didn't create this mess all by themselves.
(And their current activities are probably making a bad situation
worse).

You know this yourself, really, because you talk about the bankers
being leveraged up to 30 times in liar loans, CDPs, etc. etc.

The government just threw all the regulations in the bin and said,
'Let the free market rip!' and provided the necessary environment. The
bankers then proceeded to lend out up to 30 times their assets on
wildly inflated valuations, everybody joining in and taking their
commissions, fees and interest payments and paying themselves multi
million dollar bonuses. Individuals and companies also joined in the
bonanza, by taking second mortgages on their over-valued real estate,
and spending their winnings on the good life.

Of course, it has all collapsed now. Everybody has huge debts that
have to be paid off. The biggest banks are bankrupt, but cannot be
allowed to fail, so the government prints money and gives it to them.
(Sweden got out of the same problem in the 90s by nationalizing all
the bankrupt banks for a few years, the privatizing them again when
things improved). At present the US is only letting small banks fail
or be taken over by the bigger (supported) banks.

I agree that printing money is very likely to lead to inflation and a
collapsing currency. I just feel that that problem could be a few
years away yet. Any money printed has got to go to pay off the huge
debt mountain first. How long that will take is the big question. It
could be a ten-year depression before inflation picks up. Who knows?

There will be a *lot* of families depending on government handouts
before this mess improves. So don't agitate for destroying government
just yet!  ;)


BillK