Comments on: Refinancing Subprime Loans to Prevent Debt-Deflation http://dummyspots.com/2007/09/refinancing-subprime-loans-to-prevent-debt-deflation/ Stocks, Options, Currencies and One Big Dummy Fri, 25 Jul 2008 10:22:18 +0000 http://wordpress.org/?v=2.2.1 By: Subprime With Good Credit, It’s Still Just Good Old-Fashioned Greed • DummySpots.com http://dummyspots.com/2007/09/refinancing-subprime-loans-to-prevent-debt-deflation/#comment-4558 Subprime With Good Credit, It’s Still Just Good Old-Fashioned Greed • DummySpots.com Tue, 04 Dec 2007 23:18:45 +0000 http://dummyspots.com/2007/09/refinancing-subprime-loans-to-prevent-debt-deflation/#comment-4558 [...] the consequences are yours also. Well, should be yours. Actually, now they’re becoming mine. Thank you so much. You poor [...] […] the consequences are yours also. Well, should be yours. Actually, now they’re becoming mine. Thank you so much. You poor […]

]]> By: How to Spot the Recession Before They Do • DummySpots.com http://dummyspots.com/2007/09/refinancing-subprime-loans-to-prevent-debt-deflation/#comment-4489 How to Spot the Recession Before They Do • DummySpots.com Sun, 25 Nov 2007 16:42:42 +0000 http://dummyspots.com/2007/09/refinancing-subprime-loans-to-prevent-debt-deflation/#comment-4489 [...] Refinancing Subprime Loans to Prevent Debt-Deflation [...] […] Refinancing Subprime Loans to Prevent Debt-Deflation […]

]]> By: Dollar STRONGER Against the Euro? • DummySpots.com http://dummyspots.com/2007/09/refinancing-subprime-loans-to-prevent-debt-deflation/#comment-3902 Dollar STRONGER Against the Euro? • DummySpots.com Fri, 12 Oct 2007 02:41:32 +0000 http://dummyspots.com/2007/09/refinancing-subprime-loans-to-prevent-debt-deflation/#comment-3902 [...] about debt deflation? It’s coming, only question is whether the Fed has the power to stop it. In some [...] […] about debt deflation? It’s coming, only question is whether the Fed has the power to stop it. In some […]

]]> By: Will http://dummyspots.com/2007/09/refinancing-subprime-loans-to-prevent-debt-deflation/#comment-3428 Will Sat, 08 Sep 2007 05:42:02 +0000 http://dummyspots.com/2007/09/refinancing-subprime-loans-to-prevent-debt-deflation/#comment-3428 Hi Cedric- thanks for taking the time to share your thoughts. I think some of the richest people in the world (barons and bankers) made themselves exponentially richer during the Great Depression by doing exactly what you say- repossessing the real property lost by indebted working people due to the extreme deflation. And I'm not against the idea that the bankers helped the process along. The Federal Reserve was created of the bankers, by the bankers, for the bankers, and the Fed of the 1920s may well have pursued its terrible economy-destroying policies (as documented by Milton Friedman in 1963 and Ben Bernanke (!) in 1983) out of pure evil and greed instead of "pilot error", although I hope not. Fiat Money systems always collapse, it's just a matter of when. So far our system has managed to keep the balls in the air, but that only works as long as you have an increasing base of production somewhere down there to prop you up. And ours is waning. The moment we have one too many "takers" in this society and one too few "givers" -- entitled vs. taxed, leeches vs. providers -- is the moment the final collapse begins. Till then, the Fed is the main vehicle for keeping the teeter-totter Monopoly Money system balanced on the backs of the (diminishing number of) working mules- us. I have no figures to back it up, but my suspicion is that the Credit Card phenomenon (again, by the banks, for the banks) has generated more profit for them than stealing away our property ever could. They've been owning us as SLAVES for most of our adult lives, and we don't even protest. So I don't think they'd intentionally create deflation any more- they've learned to bleed us with INflation too well. The reason I keep harping on personal responsibility is that we could exercise our individual power and collectively say "no" to the current inflation- and- credit system, and it would wither without our complicit participation. But I think we're to addicted to the allure of living above our means, and generally too stupid to care about anything beyond what we want next. Sheep to the slaughter. Also, I think we're too far gone to return to a commodity-backed currency without completely overturning our financial and political system. Perhaps a fractional-reserve system (any token fraction!) would restore some accountability, but worldwide the governments of large economies have learned how lucrative <em>fiat money</em> is to them, particularly in their (as you alluded to) power to use inflation to transfer real wealth from the citizenry to themselves without the cud-chewing cattle realizing it. I like to think of myself as a realist, not a nihilist, but you make your own judgment. I think we're stuck with this system, while it lasts, and so I chatter about what we can/should do within those bounds. Helps to pass the time and all. Thanks again for the visit. Hi Cedric- thanks for taking the time to share your thoughts. I think some of the richest people in the world (barons and bankers) made themselves exponentially richer during the Great Depression by doing exactly what you say- repossessing the real property lost by indebted working people due to the extreme deflation. And I’m not against the idea that the bankers helped the process along. The Federal Reserve was created of the bankers, by the bankers, for the bankers, and the Fed of the 1920s may well have pursued its terrible economy-destroying policies (as documented by Milton Friedman in 1963 and Ben Bernanke (!) in 1983) out of pure evil and greed instead of “pilot error”, although I hope not.

Fiat Money systems always collapse, it’s just a matter of when. So far our system has managed to keep the balls in the air, but that only works as long as you have an increasing base of production somewhere down there to prop you up. And ours is waning.

The moment we have one too many “takers” in this society and one too few “givers” — entitled vs. taxed, leeches vs. providers — is the moment the final collapse begins. Till then, the Fed is the main vehicle for keeping the teeter-totter Monopoly Money system balanced on the backs of the (diminishing number of) working mules- us.

I have no figures to back it up, but my suspicion is that the Credit Card phenomenon (again, by the banks, for the banks) has generated more profit for them than stealing away our property ever could. They’ve been owning us as SLAVES for most of our adult lives, and we don’t even protest. So I don’t think they’d intentionally create deflation any more- they’ve learned to bleed us with INflation too well.

The reason I keep harping on personal responsibility is that we could exercise our individual power and collectively say “no” to the current inflation- and- credit system, and it would wither without our complicit participation. But I think we’re to addicted to the allure of living above our means, and generally too stupid to care about anything beyond what we want next. Sheep to the slaughter.

Also, I think we’re too far gone to return to a commodity-backed currency without completely overturning our financial and political system. Perhaps a fractional-reserve system (any token fraction!) would restore some accountability, but worldwide the governments of large economies have learned how lucrative fiat money is to them, particularly in their (as you alluded to) power to use inflation to transfer real wealth from the citizenry to themselves without the cud-chewing cattle realizing it.

I like to think of myself as a realist, not a nihilist, but you make your own judgment. I think we’re stuck with this system, while it lasts, and so I chatter about what we can/should do within those bounds. Helps to pass the time and all.

Thanks again for the visit.

]]> By: Cedric http://dummyspots.com/2007/09/refinancing-subprime-loans-to-prevent-debt-deflation/#comment-3415 Cedric Fri, 07 Sep 2007 04:39:12 +0000 http://dummyspots.com/2007/09/refinancing-subprime-loans-to-prevent-debt-deflation/#comment-3415 Hi, I am no guru on how the financial sector works but wouldn't banks just love depressions, recessions, forclosures etc? Doesn't it mean that for all the "fake" money they loaned out they get real assets in return either through forclosure or through deflation which would bring assets down to bargain prices. I suspect that banks are not acting irresponsibly when they lend their money but more in self-interest. It would seem to me that your Federal Reserve Bank is in a perfect position for creating these situations whenever they like seeing as they release or withdraw money whenever they want. Correct me if I am wrong but isn't the Federal Reserve privately owned? And as such wouldn't their goal as a private business be to make as much profit as possible? After all the 1930's depression made some people very wealthy and I wouldn't be surprised if most of them were bankers (or their friends). Nor would I be surprised if the whole thing had been engineered (by the very same people who profited from it). I agree with your sentiment that people are (or should be) responsible for their own actions but that doesn't take away from the fact that the whole fiat money system is highly questionable. Or am I missing the point? Hi, I am no guru on how the financial sector works but wouldn’t banks just love depressions, recessions, forclosures etc? Doesn’t it mean that for all the “fake” money they loaned out they get real assets in return either through forclosure or through deflation which would bring assets down to bargain prices. I suspect that banks are not acting irresponsibly when they lend their money but more in self-interest.
It would seem to me that your Federal Reserve Bank is in a perfect position for creating these situations whenever they like seeing as they release or withdraw money whenever they want. Correct me if I am wrong but isn’t the Federal Reserve privately owned? And as such wouldn’t their goal as a private business be to make as much profit as possible? After all the 1930’s depression made some people very wealthy and I wouldn’t be surprised if most of them were bankers (or their friends). Nor would I be surprised if the whole thing had been engineered (by the very same people who profited from it).
I agree with your sentiment that people are (or should be) responsible for their own actions but that doesn’t take away from the fact that the whole fiat money system is highly questionable. Or am I missing the point?

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