by
Chris Martenson
The key problems that we face are all expressions of the fact that our monetary system is based on debt, and this enforces an exceptionally short-term investing and planning horizon, along with the need for continuous exponential expansion.
Thus our primary ailment today is a failure of our money system. Practically everything else that we read about today – bank failures, foreclosures, rapidly depleting resources, etc – are merely symptoms of this failure.
We are facing a money crisis, not a banking crisis. We are not experiencing a failure of our credit markets, but a failure of our money system. The apparent inability of our policy makers to understand this crucial distinction all but assures that their attempts to “fix things” will do more harm than good.
This OpEd piece by Hank Paulson, published today by the NYT, is a monument to wasteful, off-target thinking.
The art of deception: Hank Paulson speaks
by Chris MartensonThe key problems that we face are all expressions of the fact that our monetary system is based on debt, and this enforces an exceptionally short-term investing and planning horizon, along with the need for continuous exponential expansion.
Thus our primary ailment today is a failure of our money system. Practically everything else that we read about today – bank failures, foreclosures, rapidly depleting resources, etc – are merely symptoms of this failure.
We are facing a money crisis, not a banking crisis. We are not experiencing a failure of our credit markets, but a failure of our money system. The apparent inability of our policy makers to understand this crucial distinction all but assures that their attempts to “fix things” will do more harm than good.
This OpEd piece by Hank Paulson, published today by the NYT, is a monument to wasteful, off-target thinking.
by
Chris Martenson
I want to recall that, at the time of the Fannie and Freddie bailouts at the beginning of the summer, Hank Paulson, backed up by a compliant Congressional Budget Office, made the claim that any bailout of Fannie and Freddie was largely symbolic and not likely to cost the taxpayers much, if anything at all.
Here’s a blast from the past from the July 22 issue of USA Today:
Fannie, Freddie could cost us $25 billion
WASHINGTON — Congress’ top budget analyst says a federal rescue of troubled mortgage giants Fannie Mae and Freddie Mac could cost taxpayers as much as $25 billion.But Peter R. Orszag, director of the Congressional Budget Office, predicted in a letter to lawmakers Tuesday that there’s a better than 50% chance the government will not have to step in to prop up the companies by lending them money or buying stock.
Paulson went on to reiterate those claims. At the time I found those claims to be ludicrous, as they would require loss ratios for Fannie and Freddie that were not just smaller, but a tiny fraction of the losses that the rest of the mortgage industry had already booked.
Fannie & Freddie insolvent and losing money
by Chris MartensonI want to recall that, at the time of the Fannie and Freddie bailouts at the beginning of the summer, Hank Paulson, backed up by a compliant Congressional Budget Office, made the claim that any bailout of Fannie and Freddie was largely symbolic and not likely to cost the taxpayers much, if anything at all.
Here’s a blast from the past from the July 22 issue of USA Today:
Fannie, Freddie could cost us $25 billion
WASHINGTON — Congress’ top budget analyst says a federal rescue of troubled mortgage giants Fannie Mae and Freddie Mac could cost taxpayers as much as $25 billion.But Peter R. Orszag, director of the Congressional Budget Office, predicted in a letter to lawmakers Tuesday that there’s a better than 50% chance the government will not have to step in to prop up the companies by lending them money or buying stock.
Paulson went on to reiterate those claims. At the time I found those claims to be ludicrous, as they would require loss ratios for Fannie and Freddie that were not just smaller, but a tiny fraction of the losses that the rest of the mortgage industry had already booked.
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