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Latest news only confirm this thread title. The govt keeps creating credit through its bookkeeping entries and putting it in the wrong places. As the market is trying to clear away those toxic nominal values to real ones, the govt is swimming against the current. Main points: -...

As cuban myself i know this is true.

you can ask them at www.mises.org but it was the demand for "real products" which was caused by the war. During the war, the FED increased the money supply and govt also purchased lots of war material (financed by debt from the FED)

They did do something. They reduced the amount of money, credit available and that prolonged the crisis.

In that case banks should be nationalized.

Absolutely true. Something else to add. All govt help will be 9.7 trillion, that's about 90% of all the nation's mortgages (bloomberg). So??

I WOULD LIKE TO CLOSE THIS THREAD. IT SEEMS THAT THERE IS NOT COUNTRY PRACTICING A GOOD MONETARY POLICY. There are countries that do have a more conservative approach but nothing more. Thank you all for your comments.

Austrians understand free market.................Krugman understand free government.

A war is the best that could happen for the banking industry. Remember, international banker's best profit is war. War consumes and demands everything and credit is needed from central bankers. I hope we dont see any more wars.

This a great time to stop paying them. I am considering it. Credit cards can't force you to pay.

Excellent post............California is perfect example of failed big governments. It is just sad to see more govt coming instead of retreating.

He is a liar sorry a lawyer............I wonder if he took eco 101.

Interesting..............soon banks will be something of the past.

Nationalization will fail too.

You are right but you forgot to free the banking industry from the FED

I dont know what to say. All central banks are doing what they do best, printing money. How fast they do this and how fast they economic fundamentals deteriorate will determine currency valuations. A little difficult to predict. But I know this much, the massive trade deficit the US had for...

Everything was kept artificially low. Low interest rates, low currency value, high credit, massive deficit (war) Now the market took enough and this are going back to equilibrium. A painful equilibrium.

60 trillion dollar did not evaporate. They merely exchange hands and nominal value. That's the true nature of "crisis" You are right about the "stimulus" it wont get anywhere. That's why people like this thread. Thank you.

this bubble got my attention in summer 2006. I knew prices (at least in miami) were unsustainable and that a huge foreclores were going to hit anytime in the future. At the time I was an economics student, i did not get my prof attention (so much for PhD's). But this guy knew all along...

Does anyone think investment banks function more as banks as commercial banks do?? Their main difference is that investment banks funds come from investors who are willing to give their money to banks to receive an % payment. Commercial banks in the other hand use depositors money to...