The National Debt does not have to be "paid off" and will Never be paid off

No, we haven't. That statement is inaccurate and horribly misleading.

A gold exchange standard is still a gold standard. Bretton Woods used a gold exchange standard. It was in effect until Aug 15 1971.

It's pretty embarrassing when you have to measure wealth in your own currency, isn't it? Duh...

Right back at ya, pal.

Yes, you apparently do.

Certainly. Cheer up, there's still time to learn a new trick.

 

Another amazing piece of BS. Dollars are debt, they're not assets. Who taught you these bogus economics?

Who are you? Paul Krugman? Only him and Greenspan would say something so foolish. "Just print more money", right?

Hey doofus, what do you think taxes are? How much of your tax money goes to pay off DEBT? Get a clue.

You're a dangerous little squirrel. I'm glad your hands aren't on any part of our monetary system.

 

http://useconomy.about.com/od/monetarypolicy/p/gold_history.htm

Nixon took away gold standard in 1971 . At that point it was meaningless , because since the late 1800'sish we stopped backing our dollars with gold and moved towards silver

 

It is easy to find economic systems and structures that extend the benefits of wealth and prosperity to every individual in the virtual world, you just won't find them in reality. The problem with the current monetary system is that it is a constant depletion of the purchasing power of the people. It all boils back down to a basic idea or principle that was cemented into The Constitution for a reason, Art 1 Sec 8 "Congress: has the power to coin money". The current idea that congress has control over the economy is a misnomer. That power to hold responsible and accountable in a regularly scheduled election those who hold the power to print money has been delegated (A. Jackson) away from the people's power of vote to a Federal Reserve Board whom remains untouchable and uncontrollable. The entire system of credit which powers any modern industrial nation is under the duress of a few men (paraphrasing Wilson) who can not be held responsible or accountable in a free electoral vote as detailed by The Constitution, which negates any idea or argument to a free economy or free enterprise.

As our education system, scientific endeavors, and our infrastructure crumble below an every ballooning and out of control monetary system, as the purchasing power of the people is slowly diminished and wealth garnered and accumulated within a few hands, as we play a monopoly game of some win and many lose, as liberty and the pursuit of happiness is road blocked by ever increasing incorporated servitude, as Lincoln himself did say that money should cease to be the chains of humanity and become the servant, we will every linger in an addiction of debt and deficit... like a crackhead at a crack party being told to stop smoking crack... it will never stop, it will never work, and it will be in the end destructive. Mixing a debt based economy within a fractional reserve banking system adds up to nothing but fraud, bankruptcy, homelessness, poverty, welfare, and depletion of moral values...

...but hey, I'm with stupid...

 

Not meaningless. The French drained the US gold reserves beginning with Charles de Gaulle and continuing through 1970, by taking advantage of the Bretton Woods system. They used the US guarantee of exchange at a fixed rate and traded in all their dollar reserves for gold, thereby weakening US global economic power. Combined with a persistent balance of trade deficit, the situation became intractable and Nixon had no choice but to abrogate the gold exchange provision which was the heart of Bretton Woods. Without that, the whole system broke down, and in fact the United States has been technically broke since Aug 15 1971 (not the first time, of course).

 

Except the private mortgage businesses started in early 1990, long before the boom started.

Why did the boom / bust happen in many other countries?

All the other factors had been in place for 5+ years. What was the shock to the system that started the bubble growing?

As I said twice now, there are more homes than buyers. You can't form a bubble with an over-supply.

 

Repetition of the importance of the supply-side (often deliberately manipulated by the construction industry itself)

 

So, the construction industry purposely overbuilt homes, resulting in many of them not selling?

"The Beer Game" is a far better explanation.

 

No, they deliberately restrict supply in order to increase rent seeking opportunity

 

Defend you assertion.

 

Its a well known phenomenon where land is bought and kept underdeveloped until houses price rises have occurred

 

The conversation is that the current over supply of homes is preventing another bubble, despite low interest rates.

Your comments don't contribute anything.

 

You've been shown to be talking bobbins, from your failure to refer to long term interest rates to your failure to focus on supply-side issues. Unfortunately you've allowed your dogma to get in the way of economic reality again!

 

The dramatic increase in private mortgage lending (especially with sub-prime mortgages) was between 2002-2006, directly correlating with the massive housing boom. The GSE's lost almost 50% of their market share during those 5 years? Did interest rates cause banks to completely drop their lending standards? Absolutely not... it's so simple to understand, it's been almost 5 years since we learned that all these new Wall Street financial instruments allowed an atmosphere where banks did not care about the risk on their mortgages. They made money from the quantity of their mortgages and the spread that they sold them off to Wall Street.

They no longer cared if the home owner would default or not. None of this had to do with interest rates. Just 100% pure greed from the private sector (and semi-private participants like Fannie and Freddie). There is no proof that this housing boom/bust would not have happened even if interest rates were higher.

The repeal of Glass-Steagal and the emergence of CDO's and credit default swaps. The data shows a clear gigantic spike in lending following 1999's repeal of Glass-Steagal.

 

Ummm... nationally we have not had the gold standard since 1934

All that did was tell foreigners we would not exchange their dollars for gold anymore. It was the official break from the gold standard, but we were not on an official gold standard at that point. Our economy didn't all of a sudden change because in 1971 we told foreign countries that we would exchange their dollars for gold.

Nothing embarrassing about it. Your lack of understanding of economics is what's embarrassing

Based on what you have said, this has little meaning to me.

 

Talk about the virtual world. It goes both ways. Those that want to make the country worse off than it really is can by giving their subjective viewpoints of the world. Objectively our standard of living is much higher than it was 30 years. So your claim that we are some how becoming worse off is just ignorance and a complete lack of economic knowledge.

 

They are assets to whomever owns them. Do you really not understand basic accounting?

Let me know when the debt has to repaid. Thanks!

Not very much at all. Get a clue doofus.

Lol, I'm describing our very monetary system that we use and you still can't comprehend it. Amazing!! Lol, uneducated people are funny!

 

Again, private lenders were around for most of the 90's, why did the bubble form then? What changed other than interest rates?

The "new financial instruments" were used as collateral to loan even more money - that was the chicken. The egg was the need for more money for mortgages (as in nature, the egg came first).

Lets see if there is anything else that increased sales when interest rates fell:

http://www.bloomberg.com/news/2012-...at-record-lows-helps-drive-sales-in-u-s-.html

Will there be a car bubble, I don't think so, but if the dealerships start bumping prices above sticker.....


It isn't that there is no proof, you don't want to believe the gooberment via the Fed created this fiasco.

Really? Housing starts were falling from 1999 until the interest rates dropped, the shot up.

 

Repeal of Glass Steagal, 1999

Yea, and low interest rates doesn't mean "more money", it simply means lower borrowing cost. You still have not linked lower borrowing cost to more loans given out as you do not have a clue whether a drop in lending standards would have been able to meet the demand of borrowers at a higher rate. The drop in lending standards is much more believable than cheaper loans. Banks don't care if the interest rates are cheaper, they care about profit... something you completely toss out of the equation.
Lets see if there is anything else that increased sales when interest rates fell:

Cars are not houses. Very few people decide to buy a house because they can get 3% interest rates rather than 5% interest rates.

Cars are not equivalent to houses. There will not be a car bubble because Wall Street hasn't turned cars in to crazy worldwide investment vehicles.
It isn't that there is no proof, you don't want to believe the gooberment via the Fed created this fiasco.

Glass-Steagall was repealed in 1999. I think you are missing the cause. Wall Street and risk was the cause. Interest rates made it easier, but banks did not drop their lending standards because interest rates were low. More borrowers weren't qualified because interest rates were low. Flippers didn't flip houses because interest rates were low. You literally have no made any link whatsoever between low interest rates and a reduction in lending standards. Keep trying though! I'm sure you have already convinced yourself it's "the Government's" fault, because you have been told to believe that. Not a single bit of objective evidence proves that assertion. But conservatives typically do not care about objectivity. Just keep throwing out your opinions, lol.

 

Subprime loans represented only 20% of the loans (up from 8%). How does bank deregulation cause the other 80% to take out mortgages?

 

And it was that 20% that brought the house of cards crumbling down. Tell me why did low interest rates cause banks to create more subprime loans. Subprime means risky, so banks would typically raise their interest rates regardless of such low rates. So why did banks drop their lending standards (and please do not say the CRA... that has been proven false a million times).

 

That required the other 80% to push home prices higher enough to "eliminate" the risk. What was the motivation of that 80%?

 

What? That had nothing to do with eliminating the risk. Packaging them up and selling them to Wall St eliminated the risk. Coincidentally these two events happened at the same time. Wall St didn't start driving the mortgage market because interest rates were low. The objective was to pass the risk on to investors by bundling them up in to those CDO's. Banks didn't care about housing prices, the only reason that mattered was it was easier for them to convince people to take on bigger mortgages. They probably used interest rates to entice them too. But interest rates didn't drive this, the spread between making the loans, packaging them, and selling them to Wall St/F&F drove this.

 

The loans had to be written and funded before they could be packaged and sold to Wall Street. Banks can't loan for more than a house appraises for (unless there is a bubble, then they were loaning 125% loan to value, meaning they saw no risk).

The resulting collatoral was only needed when the banks needed to lend more, meaning they needed more AAA (high leverage) collaratoral than was available - after the bubble started.

Had Wall Street passed most / all the risk to investors, then they wouldn't need to be bailed out. They held them as collatoral.

Finally, private mortgage firms became so to avoid federal regulation, including Glass - Steagle.

Using your own chart - subprime dropped after GS was repealed. The ramp up didn't start for 3 years.

 

Because the first 3 years Wall St was scooping up all the prime mortgage pools. It was when these mortgages started running out that banks went crazy with their reduction of lending standards in order to generate more mortgages. None of which happened because interest rates were low. They were trying to feed the Wall St beast. People all over the globe were infatuated with these CDO's, they were AAA rated, had great returns and there was a usual assumption that housing prices do not fall... and if they did, it would be a slight recession where only the biggest risk takers lost out.

I can't believe you are so intellectually dishonest that you can't even acknowledge the fact that CDO's, credit default swaps, and banks completely dropping their lending standards and loaning to any homeless person on the street just so they can satisfy Wall Sts demand was the cause of this man made crisis. You have not in anyway made a connection whatsoever to what Wall St did and what banks did "because" of low interest rates. There is no proof that this would not have happened with higher interest rates because we did not know the effects these Wall St investments would have in the housing markets.