Financial Vagabond

Fox News did a ten minute interview with Ron Paul and actually gave him the time to clearly state what is going on.  If the anchors were actually listening I don’t know, and frankly they need to.  The present situation is dire and people are only barely starting to take it seriously.  Given that Bernake is a student of the Great Depression he thinks the only way out is government intervention through bailouts and inflation.  The issue with that is we have a problem: Excess has built up in the system and it needs to be corrected.  By easing the debt burden on the banks the problem doesn’t go away, but only gets pushed further out into time.  

According to Austrian Economics whenever a bubble forms due to excess credit it must be deflated.  During the deflation excess inventory is bought at cheap prices, and the economy then moves forward.  This allows the economy to go though a minor correction and then move on.  The mortages need to be sold off and housing prices need to come down.  Our fiat monetary system only survives on debt and credit, which we are finding out has its limits.  

Instead of letting the system correct the taxpayer might be on the hook for other people’s mistakes.  Why is it imperative that house prices go back up?  Let them readjust to a point where people can afford them.  We will survive, and in the short-term it might be rough.  The dollar is at the brink of destruction.  A bailout will necessarily ensure that the dollar will be dumped because nobody wants to hold worthless paper.  

Warning:  If you see interest rates rising and the dollar falling this is a sign that major players are getting out of the dollar.  This is cause for concern.

Bernake, Paulson, and Bush are selling this proposal as a way to avoid a catastrophe. A necessary evil that if not enacted immediately will be the downfall of the United States and its citizens will suffer. Bush in his address to the nation did comment on the credit problem, but then went for the jugular and instilled fear just as Bernake and Paulson have been doing. He said that he believed in the free-market, but tough times call for decisive action. If he truly believed in the free market the Fed would not exist, there wouldn’t be sugar tariffs and corn subsidies, and I could go on and on. If you believe that we went into Iraq because of WMDs (Weapons of Mass Destruction) then go ahead and believe him on this one.

I find it quite convenient that we have major swings in the stock market and then this proposal comes to light. The banking crisis isn’t something new. Its been going on for over a year, and why now must it be passed right before Congress goes to recess. Fear will induce irrationality and it is imperative that this bill does NOT pass. I would rather face major banks failing then have the government try to sort this out.

Watch this video it is right to the point!