The government did incentivize giving low profit loans. It was the bankers that committed fraud to turn those low profit loans into massively unstable derivatives and then lie about them for profit.
- and this could never happen without free money and without government guarantees.
Gov't guaranteed the mortgages that were included into those SIVs, CDOs, but more importantly there was all this free money sloshing around and no real return on any actual savings and investment because of inflation. Real inflation has been in double digits for over 20 years now and real rate of return has been negative for the same period of time, everybody was looking for the quickest way to turn the cash around, gov't created the entire culture of subpar lending, not just for houses, it was in everything. Want to buy a bed? Get a loan. Want to buy a coffee machine? Get a loan. None of it was income generating business, everybody was giving out loans like a maniac, GM and GE became financial institutions and others did too, manufacturing was leaving and no real business could be started with normal loans, all because real savings were wiped out by inflation, all thanks to the Fed and gov't.
By the way, CDOs in housing started with FHA, no free market could produce such an atrocity on its own, it takes government to create that.
Every single problem in economy that occurred for the last 100 years can be traced to fake money.
Throwing words like 'slavery' around is easy, actually being able to show that it is slavery is impossible, as those are free people now, much freer than they were under complete Communist regime of the past. Millions of Chinese now are moving around, to and from cities, get hired and change jobs, that's not slavery, that's a growing wealthy economy.
Home buyers saw houses as source of income, it was done with plenty of refinancing, and saying that buyers are stupid and gullible and didn't know what they were doing... it's dishonest at best. The home buyers were at least as culpable as mortgage brokers, everybody expected home prices to go up up up.
Used to be - you saved money and bought a house. Then it became: get a house, regardless of the means, and you are set - you now have an income stream. Refinancing was the name of the game. Just because everybody pretended to be stupid or actually was stupid doesn't decrease their culpability on the entire issue, of-course the entire issue is 'easy credit' and 'easy money', the real issue is government out of control and out of the bounds of the Constitutional authority, real issue is people who don't give a fuck that their government is running amok.
The problem was created by the Federal reserve and government regulations for this so called 'affordable housing'. When gov't says it will give you something cheaper or free, expect to get fleeced.
I lay 100% of the blame on the lenders and brokers. Why?
- because you are ignorant of the fact that it was the government that created the situation with 0% discount window interest and laws that created incentives to give subpar loans and gamble with money without risk (risk being 'insured' by the gov't.)
The REAL interest rates were much higher for over 20 years now, not what the Fed set them at. There wasn't any real savings and any money to give out these loans with, all of these loans were and are still created with fake money.
borrowers did not get the shaft, they got to live in lifestyle that they could not afford, they refinanced their houses over and over and used their property as income source, I think you completely underestimate your fellow citizens.
The people who got the shaft were all the US dollar denominated asset holders, inflation (Fed increasing the currency supply) is destroying them and now it's going to be all Americans, who will feel the rising prices, because finally inflation is returning to them, the Fed is buying over 75% of all new treasuries, the debt is being monetised at ever increasing rates, the dollar value is falling, the prices are going up and people abroad will stop taking US dollars and US will not be able to buy from abroad any longer.
Now I hear some attitude from Americans, who are talking about 'nationalising the oil companies'. Well, good luck. It's not like governments haven't nationalised shit before, and it's not like they can run any of it and it's not like economies get better from any of it.
Of-course it is freer, why is all manufacturing done in China? It's not because it's more difficult to do business there, it's because it's much less difficult to do it and it's not just my words, it's actions of people who move their businesses there.
Oh, and in case of Intel and MS, it was all a standard shakedown, that's how government mafia operates - they want money, they'll shake you down for it.
My opinion about all government is the same, whatever the issue. All the anti-trust is nonsense, there are no natural monopolies, only government created ones. The times that anti-trust was applied, it was always against an economy of scale, but never against a monopoly, because those companies didn't have government protecting them in the market, and they always had some form of competition by the time the lawsuit was in progress. Gov't uses antitrust to subsidise their friends, who pay them in order to get into that business by lowering their barriers to entry through artificial regulations, which hurt the market, never helps the actual clients of the companies that the gov't is engaged against.
The real reason behind Kodak's failure is not what this story says.
Just like the real reason behind oil prices in USD going up is not what most illiterate Keynesians and lying politicians say, it's inflation because of currency counterfeiting by the Fed, not anything else, prices are actually falling in real money.
Well, there is another way - invest based on outcome that is inevitable from their policies. Obviously majority of people still don't understand what that means, but those who understand are doing very well.
There are terrorists - the Federal reserve and Congress and White House and Senate and SCOTUS and all of the executive branch - these have been populated by terrorists for a long time now, but terrorists cannot be expected to get rid of themselves.
Fiscal policy is spending, but it's also a balance of spending, it's also revenue. When instead of using real revenue the gov't "prints" money that it spends, the real fiscal policy is theft. Not purchasing of assets but theft of assets, and this translates to economic policy of theft, and you can define it as terrorism if you like.
Very well. So honestly ask yourself: do you think this (all your posts) are working towards that? Effectively?
- some people respond with comments that they actually found out something for themselves, some do not, there are convinced Marxists here, who need to go through that experience apparently to learn what it is, they can't change their mind, but they don't have that much in assets to save either it seems.
And it's good that there is something written, there is too much propaganda of all sorts, some people just never thought their way through the nonsense and they need to be shown that it is not all that believe in authoritarian government message, that there are people who understood, predicted and gained based on understanding of the economic problems.
I need more people to save their money so that they can invest it when time comes, and/. is just one way people learn about needing to do that.
All in all, I can't shake the feeling all you work (even if it's just a little) is actually not undoing much if any damage.
- only individually, not a large number.
My gut feeling tells me there are better ways to get the results you want. I mean, you probably wrote enough on/. to fill a book or two. If you published a book, I might actually buy it (ok no, I'll probably just pirate it, but you wouldn't mind right? Copyright's the devil/government's work and all, right?;p)
- one day I might, today is not that day, I am actually writing these comments while doing my real work.
As to anybody pirating what I do - I wouldn't be contributing to free source if I cared much about others using some of what I do without paying, I see free source economy as the same type of economy as we have IRL - I do something, I put it out there, somebody else does something I like, I use it too.
My mother's mother was Jewish, makes me of jewish descent, but as an atheist I don't care about religion, and obviously don't want to have parts of my body gobbled up by made up ghosts (AFAIC).
But yes, it's a token. And saying "Hasidic" was just to make a little stronger of a point. I did read a little while back that a former head of security service in Israel said that Haredim were more of a threat to Israel than Iran based on their ultra-orthodox behaviour within the country. I have a number of relatives living there, so I prefer Israel to stay safe, including from Haredim.
A year I spent in Israel I studied and worked, but no yeshiva for me, just learning some other culture.
But it is NOT a fiscal policy, it is an economic policy.
They can call it whatever and say it doesn't matter, but it affects the real economy, not just the money in abstract. It causes outflow of real capital, destruction of savings and investment, it causes destruction of manufacturing and decimation of jobs related to real production, manufacturing, agriculture, mining. Everything that people actually want to trade for.
Calling money printing a 'fiscal policy' and trying to hide what kind of economic policy that is - that's government for you, and if you are going alone with it, they will take you down with the rest of the economy.
My point is - get rid of US dollar denominated assets, whether you are Apple or anybody else.
I didn't even have to live in Israel for a year to answer this question, but I did live there in 93.
A Hasidic Jew needs to lose that part of body, otherwise it's not a perfect union between him and his god, same with economics - the person studying it needs to lose that part of nonsense, that Keynesian ideas present, otherwise he will not achieve the understanding, and it's not bigotry just because the word 'Jew' is thrown around.
So to reiterate: what/how are you improving your own circumstance for doing all this posting?
- I want a better economy, it's all for completely selfish reasons - I was born in USSR, wouldn't want the economies of the world to go that same route. Understanding the issues is half way to fixing the problem, and I am willing to do just a little work to undo just a little damage that the system causes because I am still in that system unfortunately for me. People need to understand economics, because this understanding helps the economic situation of those people.
If one person's assets are saved, because he learns something about the economy and he saves himself from being destroyed by the inflation - economic policies of the government, then that is one more person who will have something when everything crashes, and to restart the economy we will need many people with assets.
The more people save themselves by saving their assets, the less time it will take to rebuild the economy.
People need to move their assets OUT of socialist systems, OUT of government controlled currencies, INTO real production, INTO real manufacturing, INTO real agriculture, INTO real mining, INTO REAL MONEY.
Nowhere does that mean the government can't use fake money as a means of expenditure.
- WRONG. It tells explicitly in the Constitution of the United States of America that the federal government is created to make a more perfect union for the GENERAL WELFARE of all the people, not for individual welfare of any particular person, and general welfare of all people is absolutely not helped at all, but hurt, by government destroying the economy because it prints money, which allows government to grow enormously and that's what destroys the economy.
You are wrong - gov't is not set up without goals, it has goals - one goal is to keep the government system that exists honest about money, another goal is to protect individual liberties, and another goal is to protect USA from foreign threats and government of USA failed miserably in all its goals, including protecting USA from foreign threats, because foreign policy of USA is creating more enemies and threats for USA than ever.
You know, it wasn't always this way, nor is it this way for every company.
- First, that's false. Second, you are saying that it is a BAD thing that companies exist to make money for their investors?
It is the BEST THING SINCE THEY INVENTED COOKING WITH FIRE.
People searching for money, or simpler put: people searching to become wealthier in their lives - that's how everything is created. It is never created by a committee getting together and setting a goal of 'saving the whales'.
Do you know WHY the whales were saved? Because the wealth seeking companies, wealth seeking individuals decided that they can make MONEY by selling OIL that they DRILL out of ground to other people and other people bought that oil and made kerosene and the whales, which were near their extinction, were finally safe from people hunting them for whale oil.
My point is: it was ALWAYS people searching to make a buck (or a whatever, a piece of gold, any sort of asset that would create cash flow or anything of value that would appreciate hopefully, or any business that would create something), it's always the people WORKING, creating something, it's these people and companies that create the wealth.
Always. There are no exceptions. It's always somebody looking to improve his own circumstance and he does it by doing something that he can overproduce (not only for his own consumption) and hopefully sell, and the reason why he wants to sell it is NOT because he wants to give his product to people for weird reason, the reason is never weird.
The reason is to be able to get from the people something back - you catch a bunch of fish and sell some of it, not because you want others to taste the fish, but because you want to be able to buy bread that somebody else makes.
It's called comparative advantage and it happens because the same one person does not have time in the day to catch the fish and make the bread and build a house and make some clothing and build himself a car and travel somewhere and manufacture some aspirin, etc.
It is always done so that the person has access to everything that OTHER PEOPLE PROVIDE.
Trade is about trading for THINGS and SERVICES that other people CREATE/PROVIDE/DO.
Trade is NOT about giving somebody something because you are a wonderful person.
SURE, as a company, to make the best gadget, to catch the fish in the most timely manner and to make the highest quality bread of all types, it helps you, because then you are known as a BRAND that can do this thing very well, and everybody wants YOU to do it for them.
Did you ever stop to think that it may be precisely this attitude that's at the core of the precarious world financial situation that's been ongoing for over 4 years now?
- 100% WRONG.
It is the exact OPPOSITE of that attitude that created the crisis, and it's not just 4 years ago - that's very SHALLOW thinking.
I am typing in mixed letters, because I am tired of explaining the same thing over and over. You think you are the only person who doesn't understand economics and what happened? There are millions of you, and I have many things to do in my day, except for answering this really silly questions.
Lastly: right now every IDIOT 'economist' (Keynesian charlatan), is giving his take on why oil prices are going up. It's all about "speculation" and "Iran" and "demand" and "supply". It's all nonsense.
Oil prices are FALLING. They are falling in real market money, not in this funny money they like to print in every country.
Speculation has nothing to do with it. Speculators tell us what the prices are, and the more speculators there are in the world, the better the approximation of the rea
Great Depression was ended with the war, when gov't cut spending by 64% and taxes by 30%. This, combined with the fact that USA was the only economy with intact infrastructure left after WWII, allowed US to have a near monopoly on production for over a decade, but gov't grew with this new wealth coming from taxes ever more, and it also had all the new types of income (payroll taxes, then later Medicare).
By 1971 US had a serious problem - too many dollars printed, and too many people wanting to exchange their USD for gold. Nixon then defaulted on USD (said it was TEMPORARY, by the way, he was right, it was temporary, because that's what all paper currencies are - temporary, until they self destruct).
The seventies crisis was gov't created, again, more inflation. It was stopped with a serious interest rate hike by 1981 (up to 21.5%). The inflation stopped for a while, but gov't didn't stop setting interest rates, so it restarted in mid eighties. By the nineties USA would have been in great trouble, but then Internet bubble helped out and Greenspan helped tremendously to create it, again, with loose monetary policy.
By the end of the decade the bubble was near it's logical completion, the Fed took interest rates down to 0 in 2001 I think.
This, combined with the mandatory issuance of bad debt, "insured" by F&F and FHA (today FHA "insures" 95% of bad mortgages, they have 1Trillion of these with only 5Billion of 'assets', so it's only a matter of time before it explodes again), created the housing bubble. This was again, completely predicted and played against by people buying real assets, that's why gold and oil futures go up - they reflect the TRUE state of inflation, none of these fake government reports about inflation and none of this fake interest rates.
The real interest rates are simply a reverse function of yearly gains in commodity prices expressed in USD and other fake currencies that follow USD to the eventual demise.
If you want more actual explanations from back when people were LAUGHING at others for explaining this, you should really watch this video from 2006 (and in 2005 the same conference had the same speaker presenting the same data, only it was not recorded, but they laughed even more in 2005.) Of-course Ron Paul is famous for predicting this in Congress.
The point is that all of these predictions are not incidental, they are not just somebody making a wild guess, they are based on the logical outcome of the policies that are conducted by the Fed and the government, and by understanding how the market ends up reacting to these policies. It is REALLY EASY TO UNDERSTAND and none of the modern Keynesian shamanism is required. Keynesian ideas are voodoo. Maybe one good thing that will come out of this global catastrophe will be the final end to this nonsense (not that gov't schools will end up teaching the real stuff, it is absolutely not in the interest of governments, who want to keep printing fake money and call that a 'fiscal policy').
- do you want a bet? A gold ounce? Companies exist for the benefit of their investors, people don't wake up one morning and say: gee, wouldn't it be great to start a company that exists for people other than investors, not to make money of your own work, but to work, so you can give money and wealth/products to others.
Yes, things like that happen, there are non-profit organisations, charity and such, but companies that people start where they go to work and make money, those exist to make investors richer, not to give anything to society.
Society gets the output from company's work as a side effect of investors in the company trying to grow their money. If you don't understand that simple principle, you shouldn't ever try and run a business.
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The government did incentivize giving low profit loans. It was the bankers that committed fraud to turn those low profit loans into massively unstable derivatives and then lie about them for profit.
- and this could never happen without free money and without government guarantees.
Gov't guaranteed the mortgages that were included into those SIVs, CDOs, but more importantly there was all this free money sloshing around and no real return on any actual savings and investment because of inflation. Real inflation has been in double digits for over 20 years now and real rate of return has been negative for the same period of time, everybody was looking for the quickest way to turn the cash around, gov't created the entire culture of subpar lending, not just for houses, it was in everything. Want to buy a bed? Get a loan. Want to buy a coffee machine? Get a loan. None of it was income generating business, everybody was giving out loans like a maniac, GM and GE became financial institutions and others did too, manufacturing was leaving and no real business could be started with normal loans, all because real savings were wiped out by inflation, all thanks to the Fed and gov't.
By the way, CDOs in housing started with FHA, no free market could produce such an atrocity on its own, it takes government to create that.
Every single problem in economy that occurred for the last 100 years can be traced to fake money.
Throwing words like 'slavery' around is easy, actually being able to show that it is slavery is impossible, as those are free people now, much freer than they were under complete Communist regime of the past. Millions of Chinese now are moving around, to and from cities, get hired and change jobs, that's not slavery, that's a growing wealthy economy.
of-course gov't created the "free" money that banks were using and created the incentives in form of various programs for 'affordable housing'.
As to that being end of story, it's not even a beginning.
Home buyers saw houses as source of income, it was done with plenty of refinancing, and saying that buyers are stupid and gullible and didn't know what they were doing... it's dishonest at best. The home buyers were at least as culpable as mortgage brokers, everybody expected home prices to go up up up.
Used to be - you saved money and bought a house. Then it became: get a house, regardless of the means, and you are set - you now have an income stream. Refinancing was the name of the game. Just because everybody pretended to be stupid or actually was stupid doesn't decrease their culpability on the entire issue, of-course the entire issue is 'easy credit' and 'easy money', the real issue is government out of control and out of the bounds of the Constitutional authority, real issue is people who don't give a fuck that their government is running amok.
Of-course people knew about this much in advance, this is just one example.
The problem was created by the Federal reserve and government regulations for this so called 'affordable housing'. When gov't says it will give you something cheaper or free, expect to get fleeced.
I lay 100% of the blame on the lenders and brokers. Why?
- because you are ignorant of the fact that it was the government that created the situation with 0% discount window interest and laws that created incentives to give subpar loans and gamble with money without risk (risk being 'insured' by the gov't.)
The REAL interest rates were much higher for over 20 years now, not what the Fed set them at. There wasn't any real savings and any money to give out these loans with, all of these loans were and are still created with fake money.
Of-course lenders were various pension funds :)
borrowers did not get the shaft, they got to live in lifestyle that they could not afford, they refinanced their houses over and over and used their property as income source, I think you completely underestimate your fellow citizens.
The people who got the shaft were all the US dollar denominated asset holders, inflation (Fed increasing the currency supply) is destroying them and now it's going to be all Americans, who will feel the rising prices, because finally inflation is returning to them, the Fed is buying over 75% of all new treasuries, the debt is being monetised at ever increasing rates, the dollar value is falling, the prices are going up and people abroad will stop taking US dollars and US will not be able to buy from abroad any longer.
Now I hear some attitude from Americans, who are talking about 'nationalising the oil companies'. Well, good luck. It's not like governments haven't nationalised shit before, and it's not like they can run any of it and it's not like economies get better from any of it.
Only if he gives a shit about religion and that specific type of it.
Just shows that it takes a state of mind that defies authority of others over you to make it and it is consistent with expectations.
Of-course it is freer, why is all manufacturing done in China? It's not because it's more difficult to do business there, it's because it's much less difficult to do it and it's not just my words, it's actions of people who move their businesses there.
Oh, and in case of Intel and MS, it was all a standard shakedown, that's how government mafia operates - they want money, they'll shake you down for it.
My opinion about all government is the same, whatever the issue. All the anti-trust is nonsense, there are no natural monopolies, only government created ones. The times that anti-trust was applied, it was always against an economy of scale, but never against a monopoly, because those companies didn't have government protecting them in the market, and they always had some form of competition by the time the lawsuit was in progress. Gov't uses antitrust to subsidise their friends, who pay them in order to get into that business by lowering their barriers to entry through artificial regulations, which hurt the market, never helps the actual clients of the companies that the gov't is engaged against.
The real reason behind Kodak's failure is not what this story says.
Just like the real reason behind oil prices in USD going up is not what most illiterate Keynesians and lying politicians say, it's inflation because of currency counterfeiting by the Fed, not anything else, prices are actually falling in real money.
Kodak would not have failed this way (or maybe at all), if it was not prevented from diversifying its business the way it wanted to in the nineties by the government. It was not a monopoly obviously, not any more a monopoly, than any so called 'monopoly' that gov't ever used its attack dogs on.
Well, there is another way - invest based on outcome that is inevitable from their policies. Obviously majority of people still don't understand what that means, but those who understand are doing very well.
Lied? Well, too bad for you then, that you can't read and understand information that may be in fact useful to you.
Have a good day.
There are terrorists - the Federal reserve and Congress and White House and Senate and SCOTUS and all of the executive branch - these have been populated by terrorists for a long time now, but terrorists cannot be expected to get rid of themselves.
Fiscal policy is spending, but it's also a balance of spending, it's also revenue. When instead of using real revenue the gov't "prints" money that it spends, the real fiscal policy is theft. Not purchasing of assets but theft of assets, and this translates to economic policy of theft, and you can define it as terrorism if you like.
It does not mean the same thing, but people recognise the word Hasidic easier than Haredi I bet.
Very well. So honestly ask yourself: do you think this (all your posts) are working towards that? Effectively?
- some people respond with comments that they actually found out something for themselves, some do not, there are convinced Marxists here, who need to go through that experience apparently to learn what it is, they can't change their mind, but they don't have that much in assets to save either it seems.
And it's good that there is something written, there is too much propaganda of all sorts, some people just never thought their way through the nonsense and they need to be shown that it is not all that believe in authoritarian government message, that there are people who understood, predicted and gained based on understanding of the economic problems.
I need more people to save their money so that they can invest it when time comes, and /. is just one way people learn about needing to do that.
All in all, I can't shake the feeling all you work (even if it's just a little) is actually not undoing much if any damage.
- only individually, not a large number.
My gut feeling tells me there are better ways to get the results you want. I mean, you probably wrote enough on /. to fill a book or two. If you published a book, I might actually buy it (ok no, I'll probably just pirate it, but you wouldn't mind right? Copyright's the devil/government's work and all, right? ;p)
- one day I might, today is not that day, I am actually writing these comments while doing my real work.
As to anybody pirating what I do - I wouldn't be contributing to free source if I cared much about others using some of what I do without paying, I see free source economy as the same type of economy as we have IRL - I do something, I put it out there, somebody else does something I like, I use it too.
My mother's mother was Jewish, makes me of jewish descent, but as an atheist I don't care about religion, and obviously don't want to have parts of my body gobbled up by made up ghosts (AFAIC).
But yes, it's a token. And saying "Hasidic" was just to make a little stronger of a point. I did read a little while back that a former head of security service in Israel said that Haredim were more of a threat to Israel than Iran based on their ultra-orthodox behaviour within the country. I have a number of relatives living there, so I prefer Israel to stay safe, including from Haredim.
A year I spent in Israel I studied and worked, but no yeshiva for me, just learning some other culture.
But it is NOT a fiscal policy, it is an economic policy.
They can call it whatever and say it doesn't matter, but it affects the real economy, not just the money in abstract. It causes outflow of real capital, destruction of savings and investment, it causes destruction of manufacturing and decimation of jobs related to real production, manufacturing, agriculture, mining. Everything that people actually want to trade for.
Calling money printing a 'fiscal policy' and trying to hide what kind of economic policy that is - that's government for you, and if you are going alone with it, they will take you down with the rest of the economy.
My point is - get rid of US dollar denominated assets, whether you are Apple or anybody else.
I didn't even have to live in Israel for a year to answer this question, but I did live there in 93.
A Hasidic Jew needs to lose that part of body, otherwise it's not a perfect union between him and his god, same with economics - the person studying it needs to lose that part of nonsense, that Keynesian ideas present, otherwise he will not achieve the understanding, and it's not bigotry just because the word 'Jew' is thrown around.
So to reiterate: what/how are you improving your own circumstance for doing all this posting?
- I want a better economy, it's all for completely selfish reasons - I was born in USSR, wouldn't want the economies of the world to go that same route. Understanding the issues is half way to fixing the problem, and I am willing to do just a little work to undo just a little damage that the system causes because I am still in that system unfortunately for me. People need to understand economics, because this understanding helps the economic situation of those people.
If one person's assets are saved, because he learns something about the economy and he saves himself from being destroyed by the inflation - economic policies of the government, then that is one more person who will have something when everything crashes, and to restart the economy we will need many people with assets.
The more people save themselves by saving their assets, the less time it will take to rebuild the economy.
People need to move their assets OUT of socialist systems, OUT of government controlled currencies, INTO real production, INTO real manufacturing, INTO real agriculture, INTO real mining, INTO REAL MONEY.
Nowhere does that mean the government can't use fake money as a means of expenditure.
- WRONG. It tells explicitly in the Constitution of the United States of America that the federal government is created to make a more perfect union for the GENERAL WELFARE of all the people, not for individual welfare of any particular person, and general welfare of all people is absolutely not helped at all, but hurt, by government destroying the economy because it prints money, which allows government to grow enormously and that's what destroys the economy.
You are wrong - gov't is not set up without goals, it has goals - one goal is to keep the government system that exists honest about money, another goal is to protect individual liberties, and another goal is to protect USA from foreign threats and government of USA failed miserably in all its goals, including protecting USA from foreign threats, because foreign policy of USA is creating more enemies and threats for USA than ever.
You know, it wasn't always this way, nor is it this way for every company.
- First, that's false. Second, you are saying that it is a BAD thing that companies exist to make money for their investors?
It is the BEST THING SINCE THEY INVENTED COOKING WITH FIRE.
People searching for money, or simpler put: people searching to become wealthier in their lives - that's how everything is created. It is never created by a committee getting together and setting a goal of 'saving the whales'.
Do you know WHY the whales were saved? Because the wealth seeking companies, wealth seeking individuals decided that they can make MONEY by selling OIL that they DRILL out of ground to other people and other people bought that oil and made kerosene and the whales, which were near their extinction, were finally safe from people hunting them for whale oil.
My point is: it was ALWAYS people searching to make a buck (or a whatever, a piece of gold, any sort of asset that would create cash flow or anything of value that would appreciate hopefully, or any business that would create something), it's always the people WORKING, creating something, it's these people and companies that create the wealth.
Always. There are no exceptions. It's always somebody looking to improve his own circumstance and he does it by doing something that he can overproduce (not only for his own consumption) and hopefully sell, and the reason why he wants to sell it is NOT because he wants to give his product to people for weird reason, the reason is never weird.
The reason is to be able to get from the people something back - you catch a bunch of fish and sell some of it, not because you want others to taste the fish, but because you want to be able to buy bread that somebody else makes.
It's called comparative advantage and it happens because the same one person does not have time in the day to catch the fish and make the bread and build a house and make some clothing and build himself a car and travel somewhere and manufacture some aspirin, etc.
It is always done so that the person has access to everything that OTHER PEOPLE PROVIDE.
Trade is about trading for THINGS and SERVICES that other people CREATE/PROVIDE/DO.
Trade is NOT about giving somebody something because you are a wonderful person.
SURE, as a company, to make the best gadget, to catch the fish in the most timely manner and to make the highest quality bread of all types, it helps you, because then you are known as a BRAND that can do this thing very well, and everybody wants YOU to do it for them.
Did you ever stop to think that it may be precisely this attitude that's at the core of the precarious world financial situation that's been ongoing for over 4 years now?
- 100% WRONG.
It is the exact OPPOSITE of that attitude that created the crisis, and it's not just 4 years ago - that's very SHALLOW thinking.
I am typing in mixed letters, because I am tired of explaining the same thing over and over. You think you are the only person who doesn't understand economics and what happened? There are millions of you, and I have many things to do in my day, except for answering this really silly questions.
That's why I am going to give you a link to my other comment, where I had much less of these mixed characters. You should be able to read it and understand what I am talking about.
Lastly: right now every IDIOT 'economist' (Keynesian charlatan), is giving his take on why oil prices are going up. It's all about "speculation" and "Iran" and "demand" and "supply". It's all nonsense.
Oil prices are FALLING. They are falling in real market money, not in this funny money they like to print in every country.
Speculation has nothing to do with it. Speculators tell us what the prices are, and the more speculators there are in the world, the better the approximation of the rea
Government intervention is the fundamental root cause of the American recessions starting 1913. So the depression of 1921, which ended in under 2 years because Harding cut gov't spending by 70% was caused by Federal reserve printing. In 1925 they started printing again, in much more quantity to buy bad UK debt, trying to save UK pound, this created inflation that caused the stock market bubble in agriculture (mostly) that blew up in 1929, sending US into recession. I made a comment some time ago, with dates and actual programs that Hoover and the Fed and later FDR started to try and keep that bubble inflated, causing the Great Depression.
Great Depression was ended with the war, when gov't cut spending by 64% and taxes by 30%. This, combined with the fact that USA was the only economy with intact infrastructure left after WWII, allowed US to have a near monopoly on production for over a decade, but gov't grew with this new wealth coming from taxes ever more, and it also had all the new types of income (payroll taxes, then later Medicare).
By 1971 US had a serious problem - too many dollars printed, and too many people wanting to exchange their USD for gold. Nixon then defaulted on USD (said it was TEMPORARY, by the way, he was right, it was temporary, because that's what all paper currencies are - temporary, until they self destruct).
The seventies crisis was gov't created, again, more inflation. It was stopped with a serious interest rate hike by 1981 (up to 21.5%). The inflation stopped for a while, but gov't didn't stop setting interest rates, so it restarted in mid eighties. By the nineties USA would have been in great trouble, but then Internet bubble helped out and Greenspan helped tremendously to create it, again, with loose monetary policy.
By the end of the decade the bubble was near it's logical completion, the Fed took interest rates down to 0 in 2001 I think.
This, combined with the mandatory issuance of bad debt, "insured" by F&F and FHA (today FHA "insures" 95% of bad mortgages, they have 1Trillion of these with only 5Billion of 'assets', so it's only a matter of time before it explodes again), created the housing bubble. This was again, completely predicted and played against by people buying real assets, that's why gold and oil futures go up - they reflect the TRUE state of inflation, none of these fake government reports about inflation and none of this fake interest rates.
The real interest rates are simply a reverse function of yearly gains in commodity prices expressed in USD and other fake currencies that follow USD to the eventual demise.
If you want more actual explanations from back when people were LAUGHING at others for explaining this, you should really watch this video from 2006 (and in 2005 the same conference had the same speaker presenting the same data, only it was not recorded, but they laughed even more in 2005.) Of-course Ron Paul is famous for predicting this in Congress.
The point is that all of these predictions are not incidental, they are not just somebody making a wild guess, they are based on the logical outcome of the policies that are conducted by the Fed and the government, and by understanding how the market ends up reacting to these policies. It is REALLY EASY TO UNDERSTAND and none of the modern Keynesian shamanism is required. Keynesian ideas are voodoo. Maybe one good thing that will come out of this global catastrophe will be the final end to this nonsense (not that gov't schools will end up teaching the real stuff, it is absolutely not in the interest of governments, who want to keep printing fake money and call that a 'fiscal policy').
No. Companies exist for the benefit of society.
- do you want a bet? A gold ounce? Companies exist for the benefit of their investors, people don't wake up one morning and say: gee, wouldn't it be great to start a company that exists for people other than investors, not to make money of your own work, but to work, so you can give money and wealth/products to others.
Yes, things like that happen, there are non-profit organisations, charity and such, but companies that people start where they go to work and make money, those exist to make investors richer, not to give anything to society.
Society gets the output from company's work as a side effect of investors in the company trying to grow their money. If you don't understand that simple principle, you shouldn't ever try and run a business.