Thursday, October 13, 2011

I'll keep track of anyone who knows the solution....

debt jubilee and send us a check. Sounds incredible but that's the only way out of a depression. broke dicks can't spend or borrow enough to kick start the economy.

Most employed people are paying down debt and saving for retirement. The unemployed are sharing a cardboard box or moving in with Dad and Mom.

How about you? Buying a new house next year? Car? Going to borrow big to start a business? Will you find a new job? Or will you be unemployed?

Then what?

Now multiply your position with a hundred million or so and you will understand.

We are broke? You can't give your house away for the mortgage on it.

Might be room under a bridge if the damn thing doesn't fall on your head!

It's in all our interests to understand how to stop another Great Depression | George Monbiot | Comment is free | The Guardian
President Obama justified the bank bailout on the grounds that "a dollar of capital in a bank can actually result in eight or 10 dollars of loans to families and businesses. So that's a multiplier effect." But the money multiplier didn't happen. The $1.3 trillion that Bernanke injected scarcely raised the amount of money in circulation: the 110% increase in M0 money led not to the 800% or 1,000% increase in M1 money that Obama predicted, but a rise of just 20%. The bail-outs failed because M0 was not the cause of the crisis. The money would have achieved far more had it simply been given to the public. But, as Angela Merkel and Nicolas Sarkozy demonstrated over the weekend, governments have learnt nothing from this failure, and seek only to repeat it.

Instead, Keen says, the key to averting or curtailing a second Great Depression is to reduce the levels of private debt, through a unilateral write-off, or jubilee. The irresponsible loans the banks made should not be honoured. This will mean taking many banks into receivership. Otherwise private debt will sort itself out by traditional means: mass bankruptcy, which will generate an even greater crisis.

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