The KeelyNet Blog

Free Energy, Gravity Control, Alternative Health and Science and more…

  • Links of Interest

  • Contact & Support

    This blog began on
    Sept. 29, 2007.
    Email Jerry

    Feel free to
    Buy Something!

    Thank you
    for Supporting
    KeelyNet

    KeelyNet
    Vanguard Sciences
    Vanguard Sciences
    Vanguard Sciences
    KeelyNet
    KeelyNet
    KeelyNet

    KeelyNet
    Click for Details

    Or you can Donate to support this site and KeelyNet. Thanks!

    -----KeelyNet-----
    KeelyNet News Feed

    $5 Alt Science MP3s to listen to while working, driving, jogging, etc.
    KeelyNetNo time to sit back and watch videos? Here are 15 interesting presentations you can download for just $5 each and listen to while driving, working, jogging, etc. An easy way to learn some fascinating new things that you will find of use. Easy, cheap and simple, better than eBooks or Videos. Roughly 50MB per MP3. Presentations by Bill Beaty of Amateur Science on the Dark Side of Amateur Science, Peter Lindemann on the World of Free Energy, Norman Wootan on the History of the EV Gray motor, Dan Davidson on Shape Power and Gravity Wave Phenomena, Lee Crock on a Method for Stimulating Energy, Doug Konzen on the Konzen Pulse Motor, George Wiseman on the Water Torch and Jerry Decker on Aether, ZPE and Dielectric Nano Arrays. - $5.00 Download.
    More Details & Ordering

    14 Ways to Save Money on Fuel Costs - $15.00
    KeelyNetNot Biofuel, Solar, Fuel Cells, etc.. and NOT acceleration, braking, or weight type tips! If you want do-it-yourself practical information you can use NOW, this is the eBook for you. Just use one of these tips ONE TIME and it will pay for the cost of this eBook. - 151 pages - $15.00 download
    More Details & Ordering

    The Physics of Crystals - $20.00 DVD
    KeelyNetExcellent video provides insights into Pyramidal and Tetrahedral Geometry. How they work and how to use them for novel effects. Incredible, information packed, over 2 Hour long DVD describing many unusual and original experiments including transmutation of elements, energy extraction, increasing plant growth, healing the body and more. - $20.00 snailmail
    More Details & Ordering

    High Voltage & Free Energy Devices - $15.00
    KeelyNetThis ebook provides many simple experiments you can do, including hydrogen generation and electrostatic repulsion. The keys to the EV Gray Fuelless Engine. One of the most comprehensive compilations of information yet detailing the effects of high voltage repulsion as a driving force. Ed Gray's engine produced in excess of 300HP and he claimed to be able to "split the positive energy" of electricity to produce a self-running motor-generator for use as an engine. Schematics and tons of photos of the original machines and more! - 121 pages - $15.00 download
    More Details & Ordering

    MexiStim Polarity Cycler
    KeelyNetCheck out the article which tells you how to build or buy your own to experiment with. Reported to boost energy levels.
    More Details & Ordering


  • Subscribe

  • Admin

Ron Paul on the current mess

Posted by keelynet on September 30, 2008

Bailouts will lead to rough economic ride – “the government’s preferred solution to the crisis is the very thing that got us into this mess in the first place: government intervention. Ever since the 1930s, the federal government has involved itself deeply in housing policy and developed numerous programs to encourage homebuilding and homeownership. Government-sponsored enterprises Fannie Mae and Freddie Mac were able to obtain a monopoly position in the mortgage market, especially the mortgage-backed securities market, because of the advantages bestowed upon them by the federal government.

Laws passed by Congress such as the Community Reinvestment Act required banks to make loans to previously underserved segments of their communities, thus forcing banks to lend to people who normally would be rejected as bad credit risks. These governmental measures, combined with the Federal Reserve’s loose monetary policy, led to an unsustainable housing boom. The key measure by which the Fed caused this boom was through the manipulation of interest rates, and the open market operations that accompany this lowering.

When interest rates are lowered to below what the market rate would normally be, as the Federal Reserve has done numerous times throughout this decade, it becomes much cheaper to borrow money. Longer-term and more capital-intensive projects, projects that would be unprofitable at a high interest rate, suddenly become profitable. Because the boom comes about from an increase in the supply of money and not from demand from consumers, the result is malinvestment, a misallocation of resources into sectors in which there is insufficient demand.

I am afraid that policymakers today have not learned the lesson that prices must adjust to economic reality. The bailout of Fannie and Freddie, the purchase of AIG, and the latest multi-hundred billion dollar Treasury scheme all have one thing in common: They seek to prevent the liquidation of bad debt and worthless assets at market prices, and instead try to prop up those markets and keep those assets trading at prices far in excess of what any buyer would be willing to pay.

Additionally, the government’s actions encourage moral hazard of the worst sort. Now that the precedent has been set, the likelihood of financial institutions to engage in riskier investment schemes is increased, because they now know that an investment position so overextended as to threaten the stability of the financial system will result in a government bailout and purchase of worthless, illiquid assets.

Using trillions of dollars of taxpayer money to purchase illusory short-term security, the government is actually ensuring even greater instability in the financial system in the long term. The solution to the problem is to end government meddling in the market. Government intervention leads to distortions in the market, and government reacts to each distortion by enacting new laws and regulations, which create their own distortions, and so on ad infinitum.

It is time this process is put to an end.”

Youtube with Ron Paul on Fox News about the AIG Bailout – 9/17/08

So you think we have only two choices for President? Think again! Cut through all the crap and Write-In Ron Paul for President!

Update 09/30/08 – Saw this today and just HAD to add it here. It is so right. When a business fails, they SHOULD close and file for bankruptcy. Let the market correct itself. (Thanks for the nice comments!)

Bankruptcy, not bailout, is the right answer – “The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.

Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared. The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.

The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company. Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.

In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This “moral hazard” generates enormous distortions in an economy’s allocation of its financial resources. Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.

Further, the current credit freeze is likely due to Wall Street’s hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents. The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.” – Source

Advertisements

5 Responses to “Ron Paul on the current mess”

  1. pacer521 said

    nice post and thanks for the info, keelynet.

    http://culturedecoded.wordpress.com/2008/09/30/analysis-why-the-republicans-cant-replace-sarah-palin/

  2. politixican said

    This should give responsible media outlets a greater opportunity to point out the history of how it is our economy got to where we are…beginning with the Community Reinvestment Act of 1977 (President Jimmy Carter); the push by the Clinton Administration to force sub-prime mortgage lenders to expand their offerings into under-qualified, high-risk groups; the money trail of industry lobbyists (esp. Freddie Mac, Fannie Mae) and their political allies (esp. Frank, Dodd, Obama, and other republicans as well); and, the efforts by the aforementioned, as well as Maxine Waters and Pelosi, to protect such industry practices via outspoken congressional opposition to reform measures.

    Abusive mindsets in government caused these problems, not capitalism, and these same folks should not be given the opportunity to wash their hands clean of history when they have meddled dangerously close to criminality.

    Pelosi never had the votes, and politics are the sole reason she brought this bill up so fast. She needs to resign! See My Site for more.

  3. bevans623 said

    When you read or hear anything from Dr. Paul, it just makes so much sense, especially compared to the sound bites you hear from McCain and Obama. His testimony yesterday before the Bailout vote was only two minutes long, but it told me more about the economy than anything I’ve read or heard from the mainstream media. Thanks for posting this. I hope more and more people will read it and be convinced of the truths he speaks.

  4. Gary said

    Great post! I just made one concerning this in trying to understand it, but I like yours a lot better. This is another prime example of government making a big mess of things.

  5. […] KeelyNet Blog […]

Sorry, the comment form is closed at this time.

 
%d bloggers like this: