Doug Noland was pretty damn interesting this week. He says that the credit bubble has scarcely missed a beat. August has already had a record amount of junk bonds issued. RO-RO. The second RO is going to be a real doozie, especially if the Feds hands are tied. We have a $1 million plus piece of land under contract and I just hope it closes before the wheels come off.

According to Doug, they have pretty much succeeded in blowing a new housing bubble. I think he wrote there has been all of $200 billion come off FNM/FRE's books and the FHA has swelled to over $1 trillion. Interest rates are going up, either because of risk, inflation or the threat of more QE. Karl has pointed out how rates went up with the last 2 QE's, either because they expected it to work or because of inflationary expectations.

http://www.prudentbear.com/index.php/cre....

Yep. The big problem with not allowing air out of the asset bubbles is that it simply makes the Ponzi bigger, in that you continue to need more and more credit creation to cover the interest payments.

The longer you try to delay the outcome the worse it is.

Think they move to the Krugman plan when this nonsense fails? The dollar only has 2 ways to go, way up or way down. One breaks the bankers, the other breaks us.

Not a chance on the Krugman plan. If you were a bankster would you like the money you loaned to buy a car valued at a loaf of bread's price next year?

Me neither.

I would recommend amending the title of the post to "IMF paper..." as Bill does in the video. This is consistent with disclaimer on the title page of the paper and would protect you and your excellent work from charges of misrepresentation of official IMF support for this position. I do not think that is your intention (shorter titles are generally better than longer) but here the distinction is important. Never like to give the banksters any ammunition...

I'm still trudging through the IMF paper. They seem like reasonable guys and include their email addresses. Maybe you (Karl) should open a dialogue with them and send along your improvements to the Fisher plan. An official IMF analysis and discussion would give it a big boost.

The IMF is a big part of the problem and distancing ourselves from them, the BIS and central banks in general is part of the solution. Anytime congress wants, they may issue debt free (sovereign) dollars to end the debt crisis. The IMF is neither needed nor wanted.

There are many problems with the "Chicago Plan" and I'll list two:

1) It centralizes control to a small group who "independently" determine monetary policy. A much better solution would be to have congress fund a large pool of debt free money to be spent on infrastructure projects as deemed important by the states. This de-centralizes power in providing a check and balance.

2) It would increase the cost of private and local government borrowing through 100% reserve banking which essentially means that banks would no longer be able to create any money. They would become intermediaries linking those with extra money with those in need - the interest would likely increase. For example, how much return would be needed to have people wait 30 years for their money via mortgages?

A much better plan would have congress fund a pool of money for commercial banks to borrow interest free to serve their customers. A service fee could be charged and the banks could also charge service and processing fees instead of charging interest. As the money is repaid, it could be returned to the pool to be re-cycled again.

Conclusion: No doubt debt free money is direly needed to mitigate the debt crisis but we should not need the IMF and their phony economists. During the prior Great Depression, Robert H. Hemphill is attributed as writing in a Hearst publication:

“We are rapidly approaching a situation where the government MUST issue additional currency. It will very soon be the only move remaining. IT SHOULD HAVE BEEN THE FIRST STEP IN THE RECOVERY PROGRAM.

“Immediately upon a revival of the demand that the government increase the supply of currency, we shall again be subjected to a barrage of skillfully designed and cunningly circulated propaganda by means of which a small group of international bankers have been able, for two centuries to frighten the peoples of the civilized would against issuing their own good money in sufficient quantities to carry on their necessary commerce. By this simple, but amazingly successful device these `money changers’ — parasites in a busy world intent on creating and exchanging wealth — have been able to preserve for their private and exclusive right the monopoly of manufacturing an inferior substitute for money which they have hypnotized civilized nations into using, because of their pressing need to exchange goods and services.

“In our present situation the issue of additional currency is the only way out. Is there any good reason that Congress cannot or should not do this now? How long, OH GOD WILL THE AMERICAN PEOPLE STAND FOR SUCH A CONDITION; when all they need is a safe, sane, reasonable plan of economic security and “United Action” to put it into operation?"

Yeah, they can end the debt crisis, and start a currency crisis.

Someone's heart has to get broken here. Someone is being defaulted on.

Let's just say who that is and mark it zero.

Quote:

In our present situation the issue of additional currency is the only way out.

Bull****. The only way "out" is default and to stop living beyond your means...a big bankruptcy engulfing the world. I'm really tired of the banksters getting first crack at the money pool and taking all the vig.