Government-sponsored institutions kill competition

History shows that a nation can not have competition without trust and confidence.

Government-sponsored institutions kill competition because they deliver no trust no confidence.

Government is a wasteful institution

Government is a wasteful institution.

Government is unable to understand the meaning of innovation, efficiency and flexibility.

Adding debt to debt.

Once short-term interest rates get to near zero, a key focus in such an environment will be to bring down long-term interest rates, which help determine the rates of mortgages and other debt instruments.

This would likely involve in practice the Fed buying longer-term Treasury bonds.

Such actions will not solve the problem but will merely compound it, by adding debt to debt.

Unintended, adverse, long-term consequences.

The efforts to prevent the market from disciplining excesses will have unintended, adverse, long-term consequences.

One legacy will be the existence of a large number of uncompetitive companies which will cause profit margins to fall for their more productive competitors.

Another consequence will be a long-term deflationary malaise, which will keep interest rates ridiculously low to the detriment of savers.

Bank disinterest in lending the money

The aggregate reserves of U.S. depository institutions have surged nearly 14-fold in the past two months.

The growth of excess reserves reflects bank disinterest in lending the money. This suggests the banks only want to finance existing positions.

The Fed can only control the supply of money

In the U.S., the Fed can only control the supply of money; it cannot control the velocity of money or the rate at which it turns over.

The dramatic collapse in securitization over the past 18 months reflects the continuing collapse in velocity as financial engineering goes into reverse.

The modern economy and the real world

Confusion, uncertainty, doubt, distrust, distrustfulness, incertitude, misgiving, mistrust, mistrustfulness, skepticism and suspicion,

That is the modern economy and the real world.

The system is dysfunctional

There's something very strange about issuing debt to solve a problem caused by too much debt.

If something cannot go on forever, it won't.

The system is dysfunctional.

Where does government get the money?

Every dollar government injects into the economy must first be taxed or borrowed out of the economy.

No new spending power is created.

It's merely redistributed from one group of people to another.

Economic growth -- the act of producing more goods and services -- can be accomplished only by making people more productive.

The current crisis

The current crisis resulted primarily from anticapitalists forcing banks and mortgage companies to lend money to people with little or no means to pay it back.

Market-suffocating policies

Market-suffocating policies will put the country in Great Depression.

What the government gives with one hand

What the government gives with one hand, through increase spending,
it take away with the other, through increase taxation.

Cheap and easy money

Cheap and easy money fueled by the FED generated speculation which involves buying for resale rather than use in the case of commodities, and for resale rather than income in the case of financial assets.

Fed gets itself and the economy in trouble

In 2003 the Fed cut the fed funds rate to 1% and kept it there for a full year through June 2004.

Growth in the third quarter of 2003 was 7.5%, yet the Fed kept its foot on the monetary accelerator for many more months.

Fed's main obligation is price stability.

Fed gets itself and the economy in trouble when it attempts to use monetary policy to manage growth.