Fascinating video. It's ironic for me as i'm currently reading ...
... and FDR is just taking office. I'm becoming a huge fan of taking a portion of one's investment portfolio as bullion to hedge against hyper-inflation. As the saying goes, all fiat currency eventually is becomes worth only the paper it was printed on.
Good link. He points to Nixon removing us from the gold standard, and Clinton deregulation as causes for financial instability. I'm not a fan of government regulation, but sometimes it is necessary, it just needs to be properly limited and sensible, and Clinton did make a huge mistake in signing two acts into law that significantly relaxed sensible depression era regulation. The Financial Services Modernization Act repealed key parts of Glass-Steagall, allowing banks to play commercial banker, investment banker and insurer under one roof and the Commodity Futures Modernization Act overturned key parts of the Commodity Exchange Act which became rocket fuel for derivatives and credit default swaps.
I'd add that Fannie Mae and Freddie Mac coupled with the Community Reinvestment Act introduced by Carter and doubled down on by Clinton and Bush played a huge role in this last crash by ultimately requiring relaxed lending standards and increasing subprime lending activity in an effort to increase home ownership rates. Carter, Clinton (again) and Bush deserve "credit" for their roles in that mess. Couple the FM^2 with CRA, FSMA and CFMA and you've got bad loans bundled as mortgage backed securities as well as credit derivative contracts, and the mess those things led to.
Good link. He points to Nixon removing us from the gold standard, and Clinton deregulation as causes for financial instability. I'm not a fan of government regulation, but sometimes it is necessary, it just needs to be properly limited and sensible, and Clinton did make a huge mistake in signing two acts into law that significantly relaxed sensible depression era regulation. The Financial Services Modernization Act repealed key parts of Glass-Steagall, allowing banks to play commercial banker, investment banker and insurer under one roof and the Commodity Futures Modernization Act overturned key parts of the Commodity Exchange Act which became rocket fuel for derivatives and credit default swaps.
I'd add that Fannie Mae and Freddie Mac coupled with the Community Reinvestment Act introduced by Carter and doubled down on by Clinton and Bush played a huge role in this last crash by ultimately requiring relaxed lending standards and increasing subprime lending activity in an effort to increase home ownership rates. Carter, Clinton (again) and Bush deserve "credit" for their roles in that mess. Couple the FM^2 with CRA, FSMA and CFMA and you've got bad loans bundled as mortgage backed securities as well as credit derivative contracts, and the mess those things led .
None of it happens if the interest rates weren't lowered to create the demand. Or if the banks used actual standards for lending, rather than allowing stated income loans for a quarter percent higher interest rate.
And don't forget Republicans in congress who pushed the financial services modernization act (that was a republican bill that Clinton signed). Both parties had a hand in this, along with wall street/banks and the fed.
And remaining on the gold standard is FS. Currency is like oil or anything else. It's worth what someone else is willing to pay for it. Backing currency with gold is nonsensical, because one day gold might be worth the same as paper.
Yes Clinton signed the bill. But I always have to chuckle when people try to pin the recession on Clinton for signing the bill when they forget how it was created and who pushed it.
"Respective versions of the legislation were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.
During debate in the House of Representatives, Rep. John Dingell (Democrat of Michigan) argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government.[7]
The House passed its version of the Financial Services Act of 1999 on July 1, 1999, by a bipartisan vote of 343–86 (Republicans 205–16; Democrats 138–69; Independent 0–1),[8][9][note 1] two months after the Senate had already passed its version of the bill on May 6 by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed).[11][12][13][note 2]"
Good link. He points to Nixon removing us from the gold standard, and Clinton deregulation as causes for financial instability. I'm not a fan of government regulation, but sometimes it is necessary, it just needs to be properly limited and sensible, and Clinton did make a huge mistake in signing two acts into law that significantly relaxed sensible depression era regulation. The Financial Services Modernization Act repealed key parts of Glass-Steagall, allowing banks to play commercial banker, investment banker and insurer under one roof and the Commodity Futures Modernization Act overturned key parts of the Commodity Exchange Act which became rocket fuel for derivatives and credit default swaps.
I'd add that Fannie Mae and Freddie Mac coupled with the Community Reinvestment Act introduced by Carter and doubled down on by Clinton and Bush played a huge role in this last crash by ultimately requiring relaxed lending standards and increasing subprime lending activity in an effort to increase home ownership rates. Carter, Clinton (again) and Bush deserve "credit" for their roles in that mess. Couple the FM^2 with CRA, FSMA and CFMA and you've got bad loans bundled as mortgage backed securities as well as credit derivative contracts, and the mess those things led .
None of it happens if the interest rates weren't lowered to create the demand. Or if the banks used actual standards for lending, rather than allowing stated income loans for a quarter percent higher interest rate.
And don't forget Republicans in congress who pushed the financial services modernization act (that was a republican bill that Clinton signed). Both parties had a hand in this, along with wall street/banks and the fed.
And remaining on the gold standard is FS. Currency is like oil or anything else. It's worth what someone else is willing to pay for it. Backing currency with gold is nonsensical, because one day gold might be worth the same as paper.
Yes Clinton signed the bill. But I always have to chuckle when people try to pin the recession on Clinton for signing the bill when they forget how it was created and who pushed it.
"Respective versions of the legislation were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.
During debate in the House of Representatives, Rep. John Dingell (Democrat of Michigan) argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government.[7]
The House passed its version of the Financial Services Act of 1999 on July 1, 1999, by a bipartisan vote of 343–86 (Republicans 205–16; Democrats 138–69; Independent 0–1),[8][9][note 1] two months after the Senate had already passed its version of the bill on May 6 by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed).[11][12][13][note 2]"
I like to pretend that presidents have no influence on the bills they sign, that's what I like to do. For crissakes Hondo, Clinton was an eager participant in the development of this bill, which is why HE signed it into law. By the way, how many vaccines did you receive as an infant?
Yes Clinton signed the bill. But I always have to chuckle when people try to pin the recession on Clinton for signing the bill when they forget how it was created and who pushed it.
"Respective versions of the legislation were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.
During debate in the House of Representatives, Rep. John Dingell (Democrat of Michigan) argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government.[7]
The House passed its version of the Financial Services Act of 1999 on July 1, 1999, by a bipartisan vote of 343–86 (Republicans 205–16; Democrats 138–69; Independent 0–1),[8][9][note 1] two months after the Senate had already passed its version of the bill on May 6 by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed).[11][12][13][note 2]"
I like to pretend that presidents have no influence on the bills they sign, that's what I like to do. For crissakes Hondo, Clinton was an eager participant in the development of this bill, which is why HE signed it into law. By the way, how many vaccines did you receive as an infant?
Not enough 'awesomes' available for this poast. That last line is gold. Will use often.
Yes Clinton signed the bill. But I always have to chuckle when people try to pin the recession on Clinton for signing the bill when they forget how it was created and who pushed it.
"Respective versions of the legislation were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.
During debate in the House of Representatives, Rep. John Dingell (Democrat of Michigan) argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government.[7]
The House passed its version of the Financial Services Act of 1999 on July 1, 1999, by a bipartisan vote of 343–86 (Republicans 205–16; Democrats 138–69; Independent 0–1),[8][9][note 1] two months after the Senate had already passed its version of the bill on May 6 by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed).[11][12][13][note 2]"
I like to pretend that presidents have no influence on the bills they sign, that's what I like to do. For crissakes Hondo, Clinton was an eager participant in the development of this bill, which is why HE signed it into law. By the way, how many vaccines did you receive as an infant?
I like to pretend Republicans had nothing to do with it. And I like to only read part of comments, cause that's what I like to do.
(BTW, it's very clear if you read my comments, that Democrats, Republicans, the fed, wall street/banks, and hell even the consumers, were involved. But keep thinking it's all democrats. Cause that's what you like to do.)
Gold has been money for centuries because it meets the 5 properties of money. Todays paper money are currencies. There is a big difference between currencies and money.
Even though we are on a 100% paper system governments and central banks hold Gold because it is the ultimate backstop.
A hard money standard is what protects wages and keeps governments in line.
The people who argue against this are professors who are paid by banks and governments for consulting and other bullshit. Banks and governments are the two only direct beneficiaries of a non-hard money system so they have professors and PhDs arguing against it constantly.
Since we went completely off the GS in 1971 all these problems started...real wages have collapsed, the middle class has disappeared, government spending has been out of control and the gap between the rich and poor has accelerated. And its not even the top 1%...or the top 0.1%...its the 0.01% who have all the wealth. The top 1% look totally poor compared to the top 0.01%. Instead of some CEO banker asswipe making $6M a year and getting a $1.5M bonus, he now makes $50M a year and gets a $25M bonus in a good year.
Another thing to point out is the explosion in credit and debt since the 1970s hasn't produced shit. Sure there are great advancements here and there but for the most part.....transportation is no better....housing is more expensive with few improvements....few advancements in energy. Oh wait....we have iPhones and iPads and Twitter and Facebook. The fucking Internet is the best development and that was started by the government.
Currency and monetary systems don't last much longer than 30-40 years. We will see the end of this in the next 5-10 years as the entire world cannot afford normalized interest rates because of huge debts. Its a few years away but the end of this mess will come about when inflation starts rising but because of debts interest rates won't be able to rise to keep pace. In 10+ years there will definitely be some new global monetary system and Gold will play an important role. That is why China has been buying Gold for 10 years...because they want their currency to play a huge role in the new system...right next to the US$.
I like gold long term. I even bought some prospecting stuff a few years ago, but gold is headed back down below $800/oz, maybe even $600. I've been short gold via DGLD for over a year now. Dollar's getting stronger and the FED is going to kill housing inflation soon.
It's a good investment if you buy it low in "safe times", then just wait 15 years for the next banking scam collapse, then sell it while it's up and fears are rampant.
When I was a little kid I found a big chunk of what looked like it might be gold near the front end of a drainage pipe by my elementary school...a pipe that looked just like the one in this vid. But, I thought to myself...there's no gold in Tacoma and threw it back on the ground. Then I saw this vid last year...
Gold has been money for centuries because it meets the 5 properties of money. Todays paper money are currencies. There is a big difference between currencies and money.
Even though we are on a 100% paper system governments and central banks hold Gold because it is the ultimate backstop.
A hard money standard is what protects wages and keeps governments in line.
The people who argue against this are professors who are paid by banks and governments for consulting and other bullshit. Banks and governments are the two only direct beneficiaries of a non-hard money system so they have professors and PhDs arguing against it constantly.
Since we went completely off the GS in 1971 all these problems started...real wages have collapsed, the middle class has disappeared, government spending has been out of control and the gap between the rich and poor has accelerated. And its not even the top 1%...or the top 0.1%...its the 0.01% who have all the wealth. The top 1% look totally poor compared to the top 0.01%. Instead of some CEO banker asswipe making $6M a year and getting a $1.5M bonus, he now makes $50M a year and gets a $25M bonus in a good year.
Another thing to point out is the explosion in credit and debt since the 1970s hasn't produced shit. Sure there are great advancements here and there but for the most part.....transportation is no better....housing is more expensive with few improvements....few advancements in energy. Oh wait....we have iPhones and iPads and Twitter and Facebook. The fucking Internet is the best development and that was started by the government.
Currency and monetary systems don't last much longer than 30-40 years. We will see the end of this in the next 5-10 years as the entire world cannot afford normalized interest rates because of huge debts. Its a few years away but the end of this mess will come about when inflation starts rising but because of debts interest rates won't be able to rise to keep pace. In 10+ years there will definitely be some new global monetary system and Gold will play an important role. That is why China has been buying Gold for 10 years...because they want their currency to play a huge role in the new system...right next to the US$.
Agree with your basic premise but do have a few disagreements.
IMO the erosion of the middle class has less to do with being in a fiat currency system and more to do with global competition. The US industrial labor force got caught flat footed with antiquated unions and antiquated skills, which resulted in globalization of our industrial base, and that killed a lot of solid middle class jobs. Much of that tide is turning as right to work states have picked up significantly with Korean, Japanese and German auto makers designing, testing and building cars in the US with US Labor. Airbus now has design centers here and is expanding its manufacturing footprint in the US. Honda is designing and building business jets in North Carolina. You could argue that it's easier to manipulate the value of currency these days and that that also plays a role in reversing the tide, but IMO it comes down to simpler economics, based on real productivity advantages.
Also, IMO, the separation of the classes is less important than standards of living, which have risen for all classes over the decades. What we call poor today is laughable by standards abroad as well as in this country decades ago. There is limited real poverty here, it's real but it's also pretty rare. The fact of the matter is that families today live in much bigger houses with fewer family members and with a lot more stuff than they did when we were taken off the gold standard. I'm not arguing for fiat currency, just pointing out the obvious. Of course some of this rise is the result of increasing debt loads due to the availability cheap and loose credit, as well as very liberal personal bankruptcy laws that allow people to live in the here and now with little consequence for bad behavior, so there is that.
"Evil" defense spending did kick off the internet through DARPA, which is just one of many examples of whole economies spawned from "evil" defense and space spending, but privateers ultimately took it to another level. This IMO really started with the transition of "gubment" funded web browser development to public spaces, for instance, Mosaic to Netscape, and then the subsequent explosion of online commerce, advertising, marketing, sales, news, blogs, hardcore husky ... etc.
I think you're off base on improvements in housing and transportation. Modern housing is much more energy efficient today. Homes are built with far more insulation, better windows, and more efficient heating and cooling systems. Transportation is better too. Cars last a lot longer, use less fuel on average, and are safer. Aircraft are more fuel efficient, quieter and safer. The real cost of air travel has fallen dramatically since the 70's, much of that has been due to deregulation, but efficiency gains and improvements in maintenance costs have helped as well. None of these are tied to fiat currency (at least not directly) but rather improvements in technology. Material technology, manufacturing technology, control systems technology, engineering design ... etc.
Want to talk manufacturing? Manufacturing employment is back on the rise. Interesting to see when the fall off of manufacturing employment occurred, right?
Comments
... and FDR is just taking office. I'm becoming a huge fan of taking a portion of one's investment portfolio as bullion to hedge against hyper-inflation. As the saying goes, all fiat currency eventually is becomes worth only the paper it was printed on.
Also, Glass-Steagall: en.wikipedia.org/wiki/Glass-Steagall_Legislation
I'd add that Fannie Mae and Freddie Mac coupled with the Community Reinvestment Act introduced by Carter and doubled down on by Clinton and Bush played a huge role in this last crash by ultimately requiring relaxed lending standards and increasing subprime lending activity in an effort to increase home ownership rates. Carter, Clinton (again) and Bush deserve "credit" for their roles in that mess. Couple the FM^2 with CRA, FSMA and CFMA and you've got bad loans bundled as mortgage backed securities as well as credit derivative contracts, and the mess those things led to.
And don't forget Republicans in congress who pushed the financial services modernization act (that was a republican bill that Clinton signed). Both parties had a hand in this, along with wall street/banks and the fed.
And remaining on the gold standard is FS. Currency is like oil or anything else. It's worth what someone else is willing to pay for it. Backing currency with gold is nonsensical, because one day gold might be worth the same as paper.
http://en.m.wikipedia.org/wiki/Gramm–Leach–Bliley_Act
"Respective versions of the legislation were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.
During debate in the House of Representatives, Rep. John Dingell (Democrat of Michigan) argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government.[7]
The House passed its version of the Financial Services Act of 1999 on July 1, 1999, by a bipartisan vote of 343–86 (Republicans 205–16; Democrats 138–69; Independent 0–1),[8][9][note 1] two months after the Senate had already passed its version of the bill on May 6 by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed).[11][12][13][note 2]"
(BTW, it's very clear if you read my comments, that Democrats, Republicans, the fed, wall street/banks, and hell even the consumers, were involved. But keep thinking it's all democrats. Cause that's what you like to do.)
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html
I can assure you Glass Seagall was being routinely violated on a daily basis in the '80's looooooooooooooong before Clinton signed that legislation.
Funny, isn't it? Aaaaaaaaaaaaaalllll of the sudden, Mitch McConnell and Obummer are bestest frens?
Even though we are on a 100% paper system governments and central banks hold Gold because it is the ultimate backstop.
A hard money standard is what protects wages and keeps governments in line.
The people who argue against this are professors who are paid by banks and governments for consulting and other bullshit. Banks and governments are the two only direct beneficiaries of a non-hard money system so they have professors and PhDs arguing against it constantly.
Since we went completely off the GS in 1971 all these problems started...real wages have collapsed, the middle class has disappeared, government spending has been out of control and the gap between the rich and poor has accelerated. And its not even the top 1%...or the top 0.1%...its the 0.01% who have all the wealth. The top 1% look totally poor compared to the top 0.01%. Instead of some CEO banker asswipe making $6M a year and getting a $1.5M bonus, he now makes $50M a year and gets a $25M bonus in a good year.
Another thing to point out is the explosion in credit and debt since the 1970s hasn't produced shit. Sure there are great advancements here and there but for the most part.....transportation is no better....housing is more expensive with few improvements....few advancements in energy. Oh wait....we have iPhones and iPads and Twitter and Facebook. The fucking Internet is the best development and that was started by the government.
Currency and monetary systems don't last much longer than 30-40 years. We will see the end of this in the next 5-10 years as the entire world cannot afford normalized interest rates because of huge debts. Its a few years away but the end of this mess will come about when inflation starts rising but because of debts interest rates won't be able to rise to keep pace. In 10+ years there will definitely be some new global monetary system and Gold will play an important role. That is why China has been buying Gold for 10 years...because they want their currency to play a huge role in the new system...right next to the US$.
It's a good investment if you buy it low in "safe times", then just wait 15 years for the next banking scam collapse, then sell it while it's up and fears are rampant.
When I was a little kid I found a big chunk of what looked like it might be gold near the front end of a drainage pipe by my elementary school...a pipe that looked just like the one in this vid. But, I thought to myself...there's no gold in Tacoma and threw it back on the ground. Then I saw this vid last year...
Some of this guy's vids are really good.
IMO the erosion of the middle class has less to do with being in a fiat currency system and more to do with global competition. The US industrial labor force got caught flat footed with antiquated unions and antiquated skills, which resulted in globalization of our industrial base, and that killed a lot of solid middle class jobs. Much of that tide is turning as right to work states have picked up significantly with Korean, Japanese and German auto makers designing, testing and building cars in the US with US Labor. Airbus now has design centers here and is expanding its manufacturing footprint in the US. Honda is designing and building business jets in North Carolina. You could argue that it's easier to manipulate the value of currency these days and that that also plays a role in reversing the tide, but IMO it comes down to simpler economics, based on real productivity advantages.
Also, IMO, the separation of the classes is less important than standards of living, which have risen for all classes over the decades. What we call poor today is laughable by standards abroad as well as in this country decades ago. There is limited real poverty here, it's real but it's also pretty rare. The fact of the matter is that families today live in much bigger houses with fewer family members and with a lot more stuff than they did when we were taken off the gold standard. I'm not arguing for fiat currency, just pointing out the obvious. Of course some of this rise is the result of increasing debt loads due to the availability cheap and loose credit, as well as very liberal personal bankruptcy laws that allow people to live in the here and now with little consequence for bad behavior, so there is that.
"Evil" defense spending did kick off the internet through DARPA, which is just one of many examples of whole economies spawned from "evil" defense and space spending, but privateers ultimately took it to another level. This IMO really started with the transition of "gubment" funded web browser development to public spaces, for instance, Mosaic to Netscape, and then the subsequent explosion of online commerce, advertising, marketing, sales, news, blogs, hardcore husky ... etc.
I think you're off base on improvements in housing and transportation. Modern housing is much more energy efficient today. Homes are built with far more insulation, better windows, and more efficient heating and cooling systems. Transportation is better too. Cars last a lot longer, use less fuel on average, and are safer. Aircraft are more fuel efficient, quieter and safer. The real cost of air travel has fallen dramatically since the 70's, much of that has been due to deregulation, but efficiency gains and improvements in maintenance costs have helped as well. None of these are tied to fiat currency (at least not directly) but rather improvements in technology. Material technology, manufacturing technology, control systems technology, engineering design ... etc.
http://data.bls.gov/pdq/SurveyOutputServlet