An Economic Generation is About to End III

An Economic Generation is About to End III

by Charlie Champion

     The key to understanding the disaster which we face , is comprehending the methodology

which the Fed has employed.to manipulate the economic currents.

     Historically, the free enterprise system, has involved several years of expansion, followed by a

year or two of contraction. This enabled the economy to digested,the gains, adjust to the losses and provided the capital necessary to fuel the next  recovery and economic growth cycle. The contractions had a way of punishing the excesses.

     There is a certain rhythm to this type of ebb and flow. An economic logic, which keeps

speculation in some framework of caution and helps to limit too much excess.

     If you go too far you can get wiped out.”If you play the tune (toon) you better be prepared to pay

the piper”.

     The methodology of having the Government bail out failed or flawed industries, graduated from

smaller, strategically necessary actions, like saving the airlies, or the domestic automotive

manufacturers, to more serious and questionable actions., like bailing out the S&L’s.

     The list is extensive, and the bail outs have become more and more intrusive.

     The excesses of speculation have been protected by various public bail outs. We have printed

money by the ton and manipulated the interest rates to mitigate the pain of those excesses.

These government actions have made it easier for speculators to take certain risks, providing a

“down side” , safety net of public money , to ease the pain of failure.

Leave a Reply

You must be logged in to post a comment.