June 22, 2010
– Comments (11)
Notice how Soros resorts to arrogance as if that wins the argument. Hmmm...
David in Qatar
I don't know what a Vapitalist is LOL. Don't do three things at once! That's supposed to say Chinese Capitalist.
>>I don't know what a Vapitalist is LOL. Don't do three things at once!
LOL! I hear you man. My spelling is bad enough to begin with, and when coupled with multi-tasking it just goes to pot :).
It is not believable that Soros believe's what he's saying. He ignores the wisdom of crowds that concludes that the thoughts of the many outweigh the thoughts of the few, or the one (to paraphrase in two ways) - but such a large ego (and pride) goeth before the fall.
As with all Progressives, he seems to fit the outcomes in the economy to his pre-disposition (or prejudice) toward the Progressive agenda - "The market did not see the bubble" ... but the problem is the government, and regulation were in place and acting (grossly interventionist) in the financial markets and helped created the bubble - starting with a fiat currency! This is a distortion of a perverted market - blinded by government and pushed by regulation to BECOME a bubble.
What a farce!
Known as the now calming down nzsvz9
A Vapid Capitalist ... also known as a Progressive.
Known as future Wiktionary contributor nzsvz9
I don't see Soros discarding the notion of wisdom in crowds. The problem is that crowds can still be wrong. Part of his theory of reflexivity is that wisdom in crowds can become a feedback loop (manic or panic) distorting market information. This is why he buys into speculative bubbles. (He's bought gold recently)
I'd welcome a cogent argument as to how regulation actually causes bubbles. We've been having manias and panics for centuries. Looking historicly, I see a clear inverse relationship between the prevailing regulatory climate and the frequency and severity of manias and panics.
1920 was a very different economic situation than 1929. The slump was caused by a drop in aggregate demand due to federal spending cuts. (this also happened at the end of WWII) In 1920, the US was one of the largest creditor nations with a glut of savings in war bonds. When aggregate demand dropped, so did GDP and prices, but there was plenty of liquidity. Consequently, there was no financial meltdown in 1920 as there was in 1929. In 1929, the US was heavily leveraged into equities and debt had become a part of the consumer culture as shown for example through the booming automobile market. Once the music stopped, banks became insolvent, credit dried up, and businesses that operated on a line of credit had to sell assets and fire employees. 1920 and 1929 do not even remotely compare.
Vapitalist == Vaporware Capitalist
See: dotcom bubble
When I hear Soros speak (almost incoherently at times - at least to me) and I see his actions - they are incongruous at best. He derides the system from which he profits. There's a word for that I'm sure.
The economy of 1920, and 1929, and today are all different - yes. They do not compare directly, and far too many factors are different among and between them to be deterministic about the cause and effect of policies and their outcomes - even the role of the government policies, and Federal Reserve in the events of the Great Depression.
The many problems in the American economy over the years have been tied to fiat currency manipulation at their root. "Not worth a Continental" was in fashion in the early U.S.A. as is our fiat currency today. I've argued many times for mono-metalism as a foundation for a sound currency, as did the Founding Fathers. They seemed to get it right, but it's been perverted time and again through our history to our collective detriment.
And, with the Fed and the Government in charge of the printing press, we could have surplus TODAY if they would just print about 15,000,000,000,000 dollars this afternoon. Why not? We'd have a surplus and everyone would be rich right?
As a "FreeMortal" I would think you'd recognize the moral hazard there is in any entity controlling the paper we call currency. It is a gross perversion which is the means of corruption of the powerful and the well connected.
To truly be a free mortal, you need real money or the boom-bust cycle propped up by fiat money will continue.
Known as gold-plated nzsvz9
Oh ... and how does regulation create bubbles? Look at the current housing "crisis" and the government intervention through regulation of "quasi" governmental agencies Fannie Mae and Freddie Mac - and the Community Reinvestment Act.
Don't tell me this bubble was caused by the market - it was inflated by cheap money and a "desire" to promote home ownership on the part of the big regulator himself, Barney Frank.
Known as repulsed by frankfurters or as nzsvz9
How is Soros deriding the system on which he profits? He just wants a stronger referee for the system so it does not blow it itself up like it did two years ago.
It is popular myth that our founding fathers were this great infallible body of wisdom. In fact, they agreed on very little. For example, Federalists like Alexander Hamilton and Adams favored a national debt as well as a unified currency and a central bank. The Continental dollar financed the revolutionary war. Without it, assembling the resources to fight off a world superpower would not have been possible. The US was founded on debt.
You keep claiming that boom bust cycles are caused by a fiat currency but I haven’t seen you present much evidence to back this up. What makes you think this?
See Hayeks Nobel Prize in 1974 for showing how Boom/Bust cycle is caused by holding Fed rates too long for too long. See here.
I think we agree that the Fed helds rates too low for too long, however extrapolating on that idea to paint with a broad brush that regulation or fiat currency necessarily causes -or is the cause of- booms and busts is rather far-fetched.