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What's Wrong with the System

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October 30, 2009 – Comments (5)

Liquor before Beer - In the Clear

Very insightful, well-written, and insightful article about exactly what is wrong with our economy and how the government is perpetuating it. Enjoy.

5 Comments – Post Your Own

#1) On October 30, 2009 at 1:37 AM, walt373 (99.87) wrote:

Oops, I described the article as insightful twice. I meant to say educational. But basically - it's good. :)

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#2) On October 30, 2009 at 2:44 AM, Harold71 (< 20) wrote:

It deserves two "insightfuls"!

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#3) On October 30, 2009 at 8:05 AM, Gemini846 (36.54) wrote:

Good find. I was thinking yesterday that for any economy to get on the right track it has to grow internally. That means that money has to be used to develop businesses that create jobs et. Right now the money is all chasing quick bucks speculating in the stock market. From investment banks to baby boomer 401k funds. None of them are putting in the long term vision of running a business to improve GDP they are all chasing investment returns because thats what society tells you to do.

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#4) On October 30, 2009 at 8:32 AM, russiangambit (29.14) wrote:

> From investment banks to baby boomer 401k funds. None of them are putting in the long term vision of running a business to improve GDP they are all chasing investment returns because thats what society tells you to do.

Yep. I never understood ( having been an outsider to the system) how can people seriously beleive that they can put 10% of their incoe into 401K and expect comfortable retirement thatnks to stock market returns, when they couldn't acheive by simply saving and collecting interest like the rest of the world does. It is like people discovered a perpetual source of free money.

The imblance between itnerest rates and stock market return (created by FED's tinkering  with money policy) encouraged the low of money to the stock market as the only place foa decent return and inevitably a bubble got created. To avoid finacial bubles, there has to be a balance between various investment instruments, which is normally provided by free market arbitrage chasers. When external forces ( read FED), prevent that, bubbles inevitable are created.

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#5) On October 30, 2009 at 8:46 AM, russiangambit (29.14) wrote:

> For years, the discussion has been that our deficit spending will pass the costs onto "our grandchildren." I believe that this is no longer the case and that the consequences will be seen during the lifetime of the leaders who have pursued short-term popularity over our solvency. The recent economic crisis and our response has brought forward the eventual reconciliation into a window that is near enough that it makes sense for investors to buy some insurance to protect themselves from a possible systemic event. To slightly modify Alexis de Tocqueville: Events can move from the impossible to the inevitable without ever stopping at the probable.

I do hope it happens soon. Whoever created the mess should be responsible for cleaining it up, not 50 years removed, as is usually the case.

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