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All the Fed needs to do is raise interest rates

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posted on Oct, 8 2008 @ 02:29 AM
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What has happened is what's called a savings glut.

This occured because of our corrupt petrodollar system.

When we buy oil from the countries they deposit some of the profits in our banks. This is why republicans and democrats protect the oil companies and work with these countries and this is why we are in Iraq.

This is truly a corrupt system and it has caused alot of misery because of greed. It's also hurting our economy because we can't expand to things like green technology because the two parties are blocking it in order to protect the oil.

What happens is, as demand for oil increases around the world, this increases the amount of money put into savings. What also happens is the price for a barrel of oil goes up.

So you have this imbalance between savings and investment. With all these savings, this keeps interest rates down while oil prices rise.

So people are borrowing money and spending their personal savings because credit is easy to get but they have to borrow more and more as gas prices go up and then this starts to hit other sectors of the economy.

So, interest rates are artificially low as oil prices increase. This is a global savings glut because petrodollars are clogging up the system.

If you raise interest rates, you would correct the imbalance that's being caused by these petrodollars as global demand for oil increases.

You can read more about it here:
www.pimco.com...

[edit on 8-10-2008 by Wise Dome]




posted on Oct, 8 2008 @ 02:32 AM
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There is a much more elegant solution and that is to end Fractional Reserve Lending. Price gouging on oil is merely a symptom of a much larger and more corrupt system.



posted on Oct, 8 2008 @ 02:36 AM
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I always laugh when someone offers their solution to the crisis. These people must think we live in a free and democratic society and that this crisis isn't being intentionally manufactured.





posted on Oct, 8 2008 @ 09:39 AM
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I actually agree that this is happening on purpose.

They have to know that petrodollars are clogging up the system. Bernanke even talked about a savings glut.

If it was up to me, I would abolish the Fed and get rid of the IRS but most Americans accept these things because the media will never touch these things.

All of this started with oil, which leaked over to housing which has leaked everywhere.

This could have been dealt with long ago but the government never does anything about oil because their bought and paid for.

As global demand for oil increases we need to make the transition to green technology. Not in the future but now.

The universe seems to like order. Industrial age, information age and as the global economy expands, the nation who leads in green technology will emerge as the new leader on the world stage.

Sadly, we are talking about drill baby drill and this thing has become a political issue between Al Gore and the Republicans.

I think America might be in trouble on this front but hopefully I'm wrong. We are over in Iraq trying to put together the same petrodollar deal with them that we have with the Saudis.



posted on Oct, 8 2008 @ 10:10 AM
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So what if the opposite of your theory is applied, I'm curious what shall happen then;

biz.yahoo.com...

hmmmmmmmmm



posted on Oct, 8 2008 @ 10:33 AM
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reply to post by broli
 


Things will get worse. Oh hey, the dow's still tanking, libor rates are still going up, commodities are going up....I'm sure that's just a coincidence.

Don't worry. Bernanke, Paulson, and Bush know what's best for us. we lemmings just need to keep going to Disney world to maintain our economy. Remember, comrade. 911 was done by Iraqis, Afghanistan has WMD, Iran hates our freedom, Congress needs to quickly pass the bill so Paulson can take his time to figure out which of his friends get what money, and lowering rates in a fundamentally strong economy bolsters confidence.


Sheeple indeed.



posted on Oct, 8 2008 @ 12:44 PM
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Originally posted by Wise Dome
What has happened is what's called a savings glut.

This occured because of our corrupt petrodollar system.

When we buy oil from the countries they deposit some of the profits in our banks.

So, interest rates are artificially low as oil prices increase.



The Saudi kingdom accepts our PetroDollar because we protect them from those who would do them harm.

They also put the Dollars they are paid for their oil, back into the USA by buying Treasury bills/bonds...
They aren't about to go shopping any banks that offer higher interest rates,
the Saudi want the 'guarantee' that their dollar wealth will still be there next year and next decade.


besides, the USA Treasuries are paying from less than 1% on 30 day notes to less than 4% for 30 year notes.
And it's good that the US pays out low interest or out Treasury would be going broke faster than it is now. The 'artifically low' interest rates are set before any price of oil is determined---there is absolutely no connection between high oil prices and low Treasury interest payments...they both operate on different pricing mechanisms.


also, we do not buy oil from China or India, yet between those economies they hold close to Two Trillion Dollars of US Treasury bonds/bills/notes.
That is an example there is no connection to those nations 'savings' & oil prices, as you suggest.
Those 2 nation examples, buy our Treasuries because the Treasuries are convertable and accepted as cash payment to every nation on Earth, thats why the Petro-Dollar is considered the 'Reserve Currency' by all the nations.



but thats only my point of view,



posted on Oct, 8 2008 @ 05:46 PM
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Originally posted by St Udio

Originally posted by Wise Dome
What has happened is what's called a savings glut.

This occured because of our corrupt petrodollar system.

When we buy oil from the countries they deposit some of the profits in our banks.

So, interest rates are artificially low as oil prices increase.



The Saudi kingdom accepts our PetroDollar because we protect them from those who would do them harm.

They also put the Dollars they are paid for their oil, back into the USA by buying Treasury bills/bonds...
They aren't about to go shopping any banks that offer higher interest rates,
the Saudi want the 'guarantee' that their dollar wealth will still be there next year and next decade.


besides, the USA Treasuries are paying from less than 1% on 30 day notes to less than 4% for 30 year notes.
And it's good that the US pays out low interest or out Treasury would be going broke faster than it is now. The 'artifically low' interest rates are set before any price of oil is determined---there is absolutely no connection between high oil prices and low Treasury interest payments...they both operate on different pricing mechanisms.


also, we do not buy oil from China or India, yet between those economies they hold close to Two Trillion Dollars of US Treasury bonds/bills/notes.
That is an example there is no connection to those nations 'savings' & oil prices, as you suggest.
Those 2 nation examples, buy our Treasuries because the Treasuries are convertable and accepted as cash payment to every nation on Earth, thats why the Petro-Dollar is considered the 'Reserve Currency' by all the nations.



but thats only my point of view,


Your post actually proves my points.

First, we get petrodollars in order to protect these countries.

Didn't we throw mob bosses in jail for the same thing?

Like I said the petrodollar system is corrupt and we are in Iraq trying to set up the same thing. The greed causes wars just like the greed between mob bosses caused wars.

Secondly, petrodollars have a direct effect on the economy as oil prices increases along with global consumption. These petrodollars are clogging up the system and causing a savings glut.

The problem is interest rates remain low as oil prices increase and people have to borrow more and more to stay afloat.

Here's a passage from the article I cited above.

In fact, the increase in the U.S. oil bill between March 2004 to July 2006 was virtually the same as the increase in the trade deficit. In May of 2004, the U.S. non-oil trade deficit was running at about $39 billion a month ($500 billion annual rate) while the total trade deficit (including imported oil) was running at $48 billion a month ($600 billion annual rate). As imported oil prices began their upward march through $30 to over $70 a barrel, the trade deficit widened almost dollar for dollar. By July of 2006, when oil was at $77 dollars a barrel, the non-oil trade deficit was roughly unchanged at $41 billion a month while the total trade deficit was running at $68 billion a month ($840 billion annual rate).

So non oil trade deficit stayed close to the same while the total trade deficit increased along with oil prices almost dollar for dollar.

Because of the global deman for oil this increased savings which were not invested because the economy was slowing. With increased savings this makes credit easier to get. This keeps interest rates low and the reason why you would need to raise interest rates is to adjust to the influx of petrodollars and also the savings that increased do to the tax cut.

People will not risk their capital with interest rates this low in an economy that's slowing down.

What they are essentially doing is trying to artificially grow the economy by cutting interest rates and they will just keep digging themselves a hole. They need to let nature takes it's course.



posted on Oct, 8 2008 @ 06:11 PM
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Also, this is why we don't need the 700B. There's money out there but people are not loaning it out. If you raise interest rates, people will began risking their capital because they stand to make a bigger return.

It's okay to slow the economy down when you are over 10 trillion dollars in debt and you have this imbalance.

It also hurts investment into green technology. As a conservative, it saddens me that green technology is stuck in the middle of a political debate vs Al Gore and the Republicans.

This is why I'm starting to agree with Obama that we should pull out of Iraq and invest in green tecnology. We can have a green technology boom like just like what occured in silicon valley with computers.

There's things we can start to put in place as we make this transition. Sadly, this petrodollar cartel along with OPEC and oil companies have a lock on our government.

I see green technology in a metaphysical sense. I think the universe wants order. We went from the industrial age to the information age and as energy consumption expands globally we have to find more efficient ways to consume energy and I think green technology is the answer.



posted on Oct, 8 2008 @ 06:17 PM
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raising interest rates in a highly leveraged banking system will cause worse things quicker for the financial system i.e not a orderly collapse

besides i am growing stronger in my belief lately that the "crisis" was very much Encouraged and a solution has been Designed a long time ago (to be implemented when there is enough PAIN that the people's reaction is desperate enough to willingly accept said solution. I.E Problem , Reactiion, Solution.

not every step was designed see, but FINANCE and Debt was made a larger and larger part of our Economy for the last several decades with financial elite powers gaining more and more influence over washington, then within the last 10 years , the financial industry was deregulated, which was akin to a last get rich quick party, giving wallstreet and there paid off "establishment party in washington gov't a last hurrah before the SHTF i.e before the collapse and the subsequent consolidation of power occurs as well as some robbing of liberties during the chaotic period that follows

i believe President Clinton's mentor Carrol Quigley was right! he jConcluded in his book "tragedy and hope".....in the 1960's that

www.liveleak.com...


[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole...... This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.


think bilderberg group members'/Trilateral commission

i.e David rockefeller's quote from the 1991 bilderberg convention

www.rense.com...


"It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national autodetermination practiced in past centuries."




with this in mind


1. deregulating the system in the late 90's was a big part of this Premeditated plan. Allowing banks to have leverage of up to 30-40-50X the amount of capital is ASKING/INVITING Trouble...Literally! This is not something that is Unknown, people chalk it up to those running the businesses being greedy and having only a short time frame for which they care what happens, but the system was deregulated with the blessing of the FEDERAL RESERVE and ALAN GREENSPAN, there was pressure applied to company's to become "reckless" and this only gave those that were in positions of $ and greed (bankers) the push that was not always required to have a last reckless party before the SHTF! I don't KNOW who tells the FED what to do, but they do not do things for the betterment of the country and they IMO like to rule by secrecy.

2. The solution to the current "problem" will interesting to watch. The solution will be provided when the PUBLIC ENDURES ENOUGH PAIN to illicit the reaction that clamors for the solution the Elite (think Bilderbergers/Trilateral commission) want to accelerate there plans for a NWO with the intelligency agency's and the world financial system with powers that outstrip the soverign country's gov'ts EVen more than they already do, this solution will be less freedoms, more intrustion (think micropchips) but first the pain has to be heightened so that people will think the solution is actually acceptable.

3. the consolidation of power during this time is = to order out of chaos ...you could look at it like consolidation of power and stripping of liberty's out of chaos.

there is zero media network that puts these things in this perspective so people don't seem to get it, but there is enough there to give me a very strong belief that the "ball was intentionally put in motion for a crisis like we have now to occur" with a solution in mind when the time is right. I think the answers are there for those willing to stomach a inconvenient truth

the elite didn't think people should be informed of this plan, they didn't think you would swollow it well, Carroll Quigley was a globalists but unlike most of the elite, i guess he thought people should be sold this idea (i.e be "educated" /know about it)

This isn't a joke. It is our country. It is your life

Many people will die during the latter part of this "transition period" many even in the U.S.A



[edit on 8-10-2008 by cpdaman]



posted on Oct, 9 2008 @ 11:31 AM
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If you raise interest rates, people will risk their capital.

Yes, it will slow down the economy but that is what needs to happen. This is what the economy is saying but they keep trying to artificially grow the economy by lowering interest rates and pumping money into the system.

The reason why the next President will have to raise taxes by raising the tax rate to Clinton levels is because for the last 8 years nothing was paid for.

Bush and Congress borrowed and spent money like there was no tomorrow. We are over 10 trillion dollars in debt with a 13 trillion dollar GDP.

Bush did nothing to try and control spending. Just 12 vetos vs Reagan with 78 and even Clinton with 37.

The debt clock is running out of digits.

news.yahoo.com...

Also look at the financial report of the Government. This report isn't talked about much if at all because it breaks down the government financials like a business and it shows that these last 8 years have been horrible because Bush and Congress have borrowed us into oblivion.

www.fms.treas.gov...

There's nothing wrong with slowing down the economy when you have not paid for anything in the last 8 years and you have a 10 trillion dollar debt.

Let the markets correct themselves and level out because alot of this wealth was created with bad credit because interest rates were artificially low due to petrodollars and the rise of oil prices.

[edit on 9-10-2008 by Wise Dome]



posted on Oct, 9 2008 @ 03:06 PM
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This pro growth strategy is killing the markets.

They keep trying to grow the economy when things are slowing down because of things like petrodollars, 10 trillion dollar debt and more.

You can't keep cutting interest rates and pumping money into the system when the market wants to level off because of all this bad credit.

What are they doing?????????



posted on Oct, 14 2008 @ 11:24 AM
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I definately think this is a power play by the bankers who own America, Inc.

They know this problem can be fixed by raising interest rates and they can go a step further by providing insurance for these loans to get things going.

The problem is not money, it's credit. What also could be occuring is these bankers need to print up alot of money in order to keep pace with the debt and they went through the government in order to recoup through taxes.

They seem to have frozen the credit market on purpose so they can directly give the banks money to loan out.

I can only think they did this because they own America, Inc. and they want their company to take over private industry.

I'm telling you, I think banks will boom once they gain equity in them through the government or everything will crash and they will introduce a new currency.

They are definately up to something and the commentators on CNBC, FOX Business and more are USEFUL IDIOTS. I truly think these people are clueless.




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