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Greenspan Admits 'Flaw' in US Free-Market Ideology

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posted on Oct, 27 2008 @ 06:45 PM
Coming clean?

Greenspan: "[I] found a flaw ... in the model that I perceived is the critical functioning structure that defines how the world works".

Fairly interesting stuff in light of the predictions made by many ATS members.

posted on Oct, 27 2008 @ 07:15 PM
reply to post by rosio

Free markets never work in the long run. The greedy will always find a way to stack the markets in their favor and eventually topple them or require emergency non- free market action when their greed ends up getting out of hand. It is inevitable. So markets can never really be free. There are several things that could be done to help ensure the markets trade more freely and fairly.

1. Institute a short term gain tax of 50%(instead of the current top rate of 35%) on all short term equity and bond transactions. While this would be resisted heavily by the elite and those running money in our country, the result would be a system built on long term capital appreciation instead of the casino approach to the markets that we see today.

2. Eliminate all short selling. Shorting selling creates additional shares of stock from thin air and thus distorts true supply and demand. If you can sell something you don't own the whole equation can be thrown out the window.

3. Go to a flat Fed Funds rate. Preferrably you would get rid of the fed and have a central bank with the flat interest rate instead. If you must adjust liquidity in the market, which is actually anti free market, do so by making small adjustments in the banks/financials reserve requirements. This would do the trick without having inflation and deflation stealing everything.

4. Ban all speculation on commodity prices. Make these speculators trade the underlying companies if they must have exposure to a particular commodity. limit commodity trading to those who ultimately take delivery of said commodities.

5. Go to one worldwide currency. Eliminate the explotation that comes from the exchange ratios on various currencies. Why should we pay more for Oil because Europe raised interest rates? Why should I lose my job to india because the dollar is strong. A one world currency would go a long way towards sustainable free trade.

[edit on 27-10-2008 by disgustedbyhumanity]


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