Later On

A blog written for those whose interests more or less match mine.

Be careful: Financial crisis is the symptom, not the problem

with one comment

Very interesting post by Paul Rosenberg, from which the following:

Furthermore, Mark Matson is quite right to note:

A liquidity crisis by definition means people are hording money, not that the money doesn’t exist.

But this doesn’t invalidate what I take to be Rogoff’s point.  To wit: if the absence of money is not the problem, then throwing money at the problem won’t solve it.

In short, something needs to be done, but the bailout isn’t it.  Indeed, there’s a significant argument to be made that the bailout is aggravating the problem, and pushing it into crisis mode.

If we take this perspective, then we can revisit the larger array of problems that Jonweasel mentions, and that folks like Roubini have been warning about for quite some time.  In doing so, we can say something like this: …

Written by Leisureguy

27 September 2008 at 11:08 am

One Response

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  1. Congress will continue to overspend. The deficit will continue to grow. And the federal reserve will continue to print the shortfall.

    Fiat currency and central economic planning don’t work. Be wary of the bankers tricks and wording in the bill.

    The American people are overwhelming against this bailout!

    James

    28 September 2008 at 9:53 am


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