LIQUIDITY TRAP CONTINUES TO STALL RECOVERY

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM

SEE Liquidity_trap

This is a call for application of existing law, not for the ideological shifting of wealth. If people get their cars and houses back that were taken illegally, we will have the capacity to invest, to restart commerce, and prosper. If we keep people enslaved in fictitious debt, we will have succeeded in destroying the promise of the American democratic experiment. Our system is based upon the ultimate power being with the people who are governed, not with the people who do the governing. Somehow we lost that and instead of the government being fearful of public reaction, the people are fearful of government reaction. We need to “man-up” or “citizen-up”, take back that power, and apply existing laws without malice or ideological agendas that change our constitution.”

“The liquidity trap, in Keynesian economics, is a situation where monetary policy is unable to stimulate an economy, either through lowering interest rates or increasing the money supply. Liquidity traps typically occur when expectations of adverse events (e.g., deflation, insufficient aggregate demand, or civil or international war) make persons with liquid assets unwilling to invest.” Wikipedia

EDITOR’S COMMENT: In plain language our status quo is that nobody is investing in the economy to the degree necessary to stimulate an economic recovery. Fiscal or monetary policy from the Federal Reserve and U.S. Treasury can’t do anything about it because their control over monetary supply and the financial industry has been all but eliminated. Allowing the fake mortgage bonds and fake mortgages to be treated as though they had real value grants a 10:1 advantage to Wall Street over government. The nominal value and market value, as traded currently, of derivatives based upon the receivables or value derived from loans supposedly backed by mortgages is up to ten times more than the current monetary supply coming from government. Wall Street has issued more currency than the government, so THEY control monetary and fiscal policy.

In short, Wall Street is running the show because we let them create “currency” out of the bogus notes and mortgages, the derivatives, the mortgage bonds, and all the other contracts and hedge products — all based upon a fictitious scheme of “securitization” where there were no actual transfers and where there were no actual binding contracts between the real lenders and the real borrowers.

Yet the myth persists and is nearly universally accepted that if we let those false instruments fall back to earth, the entire financial system will crash. Scare tactics. This is no longer a contest between people with conflicting projections. The reality is upon us. Wall Street has all the investment capital  to rebuild infrastructure, create jobs, educate our workers, stimulate innovation, and put America back on track actually making physical objects you can touch or performing services that people want. Wall Street has it because we let them have it even though they achieved this status by violating every law of, federal and state imaginable, even though they lied, cheated and continue to steal in the “foreclosure” market.

Our system lacks credibility — otherwise those with money would be investing in it. They are not investing and they are not lending for one simple reason — they are doing better trading paper amongst themselves and creating fictitious profits which is increasing the fictitious wealth of the top2,000 people in America. We lack credibility because we are not telling the truth and we are not owning up to the fact that we were captured in a coup d’etat that was quietly achieved by Wall Street, our new government.

We lack credibility because as long as that condition persists, we won’t have a real economy of manufacturing and services. It’s not longer a prediction. It’s now a fact. And the people we call our “government” are merely cogs in a wheel taking orders from a “higher power” than the constitution. They take their orders from Wall Street.

No, this is not a call for socialism. It isn’t socialism or communism to take away a stolen car and return it to its rightful owner — but it it IS redistribution of wealth. That is why government exists — to make sure the bully in the school yard doesn’t grab everyone’s lunch and scream “Mine!”

This is a call for application of existing law, not for the ideological shifting of wealth. If people get their cars and houses back that were taken illegally, we will have the capacity to invest, to restart commerce, and prosper. If we keep people enslaved in fictitious debt, we will have succeeded in destroying the promise of the American democratic experiment. Our system is based upon the ultimate power being with the people who are governed, not with the people who do the governing. Somehow we lost that and instead of the government being fearful of public reaction, the people are fearful of government reaction. We need to “man-up” or “citizen-up”, take back that power, and apply existing laws without malice or ideological agendas that change our constitution.

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

Yes, We’re In A Liquidity Trap

Some comments on various blog posts ask what evidence we have that liquidity trap economics is any different from normal economics. Um, the answer is staring us in the face: the failure of interest rates to rise despite very large budget deficits:

DESCRIPTION

If you had told most people, back in 2007, that the federal government would soon be running budget deficits in the vicinity of 10 percent of GDP, most of them would have predicted soaring interest rates. In fact, quite a few people did predict just that — and in some cases lost a lot of money for their investors.

But it hasn’t happened. Short rates have stayed near zero; long rates have fluctuated with changing views about the prospects for recovery, but stayed consistently below historical norms. That’s exactly what those of us who understood liquidity-trap economics predicted, right from the beginning.

I don’t know what more evidence you could ask for. After all, interest rates are what the liquidity trap is all about.

2 Responses

  1. Neil

    Absolutely GREAT post.

    Heard commentators on this very subject today.

    Bernanke has created a impossible situation. He is trapped. He believes the solution is to hold the securities that the Fed has purchased until maturity. Most experts say this is NOT a solution — and that in order to reverse loose monetary policy – the Fed will need to sell these securities. Cannot hold.

    It is a mouse trap for Mr. Ben Bernanke — and the Federal Reserve .

    President Obama is clueless.

  2. Great article and I couldn’t agree more I think sometimes people just do not see what is clearly in front of thier faces.The law should be upheld and what better way to stimulate the economy and peoples faith.spot on Mr. Garfield.

Leave a Reply

%d bloggers like this: