tag:blogger.com,1999:blog-8918506024298353276.post6058841464517164327..comments2023-09-20T07:41:02.432-04:00Comments on Polecolaw: More Subprime From SchumerPalermo's Bloghttp://www.blogger.com/profile/09467127128993089930noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-8918506024298353276.post-36885071343281491452007-12-22T14:11:00.000-05:002007-12-22T14:11:00.000-05:00DD –Money supply is built from reserves in the ban...DD –Money supply is built from reserves in the banking system. The amount of reserves is multiplied as lenders make loans keeping the required amount of reserves on deposit for liquidity. Ultimately monetary growth is limited by the amount of reserves and those reserves must be adjusted to accommodate economic expansion. In your free market solution, who controls the amount of reserves in the banking system?Palermo's Bloghttps://www.blogger.com/profile/09467127128993089930noreply@blogger.comtag:blogger.com,1999:blog-8918506024298353276.post-19918268163844750722007-12-22T12:49:00.000-05:002007-12-22T12:49:00.000-05:00please explain how politicians determine monetary ...please explain how politicians determine monetary supply in a free market solution? the point is that the market controls money supply and no interference by gov't.ddhttps://www.blogger.com/profile/13396596393079037326noreply@blogger.comtag:blogger.com,1999:blog-8918506024298353276.post-88270661374610631722007-12-22T00:53:00.000-05:002007-12-22T00:53:00.000-05:00DD - there was a tulip bubble in the 1630s. Was a...DD - there was a tulip bubble in the 1630s. Was a central bank responsible for that too? The FED is not responsible for every act of human nature, although I agree that it is not perfect and has made mistakes. Remember that in your "free market" solution, politicians determine how much "money" is in the system. If you trust politicians more than officials who don't need to worry about re-election I think you are putting too much faith in a proven looser.Palermo's Bloghttps://www.blogger.com/profile/09467127128993089930noreply@blogger.comtag:blogger.com,1999:blog-8918506024298353276.post-71862759362263344872007-12-21T22:58:00.000-05:002007-12-21T22:58:00.000-05:00"the crisis was caused by homeowners who were dupe...<I>"the crisis was caused by homeowners who were duped by unscrupulous mortgage brokers into taking out bad mortgages. To fix the problem requires regulation of those bad brokers and refinancing hundreds of thousands of loans"</I><BR/>*chuckle* The crisis was caused by our easy money system in combination with irrational exuberance in the real estate market. With interest rates as low as they went, banks were all too happy to lend out money created by Fed policies. The ensuing bubble, is categoric of the boom/bust cycle of federal reserve systems. Thats why we need a return to the free markets - when money cannot be created out of thin air lenders will be much more careful.!ddhttps://www.blogger.com/profile/13396596393079037326noreply@blogger.com