Izbrani forum: Glavni forum
Izbrana tema: Keynes, upside down
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Calling the situation a liquidity trap is a misnomer. America,
and now the rest of the world, is in an insolvency (not liquidity)
trap. Banks don't want to lend to bankrupt consumers and businesses
any longer because for years, there was too much liquidity, and
they’ve already borrowed more than they can ever pay back. The
first sign of just how bad the situation really is was when former
Treasury Secretary Hank Paulson (known as “Mr. Risk” at Goldman
Sachs, and recently in charge of handing out $750 billion of
goodies to banks and Wall Street) appeared on public TV about a
month ago. During that broadcast, he actually said, and I quote: “
The economic problem is that consumers couldn't borrow to
buy the necessities of life.” Believe me, when you have to
borrow to eat and pay the rent, you are already insolvent and on
your way to bankruptcy; you just don’t know it yet! Remember, it
was Paulson and his Wall Street buddies at the major investment
houses who got us into this mess by pushing lending on mortgages to
unqualified people who could never afford them. When I
heard Hank speak, it made me sick.
by Richard Benson
http://prudentbear.c...commentary< /a>
by Richard Benson
http://prudentbear.c...commentary< /a>
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