Conspiracy of the Rich

[Buddy]

A new book by Robert Kiyosaki of Rich Dad Poor Dad fame. Apparently the sky IS faliing. Good read:
http://www.conspiracyoftherich.com/about

[Chris Fleming]

Looking forward to reading it. I'll get it from the library though.

Also really recommend one of his newer books, Financial IQ.

[Buddy]

I really recommend everyone here (you're all smart folks) to at least read the first chapter online. I must admit I believe it.

[RobP2]

http://en.wikipedia.org/wiki/International_inequality

[Teazer]

I really recommend everyone here (you're all smart folks) to at least read the first chapter online. I must admit I believe it.

A few bits and pieces from that:
Firstly the problem (or at least a problem) with the mortgage derivatives was that they became incredibly illiquid over a short period of time. So despite Kiyosaki's timeline it was, and still is, very difficult to estimate their value, and consequently the assets of the holding investment companies and banks. What drove the investment banks out of business was not so much that they were bankrupt, it was that nobody was willing to lend to them, and their business model relied on rolling over very short term debt daily.

Regarding the "Economists finally admitting that the US economy had been in recession since a year earlier", the NBER wasn't "admitting" anything, since they hadn't been denying anything. They always date recessions after the fact and it always takes about a year to work it out.

Regarding the bailout of the S&L industry during George H Bush's presidency, despite Kiyosaki's opinion to the contrary, from my recollection, the 'bailout' was not meant to support the continuance of the thrifts, it was to protect the depositors and guarantee the mortgage loans during the thrifts' dissolution. Problem solved.

Again, despite the what Kiyosaki says, the problem with repealing Glass-Steagall was not that companies like Citigroup could become riskier. In fact the opposite was the case since the most damaged by the mortgage crisis were some of the investment companies which were not constrained by it, whereas the commercial/investment bank conglomerates have managed to survive. What actually happened was less direct - with the act repealed, the commercial banks were able to grow through mergers to acquire investment branches which had enough scale advantages over the investment companies that in order to compete the latter took on serious amounts of debt - levering up to increase their return on equity and hence taking on a large amount of risk.

I imagine the reason the government ended up supporting the financial status quo in Wall street was that in the middle of a crisis there is not enough time to put together a convincing alternative. There was also no telling how dire it would get if nothing were done.

Kiyosaki then channels Griffin's anti-Federal Reserve diatribe almost verbatim with the same errors, omissions and dis-ingenuousness as I have detailed before for the various youtube clips that have been posted here many times.

In order to stop deflation, printing money works pretty well. It does not necessarily end with more taxes, debt and inflation however. That assumes the Fed in unable to pull that money back in quickly. Whether that will happen is as yet unknown.

It is less easy to monitor banks sufficiently to ensure they lend to consumers than the author contends.

[Buddy]

The Fed? Why do why have a non governmental agency running the money supply in the first place? End the Fed!

[Darth Rock&Roll]

The "fed" is what pulled america out of the great depression.

greed is what is putting america back into it.

It's not the fed's fault.

They are of course questionable in some of the practices they have been tasked with since the 80's, but if used as intended, then that organization should function in favour of the USA.

[Chris Fleming]

"The "fed" is what pulled america out of the great depression."

No, it was WWII that pulled America out of the great depression.

[Chris Fleming]

The Fed? Why do why have a non governmental agency running the money supply in the first place? End the Fed!

Buddy, Buddy, don't even try to explain the obvious to Teazer . To him, printing money and charging interest=good. Default credit swaps=good. Derivatives=good. Commercial banks also being investment banks=good. People borrowing against their house to buy TV's=economic growth. The stock market going up as a result=proof that the system works.

[Michael]

Jobless recovery.
Oxygenless breathing.
Military intelligence.
Macho taiji.
j/k Mi professor es mas macho.

[Darth Rock&Roll]

"The "fed" is what pulled america out of the great depression."

No, it was WWII that pulled America out of the great depression.

you are partially correct in as much that the war did reduce unemployment to below 10% and it got rid of the last effects from the great depression.

But America started to recover from the crash of 29 (the widely accepted source of the gd), as early as 1933 and got off the gold standard at that time along with a few other countries. The FED had a huge role in the ending of the great depression in the US.

over at wikipedia, you can find this article: http://en.wikipedia.org/wiki/Great_Depression

I was frankly surprised that there is still theorizing about it to this day!

However, there are some interesting factors I would like to point out.

90% of the wealth of the world is controlled by less than 1% of it's population.

If a significant sized cartel decides to remove their money from the market, the market will fail and will fail hard.
Many will be driven into poverty and their investments will become penny stocks or de-listed.

once that happens, the picking s are easy and the same folks who removed their money to speed the crash can now step in, replenish the system and on top of it, pick up all the cheap ass stuff that everyone else dropped on their way out the window.

so, to me, it's not so much how it happened, but who? who made it happen and how do we stop it from happening again, because apparently we find ourselves here AGAIN!!

so, what do we do? have another world war? solutions?

capitalism's greatest fault is it's innate tendency to fall and rise like waves with no predictors available because on a whim, a small group of investors can collapse the world economy. Now, with the stock markets returning to normal and less owners of said stock than before, you can be sure the trigger has been reset and may be pulled again if the desired effect wasn't achieved this time round.

I personally feel, there are agents in our world who are working hard to spark a war through any means possible and have been doing so since Eisenhower left office in 61 (constitutionally forced out as he was).

[Chris Fleming]

"The FED had a huge role in the ending of the great depression in the US."

I'm not completely disagreeing with this at all. The policies enacted around those times were country-changing policies, it ushered the US into what we are now experiencing--the negative side of those policies--the effects of bigger government and the government stepping in to control the economy and markets, not to mention the devaluation of the dollar.

[Darth Rock&Roll]

i think the fed had less to do with what's happening now than the small amount of greedy fuckers selling pigs in a poke.
Mind you, the policies were played by those same people.

Deregulation of the banks by Reagan certainly had a strong effect on the most current collapse of wall street.
i believe most economists without political agendas agree on that.

selling derivatives and default swaps in the billions and billions of dollars was the cause though most recently and that was merely a situation where people got greedy and gambled a LOT of other peoples money.

The Bush admin forcing the banks to lend to people who couldn't repay loans was a cluster fuck and the implimentaion of the powers to do that by the previous clinton admin opened the door for bush to do that.

It doesn't all happen in a day.

I applaud Obama for stepping up to the task though. hopefully he actually starts acting on some of these things that he spoke of during his campaign. lol

seems he still hasn't actually done a damn thing.

[Teazer]

The Fed? Why do why have a non governmental agency running the money supply in the first place? End the Fed!

It's like the old joke:
"I had my credit card stolen the other day, but it's okay. It turns out the person who stole it spends less recklessly than me."

Try putting dollar creation back in the direct control of Congress and see some real inflation!!
I note by omission you don't seem to disagree with anything else I wrote regarding Kiyasaki's first chapter.....?

[Teazer]

you can find this article: http://en.wikipedia.org/wiki/Great_Depression

I'd always wondered why they restricted the money supply so much....
"One reason why the Federal Reserve did not act to limit the decline of the money supply was regulation. At that time the amount of credit the Federal Reserve could issue was limited by laws which required partial gold backing of that credit. By the late 1920s the Federal Reserve had almost hit the limit of allowable credit that could be backed by the gold in its possession. This credit was in the form of Federal Reserve demand notes. Since a "promise of gold" is not as good as "gold in the hand", during the bank panics a portion of those demand notes were redeemed for Federal Reserve gold. Since the Federal Reserve had hit its limit on allowable credit, any reduction in gold in its vaults had to be accompanied by a greater reduction in credit. On April 5, 1933 President Roosevelt signed Executive Order 6102 making the private ownership of gold certificates, coins and bullion illegal, reducing the pressure on Federal Reserve gold."