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View Diary: Alan Grayson Rips the 'Liar' Alan Greenspan a New One (233 comments)

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  •  Also... (0+ / 0-)

    We can try going to a 100% reserve system -- ideally in gold, but a 100% paper reserve might be a huge step forward.

    A 100% paper reserve should prevent future credit expansion (which got us into this mess) and prevent declines in the money supply.

    Don't do vibrato. There'll be plenty of that naturally later when you're old and shaky. (Miles Davis, quoting his music instructor)

    by dov12348 on Thu Apr 08, 2010 at 12:25:45 PM PDT

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    •  Sorry, even Keynes thought the gold standard (2+ / 0-)
      Recommended by:
      Dauphin, ER Doc

      and 100% reserve systems were "barbaric relics".  There is nothing wrong with a fractional reserve system, so long as it is properly regulated.

      •  I guess you did not 'get the memo' the gold is (1+ / 0-)
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        missing in many is just one of the stories that is 'out there'...

        "My Son..Went Inside There And Basically Saw that the Vault was Empty."

        Every day when I think I am going to get a day off from this story, some revelation seems to be come out, each as compelling, shocking, and suspicious as the others, but all fitting together in what looks like a nasty picture of reckless behaviour gone wrong developing.

        Apparently some banks and brokers had been selling gold and silver which they do not have. We know it happens because Morgan Stanley was caught doing it, and was even charging storage fees from unsuspecting investors.

        Do these banks not have auditors? Are the regulators sweeping this under the rug? Are the insiders and their spokespeople correct in just dismissing this as a problem, as was done with the subprime market even by Ben Bernanke himself before it collapsed into a bank run that shocked the financial system?

        Now, we have to carefully distinguish between allocated metal, in which one holds a certificate and are assured of a firm ownership of actual metal, and an unallocated holding in which you hold basically a paper claim on metal, for which you may be an unsecured creditor, even if you are paying regular storage fees. But in the cases I am hearing about it is a firmly stated ownership of something that does not exist, and cannot be obtained at current prices.

        This is important because although there is always shorting, and some fractional reserve aspect to all banking , even in the case of bullion banking, in this case the proportion or leverage of the selling of the assets starts to look more like a Ponzi scheme than a rational and efficient market. There is a point at which 'speculation' becomes fraud, and the fraud becomes large enough to start risking the health of the bank.


        ...oh, not to worry, I'm wearing a Flame Retardant Valentino Orange Moo Moo whenever I visit DailyKos.

        by Badabing on Thu Apr 08, 2010 at 01:59:28 PM PDT

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      •  First, it shoud be clear to everyone that the... (1+ / 0-)
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        ...fractional reserve system is nothing but a cheap ponzi sceme.

        I don't buy Keynes anyway.

        Don't do vibrato. There'll be plenty of that naturally later when you're old and shaky. (Miles Davis, quoting his music instructor)

        by dov12348 on Thu Apr 08, 2010 at 03:47:19 PM PDT

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      •  Not to mention that the value of gold (1+ / 0-)
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        is as purely psychological as is the value of 100% linen paper with special pictures on it.

        Gold has value because it's pretty.


        "It is better to die on your feet than to live on your knees." -- Emiliano Zapata Salazar
        "Dissent is patriotic. Blind obedience is treason." --me

        by Leftie Gunner on Thu Apr 08, 2010 at 05:25:27 PM PDT

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