One of worlds top economic advisors tells clients to buy gold and farmland

[DiscoBiscuit]

So says the Washington Post:

"Alan Greenspan writes "The Age of Turbulence: Adventures in a New World" from the perspective of a "libertarian Republican."

http://www.washingtonpost.com/wp-dyn/content/article/2007/09/14/AR2007091402451.html

Greenspan no longer advocates letting the market control itself... a fundamental Libertarian principle. Nobody's saying Greenspan was Libertarian through and through, just the market philosophy he now resists.

 

[Pythagllio]

Ah, the logical fallacy of the appeal to authority.

Greenspan may be a Libertarian at heart, but his policies were not, and he didn't execute his job as a Libertarian.

Perhaps you might look into the Libertarian philosophy and understand it rather than further perpetrate this misrepresentation the Libertarians had anything to do with the financial situation the country is in. Libertarians would not have the government setting interest rates, manipulating a fiat currency, allowing and enabling horrendous margin loans against sketchy OTC derivatives by lending the money to the banks to make the bets, then printing even more to bail them out.

It seems like somebody has hatched an agenda to discredit the Libertarians by fraudulently calling certain things Libertarian. If you want the Libertarian POV on the economy try Ron Paul.

No fucking way that the Libertarian philosophy had anything to do with a huge central government meddling in the affairs of the market. No fucking way. Stop the fraudulent accusations now, please.

 

[DiscoBiscuit]

I don't discredit any political party. I discredit a few politicians but that's my opinion. It is not my wish to disparage any philosophy, just to understand and perceive. It's my opinion that allowing the market to police itself is Libertarian. Peeling back the onion to prove Greenspan was no Libertarian is another argument and one I take no issue with.

 

[DiscoBiscuit]

No fucking way that the Libertarian philosophy had anything to do with a huge central government meddling in the affairs of the market. No fucking way. Stop the fraudulent accusations now, please.

It seems you're making your own argument at this point.

 

[Pythagllio]

It's my opinion that allowing the market to police itself is Libertarian.

You know, you can make the argument that Hitler was a Libertarian because one or two bits of his philosophy coincided with Libertarianism. It would be just as wrong. What you are calling Libertarian is plain old fashioned crony capitalism. An interventionist government policy administered by a powerful centralized government can not be called Libertarian just because at some point said policy adopts a laissaiz-faire policy among the intervention in order to benefit the cronies of the government interventionists.

 

[DiscoBiscuit]

Pythagllio, I believe you missed my point, your making another or both. We were discussing one aspect of the market philosophy of one individual. Hitler, capitalism and interventionist government policy are your additions to an argument that never took place.

In fact, it's quite the opposite of interventionist government policy when one advocates and operates under the philosophy of self-regulation. That's what was happening before the bust and subsequent bailouts. Very little difference now until we get controls to shield the public from high risk greed. Now Greenspan eschews the idea that markets are self-regulating but it's a little too late for the current crisis. Good for the history books though.

I still think you're adding things that are easier to argue than the very basic opinion I offered.

 

[9Lives]

Pythagllio, I believe you missed my point, your making another or both. We were discussing one aspect of the market philosophy of one individual. Hitler, capitalism and interventionist government policy are your additions to an argument that never took place.

In fact, it's quite the opposite of interventionist government policy when one advocates and operates under the philosophy of self-regulation. That's what was happening before the bust and subsequent bailouts. Very little difference now until we get controls to shield the public from high risk greed. Now Greenspan eschews the idea that markets are self-regulating but it's a little too late for the current crisis. Good for the history books though.

I still think you're adding things that are easier to argue than the very basic opinion I offered.

Man it seems like you are someone who would have loved Soviet Russia. ''Shield the public'' ???

The public needs to get a fucking education or continue to get fucked over. The root of the problem is still massive money mismanagement in the American culture any way you look at it.

Consumption of crap on dept. There will always be someone offering you a loan with shitty interest. Hey why not ? It's good business. It's up to you to have sound judgement. And that's where most Americans dropped the ball...BIG TIME!

 

[DiscoBiscuit]

Man it seems like you are someone who would have loved Soviet Russia. ''Shield the public'' ???

Right....we can't have a Hitler weenie roast without good ol' Soviet Russia. Nothing wrong with Glass Stegall, until it got repealed. This law kept the Joe-public investors from getting ripped on perpetual bubbles for decades. It ended in 1999 and before that, only the S&L industry was (institutionally) corrupted on the main street side. Wall Street had their catastrophes throughout the Glass-Stegall years but the pubic was safe. After bank deregulation we got the tech bust, energy bust and mortgage bust. Right now we're bracing for commercial mortgage and credit card busts. It's not just that mortgagees took on risk at the wrong time and/or they didn't understand the bogus terms of their complex mortgages, Wall Street has packaged and branded them AAA, sold to the world and WS bought and continues to buy insurance to pay themselves when it busts. After they've sold it to somebody else. That's fraud. Arguing against controls ignores the early histories of the 20th and 21st centuries.

The public needs to get a fucking education or continue to get fucked over. The root of the problem is still massive money mismanagement in the American culture any way you look at it.

I don't think anybody's defending money management here unless you force the issue. Bush's tax cut of 2001 is the biggest budget buster in the history of our country. You can't seriously debate current budget forecasts without taking that into account. Before the tax cuts of 2001 (and 2003 to a lesser extent) CBO forcasted surpluses in excess of a trillion through the end of the Bush years and into Obamas eventual administration. Clinton reduced government to accumulate a $236 billion dollar surplus and CBO based numbers on Clinton's remarkably good economic policies. They didn't anticipate an administration declaring deficits have no ill effect and give money (we didn't yet have) back to the top.

Consumption of crap on dept. There will always be someone offering you a loan with shitty interest. Hey why not ? It's good business. It's up to you to have sound judgement. And that's where most Americans dropped the ball...BIG TIME!

You obviously didn't get caught up in any of these ponsi schemes. If you did you wouldn't be blaming your judgment, you'd be raising hell about bankers lending at 99 to 1 instead of 9 to one. Meaning their ability to pay you back in the event of a run was sharply reduced. You'd be raising hell over a single AAA mortgage buying your junk CDO package the same AAA rating. You'd be offered to buy insurance to hedge your bets but you'd be pissed to find the same folks that sold you the junk (and the insurance) all bet against you and bought insurance themselves to pay out when your junk eventually defaulted. That's a crime.

Not what's this about Soviet Russia?

 

[windsoft]

gold prices are at an all-time high in Euros and Pounds, close to it in US$, Yen, Australian Dollars, and Swiss Francs.

I'm with you on the inflation thing, it's just that the same effect is happening to most currencies -- seems like a race to the bottom.

So what to do? Own useful stuff instead of cash. My crazy idea for the thread would be a complete biodiesel plant: soybeans in one end, diesel out the other end. Looks like it can be done with about $10k in equipment for a small 30 gallon/day garage setup.

I should correct myself and say the international value of gold has gone down.

 

[SpasticGramps]

No fucking way that the Libertarian philosophy had anything to do with a huge central government meddling in the affairs of the market. No fucking way. Stop the fraudulent accusations now, please.

You are right. The government intervened as a measure of last resort to keep the music going. Despite what you may think the FED controls regulation on Wall Street. That's just how it is now. The FED is by far the most powerful institution in the world. It has surpassed all other branches of government.

For the last decades Wall Street has been unregulated. OTC derivatives and credit default swaps have been unregulated and guess what, that's what the world economy is based on. A pyramid scheme that assumes everything is going to go on forever.

Just as in 1929 when you let Wall Street run unregulated you end up with systemic risk throughout the whole system because everyone is holding the same toxic liabilities. It ends up being a web that if one fails they all fail.

SYSTEMIC RISK is the entire problem here and it comes from OTC derivatives. Even Al Capone knew way back then that it was a racket. He got into bootlegging.

In 1929 everything just crashed because no one knew what the hell was going on. This time the government jumped in as the lender of the last resort, because they don't want everyone's money going up in smoke. Which is what happens with systemic risk, ie The Great Depression.

Now these guys are going to start speculating on world economies. Shorting Greece and California. Greece has been exposed for cooking the books to get into the EU. There are hot potato's flying all over the place and people scrambling to bail each other out because they know if one goes down we wake up in 1929 again.

This system always fails. You can't compete against history.

We never learn.

 

[SpasticGramps]

The root of the problem is still massive money mismanagement in the American culture any way you look at it.

Just as Romans and Greeks main cause of failure was attributed to declining moral value. The books will read just the same for us.

The system sucks, but in the end this is a failure of American culture and personal responsibility IMO.

 

[grapeman]

I can say with absolute knowledge that good farmland in CA. (good soil and good water) is scarce and getting scarcer. Population is not shrinking.

Not a bad recommendation IMO.

 

[Pythagllio]

I'm sorry you guys think the landscape so bleak right now. Frankly from where I'm sitting the economy doesn't look too bad at all, and I think the gov't is making the right moves that have avoided a 1929 style collapse. Perhaps this is the time that the 'end of the worlders' will finally be right. I've been hearing this bull crap every other year for decades, and can find the rantings of such people written hundreds of years ago, yet over that time life as a whole has only gotten better, so I really doubt it. But a long time ago I decided I'd rather be an optimist and be proven wrong by a stopped clock moment than to live a life of cynicism and be able to say 'I told you so'in the unlikely event of a systemic collapse, the latter choice being a hollow victory indeed.

I'll happily bet you that over the next 10-20 years from now the cycle will swing to prosperity. A smart person recognizes that the business cycle is as natural as the seasons changing, and that Spring will follow Winter.

 

[SpasticGramps]

Frankly from where I'm sitting the economy doesn't look too bad at all, and I think the gov't is making the right moves that have avoided a 1929 style collapse.

And the music plays on......

The systemic risk to the market is way bigger than any government can handle. Basic economics and numbers.

It's good to always have two views though.

*Turns the music back on*

 

[SpasticGramps]

A smart person recognizes that the business cycle is as natural as the seasons changing, and that Spring will follow Winter.

I would submit that the business cycle you are looking at is too small.

Maybe expand your business cycle +200 years instead of a few years and it's a whole different story or just turn the music back on.

 

[SpasticGramps]

Whatever Greenspans side policies where, it doesn't really matter. The fundamental philosophy underlying everything was that markets police themselves. Which they do really in the end.

When markets become corrupt like they are now the reset like in 1929 and we learn it all over again. They do police themselves, but the pain of letting them police themselves is excruciating.

It was in the documentary I watched, straight from the horses mouth. "Fraud is ok in the stock market because it will correct itself." He's right it does, but only after it totally collapses and is exposed as a scam and we all learn a very hard lesson.

He was trying to have it both ways.

 

[bombadil.360]

The systemic risk to the market is way bigger than any government can handle. Basic economics and numbers.

the system's risk to the market is a direct reflection of the cultural and responsibility problem you had mentioned earlier.

people need to awake to an economy of things that have real value; and study and work subjects that also offer real value to society.

today, most people are not offering anything to the system, they are just taking and then wasting the money in things that don't have value either.

most people with degrees don't know anything about anything about the real world; and our prime example is Greece.

how can an economy that depends upon paying public workers to do shit, not collapse?

out of where do they think value will come?

it does not get any dumber than today's economy.

this is why people want to invest in gold and stocks; in things that have no intrinsic value at all... the irony...

 

[DiscoBiscuit]

how can an economy that depends upon paying public workers to do shit, not collapse?

That answer and many more are covered in civics education. Civics will also show you should pick your battles when it comes to third party contracting as opposed to government cost-only. You'll pay much more in private profit then you will government cost. When government spending gets out of control, it has to be reigned in. Too much private-sector governance is only advocated by folks that wish to see the federal government dissolve. Whatever happens to you as a result is your problem.

out of where do they think value will come?

From every service you receive.

it does not get any dumber than today's economy.

The comments aren't well thought out either.

this is why people want to invest in gold and stocks; in things that have no intrinsic value at all... the irony...

Consider economics along with civics to get the correct answers to your questions.

 

[bombadil.360]

Greece's economy is real bad because public workers do not provide any service with any meaningful value.

bureaucracy is not a value.

what Greece did was try to maintain its economy by paying wages to over half of its population to work in the public office; how were they expecting to produce real valuables through doing that?

gold and stocks don't have intrinsic value; because neither cover any real needs of societies; they are just artificial values that flow through society because of an arbitrary agreement on the part of the people to give value to these artificial things.

it is like when a friend of mine went to live in India, he ended up in some ashram because he had no money, and he worked there for food and shelter; and this Indian guy who lived next to the ashram always asked him for money (because he looks European you could say), and my friend never failed to point to the Indian guy that having cows he could milk everyday (like the Indian guy did), and reproduce, and which always provided a real valuable that he always traded for the rest of his needs, was a lot more than he had, and a lot more than many people who depend on a wage in the west have.

 

[DiscoBiscuit]

Greece's economy is real bad because public workers do not provide any service with any meaningful value.

bureaucracy is not a value.

what Greece did was try to maintain its economy by paying wages to over half of its population to work in the public office; how were they expecting to produce real valuables through doing that?

When I read "most people" I make the local distinction. I don't care to challenge Wall Street-entangled Grecian analogies

gold and stocks don't have intrinsic value; because neither cover any real needs of societies; they are just artificial values that flow through society because of an arbitrary agreement on the part of the people to give value to these artificial things.

No more artificial than good old cash. You can have your philosophical ideas of non-artificial value. Give up your worthless stocks and gold and watch as somebody else turns it into cash.

it is like when a friend of mine went to live in India, he ended up in some ashram because he had no money, and he worked there for food and shelter; and this Indian guy who lived next to the ashram always asked him for money (because he looks European you could say), and my friend never failed to point to the Indian guy that having cows he could milk everyday (like the Indian guy did), and reproduce, and which always provided a real valuable that he always traded for the rest of his needs, was a lot more than he had, and a lot more than many people who depend on a wage in the west have.

I'm going to pass on the next analogy and leave you with this. Nobody advocates senseless bureaucracy. However, the earlier point you seem to make is all bureaucracy is worthless. Not all valuable work produces a product or service, it just runs the show. It's called administration. Private companies can't make a product or provide a service without their own bureaucracy.