Thursday, December 11, 2008

Easier for you to read.

Hello Sarah,

Thanks for still reading. Interesting comments.

From WIKI:

Nonintervention or non-interventionism is a foreign policy which holds that political rulers should avoid alliances with other nations and avoid all wars not related to direct territorial self-defense. A similar phrase is "strategic independence".
Isolationism is nonintervention combined with economic nationalism (protectionism). Proponents of non-interventionism distinguish their polices from isolationism. George Washington and Thomas Jefferson favored nonintervention in European Wars while maintaining free trade and cultural exchange.

So there is a difference between the two. Simply put, Isolationism totally breaks us away from the rest of the world, while non-interntionism simply isolates us into a strictly self defence minded military force.

I would strongly recomment that anyone that wants to learn about our governmets “dirty secrets” pick up a copy of Ron Pauls book, “Revolution: A Manifesto”. I learned more about how our economy works by reading that book, than any thing else I have read. Also, if anyone wants to get pissed off, watch the HBO special called “Iraq for Sale”. It talks about the defence contracts in place for Iraq and the dirt behind the ears, so to say.

Also, talking about the bailouts, we must take into consideration what is taking place. In the bank bailouts, Congress was pushed to act quickly to “save” the economy. An overwhelming majority of the population disagreed with the idea and shut down the DC telephone and email switchboards the day of the vote with massive amounts of voter interaction with their representatives. In other words, so many people called and emailed their congressmen that the lines were overloaded. Yet they pushed it through. Now they are asked to do it again with the Auto makers. I think that they are a little more hesitant now because the bank one did not work.

As far as the jobs being saved? I can easily argue that the amount of jobs lost if the largest of the banks were to fold would be astronomical compaired to the Auto job losses. GM was stated that if they closed their doors, it would affect 2.5 million jobs over night. I can easilly see that number to be close, but if the banks were to fail, then it would be at least ten times that. The banks are what is keeping the industry running nowendays because of credit.

As pointed out in R.P.’s book, The way the banking industry works is this:

By law, a bank must have a certain percentage of its total deposits on hand ready to issue if needed. (i.e. people withdrawing money from their accounts) What happens is the banks will, through lending and spending, find themselves with a lower than allowed percentage of funds. The only way for them to return to the proper percentage is to borrow money from another bank or sell bank bonds. It is easier to borrow. Now the issue is that there is not enough money in the banking industry for them to borrow from another bank. They therfore cannot meet the required percentage and must start calling in loans and cutting staff to gain the required funds. They are now in a downward spiral that will end in their demise. The Federal Reserve Bank, a privatley owned bank, sees this problem and decides to buy bank bonds from the bank needing the cash. This injects money into the banking industry and the interest rates lower. This is how the Fed “cuts interest rates”. They have no control over any mysterious interest rate genie. They just print more money, not backed by anything except their word of its worth, and inject it into the market. This frees up money to be spent and pockets are loosend so interest rates go down. The problem with that is the more money you have in circulation, the less each piece of money is worth. This is the definition of inflation. The original definition of inflation meant the increase of the money supply. This increase, in turn, caused an increase in the price of goods. That is why most people define inflation as prices going up, instead of prices going up BECAUSE of inflation.

Anyway, I am going to go now. I think this makes sense. Get the book people. Read it. It is like, Government Corruption for Dummies”.

Any questions, please feel free to ask.

Good night.



Sarah said...

Hey, I learn things reading your blog, I'll keep on reading. I appreciate the clarifications. There's so much about economic, inparticular, I really want to understand. I have to be honest, after I read your responce here, I felt pretty stupid. But I cant understand everything. DOH!

I'm definetly going to check out that book. Thanks for recomending it to me. I was actually thinking awhile ago about trying to find the actual, Economics for Dummies, I may still. At some point this week I'm going to make the time to got to the library book hunting.

Oh, I forgot something. In regards to the differences between non-interventionism and isolationism, I was more saying, that any foreign policy in place, would be remolded by the corruption of government. You know, sort of the way churches interpret the bible to suit there own agendas. I did actually understan the difference. YAY ME!hahahahhahahaha

anyway, look forward to reading more.
later sarah

Sarah said...

i went to the library looking for the ron paul book. they lost it. I guess i'll just break down and buy it, after christmas, when you can actually see the shelves in the book stores again.

Dan said...

That is good. I can't believe that they "lost" it. The stores that I have seen it in are barnes and nobles and borders. Each has had only one or two copies. Good hunting.


Ed said...

Good Post! In a true capitalist system, there is no need for bailouts, because if a company fails, another one is ready to step up.