My economic ignorance

[malleefarmer]

Cotton will help me out i hope.

My brain cant get around how these economic bailouts in the us will help long term, isnt it taxpayers money, just creating more debt for the usa as a whole,they just cant print more money, more companies will ask for help in the future doesnt the whole thing explode?

A farmer,pizza shop owner,local bar whoever if they have bad debts or to much debt,they go broke end of story, whats the difference and they get no handout.

ok cotton and others let me have it,i know its simple thinking

[NDHAWK]

I remember an old adage from my younger days " If you owe the bank $10,000, its your problem, If you owe the bank $1,000,000 its their problem"
This applies here but with a lot more zeroes.The economic effects of letting these banks/trading houses go under would be catastrophic to everyone,even those who lived within their means.
I know this borrowing for today/pay tommorow attitude is what caused this economic turmoil but we are on that road now and we cant go back.

"remember the markets can act irrationally longer than you can stay solvent"

[liberty]

The only thing these bailouts will create is more demand for bailouts. Watch for the big automakers to be next in line with their hands out.

Having the taxpayer assume responsibility for bad mortgages does not magically make them good mortgages.

I think it's inevitable that the Federal Reserve will simply print whatever money it needs to make good on these debts, thereby stoking the fires of inflation to such an extent that no amount of statistical massaging will hide its true extent.

As far as agriculture goes, I think we're going to see any major upswing in commodity prices in the next several months.

[btjadenlepp]

I think that by taking over the bad paper, the government helps spread out the problem, which is really everyone's problem in the U.S. since the banks are so huge and every one ended up in the same boat. Also important is that it will allow the banks to get back to doing what they do, lend money. The credit freeze since this fallout started has made the recession worse because credit can't be accessed. since this is a consumer driven recession, capping inflation will be key to turning things around.

[jensend]

they are treating the symptom not the problem and the end result will only be the same as or worse than if they had done nothing.

[btjadenlepp]

i just read a great line in one of my daily market news wires: 'there is a difference between "bailing out" and "keeping the system from collapsing".'

i think the u.s. treasury is handling this pretty well all things considered. one can't seriously expect them to sit back and do nothing. it's a government's job to use monetary policy as needed to promote stability.

www.farmlinksolutions.ca

[charliep]

Is this a day to buy or sell? Your question back to me is likely what and from a nearby strategy perspective or long term plan to which I will provide a blank look.

Will note commodities are up today with crude oil over $100/barrel again. The inflation issue is the one to be watched.

[jensend]

this is a way for bush to stall the collapse until after his term is up. it's almost a scorched earth move. who would want to be president for the next four years? the usa is living beyond its resources and can't afford to pay the true cost of its policies. now it will take on up to another trillion dollars of debt. today was called 'a classic bear market rally'. it will take a while to see if the cat is alive or dead.

[agstar77]

In Cramers words if you were afraid before today you should have been selling today!

[grassfarmer]

Charlie, from my perspective Wednesday was a good day to buy stocks in companies with good prospects. We hit it lucky by selling a lower performing mutual fund late last week and re-investing in stocks on Wednesday. There is no such thing as a "good market" or a "bad market" in my opinion just times when it is opportune to buy and times when it is opportune to sell - just the same as the cattle market.

[cottonpicken]

No,your asking questions about something you dont know about,your ahead of the game.

I dont know how to explain something so complex in a few words.

The us government took on about 5 trillion dollars worth of morgage debt.

What people seem to miss is this is a paper asset on some other persons balance sheet in the form of a treasury.

Instead of letting this paper asset decline in value the gov descided to back it with the amercan tax payer dollars.

I reserve the right to reexplain after a good nights sleep.

This is liquidity injection.

With the situation the way it is i dont blame them.

Well big,deal whats the difference you might say.

The usdx is the worlds reserve currency.
Everything is priced in us dollars.

These two factors have created a never before seen situation.

The us had in its power to export inflation and stop recession because of dollar hedgonomy.

All it accomplished was to compress the springs of economic reality to crazy levels.

This has been happening for generations,not years.

Which brings us to inflation,lots of dollars over lots of years at an exponential rate.

And those dollars flow to tangibles,espesciaaly ones that havent moved much.It finds the path of least resistance.

In a nut shell.

Where from here?

Extrapolation from these realities is the fun part,which is what ive been thinking about for a long time.