The movement is well known and has a lot of participators including well known celebrities such as Michael Moore. Many of them have put up hard cash to support the movement. Unfortunately the protestors are on the most part uniformed and the whole movement is unorganized despite it's popular support.
I understand their anger of not having jobs, a reduced standard of living, and many losing their homes in the housing crisis. But who really is the blame here?
The problem is their anger is filled with a lot of stupidity. They have no serious demands other than to attack WallStreet and business. To me it's more of a punk movement - although I know there are serious protestors that actually have serious demands that attack the cause of crisis but on the most part the majority are uniformed and many are punks in my opinion.
While on the surface WallStreet looks like the problem because the corporations that participated in the crisis are all on WallStreet. Let's not forget all the hype from movies that glorify WallStreet making it seem like the cause of all evil.
In actuality WallStreet is good. It represents the right for a corporation to do business and raise funds it needs to expand. The problem with this is not the concept of the corporation and stocks itself but the bailing out of these corporations after they make huge mistakes such as gambling with investors money on the housing bubble, ect. Slogans such as too big to fail have been used by the government which is a failure itself because bad business decisions are supposed to have consequences which do not represent the end of the world. If tax payers have to pay for bad business decisions that is a system failure and the government is directly at fault - not WallStreet.
The underlying causes of the crisis were not WallStreet but the regulations that govern lending. Perhaps the largest mistake was by the Clinton Administration who deregulated the banks by repealing the
Glass Steagall Act.
The Glass Steagall Act was created to prevent another 1929 crisis from occurring. Unfortunately it was repealed in 1999 - not long after (and to no surprise if you understand what is happening) there was a massive housing bubble and worst crisis since 1929.
The repeal of the gold standard also doesn't help the situation. A gold backed currency is another form of regulation. This makes it so the currency itself has to be worth something other than paper. Nixon declared a
Force Majeure and lifted the gold standard 1971 - it was called the
Nixon Shock, officially it ended the
Bretton Woods agreement.
As if it weren't enough that the banks were deregulated on Clinton's watch - he also sent away the jobs to China and Mexico by signing trade agreements NAFTA and GATT. 3 critical things have happened here: 1) the dollar deregulated by lifting the gold standard. 2)Banks deregulated by the repeal of the Glass Steagall Act. 3) Jobs sent away by trade deregulation.
It's no wonder that the debt is so high in the US. It would be 1 thing with deregulation that could be backed by a productive country to some extent but since the jobs are sent away to countries that have more labor power there's no way the US could ever pay for it's debt.
With banks deregulated, jobs all sent away, and the dollar deregulated gold has an unlimited future value. I say unlimited because I think the USD will collapse in the future.
For Feb. 2012 the debt-to-GDP ratio for the United States is 115%. Anything above 100% is saying that the country is bankrupt and doesn't have control of it's debt.
The reason Obama raised the debt ceiling in 2011 was so the government could continue to operate. In fact he raised it so high that the subject would not come up again under his current term. To me this is not only irresponsible but a move that a 3rd world country would make.
Greece for example is floating a runaway debt at 160% of GDP. They have to be constantly bailed out for their government to stay afloat. Just imagine the price of gold in Drachma's if Greece wasn't in the Euro.
To say the gold is a bubble (to be more accurate) one would have to say a bubble of what - US debt?
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Neal Vanderstelt
Self-Proclaimed EconomistPlease Recommend Below:
