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I didn't suggest the stock market is the economy, but it is an important cog within our connected financial system. The key to my argument is in my first senten
by jeromec 17y ago
I didn't suggest the stock market is the economy, but it is an important cog within our connected financial system. The key to my argument is in my first sentence about psychology. Did you read the WSJ article I linked to? Another quote from Buffet in the article: "I felt that this is something like I've never seen before, and the American public and Congress don't fully understand the gravity of the problem" General Motors needed to be rescued, and there are millions out of work, yet these items have little association with Bear Sterns, AIG, Wall St. etc., the financial institutions where the damage shook the pillars of our economy which rests upon the financial system and the dollar. The point being things are connected; significant trouble in one area knocks into the other, and you get a domino effect. The dollar is no longer backed by anything but promises, and people accept it because of our superior position as an economic and world power - even with all our escalating debt. However, we are not invincible (as Rome was not) and can experience a dollar crash if, as I said, enough people begin to think the dollar based system will not survive due to stress load (debt for bailouts/stimulus, future medicare). It's true the dollar has been fairly consistent for about a decade, and that's because our standing in the world has remained so - people still die to get in. However, a truer measure of faith in the dollar is the price of gold 10 years ago vs. today - $280 vs. $1080 respectively.
- anamax 17y ago> Buffet in the article: "I felt that this is something like I've never seen before, and the American public and Congress don't fully understand the gravity of the problem" Do you really think that Buffet has a "sense of the people"? > General Motors needed to be rescued No. General Motors needed to go into bankruptcy and have all of its contracts broken. > and there are millions out of work, yet these items have little association with Bear Sterns, AIG, Wall St. etc., the financial institutions where the damage shook the pillars of our economy which rests upon the financial system and the dollar. You're babbling. > The point being things are connected Yes, but that doesn't tell us that TARP was a good idea. > The dollar is no longer backed by anything but promises That's nothing new and TARP did nothing to change it. > It's true the dollar has been fairly consistent for about a decade, and that's because our standing in the world has remained so - people still die to get in. However, a truer measure of faith in the dollar is the price of gold 10 years ago vs. today - $280 vs. $1080 respectively. The price of the dollar relative to other currencies tells us the relationship between the US and other countries. The price of gold is a combination of absolute value and general skepticism. Note that TARP didn't address any of that. You do remember TARP. You're trying to argue that it was necessary. Yet, you've only mentioned generalities that are independent of TARP.