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    This entire collapse began when Greenspan started to believe his own press clippings. While setting the Fed Rate at 1%, thereby killing off U.S. domestic savings and encouraging manic spending, he commented that people were acting with "irrational exuberance".  Far from it- people were acting rationally, by buying assets, with cheap debt, before those very assets rose further in nominal pricing.        

    Talking as if he had slept through his Economics 101 class, he commented further that perhaps savings existed  in the housing bubble. There is no better example of why a Fed chairman should be term limited just like a President. Greenspan's wax melted from his wings as he flew closer to the sun.

    All the other factors- the Casino mentality in Wall Street, asset bubbles in commodities, poor regulation in Investment banks, and no regulation of derivatives, can all be traced back to Greenspan.  Had Greenspan done his job of protecting the purchasing power of the U.S. dollar and properly regulating the croupiers in Wall Street, this current meltdown of everything would not have occurred- certainly not to the degree it has.

   While the Great Depression had similarities to this current collapse, the absolute insolvency of the entire western world's banks, the outrageous one-way trading relationship with China, the mindless addiction to foreign oil, and the 15 year destruction of the American middle class, will require a new John Maynard Keynes with new ideas to recover from this catastrophe.

    Fire Greenspan's man Bernanke and find a new Volker.  If you think today's collapse is bad, wait until the U.S. government can borrow no more.

Kevin McKinney

Good time to make money if you know where to put it.

Kevin,

I don't think blaming Greenspan is the answer.  He may have screwed up on one decision  but most of the moves he made  were fine. The problem may lie  with  the democratic system.  The population demands  money  and  the politicians give the people  what  they  want. Its not wealth creation but inflated dollars. The Ponzi scheme can continue until the bubble bursts. Deflation can be managed if its equally disbursed  but unfortunately the government sector doesn't take part in deflation so its role  in the economy  becomes greater.  The government cannot create wealth but only redistribute it. History tells us  the  next  stage  is fascism  and  civil  unrest.

Peter,

There are two possible paths available before Fascism and civil unrest.

  The government can continue on the current path of following the fear mongers in Wall Street, jumping from fabricated crisis to fabricated crisis. Or they can do their job of regulation by providing an inflation adjusted real savings rate for America by letting the Fed rate rise. And by regulating the top end borrowing rates, so the middle class isn't bled dry by the Ponzi People.

  The cocktail party Fed chairmen need to re-think dirt cheap money for the Ponzi People.  This short term, hot money goes into speculating in commodities, shares, corporate take-overs.  None of which creates real growth in the economy.

  Japan has had a bank rate below 1% for decades.  In that time the Japanese Dow(the Nikkei)  has dropped from 39,000 to 8,000- a fall of 80%. The true objective for Japan is to keep the Yen from rising. This has kept Japan's export employment higher than it otherwise would be. Good for Japan, not so good for the U.S.

  Currently the lower U.S. fed rate should reduce the value of the U.S. dollar, thereby helping U.S. export driven employment. However, every country is now in the game of reducing their bank rates. And the U.S. dollar is rising from the fear factor- this fear being well justified.

   While it is true that government cannot create wealth, it is the reponsibility of government to set the rules and the infastructure so that private enterprise can create wealth.  Today that means busting up the banks, insurance companies, hedge funds and any industry that is "too big to fail".  If it is "too big to fail" then it is "too damn big" period. Economies of scale long ago ran into diminishing returns. These bloated pigs need busted up. That is the job of the government.

   This country does not need socialism but it does not need the pretend capitalism that it currently has.  Bust up these giant pigs into smaller competitive enterprises.  If a smaller enterprise goes bust, so what. Another one will be there to fill in.  

   The country needs leadership. Let's hope the lobbyists from oil, Wall Street, Madison Avenue, and offshore hot money havens have the door closed in their faces. If China doesn't want to equalize trade with the U.S. then cut them off.  It will be a fight, but it will be the good fight.

All the best

Kevin

p.s. Greenspan was getting long in the tooth a decade before he resigned.

Even though SRS hit a alltime high do you think that this is a good play right now?

I read on a board here on MSN a post about an analyst who is a gold bug predicting earlier this year a market crash and that the DOW will be under 6,000 by the end of the year.   I reproduced it below because I think this guy is one of the few analysts that seems to know what he is talking about.   "  The US stock market and the DOW will see a decline of historical proportions.  You will probably see the DOW close under 6,000 points by year end.  "   -  George Sorost (  www.americangoldstocks.com )

The higher than normal volatility in the market worries many investors who are forced to witness wild swings in the value of their stock portfolios.  A select few market players welcome the higher volatility as a great opportunity to profit from day trading stocks.  The financial media has painted a picture that day trading stocks is a very risky activity and that most participants lose money.  Well the reality of the market is that most investors lose money employing the traditional buy and hold for the long-term strategy.  There is a common saying "10% of the investors make 90% of the money in the market"  that is very true !  Day trading stocks can be highly profitable if a person has an objective method of playing the swings in market prices.  Smart investors who daytrade stocks use software programs that essentially make the decisions for them as to when to buy and when to sell.  In short, they introduce objectivity into the decision making process and eliminate emotions (fear and greed).  It is an intelligent approach to playing the large percentage swings in the share prices of some stocks each day.  More info on day trading stocks at www.howtodaytradestocks.com

From a balanced budget to this in just 8 short years.Thanks mr Bush and all your buddies that voted with you.People can blame it on their beliefs or what ever.are you better off than you were 8 years ago? I'm sure of one thing this country is not.

Stimulate the economy by bringing jobs back home. Any company seeking bailout money has to prove they're bringing back 100% of the jobs that are currently being done overseas that could be done here. Reward those that bring manufacturing back home. Reward start-up companies that create new jobs. When everybody is working, everybody is spending. When you have tens of thousands of jobs being shipped out that could be performed here, you have tens of thousands of people not working or spending.

Also, those seeking bailout money have to have restrictions of CEO salaries. I've recent read about companies in the mortgage industry who are not only surviving, but they are thriving because they have managed their portfolio, kept spending in check and limit CEO salaries to somewhere in this stratosphere. It was written that in similar companies, the CEO of the large "fat" company the boss was rewarded for his efforts with a $22 million salary where in the lean company the CEO was paid $190K. And, the guy making less actually did more man hours of work running his company with less assistants and they did not utilize overseas staff for phone soliciation, unlike the big boys.