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URL:  http://boards.fool.com/quoti-always-wondered-whether-they-could-have-20697072.aspx

Subject:  Re: RON PAUL: The Federal Reserve Debt Engine Date:  4/28/2004  11:05 AM
Author:  pauleckler Number:  10047 of 35367

"I always wondered whether they could have avoided bankruptcy."

So long as consumers were willing to accept 3 to 5% interest for their passbook savings and mortgage borrowers would pay 7-9% interest on their loans, the S&L system worked pretty well. People saved their funds for a downpayment and those funds were invested in other peoples mortgages.

But once high yielding instruments like junk bonds became available, S&Ls were in trouble. Congress tried to keep them alive by allowing them to pay higher interest rates on CDs, but that resulted in disaster.

That seems to be a fundamental rule of investing. Many situations can be profitable for a time. But gradually large factors beyond our control shift. Sometimes the profitable niche disappears or even becomes a loser. Thats why investors need to be watchful, keep up with the times, and be willing to try new things.
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