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Hi Nick,

Slow day and we want to get the members juiced :-)Thanks for the "food" for thought.

How do we discuss this without getting political? Don’t want to go there, as real as the political factors are, because the polarized views are usually more emotional than fact based.

If I were on the bank’s side, and I find that hard to do since they are responsible for much of the financial crisis (if we ignore the government pushing), I would say that lending to anybody is a risk that I will stickily control until the smoke clears. Bad debt, whether that of countries or its citizens is not good for profits and profits are why I’m in business.
But where does “good” debt come from? People with good jobs and businesses willing to expand because people with good jobs are willing to spend. So the cart in this situation is preceded by an employed horse.

Many of the good jobs are predicated on a recovery of the housing industry. But with mass amounts of foreclosed and short sale houses on the market what is the incentive to build more houses. How could you get a loan to finance the development? Most of us here on PRO or TMF services in general are employed or retired with income so it’s hard to postulate about how the unemployed think, but IMHO many people will hold out too long trying to keep the same level of income. Many complain about illegal aliens taking our jobs. I’m totally against illegal aliens (not immigration) and the “welfare” sink hole they produce in health care, education and social services are bankrupting some states and breaking hospitals and schools. But if I had a family to feed and no job, I would be picking fruit, digging ditches or whatever it took to make money, including working multiple jobs.

Stop the wars and bring our troops home. As long as they stay in the military to pull a paycheck that would help US debt and the local economies. But if you don’t stay in, where do you find work?

Booms and busts, in the stock market and in everyday life. We need another boom but where does it come from? Commodities increases seemed like a helpful factor for farming, then along comes mass flooding, tornadoes and other natural disasters.

The best we can hope for right now is the continued hold on inflation. The oil spike seems to be over and if we could get by without any more natural disasters or war escalations, folks could look to be able to spend more within their budgets. Wholesale inflation would sink this listing ship called the US economy.

Can’t get by without one semi-political statement. If we don’t fix the debt crisis everything else is a moot point. I wish we could suspend the total salary of every member of congress and the president until we have a fix in place. All the above poses some hard questions with very few good answers, but this last point is the one which will over ride all others.

Continue QE2? I honestly am not smart enough to supply a good response.

Regards,

Bob
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