I saw a link in my favorite property whining blog to an article in New York Times, which talks about mortgage-backed financial securities in the US and their role in the current housing boom.

Even more interesting is the quote from John Keynes, given in the blog: "A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him" .

Tags: computers
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2 comments have been posted.

    Sept. 17, 2006, 12:47 p.m. - Anonymous  
    Lord John Keynes - definitely worth reading. The guy's books lay in the foundation of the modern monetary system. Inflationist - one of his ideas was that central bank should take care to keep inflation above zero and avoid deflation by printing money. The simplified line of reasoning - it is easier to increase the paycheck than to cut it. In the deflationary environment employee will tend to fire the people, instead of cutting the paychecks. The guys books delivered last blow to the gold standard. And today paper money (actually not even paper) rule and gold is trash for developing nations. Indeed, who needs it ? This is just metal, like any other. And steady or less steady inflation brings political gains to the ruling classes which are hard to overestimate.
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    Sept. 17, 2006, 1:01 p.m. - Andre  
    I read his "The Economic Consequences of the Peace" - about economic results of Versailles negotiations and peace agreement after the first world war. There, already in 1919 he foresaw the economic future of Europe and Germany in particular, predicting that German will eventually rebel against the sanctions. How this ended we all know...
    Reply
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