Another Crash Imminent?

John A. Quayle blueoval57 at VERIZON.NET
Fri Oct 19 23:56:21 MDT 2007



Experts Fear Repeat Of
1929 Economic CRASH

By Paul J Watson

<http://www.prisonplanet.com/index.html>Prison Planet | Tuesday, 
October 16, 2007

Kuttner blames "insiders with conflicts of interest"
for meltdown danger, [and the] tanking of dollar

Two prominent economic experts have warned that "insiders with 
conflicts of interest" allied to the Fed's policy of tanking the 
dollar to bail out Wall Street could lead to a repeat of the economic 
crash of 1929, during a segment on Bill Moyers' PBS show.

"I think there are three big parallels between what happened in the 
20's and what has been happening in Wall Street lately," Robert 
Kuttner told Moyers.

Kuttner is a veteran economic journalist and a former legislative 
assistant in congress.

"One is insiders with conflicts of interest that are not fully 
disclosed to the public generally, secondly - there's much too much 
borrowed money....particularly in the financially engineered parts of 
the economy....and third is the lack of transparency - regulators and 
the public don't get any kind of disclosure," added the former 
BusinessWeek writer.

  Kuttner blamed an economy based on "asset bubbles" for the rising 
tension in the markets and said that, similarly to the 1920's, 
"engineered euphoria" and companies cooking the books had combined to 
endanger the safety of the economy.

A clip of the PBS discussion, for the full video, 
<http://www.pbs.org/moyers/journal/10122007/watch.html>click here.
[]


Kuttner called for more transparency and slammed the Fed for 
recycling a vicious circle of cheapening the dollar to bail out Wall 
Street, inviting another round of speculative excess.

"The risk is that every time we repeat this cycle, we get bigger and 
riskier bubbles. And with the dollar being in the tank-- it's not a 
costless kind of bailout," said Kuttner. "One would have thought that 
if the dollar were down to 140 Euros there'd be a run on the dollar. 
We're gonna see inflationary pressures as a result of the cheap 
dollar. So it's not as if the Fed can simply print more money to bail 
out these excesses, and there be no cost to everybody else."

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William Donaldson, the former chairman of the Securities and Exchange 
Commission, also warned that the dollar was "disappearing" through 
the floor as a result of the Fed's policy of bailing out "devious" investors.

So I think that the central banks have a greater technique and 
ability to meet this problem," said Donaldson. "But insofar as they 
do-- we run into a moral hazard, i.e. we bail out the people who made 
bad or devious, or whatever you wanna call 'em, investment decisions. 
So you sort of are saying, "Go ahead and do whatever you want, and 
you can count on the good old Fed to bail you out."
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