Bubble
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The housing bubble is a term I was not aware of before this chapter. I knew of the housing crisis, but I have never investigated the root causes of why we got to that point. The documentary really helped to highlight that government involvement, especially in terms of the Federal Reserve, is counterproductive. This documentary also shows us that when we are given funding assistance, it hurts our personal financial situation, including spending and so on. The government is terrible at handling money, especially ours, and the housing crisis showed us all.
So, we all know that banks loan money from the Federal Reserve to give us access to capital. This, in turn, though artificially adjusts interest rates. Being able to control interest rates may seem positive when you look at financial hardships on a national scale. But it does the opposite by basically creating a false floor that once the weight starts getting applied and things start getting tough, it collapses and makes things worse. This is because the government is terrible at making decisions that involve our economy and money situations. For example, with the transition from Hoover to FDR, we've seen the implementation of Hoover's plans and how that played out negatively for the American economy.
Key and point, no one is powerful enough to control the currency of a nation, and this is shown time and time again. It's also funny to look at during World War One and World War 2 how at the start of a depression era, the war brought it out so your most cruel, harsh, punishing advance leads to economic growth in recovery. When the government is in full control of every aspect, life is in complete chaos. The only reason was that because so many men were overseas and so many back homes or left to work the government had controlled commodity prices as well as the price of goods.
All the advances that were talked about during the documentary and even some common sense just leave me to believe that the economy is left in the hands of the consumers. In that, at the end of the day, the market will do what's right for the pocketbook. Historically it's always been in situations, not just involving currency or the economy, where people trying to become too powerful and control things thinking they're doing the right thing does the exact opposite and hurts those that's trying to help. The same goes for the housing bubble when various presidencies tried to give people the ability to make down payments on homes or force banks to have a 0% down or very low percent down policy.
On top of that, when we look back at artificial inflation adjustment where the Federal Reserve prints more money to allow more capital in the economy, essentially giving off this false reality of the wealth of the nation. Then more money is loaned out, and things become more unstable, and eventually, it completely collapses. The last subject was talked about the gold standard, and we're in the latter half of the 60s. There were so many dollars pushed into the economy that gold was supposed to be the backing for its value, and there was essentially too much to make it balance. Which, in a sense, isn't completely bad because this was able to fund things like the moon landing, the Vietnam War, and the fight against poverty.
People thinking that they could fix a problem that is just best left to play itself out. Most of these situations were not so much of dollars being contributed, but the government was mismanaging and going into a higher spending deficit that ended up resulting in economic collapses. Mean as of currently, we also have a very high national inflation rate and very high debt spending because we're funding a war in Ukraine and supporting another in the Middle East. But it looks like we've learned our lesson from before, and we're not printing a whole bunch of money to bring things down. We'll see with the presidential running of 2024 will lead for the next four years, but hopefully, things can come back to more stable means, and we can get back to producing in the United States.