Capitol Hill Blue Forums Political Issues Finance, the economy & Economics How will the financial crisis develop?

Nope, sorry...allow me to amend.
There WILL be lots of lost jobs, you're right Kap.
Okay now on to the rest.

You say "Bernake is correct. Credit has been the lifeline of our economy for quite some time. Why? Because a lot of the assets companies hold are not liquid thus cannot be used to pay for payrolls, raw materials, operating costs etc."

I say he is uttering the relationship between the Federal Reserve and the American people, that of Master to Slave.

If a lot of assets that companies hold aren't liquid, then they aren't proper assets. Somehow goods and services managed to be rendered in this and other countries BEFORE widespread use of credit became commonplace and eventually IRREPLACEABLE.
We muddled by.

Can I imagine having to fire workers because I made a hundred cars and couldn't sell them? What about all the customers who have to use THEIR assets to buy those cars.
At some point actual wealth has to trade hands, sorry if that's inconvenient.
At some point credit has to be regulated so that it is not used as a drug. The situation we are in right now is because there IS NOTHING BUT credit.
If my position seems extreme, it is because we are in a situation that is extreme to the opposite.
"Give me control over the issuance of money and credit and I care not who makes your laws"
"Modern banks pose a larger danger to this country than standing armies"
Kap, until we learn once again how to create goods and services with LESS credit and more actual wealth, I'm afraid nothing will be made, and the hard truth is that perhaps the best economy is one that does not rely solely on continuous growth but which can be healthy and stable in a growth state or a steady state.
Economies that are backed by sound interest bearing money which is based on intrinsic value are capable of that.
Economies which are backed by fiat currency
behave exactly the way you described in your post.
You are pointing out the symptom.
I'm trying to point out the cause.

Jeff H in Occupied TX