Arabs in U.S. could be held, official warns

[Sava]

Actually, I agree with Fez (shivers)... I say drop a bomb on Baghdad, and then let's start WW3, Arabs vs the West. After the West wins, we can focus on China.

[Giancarlo]

Originally posted by Sava
Actually, I agree with Fez (shivers)... I say drop a bomb on Baghdad, and then let's start WW3, Arabs vs the West. After the West wins, we can focus on China.

No that is not what I meant. And I won't even ****ing bother explaining.....

[Sava]

I'm not being sarcastic Fez. I truly think we should nuke Baghdad.

[Giancarlo]

Originally posted by Sava
I'm not being sarcastic Fez. I truly think we should nuke Baghdad.

Forget it. I don't even know when to believe when you are being sarcastic or not.

[Sava]

I can't say that I blame you...

I just look at what the historical outcome of a decisive war is. WW2 is the #1 example. Every bit of ground that the Allies liberated is now Democratic and prospering economically. I think that the US has a responsibility to liberate the Arab nations from their oppressive, fundamentalist regimes.

[Giancarlo]

And maybe you are right. Iraq might have to be broken into two though for that to occur... and every mullah in Iran will have to be imprisoned.

[Sava]

That's why I say, drop the nuke, let God (or Allah ) sort em out.

[Ned]

Originally posted by Frogger

Quote:

And, let's further assume that deflation is at 10%. That 980 is worth approx. $1080 in constant value buying power. The loan cost you 1080-1000 (you kept 20) = 80

We already posited a 50% deflation rate, sweetheart. It doesn't matter. The loan didn't cost me anything. At the beginning of the year I had a sock, a bed and no money. At the end of the year I had a sock, a bed and 20$.

Frogger, you are ignoring your collateral that has dropped in value by 10%. You are actually out the $80. Had you not secured your loan with that collateral, you could have dumped it for cash or gold. Your exampe assumes too much.

[Q Classic]

the nuke? as in one? good god almighty, you have no vision!

just imagine, we could eliminate all of our nuclear stockpiles AND solve the overpopulation crisis! why wait to have the dust settle after nuking baghdad? why not take out the chinese while we're launching nukes?

to change the world, you must have vision!

[Giancarlo]

Originally posted by Ned


Frogger, you are ignoring your collateral that has dropped in value by 10%. You are actually out the $80. Had you not secured your loan with that collateral, you could have dumped it for cash or gold. Your exampe assumes too much.

And what the heck are you trying to prove? You still have yet to prove 0% interest rates or below are possible (they certainly are not).

Again you prove nothing with big words. Frogger has a point.

You cannot secure loans with 0% interest or negative interests because that will cause a massive drain on financial institutions. The government would also need to bail out with loans and print money because demand is so high for money and it would only be squandered therefore actually causing hyper-deflation. Therefore proving your argument as hyper-moronic.

[KrazyHorse]

a) Collateral is not always required for loans
b) Cash in a safety deposit box at the bank can be used as collateral. This is not negatively affected by inflation
c) The bank still isn't making any money. It would have been better off keeping the cash in the vault

[Ned]

Originally posted by Fez


And what the heck are you trying to prove? You still have yet to prove 0% interest rates or below are possible (they certainly are not).

Again you prove nothing with big words. Frogger has a point.

You cannot secure loans with 0% interest or negative interests because that will cause a massive drain on financial institutions. The government would also need to bail out with loans and print money because demand is so high for money and it would only be squandered therefore actually causing hyper-deflation. Therefore proving your argument as hyper-moronic.

Fez, I'm sorry, but we recently had and still do have 0% autoloans. This has not caused any collapse of anything. What it did was spur auto sales.

Ditto if we reduce short term business loans to 0%. It will spur business, create new jobs, etc. This is what the US economy needs.

[Ned]

Originally posted by Frogger
a) Collateral is not always required for loans
b) Cash in a safety deposit box at the bank can be used as collateral. This is not negatively affected by inflation
c) The bank still isn't making any money. It would have been better off keeping the cash in the vault

The bank actually makes money on the difference between what it pays for money and what it gets for loans. So, to some extent, your right. No one will place money in a bank at negative interest rates if keeping in a safe is possible.

What happens in this environment is that the economy simply collapses. No one is willing to make loans or to place their money in banks. The lack of monetary circulation feeds on itself causing further deflation. It is a vicious downward spiral.

We never really got out of the great depression until WWII and the massive government spending related to the war effort.

This in essence is what we need now. The central bank should essentially drop short term interest rates, and keep dropping them until we turn this thing around.

However, there is good news today. For the second time in a week the Dow is up nearly 500 points. Bravo!

[Kontiki]

Gotta throw my two cents in. Ned, you are confusing nominal and real (effective) interest rates. You're right about deflation, but that only affects real rates. The rates put forth by central banks (via monetary policy) are NOMINAL rates - ie. independent of inflation. The role that inflation plays is what determines REAL rates.

So, if the nominal rate is 2% but you are in a 5% deflationary environment, then yes, real rates are -3%. This is what is happening (and has been for some time) in Japan. The nominal rate in Japan has never touched zero as far as I know, although it is very close to it.

For a central bank to have negative nominal rates would be suicidal for the economy. As pointed out by Frogger and others, you cannot have negative nominal rates because a borrower would have to pay back less in nominal terms, which is always a real loss. (Sorry if this is a bit confusing). The bottom line is, no one will lend money and realize a loss on it on paper, purchasing power aside.

So what about 0% loans from car companies? Are they losing money because the purchasing power of their return declines over time? Not really. They're still making money on the price mark up, not to mention that retail vehicle sales are hardly their only source of income.

[KrazyHorse]

Kontiki's point about car loans is right on the mark. Ned, it's like me telling you that giving away oranges is not a sound business plan while you attempt to prove me wrong by showing me a successful business which gives away an orange with every computer you buy...

[KrazyHorse]

Speaking in free market terms, the possible supply of loans drops to 0 as you approach 0% interest rates. Even if the government gave away money at less than 0% interest (by setting prime as negative), there's no incentive for the banks to lend that money out to anyone. They'd borrow it and keep it for a year if nobody was willing to reborrow it for >0%.

Same with oranges; there's no supplier willing to sell you oranges at less than 0 dollars a pound; no matter how cheaply he got them, he'd rather throw them out than give you money to take them.

[Kramerman]

Originally posted by Imran Siddiqui
Scary... like that famous quote about the guy not saying anything when the Nazis came for other people... and then there was no one left to speak for him when they came for him.

OK. (follow this - it has a point unrelated to my opinion of hippies) I must say, that i hate hippies. I think they are dirty, ignorant anarchists (i wont mention hippocrites, cause everyone is one) who are lazy and complain and feed off the very society that allows them to live how they want to live. Now, let me stop there, i dont want to get into my fathers homcoming from Vietnam story.....
Anyway, for as much as i hate hippies, they would never stay quiet for anybody to be locked up. They are the first to jump on the US government for any reason, no matter how small, and so there should be no worries of people protesting this action loudly. They arent the only group that would protest this as well, not to mention the international condemnation. United States citizens have a long track record of being loud, and fighting for what they believe. That is one of the reasons why we have been able to grow and prosper, becuase we are dynamic, never static for too long (with exceptions) and always changing - forever striving for our ideals that we will probably never reach.

Kman

[Ned]

Kontiki, Japan has been in the economic doldrums since 1992 because real interest rates have been too high, even at approximately zero. This same phenomenon occurred to the United States in the '30s. There is a real posibility of it happening again, IMHO, although the two strong stock market rallies in the last week provide hope.

I am not a rich man by any means. But I personally have lost hundreds of thousands in the current bear market. Rich people have lost millions and billions. This loss of real money has got to be reversed. It can be reversed by reducing the cost of loans as much as possible.

Perhaphs Frogger you and others are right that no bank will lend money at negative interest rates. But would I buy house in a falling housing price market of 10% per year at 6% interest The real rate is 16%, a whopper by historical standards.

Deflation is a killer economically.

[KrazyHorse]

This loss of real money has got to be reversed

There's no loss of real money in market downturns. The only real loss that happens is when the companies earnings go below zero. Everything else is just psychology.

[Ned]

Frogger, If a bank could borrow money at -1% and just sit on it make a nominal profit, it would. But in reality it loans that money out to others at approx. 2 percent greater than it cost of borrowing. Thus a -1% fed rate would lead to a 1% prime rate. Something like that is needed.

As to the 0% autoloans, if the car makers make a buck off of moving iron, they should keep the autoloans permanently at 0%. Why would they ever charge more? In fact, why don't they charge negative interest? This would move a lot more iron, inreasing profits?

[KrazyHorse]

If the banks could borrow money from the gov't at less than 0% there would be a run on available credit. It's like what happens when you set price controls on products so low that they're sold out before they reach the store. Demand goes through infinity as you go to 0% interest.

[Giancarlo]

Originally posted by Ned


Fez, I'm sorry, but we recently had and still do have 0% autoloans. This has not caused any collapse of anything. What it did was spur auto sales.

Ditto if we reduce short term business loans to 0%. It will spur business, create new jobs, etc. This is what the US economy needs.

No, what you are proposing is to collapse the banking system by setting real interest rates to 0% percentage what is pure stupidity. You would establish an hyper-deflationary period and shortly after the state starts printing up tons of money that process will reverse into hyper-inflation. Has it happened before? I am not sure.

So quit talking about something you obviously don't know about. Policies like your's are similar to that of what Mexico had in 1994 and caused the whole banking system to meltdown. To reliquidate the banking system 20% of the GDP was liduidated.

Also you have to look at the Laffer Curve for therein if you reduce taxes to a amount low enough business will start to grow. Lowering interest rates is hardly the whole picture, Bush's tax cut is the major part.

If you wish to say something I suggest you study about it before hand because I just finished a year of an intensive university level AP economics class.

[Kontiki]

A) Japan's problems are far more complex than its interest rates. For the record, its REAL rates are below zero, its NOMINAL rates are approximately zero. Aside from that, there is a fundamental avoidance of borrowing in the country - for some reason, people would rather save even at rediculously low rates than borrow. The kairitzu (sp?) system isn't helping much either. You overestimate the power of monetary policy. Not to say it's insignificant, just that there are other factors at work.

B) I'm amazed that I have to point this out, but one of the basic principles of a free market is "why charge a dollar for something when you can charge two and still sell the same amount". Car companies do make money from their financing divisions (when they aren't offering 0% rates). It's just a balancing act to get the optimum profit from sales and financing. If sales are drying up, of course it makes sense to offer 0% rates. But if people are going to buy cars anyway (ie. stronger economy), then why not make some money off the financing too?

[Imran Siddiqui]

I can't believe Ned is still going on about this! HOLY CRAP! As a recently graduated economist, I have to say that arguing with Ned that negative rates is silly and foolish is just a waste of my time. Frogger, Fez, Kontiki, you are doing a bang up job, but you'll never change his warped views. Agree to disagree .

[Ned]

Originally posted by Kontiki
A) Japan's problems are far more complex than its interest rates. For the record, its REAL rates are below zero, its NOMINAL rates are approximately zero. Aside from that, there is a fundamental avoidance of borrowing in the country - for some reason, people would rather save even at rediculously low rates than borrow. The kairitzu (sp?) system isn't helping much either. You overestimate the power of monetary policy. Not to say it's insignificant, just that there are other factors at work.

B) I'm amazed that I have to point this out, but one of the basic principles of a free market is "why charge a dollar for something when you can charge two and still sell the same amount". Car companies do make money from their financing divisions (when they aren't offering 0% rates). It's just a balancing act to get the optimum profit from sales and financing. If sales are drying up, of course it makes sense to offer 0% rates. But if people are going to buy cars anyway (ie. stronger economy), then why not make some money off the financing too?

Kontiki, Real rates below zero? From my understanding of the situation in Japan, there is a gigantic banking crisis that the government has refused to address seriously. Many banks have bad loans secured by property worth far less than the loans. If there were to be a mass foreclosure in this environment, real estate prices would be driven down even more.

Isn't this right?

[Lord Merciless]

If the Arab Americans can fight against Arab countries with the same ferocity as the German Americans against Germany, nobody would ever mention locking them up.

[Lefty Scaevola]

Originally posted by DinoDoc
Korematsu is still "valid" law is it not.

Likely not with the passage of several civil rights act since then. The is also a good chance it would be reversed on its face given various 14th amendment decisions since then. What a travesty of a case, with the majority decision writtten by the great liberal justice of the last century, Douglas with spport of all the FDR appointed justices, opposed by the consevative on the court.

[Ned]

Originally posted by Lefty Scaevola

Likely not with the passage of several civil rights act since then. The is also a good chance it would be reversed on its face given various 14th amendment decisions since then. What a travesty of a case, with the majority decision writtten by the great liberal justice of the last century, Douglas with spport of all the FDR appointed justices, opposed by the consevative on the court.

Interesting how the court split on this one, with FDR appointees supporting him and Republicans against.

But still the point of the case is that racial discrimination is not absolutely prohibited and could be justified by compelling governmental interests of sufficient gravity.

In my observation, the Supreme Court tends to uphold reductions in individual rights during times of war.

[S. Kroeze]

Originally posted by DinoDoc
I don't want any of them (persons of Arab ancestry) here. They are a dangerous element. There is no way to determine their loyalty. ... The danger of the Arab was, and is now-if they are permitted to come back-espionage and sabotage. It makes no difference whether he is an American citizen, he is still an Arab. American citizenship does not necessarily determine loyalty. ... But we must worry about the Arabs all the time until he is wiped off the map. Sabotage and espionage will make problems as long as he is allowed in this area. [/paraphrase]

This same 'nice Ned' suggested it was racist when a sovereign democracy would decide which and how many immigrants to admit to its territory.

Of course refusing Europeans is racist, refusing Arabs or Muslims is not!

Now we are not discussing immigrants, but naturalized citizens of non-European descent and....

Originally posted by Ned
S. Kroeze, You make it sound so simple. But it is not.

"The only solution of tile problem put forward by the Arab Higher Committee was the immediate establishment of all independent Arab Government, which would deal with the 400,000 Jews now in Palestine as it thought fit."

This is a quote from the Peel Commisssion report.

The end to the Jewish presence in Palestine was and to, some extent, is still the ultimate Arab goal. A second, Final Solution.

You suggest that we Americans could round up all illegal Mexicans and simply return them to Mexico. But, there are tens of millions of them! There may be some lunatics who could advocate this, but can you imagine the human suffering this would cause if it were actuallly attempted? The mere advocacy of such a position is astoundingly racist.

But this is exactly what you and your Arab brethern were and still are advocating. The fate of the Jews in Palestine, if you had your way, would be the same fate they suffered at the hands of the Nazi's.

[Guynemer]

Originally posted by Lord Merciless
If the Arab Americans can fight against Arab countries with the same ferocity as the German Americans against Germany, nobody would ever mention locking them up.

You're just full to brim with bullshit arguments, aren't ya, "Merciless"?

Perhaps nobody should mention locking them up simply because it goes against every principle our country allegedly stands for?

Who gives a **** if they're willing to fight against Arab countries? Which, incidentally, is an interesting litmus test, seeing as how we're not currently fighting against any Arab country, nor have we for a number of years.