Tuesday, January 31, 2006

"Owe my soul to the company store." (16 Tons hit song- Tennesee Ernie Ford)

(19th century West Virginia coal mine company store.)

"...16 tons and what do you get?
another day older and deeper in debt...
St Peter don't you call me cause I can't go,
I owe my soul to the company store..."

What's fundamently wrong at the Fed is its failure to understand terms of credit nowadays are far more significant than interest rates. That's why the Fed's traditional interest rate "medicine" treatment plan for inflation no longer works.

Sharply rising mortgage interest rates hasn't curbed the housing price inflation because lenders adjusted by relentlessly easing credit terms. That's why home loans are now routinely advertised in terms of the monthly payment rather than the interest rate.

Most Americans live like 19th coal miners hopelessly endebted to a company store.

Should I win the White House I will sharply restrict unsound lending practices so that most Americans don't remain little more than wage slaves working themselves to death for today's "company stores"--credit card and mortgage lenders.

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