To any suggestion that the government shall set its printing presses free and flood the country with fiat money, all our economic intelligence reacts with no.  Only those who will say yes who are mentally or politically unsound.  And if a government is obliged by vote of the unsound to do it, then everybody, including the unsound, will begin to hoard gold because gold is the one kind of money no government can make or dilute.  Or if it were proposed that every bank should have the privilege to issue money as it might think fit, entirely in its own discretion, we should all know better.  Even banks would say no to that.  It is not only that people cannot trust private bankers with that privilege; private bankers would be unwilling to trust one another with it.

Yet on this jealously guarded base of money itself, banks are free to inflate and multiply credit, each in its own discretion, notwithstanding the fact that inflation of money and the inflation of credit are similar evils, producing similar miseries.  Inflation of credit - ecstasy, delusion, fantastic enrichment.  Deflation of credit - depression, crisis, remorse.  One state succeeds the other and there is no escape, for one is cause and one is effect.

Page 56 from a 1932 work by Garet Garret titled: "A Bubble That Broke The World".

It's 1997 during Mardi Gras at New Orleans.  I'm a block or two off Bourbon Street and separated from my friends.  I bought this cool black overcoat the other day at Saks Fifth Avenue.  Ten years later, I still have the coat and it's still in good condition.  Anyway, I'm walking down the road and I see a group of people gathered together playing some kind of game on the sidewalk.  Then all at once, they pick up their makeshift cardboard stand and move diagonally to another side of the road and start playing the game there.

I'm 6'5'' so I walk over to look over the top of this group.  It appears to be some type of card game and one of the players keeps winning.  There is money changing hands and the crowd is cheering for the winner.

In the distance, two tourists, college age, attracted to the excitement, start walking toward the game.  The other members playing the game don't acknowledge the newcomers directly, but they seem to naturally open up a space for them to watch.  The same player continues his winning streak; he picks the winning card each time, the crowd cheers, and he gets paid!  The crowd is more excited than ever.  To me, this has all the trappings of a con. 

I really thought it was a bunch of bad acting, although maybe the swindle setup was more transparent to me because I saw the moments leading up to the game.  My skepticism may well have been a carry-over from the day before when someone in New Orleans told me he recognized my shoes.  Not only did he recognize them, he knew where I got ‘em, when I got ‘em, and what time I got ‘em.  And for a $10 bet, he would tell me.  I didn't take the bet, but I did stick around to watch the next tourist accept his wager.

"You have to be honest with me", the street con said.  "That's all I ask is that you be honest with me when I tell you where you got your shoes".

The tourist says: "you'll never guess where I got these shoes.  I'll take that bet".

The street con aggresively informs: "You've got your shoes on your feet, you're standing on Canal Street and it's 2:30PM on Monday.  Now give me $10".

Needless to say, in the aftermath of this, my con-antenna was in defense mode and I did feel bad for the other tourist who was rooked by the got-your-shoes-con.  And here I am again, watching another shell game.  This one though, no one's going to fall for...or so I thought.

I see the naive college kids are reaching for their wallet to place a bet.

Without forethought, I say with a loud voice: "HAS ANYONE EVER HEARD OF THREE-CARD MONTY!?!"

Ten or so criminals in cahoots turned and gave me the meanest look, like I scared their pigeon away.  I suddenly realized I was alone and that wasn't the most conservative move I could have made.  I maybe could have had more tact and given some advance notice to the kids.  Subtle would have been better.  Needless to say, I exited out of there quickly.  I survived.  Like I said, I still have the coat.  Looks good too.

New York Times reports today:

Several of the world's biggest banks are in talks to put up about $75 billion in a backup fund that could be used to buy risky mortgage securities and other assets, a move designed to ease pressure on a crucial part of the credit markets that threatens the broader economy.

Citigroup, Bank of America and JPMorgan Chase, along with several other financial institutions, have been meeting to come up with a plan to create a fund that could prevent a sharp sell-off in securities owned by bank-affiliated investment vehicles. The meetings, which began three weeks ago, have been orchestrated by senior officials at the Treasury Department, and the discussions have intensified in the last few days.

(cough, cough)

Shell game.

(cough, cough)