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gakduki
Joined: 16 Jul 2009
Location: Passed out on line 2 going in circles
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 Posted: Wed Aug 12, 2009 7:27 am Post subject: |
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Obama will take the blame for this recession. He wasn't handed governace on a silver spoon but his policies certainly won't lead to a reversal anytime soon. At least to the levels they were prior to his inauguration. UE will remain around 9% for the time being. The Debt will continue to balloon and manufacturing will continue to slump. McCain may have started a war that could have helped unemployement. Obama will only lead to the eventual bankruptcy of USA. We know the world cannot afford such a thing to happen, but when is enough enough? I predict the total Debt will more than DOUBLE under the Obama administration.
There is no room for Monetary Policy to operate anymore and the trend of losing jobs to asia isn't likely to reverse anytime soon. Ultimately Obama will have to tax the middle classes or add a Federal VAT tax to get the money necessairy to cover interest payments and the wars. Also his public healthcare dream will be in the toilets soon too. Bush wasn't bright for spending more than what was being taken in during an expansionary phase, but Obama is even crazy for not cutting spending during a recession. Sure the automatic stabilizers are taking their toll, but something more has to be done. When will it be time to pull back the troops? Cut down on the civil servants and slash aid to the poor when infact in absolute terms the American government is the poorest entity on the planet at negative $11 000 000 000 000.00 and counting? |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Aug 12, 2009 7:43 am Post subject: |
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| gakduki wrote: |
Obama will take the blame for this recession. He wasn't handed governace on a silver spoon but his policies certainly won't lead to a reversal anytime soon. At least to the levels they were prior to his inauguration. UE will remain around 9% for the time being. The Debt will continue to balloon and manufacturing will continue to slump. McCain may have started a war that could have helped unemployement. Obama will only lead to the eventual bankruptcy of USA. We know the world cannot afford such a thing to happen, but when is enough enough? I predict the total Debt will more than DOUBLE under the Obama administration.
There is no room for Monetary Policy to operate anymore and the trend of losing jobs to asia isn't likely to reverse anytime soon. Ultimately Obama will have to tax the middle classes or add a Federal VAT tax to get the money necessairy to cover interest payments and the wars. Also his public healthcare dream will be in the toilets soon too. Bush wasn't bright for spending more than what was being taken in during an expansionary phase, but Obama is even crazy for not cutting spending during a recession. Sure the automatic stabilizers are taking their toll, but something more has to be done. When will it be time to pull back the troops? Cut down on the civil servants and slash aid to the poor when infact in absolute terms the American government is the poorest entity on the planet at negative $11 000 000 000 000.00 and counting? |
Good stuff.
You're right that that there is little room for monetary policy but Sweden has gone into negative rates:
http://www.nakedcapitalism.com/2009/07/sweden-negative-interest-rates-and.html
Benny only knows one game in town, and I assume they'll head negative at some point. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Wed Aug 12, 2009 4:52 pm Post subject: |
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| mises wrote: |
| RufusW wrote: |
Oh, he hasn't fixed it in 6 months!! C'mon, at least give him half his term to sort it out - you're really going to condemn him after an 8th of his presidency? |
There is no evidence that Obama intends to push meaningful reform in the FIRE economy. None. In fact, he wants to centralize regulatory functions in the Fed. He is completely [criminal].
The conservatives were right about him. He has a JD and was a "community organizer". He hasn't a clue about the economy. He is completely captured. |
Fixed. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Wed Aug 12, 2009 5:24 pm Post subject: |
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| gakduki wrote: |
Obama will take the blame for this recession. He wasn't handed governace on a silver spoon but his policies certainly won't lead to a reversal anytime soon. At least to the levels they were prior to his inauguration. UE will remain around 9% for the time being. The Debt will continue to balloon and manufacturing will continue to slump. McCain may have started a war that could have helped unemployement. Obama will only lead to the eventual bankruptcy of USA. We know the world cannot afford such a thing to happen, but when is enough enough? I predict the total Debt will more than DOUBLE under the Obama administration.
There is no room for Monetary Policy to operate anymore and the trend of losing jobs to asia isn't likely to reverse anytime soon. Ultimately Obama will have to tax the middle classes or add a Federal VAT tax to get the money necessairy to cover interest payments and the wars. Also his public healthcare dream will be in the toilets soon too. Bush wasn't bright for spending more than what was being taken in during an expansionary phase, but Obama is even crazy for not cutting spending during a recession. Sure the automatic stabilizers are taking their toll, but something more has to be done. When will it be time to pull back the troops? Cut down on the civil servants and slash aid to the poor when infact in absolute terms the American government is the poorest entity on the planet at negative $11 000 000 000 000.00 and counting? |
You're right about Obama not doing anything to help.
However, it's more than that. I'll mainly add that under the Federal Reserve System it is literally impossible to for the general public in the US, or the US gov't itself, not to be in debt. This is because the entire money supply is debt-based, all with interest attached. If this debt were paid back to the Fed, it would actually mean no more money in circulation. This is the very point of having such a system: to keep everyone permanently indebted to the banks, and just keep making interest payments (cash flow), while the debt piles on and on. It's literally a ponzi scheme of epic proportions. Great if you're the bankers, pretty much ruinous if you're most the rest of the country.
Having said that, the system is extremely inflationary by nature, and quite volatile. The main (and most difficult) task of the Fed (which is a private banking cartel) is to manage the controlled expansion and contraction of the money supply; in other words the inflation, followed by the deflation of the economy (namely by manipulating interest rates on their fake, legal tender monopoly money which we are all forced to use). This is how they build up the nation's assets (by getting the American people people to do all the work) and then suck us dry by contracting the money supply, consolidating the real wealth into their own hands.
This is exactly what happened in the Great Depression, and exactly what is happening now. The FIRE economy bubble was caused by the Fed pumping money into the economy, fueling derivatives markets and other junk, then came the crash (starting with sub-prime mortgages and the credit crunch). The credit crunch is still going strong if you are an average citizen; many people are losing their homes and jobs. But the banks are receiving trillions in bailouts (money created out of thin air by the Fed, lent as bonds to our corrupt, thieving gov't, and passed on to the banks themselves) which makes their purchasing power go through the roof, while indebting the public even further. This increased purchasing power also goes to the government, which gets to spend those junk bonds before that money has a chance to circulate around in the economy (raising inflation), and allows the government to spend beyond its means, usually on things of no benefit to Americans like the Iraq war.
Even if the dollar hyper-inflates (which it probably will at some point), the banks hold all the real assets like gold and property, which they are nabbing as much of now as they possibly can.
To sum up, what the banks are doing is going all out, pillaging as much from us now as they can, while the getting is still good. Obama is doing his utmost to facilitate this theft. The only way he could redeem himself at this point would be to do a 180 and push to abolish the Fed. But this is not likely to happen; he is doing the exact opposite, selling us all down the river, and I believe he will continue to do so until people get outraged and all hell breaks loose. |
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gakduki
Joined: 16 Jul 2009
Location: Passed out on line 2 going in circles
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| Posted: Wed Aug 12, 2009 5:41 pm Post subject: |
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| visitorq wrote: |
| gakduki wrote: |
Obama will take the blame for this recession. He wasn't handed governace on a silver spoon but his policies certainly won't lead to a reversal anytime soon. At least to the levels they were prior to his inauguration. UE will remain around 9% for the time being. The Debt will continue to balloon and manufacturing will continue to slump. McCain may have started a war that could have helped unemployement. Obama will only lead to the eventual bankruptcy of USA. We know the world cannot afford such a thing to happen, but when is enough enough? I predict the total Debt will more than DOUBLE under the Obama administration.
There is no room for Monetary Policy to operate anymore and the trend of losing jobs to asia isn't likely to reverse anytime soon. Ultimately Obama will have to tax the middle classes or add a Federal VAT tax to get the money necessairy to cover interest payments and the wars. Also his public healthcare dream will be in the toilets soon too. Bush wasn't bright for spending more than what was being taken in during an expansionary phase, but Obama is even crazy for not cutting spending during a recession. Sure the automatic stabilizers are taking their toll, but something more has to be done. When will it be time to pull back the troops? Cut down on the civil servants and slash aid to the poor when infact in absolute terms the American government is the poorest entity on the planet at negative $11 000 000 000 000.00 and counting? |
You're right about Obama not doing anything to help.
However, it's more than that. I'll mainly add that under the Federal Reserve System it is literally impossible to for the general public in the US, or the US gov't itself, not to be in debt. This is because the entire money supply is debt-based, all with interest attached. If this debt were paid back to the Fed, it would actually mean no more money in circulation. This is the very point of having such a system: to keep everyone permanently indebted to the banks, and just keep making interest payments (cash flow), while the debt piles on and on. It's literally a ponzi scheme of epic proportions. Great if you're the bankers, pretty much ruinous if you're most the rest of the country.
Having said that, the system is extremely inflationary by nature, and quite volatile. The main (and most difficult) task of the Fed (which is a private banking cartel) is to manage the controlled expansion and contraction of the money supply; in other words the inflation, followed by the deflation of the economy (namely by manipulating interest rates on their fake, legal tender monopoly money which we are all forced to use). This is how they build up the nation's assets (by getting the American people people to do all the work) and then suck us dry by contracting the money supply, consolidating the real wealth into their own hands.
This is exactly what happened in the Great Depression, and exactly what is happening now. The FIRE economy bubble was caused by the Fed pumping money into the economy, fueling derivatives markets and other junk, then came the crash (starting with sub-prime mortgages and the credit crunch). The credit crunch is still going strong if you are an average citizen; many people are losing their homes and jobs. But the banks are receiving trillions in bailouts (money created out of thin air by the Fed, lent as bonds to our corrupt, thieving gov't, and passed on to the banks themselves) which makes their purchasing power go through the roof, while indebting the public even further. This increased purchasing power also goes to the government, which gets to spend those junk bonds before that money has a chance to circulate around in the economy (raising inflation), and allows the government to spend beyond its means, usually on things of no benefit to Americans like the Iraq war.
Even if the dollar hyper-inflates (which it probably will at some point), the banks hold all the real assets like gold and property, which they are nabbing as much of now as they possibly can.
To sum up, what the banks are doing is going all out, pillaging as much from us now as they can, while the getting is still good. Obama is doing his utmost to facilitate this theft. The only way he could redeem himself at this point would be to do a 180 and push to abolish the Fed. But this is not likely to happen; he is doing the exact opposite, selling us all down the river, and I believe he will continue to do so until people get outraged and all hell breaks loose. |
Sounds like your a Ron Paul supporter or a member of the Zeitgeist movement. I always follow the model, if you don't understand the economy, stay away from the markets. Recessions have been around lon before the Federal Bank. People will lose jobs and people will lose their homes. Is home ownership not near absolute highs? Are people in America not richer than ever before? (other than 2008 pre-recession).
People are living better than ever, and conspiracy theories which say the super wealthy want to do nothing more than make us slaves are based on loose assumptions. The people who have lost their homes should have never 'owned' a home in the first place. I agree both Fannie Mae and Freddie Mac were buying up shoddy mortgages and disguising them as AAA tranche investments. However, I don't think Obama is a puppet in a master plan to screw everyone over.
Also, whats wrong with paying off the debt? I don't really understand your arguement. Are you trying to say that if the governent pays all the money back, there will be no more money left? Wouldn't that be a dream. Pay the Federal Bank back and be out of their golden claws forever. These banks are making a very small percentage on their loans. If you want to beat the system, stop using your 'credit' card, your overdraft and start making diversified investments. |
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gakduki
Joined: 16 Jul 2009
Location: Passed out on line 2 going in circles
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| Posted: Wed Aug 12, 2009 5:49 pm Post subject: |
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Thats very interesting. Negative interest on Deposits. So what will everyone do? Im guessing the wealthy will pull their money out of Sweden, the value of their currency will fall and they will be one of the last countries to emerge from the recession. Just like Japan, which still hasn't recovered from the IMF crisis. I wish I could qualify for a 0% interest Swedish loan. Take it out of the country, invest in China and become very wealthy.
I don't think it could work in America, their country is too large, too fiscally lose and is not a single economy like Sweden. California is different from NY, Texas, Midwest, Alaska, not all the states are in a recession. Sweden is playing with fire and will be burnt. Also its ridiculous, they are going to contract by 5.6% this year, than turn around and expand next year? where do they come up with these figures? |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Aug 12, 2009 6:15 pm Post subject: |
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| Thats very interesting. Negative interest on Deposits. So what will everyone do? Im guessing the wealthy will pull their money out of Sweden, |
Extracting wealth is a booming business:
http://www.scribd.com/doc/18504384/cfmv20n4?autodown=pdf
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| Take it out of the country, invest in China and become very wealthy. |
That's been a huge source of ultra-wealth for the past decade or so. The Bank of Japan loans money to foreigners at a nominal rate and they then turn around and invest it in low risk assets with 2-3% growth. Buffett benefited handsomely from this. A spread of 1-2% isn't much, until you borrow billions.
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| I don't think it could work in America, their country is too large, too fiscally lose and is not a single economy like Sweden. California is different from NY, Texas, Midwest, Alaska, not all the states are in a recession. |
I understand your point, but is the difference between 0.0 and -0.1 really meaningful? You're already smacking savers around with a anti-saving brick.
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| Where do they come up with these figures? |
Sweden is well known for fabricating statistics. Every country does it, but the Swedes make an art form of it. They report an unemployment rate of 9% or whatever but even in good times have a 15% unemployment rate (by Mckinsey's measures).
http://www.mckinsey.com/mgi/publications/sweden/
Canadian and American stats are increasingly unhinged from reality too. I don't think economic reality is at all depicted in official data.
Have you seen shadowstats.com? |
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gakduki
Joined: 16 Jul 2009
Location: Passed out on line 2 going in circles
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| Posted: Wed Aug 12, 2009 9:52 pm Post subject: |
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http://www.scribd.com/doc/18504384/cfmv20n4?autodown=pdf
That is a very interesting article Mises. There is a movement now about closing these tax havens. I agree with the article they won't ever completely close them, but something must be done. I think in conclusion we are in for a period of rampant inflation, so the best bet is to spread out your holdings, do not sign long-term contracts, and keep you money in commodities.
The spread has been helpful and has helped hedge funds more than anyone, it isn't entirely risk free arbitrage as we recently found out. But nonetheless, more money has been created than lost by the hedging phenomenon.
I will look at shawdowstats.com seems interesting. Look forward to reading more of your posts, you seem to know a thing or two and aren't just arguing for the sake of arguing. It drives me crazy that people will attack an economic arguement about things like the prime rate, arbitrage, deflation etc. and their first stop is a wikipedia definition. And their next stop is a far left website. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Wed Aug 12, 2009 10:10 pm Post subject: |
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So instead of earning interest on your deposits, you lose it?  |
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gakduki
Joined: 16 Jul 2009
Location: Passed out on line 2 going in circles
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| Posted: Wed Aug 12, 2009 11:23 pm Post subject: |
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| bacasper wrote: |
So instead of earning interest on your deposits, you lose it? |
Yes the balance will drop every month in such an account.
It encourages you to spend all your money, which will speed up the money multiplier, It encourages investment, and ultimately drive up GDP to get out of a recession. Hopefully if hyperinflation is avoided. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Thu Aug 13, 2009 2:25 am Post subject: |
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| gakduki wrote: |
| Sounds like your a Ron Paul supporter or a member of the Zeitgeist movement. I always follow the model, if you don't understand the economy, stay away from the markets. Recessions have been around lon before the Federal Bank. People will lose jobs and people will lose their homes. Is home ownership not near absolute highs? Are people in America not richer than ever before? (other than 2008 pre-recession). |
I'm not really a Ron Paul supporter per se, but I definitely think he's right about most things. As for your assertion that recessions have been around before the Federal Reserve, yes they have, but never so bad or as frequent. Anyway, it's the whole fractional reserve method of banking that is to blame, as it allows people to lend, borrow, and play with money that doesn't really exist. Banks wouldn't treat investment like a gaming at a casino if they had to lend out hard cash backed by real assets. Rather, the banks lend out fake money (backed by only a fraction of 'reserves', in reality nothing), at virtually no risk to themselves, and treat the debt the borrower incurs as if it were a real asset itself. It's a totally falacious, absurd system, as well as being fraudulent.
If you tried to lend me paper money backed by, say, gold that you didn't actually have, you'd be sent to jail for fraud. But the Fed and banks do the exact same thing and are sanctioned by the government through legal tender laws.
I'm not really a Zeitgeist supporter either... I agree with all the basic ideas he discusses on the Fed, but his whole "resource-based economy" idea in the addendum movie seemed quite unrealistic to me. I still believe capitalism is our best bet, it's just that we can never have it in its true form, with equal opportunity for all, while the Fed continues to exist.
| Quote: |
| People are living better than ever, and conspiracy theories which say the super wealthy want to do nothing more than make us slaves are based on loose assumptions. The people who have lost their homes should have never 'owned' a home in the first place. I agree both Fannie Mae and Freddie Mac were buying up shoddy mortgages and disguising them as AAA tranche investments. However, I don't think Obama is a puppet in a master plan to screw everyone over. |
You are not giving credit where it is actually due. Of course American people live well: because the American people are innovative, hard working, and they have built the greatest, most prosperous nation ever. All the goods and services are produced by people -- the banks actually do nothing (well, actually they do provide some essential services, but the usury from which they obtain most of their profits isn't one of them).
Also, to be clear: when you go to the bank to borrow "money", you sign a pledge promising to pay back the amount of the loan to the bank. The bank doesn NOT lend you its own money; it simply creates new money out of thin air and types it into your account on the computer (brand new money, backed by nothing). As the borrower you must pay back the amount of the loan PLUS INTEREST to the bank, or else lose your home/business (ie. a huge commitment from you), but the bank has no risk at all, since the money they lend you is backed by nothing.
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| Also, whats wrong with paying off the debt? I don't really understand your arguement. Are you trying to say that if the governent pays all the money back, there will be no more money left? Wouldn't that be a dream. Pay the Federal Bank back and be out of their golden claws forever. These banks are making a very small percentage on their loans. If you want to beat the system, stop using your 'credit' card, your overdraft and start making diversified investments. |
Yes, I know it is a very difficult notion to wrap one's head around (it was one of the main epiphanies I had that led me change my view on so many things). But it is true. As I touched on above, the banks do not lend money backed by real assets (property, gold etc.) - they merely lend out fiat currency. They treat the actual pledge signed by the borrower as an asset itself. The debt is used by them as a commodity that can be bought or sold, and one that forever collects interest. Actually they use this debt-asset as their so-called "reserve" in the fractional reserve method they use, which means it is literally a ponzi scheme, by definition.
However, if that debt is ever repaid, then the commodity itself ceases to exist, and that amount vanishes from the money supply. Moreover, since all money is issued as debt, where is the money to pay off the interest on that debt supposed to come from? The answer is, nowhere. This is why our society is unjust, because there is literally not enough money to go around, to pay off the debt and the interest. This is also why more and more debt must be incurred just to keep up with the cycle, and why despite being the most prosperous country on earth the US has by far the greatest debt, which can never, ever be paid off.
It's utterly absurd, but there it is. Our real economy is incredibly strong, and really should be the best on earth. What's messing it all up is the current ridiculous monetary system we have in place, which is extremely inflationary and baloons finance far, far above the real economy. To solve it we first need to abolish the Fed, create an interest-free, value-based currency (issued by the government) instead of our current debt-based one. |
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ubermenzch
Joined: 09 Jun 2008
Location: bundang, south korea
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| Posted: Fri Aug 14, 2009 9:30 pm Post subject: |
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| bucheon bum wrote: |
I don't think any of us are blaming Obama for the economic crisis. What we're blaming him for is the failure to fix things, and just maintaining the status quo. The next economic downturn will fall strictly at his feet. |
I agree completely with the above.
It's both hilarious and depressing that if you watch only the MSM's interpretation of the current state of the economy (as I have stupidly found myself doing the past few months), you really can be made to disbelieve that we were ever in a crisis in the first place, and disregard any notion that perhaps we are now complacently prancing into even bigger dangers.
I thank you for these links. They gave me a much needed chill. |
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