steveyoung

Erect and LotsofZeros here is a link you should read if you are into researching the problem. Its rather lengthy but well worth the read. Scroll down when it appears to go blank.
Taki’s Magazine, edited by Taki Theodoracopulos

Brandon

You think Bush responsible for all the mortgage crap?

Do you know who created Fannie Mae? Do you know who ran it? Do you know who got a ton of money from them for their political campaigns? Do you know who voted to bail them out?

Read: FOXNews.com - Barack Obama's Fannie Mae/Freddie Mac Connection - John Gibson Radio

__________________
"Let me tell you what Melba Toast is packin' right here, all right. We got 4:11 Positrac outback, 750 double pumper, Edelbrock intake, bored over 30, 11 to 1 pop-up pistons, turbo-jet 390 horsepower. We're talkin' some fuckin' muscle." - Wooderson

-Bill-

Since we're all bullshitting about it..
Im making a lens on the bailouts...
Not much yet, but heh... I got me a linky linky

Bailout

__________________

LotsOfZeros

I agree with the pure capitalism play and letting these companies die off and face liquidation. Sure there is the argument of job losses diminishing the tax base, etc but I believe we need to take our medicine now and let the market decide so that we don't just prolong the inevitable. I care about the future we pass off to our children.

__________________
"Concentrated power has always been the enemy of liberty" ~ Ronald Reagan

LotsOfZeros

Thanks for the link. I read the first half and skimmed the rest as it got more convoluted. This article is a good read into the bi-partisan pressure to lend more to the unqualified in the name of 'fairness'. It's just another in the long list of examples of how the affirmative action movement is killing this country.

As stated before, I tend to lean more towards the pure capitalist ideals: If they can't afford it, they don't get the loan. I don't care what color they are. Let the banks decide what is a good risk for their lending standards and keep the government out of it. The government pressure to loan to unqualified purchasers has backfired immensely and we will all pay for that. My taxes will go to bail out Fannie, Freddie and others, the inflation is going to kill me at the grocery store (see devaluation of the dollar when we keep printing 'funny money'), and the house I own is now most likely worth less than when I purchased it due to the ever-softer real estate market (see 'appraisal comparable sales' and vacant houses).

It's now becoming a domino effect.

__________________
"Concentrated power has always been the enemy of liberty" ~ Ronald Reagan

Drake

Regulation is in some markets and industries very important. It is not an ex post facto law by definition or practice. It does not necesarily go back into the past and regualte those times. That is what ex post facto means.

It may be correcting a problem that has already happened but realistically what problem has not happened before in some way or place?

The drug war is not regulation, it is increased federal sentencing guidleines for criminals and hype. I dont think it is effective but also not regualtion per se.

The FDA is an example of regulation done to increase the power and wealth of doctors and the medical field at the expense of the public. I think it is necesary but should be severly shrunk in size, scope and power. The fact that Codex laws are coming into power is proof that there are severe conflicts of interest in the FDA and US and International laws. People cant decide what vitamins to take?

Not all regulations are bad. Enron is an example of what can happen when regualtions are taken off. Also the utility prices for electricity and gas service in developing areas like South America. When someone wants regulations taken off be very afraid. Look into who they are and why they want it. Usually it is not market oriented and is basically subjecting people to a monopoly on something they cant live without.

When the regulations are removed instead of lower prices and competition often there is price gouging and worse service.

What these markets needed / may need were real regulations that were in the govt and public interest. Unfortunately we have not been getting that lately.

The whole system is corrupt as shit and that is why we are getting fucked no matter where we run. Vote them all out.

There needs to be changes to the campaign finance and lobbyist laws so that special interests dont run DC.

guerilla

Right, but that's the issue. They have constructed a game where if several fail, all fail, so it means that an entire segment of the global economy is allowed to play a game of no-lose capitalism that is subsidized by everyone else.

Right. It's not just capitalism, it's free market economics. You have to allow cause and effect to play out. What's happening now, is moral hazard. The effect is being transferred onto people who had little or nothing to do with the failure. In every other aspect of our lives, we would consider such actions unacceptable.

Sorry, I meant that regulation is not ex post facto, it cannot fix what has happened. My bad.

Monopolies only exist where there is no competition. The best way to limit competition, is to regulate an industry. Regulation always raises the price of entry, making it more costly for small players to emerge and challenge an established order. That is why most regulation is actually written by the industry, and not consumers or legislators. It's more profitable to limit competition through regulation (bang for the buck) than to compete in an open and free market.

Think about this. It's true.

Imagine how many fewer offers and products there would be if AM was regulated. Consider how many fewer AMs there would be if they had to get a license and perform industry specific reporting on their tactics for government oversight.

I'm sure one could make the argument, but the industry would be safer and there would be less dirtbags and shady (no offense xmcp123) characters.

Perhaps. But at the cost of lower payouts (because the affiliate companies would have to hire staff to meet regulatory paperwork expectations, and potentially limit the number of programs they carry), more challenging entry into the industry, and rules that limit ways to generate leads?

Intervention has costs. If you believe in a free market (and I do), then you want the market to regulate, based upon consumer choices. It's the most efficient and moral model.

I certainly trust myself and all of you more than I trust politicians. Trusting in politicians is really dumb.

More competition equals price gouging and worse service? This is counter-intuitive. I think we all know that more competition leads to innovation, product and service improvements and lower prices.

What you're repeating are fallacies that a lot of people seem to believe, but have no rational basis to believe. Normally, as soon as people bring up natural monopolies and such, my first instinct is to say, "show me one" but these days, I just shutdown on the conversation, because it's hard to argue rationally with people who repeat things without having thought them through themselves.

Now that is very true. Unfortunately, you can't vote them all out. The lobbyists have more money than you. Incumbents are rarely defeated, and the two party duopoly will not allow outside challenges.

Ron Paul's idea is better. Follow the Constitution. Then there is little money or power in Washington, and lobbyists have to lobby either 50 states, or 500 cities or 300 million consumers.

Historically, centralizing power and money attracts the worst the sort of vermin. There are thousands more laws on the books now than there were 100 years ago. And yet politicians and the political process is more corrupt than ever. Maybe the power to legislate over so much, and to hand out so much money in appropriations is the problem.

Maybe, instead of feeding a drug addict more heroin, hoping it will kill him, the heroin should be taken away.

__________________

Drake

I think energy is one industry that needs to be regulated. Its a nice idea that having no monopoly on it would lower prices. Some people say as much as 25%. But that was also said in South America where prices increased after deregulation several hundred percent.

You stated above that industry writes a lot of the regualtion papers. But you really did not cite anything. I would imagine that they would want it deregulated as regulation allows a normal profit but not absurd profits. If the business is having problems they petition in front of the regulation commsion.

And did you know Enron wrote a lot of the energy deregulation here?

Internal Enron documents, which were released in 2002, revealed that the Houston-based company helped write the legislation, which was signed into law by President Bill Clinton in December 2000.
Freed from regulatory interference, Enron then used manipulative trading practices to game the California electricity market and drive up electricity prices across the state.
While California consumers were getting fleeced, the new Bush administration shielded Enron from early accusations of market manipulation. President Bush personally joined the fight against imposing caps on the soaring price of electricity, buying additional time for Enron although the company’s house of cards collapsed anyway in fall 2001. [For details, see Consortiumnews.com’s “Bush’s Enron Lies.”]


And of course you mentioned that you think a monopoly is no competition as in zero. The EU states a monopoly is 90% of the market. I personally think industries start to act in a monopolistic fashion at around 70%. ie Google in the USA. Not that they need to be stopped at that point but should merit extra attention.



And I dont think AM should be regulated. In fact I think SEO standards in general are onesided.


I just think some industries should be regulated where there is a history of no one providing a real competitor. Can you imagine your house having 5 power lines running up to it and you go unhook one and hook up another? How much would the waste be from extra lines or extra switching/metering devices?



My home town had one power company in some sections and another in other sections. You could buy a house in the section you wanted to deal with. Or not buy/rent one at all and move out of the city. It is not exactly a prison.

guerilla

The market is self-correcting. As long as there are not barriers to entry, monopolies cannot maintain their market share WITHOUT (this is the caveat) providing better prices and services/goods than any competitor. Which is a win for the consumer.

Google falls into this paradigm. Yahoo and MSN are so incompetent, and their search so useless, that Google dominates the landscape. Both Yahoo (time) and MSN (OS) have had big traditional advantages over Google. And yet they lost out.

Someday, someone will challenge Google seriously, by taking on the search engine portion. Unless Google continues to have the best search engine, in which case again, the consumer wins with Google being available and pervasive.

As far as Enron, you're making my point. No regulation and deregulation are not the same thing.

So you're saying that in an industry where there is no competition, we are going to regulate it into a monopoly?

Maybe there is no competition because the cost is below the price to develop an alternative? In which case, the market price (however high it may be perceived) is not higher than it should be.

Maybe no one can compete with your electric company, because there is not enough profit in it to compete! Duplicating infrastructure may not be profitable because only a portion of the existing market will be served with 100% of the capital costs. These are just economic realities, not monopolistic agendas.

Can you imagine having multiple phone companies? Multiple cable companies? Oh wait, Cell Phones and Satellite TV.

The market will provide if there is demand. Just because it is a hassle to duplicate infrastructure today, doesn't mean that the free market won't create new infrastructure or find a new technique around it.

But in order to have the profit incentive to do so, the market has to have zero artificial barriers to entry. If it's too costly to get in, then it becomes even harder to develop alternatives.

It's like the so-called energy crisis. You can't drill anywhere. You can't build nuclear. There are probably a million other things you can't do. So the costs are enormous to practice any R&D and establish a new company.

So the government's solution is, spend more money. Instead, they should just cut regulatory red tape. Let people drill. Let people build nuclear. Let the market work.

You see this all day, every day. Right now, the banks are in trouble. The system is starved for genuine, real capital.

So the government will impose more regulations, force capital to flee to other markets and out of the currency. They will run up more debt, causing inflation, which will make it even harder for people to keep the homes they haven't bought yet.

When really, they should cut red tape, raise interest rates and cut spending/taxes simultaneously. That would allow the market to respond to the crisis, higher interest rates would be an incentive for people to save (savings are capital) and by cutting taxes would have the same effect. People would be more inclined to work, save and invest. The spending cuts have to come, because more debt is inflationary, so you can't cut taxes unless you cut spending, otherwise you're spinning your wheels.

Watch what the government does over the next year or two. They will do everything assbackwards, and then blame the market, price gougers, greedy capitalists etc. All while they continue to spend spend spend, and help out their buddies on Wall Street.

__________________

grafixguru36

I really can't believe the mess that the Bush administration has got this country in. Hopefully this bailout will fix things. But again, I wish I could say that I was optimistic.

LotsOfZeros

Congratulations! You sir, are a first-post idiot. it's obvious by your response you didn't read any of this thread.

__________________
"Concentrated power has always been the enemy of liberty" ~ Ronald Reagan

guerilla

Many economists skeptical of bailout - Avi Zenilman - Politico.com

__________________

hellblazer

Not only Germany, but Argentina, Zimbabwe, and ancient Rome all collapsed from the same ailment - hyperinflation.

And the US is doing the exact same thing - injecting more and more money into the money supply. It's debasing the currency bigtime. And if any foreign country, like Russia or China, decides to dump their dollars back onto the market because they're sick of the declining value, we're FUCKED.

As in, bye bye US economy. We'll probably drag a couple other economies down with us, but if any other country decides they've had enough and gets rid of their Dollar reserves, seeya.

guerilla

Ron Paul on Wolf Blitzer this morning.

YouTube - 9/21/2008 Ron Paul on the Late Edition with Wolf Blitzer

__________________

steveyoung

Ron Paul is an idiot. He offered no "plan" to FIX the economy except to say we couldn't fix it, unless we change our policy in the future. I believe we HAVE to try and fix it now AND change our policy. Yes, it will be on the back of the taxpayer. Yes, it will be painful. But our only alternative, and the one Paul seems to want, is to let the economy collapse . . . to let the economic bubble burst. If that happens, the dollar will buy nothing. The only economy we will have will be the barter system. I don't know about you, but I do not want to trade my watch for a loaf of bread and a gallon of milk. I'll take my financial advice from the Secretary of the Treasury and the Chairman of the Federal Reserve, not from some idiot congressman.

Oh yes, flame on.

guerilla

Not true. Ron Paul outlined a fiscal plan, dubbed the "Prescription for Prosperity" that was based on already introduced legislation.

The RogueNation: The Prescription for Prosperity: We Americans have a Tradition of Rebellion

Basically, he wanted to do what I outlined above. Let the bubble break, but put the market and economy in a position to recover quickly.

Look, like it or not, the bubble will eventually break. You can blame Ron Paul, but he didn't create the problem, and the longer it goes on, the more it is going to cost you than a watch or some other goods.

Btw, the neo-primitive argument for a barter society is nonsense. There might be some barter in a dollar collapse, but other currencies will become the defacto trade standard. People will deal in Euros or something like that until a stable dollar currency can be re-established.

Btw, Paul's plan saves the dollar, it doesn't destroy it. It does however mean that people have to go back to work, and the trillion dollar overseas war machine and foreign aid packages have to come to an end.

__________________

steveyoung

I have to disagree with you. Letting the bubble burst is not the solution. The link you provide to Paul's "Prescription for Prosperity" states it was published on January 24, 2008. That was almost 9 months ago and is not applicable to the current state of the economy. Also, if the barter system is "nonsense" what are you going to do until you get Euros? I seem to be fresh out of them. I'm all for people going to work and ending most foreign aid, however, the war must continue until it can be won.

guerilla

Look, we can debate all we want. The bubble is going to break, it is not going to go on for eternity.

What you're arguing is that cause and effect doesn't happen. That's not rational.

Perhaps you didn't know that Paul predicted the Fannie/Freddie collapse in 2005? That's why Paul has been on TV everyday this last week. He's predicted all of this years ago, and as far as I am concerned, is the smartest member of Congress about economics. His reforms were specifically to address this situation, which was and is inevitable.

And since you don't believe the bubble should burst, I've got bad news for you. Paul is batting 1.000 on his financial predictions, and he predicts a massive dollar collapse. Take that to school in your lunchbox!



Just out, apparently the FED and Treasury now expect you to bailout and payoff Foreign banks as well. This is unbelievable.

Exclusive: Foreign banks may get help - Mike Allen - Politico.com

This is anal rapage with a sandpaper condom. And the irony is, it does nothing to stop the bubble from bursting or a dollar collapse, it just transfers all of the debt to main street, and all of the wealth to Wall Street.

__________________

aim

<narrative>

Guerilla continues to dominate the this thread with logic, common sense and facts.

...World class entertainment watching folks try to counter-argue...

</narrative>

__________________
http://cgi.4chan.org/s/src/1242695804300.gif

guerilla

I'd rather not talk about Paul, so I'll put this stuff to rest.

The GSE Crisis by Ron Paul

Excerpt (2005)

__________________

Albus Finch

+rep guerilla

My understanding of the current situation has increased ten-fold by reading this thread.

steveyoung

I see you are having a difficult time NOT talking about Paul. Now, you quote his comments from 2005 because you'd "rather not talk about Paul." What do you not understand about the word "today". In 2005, McCain also warned about this problem but the Democrates blocked his legislation. Again, that was 2005 not today.

Today, we have a serious financial problem. It does not matter who did what in 1835, 2005, or January 24, 2008. It only matters what we do from this day forward. Letting the economy go bust is like telling your doctor you want to die today rather than wait for the certain death you will face in years to come. You are wrong but I will argue with you no more. I am past the time of arguing with someone who is not going to change his views. I can only hope others will not listen to your folly.

Oh yes, and I haven't carried a lunchbox to school in over 50 years. I'll bet its been much less time for you.

-Bill-

Well put

I always opted for the hot lunches... mommy didn't love me enough to pack lunches

__________________

guerilla

I quoted Paul because you seemed to be misinformed that (1) he did not have a plan and (2) his plan was not related to the current crisis.

You were wrong on both. I settled the issue.

McCain is part of the problem, he was dirty in the S&L crisis.

This is the kind of thinking that created the mess. People who refuse to learn history, are doomed to repeat it.

You misunderstand. The economy is going to bust. The government can't wave a magic fairy wand and change reality. The economy is cancerous. You either take the bitter therapy, or you die. This isn't an either/or situation. The economy is not asking your or George Bush's permission on what to do. The market will not-sustain massive losses like this. That is why it is called a crisis, and not a checkup.

You haven't made a single point yet.

I can't change my views because you haven't brought anything worth changing them over to the table. You still don't get it. The bust doesn't ask permission to bust. If the government had the power to stop busts, it would have stopped the Depressions in the 30s and 70s. The Soviets would have kept the USSR together in 1989. When the bust comes, it comes.

__________________

blueRAP

That really sums it up.

+rep guerilla for Economics101

guerilla

Again, doomed to repeat history.

The details of the bailout bill are coming out.

All it does, is allow the Treasury Secretary to spend up to $700 billion at one time (yes, he can do this multiple times) to buy up bad assets from foreign and domestic firms, with the taxpayers money.

He sets the prices, and he makes these determinations all on his own. There is also a nice part that absolves him of any legal recourse later (but of course).

Essentially, Wall Street takes over the country. And this does nothing to protect the dollar or prevent the bust that Steve is worried about. It just makes sure the people and dollar go bust before the banks.

This is what I was getting at before. If you bailout the banks, you haven't removed the bad debt. All you have done is made sure the taxpayers and citizens will burn for it, not the banks. The bailout does nothing to prevent the bust.

__________________

Drake

Well in the industries I think should have regualtion there are significant barriers to entry. One is cost of providing the goods and service. One is lack of inititaive by local people and businesses to provide an alternative. One is lack of capital. Loans are getting harder to get. Less businesses will be created. Should people get overcharged by the few companies that survive in each industry? You will be screaming for regulation if there ends up being 2 or 3 big banks in the US after this mess.

Someday, someone will challenge Google seriously, by taking on the search engine portion. Unless Google continues to have the best search engine, in which case again, the consumer wins with Google being available and pervasive.[/quote]

Well Yahoo was overconfident by their early success and Microsoft has always been MS. Not really serious about anything until it takes off.

I dont expect a real competitor to Google anytime soon. For someone to have the human capital to design a real search engine and the resources to allow them to mimic the 50 different apps Google has would be very unlikely. Not to mention the hundreds of data centers all over the world. Also they cant get contextual ad customers without a large industry share. Google can / and is charging and acting basically how they want. If people stop using Google adwords usually they stop advertising. $10 clicks when there is no other bidder? That is not a free market.

Not sure how. Please explain. A company could fight for less regualtion from a point of little regulation or lots of regualtion.

It already is a monopoly. But in some industries with high barriers to entry, and price inelasticity to demand, I think govts should prevent gouging.

Really? Always? I can think of dozens of cases where that is not true. Your idea is in a perfect world. The world is far from perfect. There are high costs, lack of initiative, barriers to entry, capital problems, human resource shortages, corruption, and bribes.

So whats your point? That the local electricity company should be protected by the economic realities and charge whatver they can get away with? Or until someone else spends millions, maybe billions and 5 to 10 years to build a competing system?

Yes and all of those are good for the market as a whole and low power and wireless. Until electricity can be transmitted wirelessly and the equipment is not huge and expensive I dont see people having choices for electricty worldwide. I dont even know of one community where people can decide what electricity provider they can have. Let alone all communities in the USA or the world.

The market does not always provide. Our grandparents lived in a world of one electricity company, one phone company, a few car makers, and limited food and entertainment. Should those companies be able to do whatever they want? Charge what they want, and make unsafe products?

Are you speaking for all CEOs and all companies? Where do you get all this insight? There are always barriers of some sort. They just get added into the big picture. Profit and Loss, Costs and Benefits.

Yes a lot of what you see in the news is made up shit. The energy crisis, the banking crisis, the Enron crisis. The govt is pushing these and will try to make the results come out in their (or their friends) benefit. Its classic Hegelian dialect.

But you can drill in many places in the USA and abroad. If the oil companies really wanted to they would lobby for that. They are making record profits year after year. They found what works for them.

You can build nuclear. No one wants to for public relations and cost reasons. Nuclear is more expensive than the alternatives. That might change. In my hometown there are two electrcity companies as I discussed. The one with nuclear is more expensive because of inefficiencies and mismangement. Because of the nuclear plant.

Regulation and the banking crisis are two different things. You cant jsut cut red tape and ignore the other problems. The market is slow, and slow change is painful. Ask Japan, they tried to slowly right their problems and still have deflation 20 years later.

I think the banking crisis was created by not enough regualtion and not enforcing the regualtions we had. Plus they wanted it to some extant. They made tons of profits for years and the more fucked their company is now the more likely the government will bail them out.

I think they had too much capital, with lowering fractional reserve amounts and loose lending practices. And the government is giving them tons of capital, is that good? The banks currently deciding to not lend each other money is the markets way of dealing with this. How fun would that be for a few years? Goodbye economic growth.

Yes they will but this govt is regualtion crazy. Probably why this happened in the first place. They let it. They let it snowball a bit. And now are trying to get it under control. Record profits for companies and Americans get to work two jobs to keep their house.

Just becuase this admin is fucking loony does not mean I ignore economic principles and think that a truly free in all markets economy would work with this level of special interests and corruption.

Personally economically I think a slow hand on things is typically better. I have no idea what the markets reaction would be to those things. Probably disbelief of less regulation when that is what started this. Higher interest rates would probably mean less people and companies would want loans but banks would be more likely to want to issue them. Resulting in lower loaning standards. And this govt is in love with spending. They could not stop if they tried. I think they should try, but that would involve no long term bases in the Middle East which we seem to really want.

Yep this admin and probably the next is stupid as shit. From the Treasury department, to the Executive Branch, to the gutless sheeple Congress.

steveyoung

I am not arguing with you. I am correcting your statements.
I was wrong on neither. You "settled" nothing. My "point" is that Paul has the same "plan" for our economy as you. Let the economy go bust. Your video proves that and your writings here back it up. Your fatalistic belief that the economy will bust precludes any expectation or hope that it will not and is groundless.

It is not wrong to change what can be changed today and leave yesterday to history. One true lesson from history is that the only persons who will be "doomed" are those who do nothing. You hurl your gloom and doom prophecies and blame others for what you believe is our destiny, yet, you offer no proof other than the ramblings of a single, idiot congressman and feel secure in the knowledge that, either way it goes, you looked like a hero when you were talking your crap that no one will remember.

You still don't get it? I have more faith in our economy, in our leaders, in our country and our people than to believe you are correct. So, go live in a cave somewhere and wait for the end to come. I am certain you will be joined by many on this board. I am not worried about it in any case because I have already lived a long and full life. Unfortunately, others have not and they may actually believe you.

Now, to paraphrase you, I have settled the issue. You can have the last word, as I will post no more in this thread.

erect

I've done TONS of reading & watching about our economy, debt & upcoming recession over the weekend. There's an equal amount of misinformation out there as there are solid theories. Because money flows uphill (to the rich) you will not find any hard facts or smoking gun that support any one battle plan for fixing this mess. It's all just best guess since history has not produced a long term sustainable solution for us to follow.

If you have 3.5 hours and are interested in our history of money & how it influences interest rates, depression, the federal reserve and even war you'll totally dig this video. It touches on many of the issues discussed in this thread ... it's also a pretty accurate history lesson (done in ~'95).

You can feel some conspiracy theory vibes coming from it but I've looked up a number of quotes and events from the video, all that I looked into are quite creditable and based on true events and quotes ... but there was a ton of info thrown out there so no guarantees.

My conclusion overall is that very few know or care about the economy and how our actions influence it. This is understandable (yet unacceptable) because it's so fucking overwhelming. This is exactly why we trust people who are "smarter" than us, and then get robbed blind. It's also why we're called the sheeple!

To get us out of this rut, it seems we will need some seriously bold politicians (like better than we've seen in over a century) who are popular enough to sustain re-election while guiding the US through some hard times. However names like Jackson & Jefferson are not on the election card this year.

Obama plays the blame game and takes handouts .. McCain turns to the fed for help (WTF!?!?!?). The truth is, neither of these people are an acceptable answer and we're long overdue for a revolution.

In the end, I'm a better person because I'm much more informed about all of this. Thanks to everyone for the swift kick in the ass.

__________________

guerilla

I know.

Dude, it's not fatalistic. It's not a belief. What goes up, must come down. Cause and effect. Historical precedent.

What part of this are you not getting? Paul nor I are arguing for a bust. We know it is inevitably going to happen. So the idea is to make a soft landing, not to make the bust bigger. Paul's plan is for a swift recovery.

I know you want to think the good times can roll indefinitely, but they can't. The fundamentals are horrible. Most of the economy is built on debt, and most of the debt has gone bad. That's the indisputable facts.

My video and my points. I'm not sure if you're trying to diminish me personally, but that doesn't matter. The fundamentals are unchanged if you criticize my youtube posting. You need to get past blaming me, and start looking at what is happening, how it can be addressed and what is being done now to make it better or worse. Whether I am right or wrong, is irrelevant in an economic crisis.

What gloom and doom? The FED chairman and Sec. of the Treasury told Congress last week, that if they don't act, the entire financial system will meltdown.

Also, calling Paul an idiot in no way diminishes that he has been right all along.

Your leaders are calling it a crisis and not promising it can be worked out. These are the people you put your faith in.

The idea is not to live in a cave, it is to brace personally for financially hard times, and to better understand what is being done at the top to make it pass faster or slower.

You should post no more because I was tempted a few times to make a couple personal attacks in response to your comments at me. I'd rather discuss the economy than get into petty games like that.

__________________

guerilla

These are two pretty good movies as well (shorter).

YouTube - Money, Banking and the Federal Reserve

YouTube - Liberty and Economics

There are tons of resources online to learn about economics that makes it less complicated.

__________________

brianpaxton

Where is Jimmy Carter when you need him?

lmao..

Don't want the gravy to thicken, added a little creme..

Guerilla - I too have enjoyed most of your posts, but I've got to say, I object a bit to the general tone and idea of selfhelplessness.. The idea that nothing can be done, we shouldn't hardly even try, because what's coming is.. a comin'..

While I'm all for accepting "the truth", and taking my medicine and dealing with the real circumstances, I'm not a big fan of admitting that there's something affecting me and my family that is totally beyond my control.. Then, the serenity prayer comes to mind, pardon me, but I've had quite a few friends who've had to rely on it to turn their lives around.. and it remind me that indeed, sometimes, life is a motherfucker, and there are truly things that you cannot control, and perhaps.. one such thing is an economy gone amok, an economy forever under the control and spell of the super rich and powerful, who want to keep things "as is" for as long as they can, before we all find out what frauds they are and take away their toys..

Is the economy being used as yet another tool of "instilling fear" to maintain power and control over the masses? Haven't we seen this in action before? Aren't we been drilled with fear-inducing propaganda every time the good ole boys in Washington has an agenda to meet?

Viva la Revolucion!

popeye

In Bush's admin he has called for reform to Freddie Mac 17 times. These organizations were ran by democrats left over from the Clinton admin. There are also some wierd ties between FM and the O'bama campaign.

Get your facts straight...your partisonship is showing!

It's not time to play partison games. As Mr. Paulson stated "If it doesn't pass, then heaven help us all,"

To all the non-US posters that are gleeful at the current state of economic problems in America: If the US goes down, so will your country!

__________________

guerilla

Think of it as a natural disaster. Act of God if you will.

There is no selfhelplessness. On the contrary, do whatever you have to do to make sure your accounts are FDIC insured, that you are properly diversified, that you are not over extended on credit, that you are following what is happening with the government programs like a hawk etc etc etc.

But a correction is long overdue, and when it comes, because it has been pushed off so long, it's going to be a real mother. And no one man or group of men will be able to hold it off by writing a bill.

Even the Sec. of Treasury and FED Chairman admit this. I think they are full of shit, but they are promoting the bailout as the only solution or absolute devastation. That's how serious it is.

The government could definitely do some things to lessen the impact, but that's up to them. So far, devaluing the dollar to make sure Wall Street doesn't lose money is the only strategy they can come up with, and it does nothing to help homeowners, or to improve the economic outlook. It's strictly a wealth transfer.

The Prescription for Prosperity I posted about before calls for creating a capital friendly environment, encouraging savings, and encouraging more economic production. It also calls for government to cut spending.

These are sound measures to prepare for hard times. Thus, they unfortunately will not be considered.

Individuals and families can adopt similar strategies themselves however.

Work more, save more, spend less, pay off debt and make conservative investments. Basically, be smart with your finances.

__________________

brianpaxton

guerilla -

agreed.. 100%

I work in the credit world.. The much needed antidote to our reliance on credit [allowing us all to live beyond our means] is that which you describe, no doubt.. however hard the pill is to swallow..

But that'd mean that the 5% Top Richest would lose FORTUNES, aren't you going to feel sorry for them? What about all the job losses? Aren't you afraid? lol.. (sarcasm intended)..

HarveyJ

Only if said country is entirely reliant on US trade and can find no other buyers for their export goods, nor sources of import for major US exports.

Whilst there will be a dip in the markets of pretty much every first world economy, most of those economies are likely to forge new trade links elsewhere in the newly growing economies of India and China.

From my own observations of local market movements, our FTA with the US is already showing signs of being nearly useless, and our new federal government is getting cosy with China as our new major trade partner.
As it is, they've already surpassed the US in their agricultural, mineral and informational imports from Australia. Energy is looking to skyrocket as well, now that we're opening more radioactive metals & coal to the market.
If our production capacity manages to increase with their demand (although linear growth is unlikely considering how long it takes to get new mines approved, and that our agricultural practice has to change due to current climate changes), any drop in US imports will be swiftly taken up by China & India.

It will have massive affects on the financial markets, but those should correct when people realise that there's still a lot of actual assets that grossly exceed the devalued "paper worth" caused by panicked markets.

As terrible as it may seem, if the American economy crashes in a worst-case-scenario kind of way, it will simply become a 3rd world country with good infrastructure. Citizens will have to work at the sort of slave wages seen in India & China, and the growing middle classes in those countries will start to live in semi-affluence.

__________________
After 10,000 years I'm free!

Albus Finch

Don't mean to a hijack a good discussion but K-Rudd has made his intentions and ambitions on stepping up our trade relationship with China pretty clear - both with words and actions. It seemed to be one of his top priorities when he took office.

Thanks to the change of government in my home state of WA, Uranium mining is very likely to get the go ahead. Fantastic idea for state taxes but stupid for a state that can't find enough workers to support our existing industries. We literally can't grant Visas fast enough to keep up with the labor demand. The Uranium that is in the ground isn't going anywhere so I don't understand why we can't just sit on it until the boom cools off.

I'm also not too excited about Uranium potentially being shipped out of a port that is surrounded on both sides by some of the best beaches in the world.

Edman

Right, and China and India isn't going to be affected by a US economic collapse and will continue to consume and produce just as always, because they don't export anything to the US. Oh wait... shiiiit

The EU is practically in a recession as well, somebody merely needs to fart in its direction to tip it over. I personally live in a EU country with negative GDP growth and 15&#37; inflation (government advertised value). Its not a lot of fun, but it looks like you'll soon join me. But hey, at least property is much cheaper!

The only ones who might MIGHT not be affected are the rich beyond reason socialist countries - Norway, Sweden, Denmark, Finland. The Baltic States are probably gonna stay afloat by jumping into rowboats and plundering Swedish towns, like the good old days.

Everyone else is going down with the mother ship.

Rusky

Home owners in distress are getting out of their homes without owing any money. Ever heard of Short Sales. Example: mortgage was for 350k current market value 300k lenders have been writing off huge losses in the past couple years. Now lenders are at a point were they cant handle anymore losses. This is were the bail comes in, so in a way it will benefit people. The bail will also insure lending is still available in different aspects of our economy (cars, student loans, homes, small biz loans) Imagine if credit will freeze for these industries. I just think this should be carefully handled not in 7 days and start selling the failing companies good assets. Why should we be the only ones getting screwed.

__________________
Nobody gives you a chance, you gotta take chances.

HarveyJ

I'm not saying they won't be affected, just not as badly as people in the States seem to think.
You're still thinking that China and India are these 3rd world countries, but both countries now have middle classes that are larger than that of the US, simply because they have populations that are 4 and 3 times as large, respectively.
Their own middle classes will pick up a lot of the slack.
Not all, but certainly more than people are giving them credit for.

__________________
After 10,000 years I'm free!

Edman

Dude, India's middle class is the guy who picks up the phone when you call your bank. If your bank goes out of business, so does he, so does the guy he's buying food from, so does the farmer who's producing food for the grocery store, so does the guy who's producing machinery for the farmer, and so on.

The whole worlds depends on America buying stuff. How can their middle class "pick up the slack" when there quite simply isn't gonna be anyone buying most of the stuff they're making? They are gonna sell it to someone else? Us Europeans aren't gonna be able to buy more stuff any time soon. Who else? There isn't anyone else. Nobody has the purchasing power of USA and the eurozone.

Have you seen what goes on in the stock exchanges? Everyone nearly made a run for it end of last week. Everyone from Moscow to Hong Kong was affected, it was a good show on what happens to the rest of the world if someone in America sneezes (or rather, starts coughing like sick with tuberculosis).

If America stops importing so much, we're all fucked. The only ones who won't feel the effect are the people who are already living in the stone age or are so rich they just don't give a shit anymore.

tony115

Great topic. Haven't been here for awhile. I actually sent a letter via email to my state's representatives and to Obama and McCain. It reads as follows:
Do you know that a day after I sent this letter, McCain stated that he would suspend his campaign to go back to the Hill?

__________________
Join our dating site free!

Blackcoffeeandcandy.com

guerilla

This is a fallacy. Peter Schiff addresses it in his book.

His example is something like this.

Imagine an island with one American and a half dozen chinese. The Chinese catch fish, harvest coconuts, prepare meals and set and clear the table, do dishes so that the American can eat.

Now take the American out of the equation. The chinese catch fish, harvest coconuts and so on, but now for themselves. They begin to accumulate capital (excess supply they can use to keep themselves fed while they divert their energy to other tasks) and begin to raise their standard of living. Which is precisely what is happening. A lot of American consumption today, is actually paid for with Chinese debt. The chinese lend the money, to buy their goods, basically doubling down on every transaction.

Indians who stop answering American phones, will answer European phones. They will answer Indian phones. They will shift to other industries. They will create new industries.

The notion that the Chinese need to lend Americans the money to consume Chinese and Indian goods or the system will collapse is an absolute fallacy.

Imagine if you had a store, and your biggest customer came in, and said "Lend me the money to buy your stuff, or you are out of business".

What would you do? How long can you lend him the money he pays right back to you for the goods he consumes?

Now that's not to say that American consumption isn't very important. But it's fueled a production bubble, and what will happen if Americans stop buying, is that prices will fall to clear excess inventory (massive global deflation). Indian labor rates will fall as people get desperate for jobs. And suddenly, the Chinese and Indians will be able to afford their own goods and services.

__________________

Rusky

Guerrilla knows what his talking about. Once China and India start using their own product, their economy will change dramatically. China is the next super power of the world. Americans needs to wake up before its to late. Give tax brakes to companies keeping their business here, no tax brakes for companies outsourcing. Plus small business needs to revitalized. Also we need to start saving.
Check this out China's workers save an average of 40% of their income.
Americas average saving is -% of their income.

__________________
Nobody gives you a chance, you gotta take chances.

Bofu2U

PS - Wall Street just got bailed out.

__________________

$5 Submissions

Or the dollar's value. Bailout = larger deficit = crappier dollar value. The US can't lower interest rates because of high inflation.

__________________
Make More Money off Downloaders

They UPLOAD - You Make Money

$5 Submissions

Dude, thanks for posting that. Ron Paul was on this SHIT since Day 1--the current Fed and Fiscal system is a giant PONZI scheme since "bank assets" are based on loans. What happens when those loans are BAD? We're finding out now and it doesn't look good.

There is one solution we should TRY--bring back the GOLD standard!

__________________
Make More Money off Downloaders

They UPLOAD - You Make Money

guerilla

Some great podcasts if you like to listen to this stuff while you work like I do. Schiff is super entertaining.

Radio Interview: Dr. Bob Murphy and Dr. Mark Thornton
Archived MP3 of the interview:
http://dissentradio.com/radio/08_09_...hythornton.mp3
————
Radio Interview: Robert Blumen
Archived MP3 of the interview:
http://dissentradio.com/radio/08_09_23_blumen.mp3
————
Radio Interview: Peter Schiff
Archived MP3 of the interview:
http://dissentradio.com/radio/08_09_24_schiff.mp3

__________________

yast

impossible.
read up on the Bretton Woods agreement and why it failed 1971
then read up on the Smithsonian Agreement and why it failed afterwards
then read up on the Plaza Accord and why it failed (because the US did break the agreement)

the world isnt the same like after WW2 when the gold standart was introduced.

i dont understand why people say "go back to the gold standart" when they dont know why it was introduced and how it worked out in the first place.

guerilla

Bretton Woods was not a true gold standard.

America always had a gold standard. It wasn't introduced after WWII. Bretton Woods came after WWII.

__________________