Post by: Manedwolf on January 21, 2008, 05:57:37 AM
Fears of recession
Possible recession
Consumers might close their wallets
Spending might be down
Coming possible recession
....and the Asian and European markets just took a major hit on those worries.
Is this going to turn out to be a self-fulfilling prophecy, that all this talk of recession is going to cause a recession? Is it doing that already? Too late?
Post by: grislyatoms on January 21, 2008, 06:05:28 AM
Coming off their reckless holiday spending sprees, folks are being bombarded with the "R" word and horror stories of foreclosures and rising energy prices.
I think it's inevitable. All I really wonder now is how long it will last.
Post by: GeoJAP on January 21, 2008, 07:05:07 AM
http://www.newstarget.com/z019659.html
Post by: Paddy on January 21, 2008, 08:30:02 AM
Post by: Manedwolf on January 21, 2008, 08:33:47 AM
Quote
Britain's benchmark FTSE-100 slumped 5.5 percent to 5,578.20, France's CAC-40 Index tumbled 6.8 percent to 4,744.15, and Germany's blue-chip DAX 30 plunged 7.2 percent to 6,790.19.
In Asia, India's benchmark stock index tumbled 7.4 percent, while Hong Kong's blue-chip Hang Seng index plummeted 5.5 percent to 23,818.86, its biggest percentage drop since the Sept. 11, 2001, terror attacks.
Canadian stocks fell as well, with the S&P/TSX composite index on the Toronto Stock Exchange down 4 percent in early afternoon trading. In Brazil, stocks plunged 6.9 percent on the main index of Sao Paulo's Bovespa exchange.
In Asia, India's benchmark stock index tumbled 7.4 percent, while Hong Kong's blue-chip Hang Seng index plummeted 5.5 percent to 23,818.86, its biggest percentage drop since the Sept. 11, 2001, terror attacks.
Canadian stocks fell as well, with the S&P/TSX composite index on the Toronto Stock Exchange down 4 percent in early afternoon trading. In Brazil, stocks plunged 6.9 percent on the main index of Sao Paulo's Bovespa exchange.
If investors here are panicking and putting in SELL orders with their brokers or clicking on them online as a scheduled sell, it'll all show up at tomorrow's opening bell all at once. I hope the market shutdown software (the parameters that will halt trading to prevent a 1929) is in order.
Post by: grislyatoms on January 21, 2008, 09:37:16 AM
Post by: Brad Johnson on January 21, 2008, 10:03:49 AM
Quote
Is a recession going to be a self-fulfilling prophecy?
Absolutely.
Given the media's penchant for screaming "RECESSION" at every turn, it's no surprise that peoples' fiscal confidence is down. It's that confidence, and that alone, that determines the economy. No confidence equals no spending. No spending equals slowdown. So, the media screaming about a recession can, and in all probability will, result in a slowdown of the economy. How far it goes is anyone's guess.
It's like a person who sits around thinking that no one likes them or wants to be around them. They develop a sour attitude and stop taking care of themselves. As a result no one likes them or wants to be around them. Self-fulfilling prophecy.
Avoiding a downturn in the economy has exactly zero to do with what some item is priced. Gas could be ten bucks a gallon and the economy still be in great shape as long as consumer confidence is high. Our national economic health is totally dependent on consumer confidence. And the media is putting every effort into beating that into submission.
Brad
Post by: El Tejon on January 21, 2008, 10:27:13 AM
Post by: geronimotwo on January 21, 2008, 10:34:41 AM
Quote
Is this going to turn out to be a self-fulfilling prophecy, that all this talk of recession is going to cause a recession?
if you keep repeating it every day, if/when it does happen you can say you were right.
Post by: Tallpine on January 21, 2008, 10:53:56 AM
Of course, it seems that Republican administrations always have to end in a recession, at least according to the media.
Post by: Brad Johnson on January 21, 2008, 11:04:36 AM
The opposite is also true. Hear something long enough, especially from a source that tends to be views as an "authority" on information, and you begin to believe it on a deeper level. In other words, repeat a lie long enough and it becomes the truth.
A quickie "Positive Is As Positive Does" From BabyBoomerExpress.com:
Quote
Think Yourself Happy
Can You Really Think Yourself Happy?
Believe it or not, it certainly is within your power to create positive thoughts allowing you to accomplish anything that you set out to do. Can you really think yourself happy? The answer is a qualified yes. Here are the ways in which positive thoughts can help you accomplish many things in life. It is widely recognised that 'thoughts become things'.
Positive thoughts produce positive results. We can either bemoan and whine about our situation, or we can change it. We can be negative about an event or we can be enthusiastic. It's entirely your choice!
President Lincoln once said, "Most folks are about as happy as they make up their minds to be." If you really want to think yourself happy, you can, just make up your mind to do so. It may be difficult to think happy in a world filled with hatred and violence. But it's not impossible. One thought at a time, one day at a time. One person, one idea, one positive thought can change society. How, then, can we make ourselves happy? By being a constant reminder to others that there is an abundance of goodness in the world.
* Seek out and find positive people to associate with.
* Expose yourself to all the amazing books, music and movies that are available.
* Find the one important thing in your life that inspires you, and pursue it.
* Practice random acts of kindness and respect towards others.
* Live life as if every day is your last. Smile.
* Use positive thoughts and words wherever and whenever you can.
* Use visualization to view the positive aspects of life.
* Speak in a positive tone of voice.
* Rid your mind of negative thinking. Perhaps you could try yoga and exercise.
* Let your expectations reflect your positive attitude.
* Allow peace of mind to be your constant companion.
* Become your own best friend. Practice TLC (Tender Loving Care)
Here is a wonderful poem which explains how unhappiness can thwart our every desire.
If you think you are beaten you are;
If you think you dare not, you don't;
If you want to win but think you can't;
It's almost a cinch you won't.
If you think you'll lose you're lost;
For out of the world we find
Success begins with a fellow's will;
It's all in a state of mind.
Life's battles don't always go
To the stronger and faster man.
Happiness is not a genetic trait we are born with. It can be ingrained in us by our parents and those we love. Or we can cultivate it from scratch, and nurture it within. It is up to us to maintain it, share it with others, and build our lives around it. Think happy, and you will be happy.
Can You Really Think Yourself Happy?
Believe it or not, it certainly is within your power to create positive thoughts allowing you to accomplish anything that you set out to do. Can you really think yourself happy? The answer is a qualified yes. Here are the ways in which positive thoughts can help you accomplish many things in life. It is widely recognised that 'thoughts become things'.
Positive thoughts produce positive results. We can either bemoan and whine about our situation, or we can change it. We can be negative about an event or we can be enthusiastic. It's entirely your choice!
President Lincoln once said, "Most folks are about as happy as they make up their minds to be." If you really want to think yourself happy, you can, just make up your mind to do so. It may be difficult to think happy in a world filled with hatred and violence. But it's not impossible. One thought at a time, one day at a time. One person, one idea, one positive thought can change society. How, then, can we make ourselves happy? By being a constant reminder to others that there is an abundance of goodness in the world.
* Seek out and find positive people to associate with.
* Expose yourself to all the amazing books, music and movies that are available.
* Find the one important thing in your life that inspires you, and pursue it.
* Practice random acts of kindness and respect towards others.
* Live life as if every day is your last. Smile.
* Use positive thoughts and words wherever and whenever you can.
* Use visualization to view the positive aspects of life.
* Speak in a positive tone of voice.
* Rid your mind of negative thinking. Perhaps you could try yoga and exercise.
* Let your expectations reflect your positive attitude.
* Allow peace of mind to be your constant companion.
* Become your own best friend. Practice TLC (Tender Loving Care)
Here is a wonderful poem which explains how unhappiness can thwart our every desire.
If you think you are beaten you are;
If you think you dare not, you don't;
If you want to win but think you can't;
It's almost a cinch you won't.
If you think you'll lose you're lost;
For out of the world we find
Success begins with a fellow's will;
It's all in a state of mind.
Life's battles don't always go
To the stronger and faster man.
Happiness is not a genetic trait we are born with. It can be ingrained in us by our parents and those we love. Or we can cultivate it from scratch, and nurture it within. It is up to us to maintain it, share it with others, and build our lives around it. Think happy, and you will be happy.
Post by: French G. on January 21, 2008, 11:26:23 AM
Post by: GeoJAP on January 21, 2008, 11:29:28 AM
No spending equals slowdown.
That's the problem. The spending. We are living beyond our means and the bubble is going to pop. Most Americans seem to have no clue about this, uinfortunately. There is going to be a very hard landing soon.
Post by: gunsmith on January 21, 2008, 11:34:46 AM
The media is screaming about the sky falling, they also do this every October. It sells dead trees.
My prediction is massive fiscal problems if the Dems win.
GW will hand them a fine mess that we can blame on the Dems like the Dems did to GW.
Post by: wooderson on January 21, 2008, 11:48:59 AM
Quote
Not incompetent central monetary policy, not a worthless currency, not an economy that has everything made for it overseas, none of these problems that have been brewing for years; no it is Bushco's fault, the eeeeVil henchmen stole all the money and took it to Dick Cheney's lair.
Not to say that the first part isn't largely true - but which of these has Dubya taken steps to correct? He has been El Jefe since Jan. 2001, right?
Post by: GeoJAP on January 21, 2008, 12:12:31 PM
The Clinton admin handed the GW admin a big fiscal mess...
This is actually not true at all; it's completely false. George Bush Sr began the process of balancing the budget (in part by raising taxes). Bill Clinton continued what President Bush Sr started and completed the balancing of the budget.
Once we had a balanced budget, it allowed Greenspan the flexibility to cut interest rates (since inflation was very low because the money supply was very stable because the government wasn't borrowing tons of money) which spurred massive investment which lead to the economic boom of the 1990's.
George Bush Junior is running up huge deficits, and when combined with oil prices rising due to increased demand and the real estate bubble fallout, this will be our downfall. Our national balance sheet is so sick that our currency is becoming worthless. When the dollar falls in value, other countries will lose faith in it and also get sick of having their savings (which are in dollars) devalue. They will divest themselves of dollars. It is going to get really ugly at that point and multiple things will happen that we will have no control over.
The sad thing is that most Americans are oblivious to all this, as is obvious by this thread. You can see the writing on the wall, but no one is paying attention while they borrow more and consume everything in sight.
Post by: thebaldguy on January 21, 2008, 01:34:20 PM
This one could be pretty bad. I can remember recessions before, but remember in those days we had lots of manufacturing and production jobs back then. We don't export much anymore, and many of those jobs are now gone for many reasons including outsourcing. I think there will be problems regardless of if it's discussed. We certainly can't ignore these problems.
Post by: drewtam on January 21, 2008, 02:11:10 PM
Think of it in reverse terms, do you invest? Who do you invest in? Losers? No, you find companies with good credit history, and strong fundamentals. Show me some shred of nationwide evidence that people are "living above their means".
Post by: GeoJAP on January 21, 2008, 02:24:12 PM
The USA has a zero savings rate. We save 0% of our income. Europeans save 20% nationally while Japan saves 25%. National savings is what allows investment to occur. The only reason the USA economy functions at all is because other countries do our savings for us, hoarding dollars as their national reserves.
When those countries feel that the dollar is no longer the best currency out there and they sell their dollars, the standard of living in the USA will plummet because there will be no money for investment. On top of that, when everyone sells their dollars, the dollar itself will be worth a fraction of its current value due to over-supply. The only reason this has been allowed to persist as long as it has, is because the dollar, up to this point, has been stable. But now we appear to other countries to not care about our own currency. Other countries are losing faith that we care about our banking industry.
Americans need to wake up. Our government is running huge deficits, the economy is being wracked with huge problems like increased oil cost and a real estate bubble.
Post by: drewtam on January 21, 2008, 02:49:12 PM
Here's some more tid-bits to chew on.
The USA has a zero savings rate. We save 0% of our income. Europeans save 20% nationally while Japan saves 25%. National savings is what allows investment to occur. The only reason the USA economy functions at all is because other countries do our savings for us, hoarding dollars as their national reserves.
The USA has a zero savings rate. We save 0% of our income. Europeans save 20% nationally while Japan saves 25%. National savings is what allows investment to occur. The only reason the USA economy functions at all is because other countries do our savings for us, hoarding dollars as their national reserves.
I am compelled to point out that is a myth. The "0% savings rate" does not include: 401K, IRAs, Capital Gains, Real Estate, and other investments. In real life, those are modern forms of savings. In turn, these investments directly fuel more economic growth.
To sum up:
Quote
In the end the saving rate, as it is currently calculated is a useless measure of household balance sheets. A much better measure of true savings is the net worth of households, a statistic calculated by the Federal Reserve. As of September 2006 (the latest data available) US households had $54 trillion more in assets than liabilities, an all-time high. Moreover, total net worth had increased by $3.5 trillion from the year before. If this $3.5 trillion increase in net worth were used as the appropriate measure of personal saving, the saving rate was 37% last year and has averaged 33% the past ten years, a far cry from the "negative saving rate" which so many pessimists decry.
http://time-blog.com/real_clear_politics/2007/02/personal_saving_rate_is_a_misl.html(Emphasis added)
Post by: GeoJAP on January 21, 2008, 03:08:17 PM
American household savings was negative in 2005. The government's figure was even worse, at -2.9% savings.
Here is a study from the Brooking's institute. There are many more similar studies out there, just search.
http://www.brookings.edu/testimony/2006/0406macroeconomics_bosworth.aspx
I really hope you're right. But the overwhelming volume of data does not support your assertions, or your redefining of "savings". I really hope to God that what looks like is about to happen, doesn't happen.
Post by: Archie on January 21, 2008, 03:11:55 PM
Pretty much all the doom and gloom economic reports are coming from the media in an effort to blame the Republican party for a 'recession' - that is not yet happening - and push the election of Democratic candidates.
It happens every presidential election.
So, any 'recession' we have will last until either - the populace finally ignores the left controlled media and simply goes about their lives or - a Democrat is elected President. Then we'll hear how wonderful things are.
Post by: El Tejon on January 22, 2008, 11:37:26 AM
Post by: K Frame on January 22, 2008, 01:45:49 PM
Pikers, all.
I'm now putting between 38 and 40% of my paycheck into either pretax or post tax savings.
Post by: Paddy on January 22, 2008, 02:04:10 PM
Quote
US households had $54 trillion more in assets than liabilities, an all-time high. Moreover, total net worth had increased by $3.5 trillion from the year before. If this $3.5 trillion increase in net worth were used as the appropriate measure of personal saving, the saving rate was 37% last year and has averaged 33% the past ten years, a far cry from the "negative saving rate" which so many pessimists decry.
So, you think artificially high real estate values are the same as savings? Gimme a break.
Post by: Headless Thompson Gunner on January 22, 2008, 03:20:01 PM
The fundamentals of the economy are mostly sound. A few problems here and there, but we're generally in good shape. We've had some spectacular growth in both the stock market and in real estate over the past half dozen years. That sort of growth cannot continue indefinitely. So we'll probably see a reduction in the rate of growth compared with the near past. Maybe it'll actually turn to mild negative growth for a few quarters. How much rediction will largely depend upon the willingness of the finance industry to lend. Bernanke's interest rate cut should help that.
All the while the media will do its best to make us think the sky is falling. It won't be.
Personally, I hope stocks and real estate continue to fall. The fools will panic and sell "before it's too late", and I'll eat up the bargains.
These forums need a greedy capitalist smileyface.
Post by: Headless Thompson Gunner on January 22, 2008, 03:32:00 PM
Quote
US households had $54 trillion more in assets than liabilities, an all-time high. Moreover, total net worth had increased by $3.5 trillion from the year before. If this $3.5 trillion increase in net worth were used as the appropriate measure of personal saving, the saving rate was 37% last year and has averaged 33% the past ten years, a far cry from the "negative saving rate" which so many pessimists decry.
So, you think artificially high real estate values are the same as savings? Gimme a break.
Post by: Tallpine on January 23, 2008, 07:18:16 AM
Quote
The fundamentals of the economy are mostly sound.
How do you figure that, considering we are becoming less and less a manufacturing and producing nation, and more and more a nation selling services and imported goods to each other
Post by: taurusowner on January 23, 2008, 11:40:19 AM
Post by: Paddy on January 23, 2008, 11:47:05 AM
Quote
The Media has been talking up the "bad economy" in an effort to make the current Republican administration look bad.
Lord knows the current Republican administration hasn't done anything to make themselves 'look' bad. It's all the media's fault.
Post by: GeoJAP on January 23, 2008, 12:41:14 PM
Real estate is an investment and an asset. Sometimes it's priced artificially high, sometimes artificially low, sometimes accurate. It's still an asset that generally appreciates over the long term. It's still a way to accumulate wealth, still a form of savings. It's one of the more interesting forms of savings too, in that it provides an immediate utility value at the same time.
The thing that you are missing is that the type of savings to which economists are referring is the kind of savings inside banks. That banks can then lend, in the form of loans, to borrowers. This drives investment in an economy. If there is no savings, there is no investment because no loans can be made.
That is what is important here. No savings = no investment in the economy. Home appreciation does not apply here.
Post by: Manedwolf on January 23, 2008, 12:44:53 PM
Quote
US households had $54 trillion more in assets than liabilities, an all-time high. Moreover, total net worth had increased by $3.5 trillion from the year before. If this $3.5 trillion increase in net worth were used as the appropriate measure of personal saving, the saving rate was 37% last year and has averaged 33% the past ten years, a far cry from the "negative saving rate" which so many pessimists decry.
So, you think artificially high real estate values are the same as savings? Gimme a break.
Not when people use their house as a bank, cashing out the equity in the form of high-interest loans to buy instantly depreciating, worthless-in-five-years items like big flatpanel TVs.
Post by: GeoJAP on January 23, 2008, 12:48:44 PM
The fundamentals of the economy are mostly sound. A few problems here and there, but we're generally in good shape.
Could you please explain what will happen when the dollar valuation against other curriencies drops even further, far enough so that other countries decide to divest themselves of most of their dollars?
At the moment, this is what is scaring the bejesus out of anyone who knows anything about economics. The answer is basically a meltdown. I hope it won't happen. But our leaders (coupled with other minor disasters like energy costs, the real estate collapse and banking crisis) are basically doing everything they can to keep pushing us in that direction, so it looks unavoidable at this point.
Post by: charby on January 23, 2008, 12:57:01 PM
Quote
The Media has been talking up the "bad economy" in an effort to make the current Republican administration look bad.
Lord knows the current Republican administration hasn't done anything to make themselves 'look' bad. It's all the media's fault.
Well a lot of the main stream media and bloggers haven't highlighted very much of the current administration either. Bush and admin has screwed up a lot and so has a lot of other past presidents, but I'm at my wits in end with all the Bush blaming, hating and etc.
Post by: Paddy on January 23, 2008, 02:37:58 PM
Post by: Headless Thompson Gunner on January 23, 2008, 03:35:10 PM
The fundamentals of the economy are mostly sound. A few problems here and there, but we're generally in good shape.
Could you please explain what will happen when the dollar valuation against other curriencies drops even further, far enough so that other countries decide to divest themselves of most of their dollars?
At the moment, this is what is scaring the bejesus out of anyone who knows anything about economics. The answer is basically a meltdown. I hope it won't happen. But our leaders (coupled with other minor disasters like energy costs, the real estate collapse and banking crisis) are basically doing everything they can to keep pushing us in that direction, so it looks unavoidable at this point.
What will happen when foreign holders of dollars divest themselves? Those dollars will end up buying dollar-denominated (i.e. American) investments, assets, and infrastructure. American investments are the strongest, safest, most predictable place to park your wealth. Our financial markets are the envy of the world, our government protects property rights like none other, our business acumen is second to none. These things are valuable, very valuable, and they can be purchased (rather, they can be invested in).
Essentially we're trading small investment stakes in our extremely valuable economy for the foreign oil and manufactured goods we import. The dollars are merely a clearinghouse. We benefit in the short term from the oil and cheap labor products, and we benefit in the long term from the investments. Ultimately it improves our infrastructure, grows our capital assets, makes our workers more efficient, grows our economy, and raises our standard of living.
Basic macroeconomics. But you knew all that already, you're someone "who knows anything about economics". Right?
I wasn't talking about macroeconomics earlier. When I said "the fundamentals of the economy are mostly sound", I was in fact referring to the fundamentals of the economy being mostly sound.
GDP is growing, some months strongly, some months not so strongly. Unemployment is low. Inflation is up, primarily due to oil prices, and thus would come back down if oil comes back down. Housing is rough in the short term. So is the finance industry. Bernanke's recent rate cut should alleviate both of those problems within a couple years. The recent behavior of the stock market shows that lots of people are ready to bargain hunt, so I doubt either the stock market or the real estate market will fall precipitously. Unemployment is low. Consumer confidence is falling, but foreign exports are growing rapidly.
Most objective forecasts of the economy call for low to zero GDP growth for a brief span. Thus no actual recession. It'll still be fun to watch politicians and the media howl about "the big, devastating recession".
Post by: Paddy on January 23, 2008, 03:57:15 PM
Quote
Ultimately it improves our infrastructure, grows our capital assets, makes our workers more efficient, grows our economy, and raises our standard of living.
Our infrastructure is obsolete and crumbling due to lack of investment; our capital assets consist of largely overvalued real estate, because the assets of production have been shipped overseas along with our worker's jobs because third world slave labor is cheaper, Our economy is completely dependent on foreign goods and oil, and our standard of living has been declining since the early 80's.
What lala land do you live in, again?
Post by: Headless Thompson Gunner on January 23, 2008, 04:06:51 PM
That's the biggest load of bullhockey I've heard since "Mission Accomplished"
I'm sure you think it is. Leave it to a populist, a populist from California (right?) no less, to always doubt the economy.
Post by: Paddy on January 23, 2008, 04:43:26 PM
What lala land do you live in, again?
I live in a land where you've never been. A land of an expanding, prosperous middle class. In a time when one man working could raise a family and pay a mortgage. Each year was better than the last. The purple USDA stamp on meat in the supermarket was an absolute guarantee of quality. The air was clean and the water was pure. A man's word and a handshake were a binding contract (Dad was a roofing contractor. He gave a bid, shook hands, and was paid at the end of the job. No BS, no written incomprehensible contracts. He cleaned up the worksite everyday before he left).
A land where you didn't have to think "Buy American", because everything you bought was American made, by Americans and for Americans. Big, heavy cars with V-8 engines and thick chrome made in Detroit with real Pittsburgh steel.
A land where you didn't have to keep your doors locked all the time for fear some psychopath would break in. Where neighbors knew and helped each other.
A land where loyalty to your employer was reciprocated; you could spend your entire career with one company if you wanted.
I could go on and on, but I'm sure these concepts are foreign to you
Post by: Headless Thompson Gunner on January 23, 2008, 05:25:59 PM
What lala land do you live in, again?
I live in a land where you've never been. A land of an expanding, prosperous middle class. In a time when one man working could raise a family and pay a mortgage. Each year was better than the last. The purple USDA stamp on meat in the supermarket was an absolute guarantee of quality. The air was clean and the water was pure. A man's word and a handshake were a binding contract (Dad was a roofing contractor. He gave a bid, shook hands, and was paid at the end of the job. No BS, no written incomprehensible contracts. He cleaned up the worksite everyday before he left).
A land where you didn't have to think "Buy American", because everything you bought was American made, by Americans and for Americans. Big, heavy cars with V-8 engines and thick chrome made in Detroit with real Pittsburgh steel.
A land where you didn't have to keep your doors locked all the time for fear some psychopath would break in. Where neighbors knew and helped each other.
A land where loyalty to your employer was reciprocated; you could spend your entire career with one company if you wanted.
I could go on and on, but I'm sure these concepts are foreign to you
I'm a working man. I can pay a mortgage and support a family. Don'y have a family yet, but I'm working on it. Going to get married in October. In Rome. Why Rome? Because I can. Could you have held your wedding in Rome back in your day?
Never had any problems with air or water or food. Buy from the local farmers market every summer. No USDA stamps, don't need 'em.
Never had a handshake deal go bad. We sign contracts, but we also tell each other what's in the contract first, making the contract a formality. Never had a verbal description mismatch the text, but if it did the culprit would lose of business.
I trust my neighbors. I trust my employer. I trust our customers. They all seem to trust me. Only psychopaths I've ever seen were on the news.
I could buy an American V8 muscle car if I wanted. Not my taste, though. I think my next auto is going to be a Miata, which is a strange combination of Japanese and British. Thankfully I have the choice.
This year is definitely better than last year, which was better still than the year before. I can't wait for next year.
If you look around and see a world that's falling apart, then perhaps you should move. Or perhaps you should clean up your neighborhood. Those things you think don't exist any more, do exist. In abundance. At least they do in Indiana.
You're in California, right? Maybe that's your problem. I've only spent a few weeks in California, but it was definitely a surreal Twighlight Zone kind of experience. I was glad to leave and get back to the real world.
Or maybe you're just a grouchy pessimist.
Post by: charby on January 23, 2008, 05:52:41 PM
I want a recession. Now that I have some silver and gold, I want everyone buying silver and gold to drive up the price. Then I'll sell, and buy back into an undervalued stock market.
Every investors dream....
Post by: charby on January 23, 2008, 05:57:56 PM
That's the biggest load of bullhockey I've heard since "Mission Accomplished"
Our infrastructure is obsolete and crumbling due to lack of investment; our capital assets consist of largely overvalued real estate, because the assets of production have been shipped overseas along with our worker's jobs because third world slave labor is cheaper, Our economy is completely dependent on foreign goods and oil, and our standard of living has been declining since the early 80's.
What lala land do you live in, again?
Quote
Ultimately it improves our infrastructure, grows our capital assets, makes our workers more efficient, grows our economy, and raises our standard of living.
Our infrastructure is obsolete and crumbling due to lack of investment; our capital assets consist of largely overvalued real estate, because the assets of production have been shipped overseas along with our worker's jobs because third world slave labor is cheaper, Our economy is completely dependent on foreign goods and oil, and our standard of living has been declining since the early 80's.
What lala land do you live in, again?
Show me infrastructure that pays decent dividens and I'll invest. I dropped $5k in some real estate funds that have paid consistantly 10-12% returns over the past 40 years. I want more $$$.
-C
Post by: GeoJAP on January 24, 2008, 04:22:53 AM
What will happen when foreign holders of dollars divest themselves? Those dollars will end up buying dollar-denominated (i.e. American) investments, assets, and infrastructure. American investments are the strongest, safest, most predictable place to park your wealth. Our financial markets are the envy of the world, our government protects property rights like none other, our business acumen is second to none. These things are valuable, very valuable, and they can be purchased (rather, they can be invested in).
None of this is true anymore, unfortunately. You need to read some financial periodicals and get up to date, rather than regurgitate patriotic statements that I see have no factual basis behind them. Just because YOU think this, doesn't mean the rest of the world does.
Also, your statement about what will happen when foreigners divest themselves of their dollar reserves is a fantasy. How do dollars buy dollar-denominated investments? What are you talking about? It is a person who buys something, last I checked, so dollars can't buy a dollar-denominated investment. That is like saying a Ford car will buy a Ford factory. It makes no sense.
What will happen is that the dollar will become worthless. There will be a glut of dollars for sale on the world market with no buyers. Hyperinflation will result along with the associated turmoil. See 1920s Germany and 1990s Argentina for reference.
I agree with you that the economy is currently not doing too terribly bad. Businesses are generally able to make a profit and continue operations, unemployment is relatively low still, and income is doing well. There is higher than normal inflation, the banking sector is taking a beating and many overvalued real estate markets are seeing a correction.
It's certainly no disaster, YET. If certain things happen however, it will become a disaster. The finances of the USA are fundamentally flawed. We depend on foreign governments for the solvency of the US economy, because they do our savings and investment in the USA for us. The world's economy is transacted in dollars (but more and more transactions are now done in Euros). There are many things happening which is driving down the value of the dollar, which the rest of the world does not appreciate. There is nothing that says they have to have their currency reserves in dollars, and they could just as easily change to Euros or something. That would cause the US economy to crash (and the rest of the world's economy to crach as well if it is done too quickly). It is already happening slowly, countries are divesting themselves of dollars at a more rapid rate all the time now.
Post by: Headless Thompson Gunner on January 24, 2008, 08:52:21 AM
Well, you're right. I don't understand anything about anything. I mean, c'mon, I even said that dollars are self-willed creatures that would go out and buy things all on their own. (That's obviously what I meant, wasn't it?)
I see now that your conspiracy theories of imminent financial collapse make so much more sense. Thanks for straightening me out. From now on I'll only express the proper Chicken Little attitudes. I'll even throw in some fearmongering about hyperinflation from time to time, just for good measure.
Seems to be all anyone on this board ever wants to hear...
Post by: GeoJAP on January 24, 2008, 09:49:29 AM
But the fact is that nothing is happening that will pull us away from the edge. Everything we are doing (lowering interest rates to stave off market corrections, incurring more national debt, decreasing the value of the dollar) is pushing us closer and closer.
The really bad thing in all this is that once hyperinflation sets in, history has shown us that fascist ultra-nationalist governments usually rise to power.
Post by: Headless Thompson Gunner on January 24, 2008, 01:16:09 PM
Post by: LAK on January 25, 2008, 02:40:07 AM
Quote
The federal government's total liabilities and unfunded commitments for future payments related to Social Security and Medicare are now estimated at $53 trillion, in current dollar terms, up from $20 trillion in 2, Walker said
http://www.govexec.com/dailyfed/1207/121707cdpm1.htmQuote
The Outstanding Public Debt as of 25 Jan 2008 at 12:33:31 PM GMT is:
$9,194,530,939,010.92
[that's nine trillion dollars folks]
The estimated population of the United States is 304,176,748
so each citizen's share of this debt is $30,227.59.
The National Debt has continued to increase an average of
$1.43 billion per day since September 29, 2006!
http://www.brillig.com/debt_clock/$9,194,530,939,010.92
[that's nine trillion dollars folks]
The estimated population of the United States is 304,176,748
so each citizen's share of this debt is $30,227.59.
The National Debt has continued to increase an average of
$1.43 billion per day since September 29, 2006!
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