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The Dow fell below 10,000 today. On the NYSE, 98 stocks rose and 3,114 dropped. No single investment bank remains in its historical form, all having failed or in the process of converting to commercial status. Fannie, Freddie, AIG, WaMu...
Asian Markets are tumbling.
European banks are failing.
Are we seeing the entrance to a second great depression? Or is this a recession? Or something in between?
Something in-between, I think.
Unless employment drops dramatically. Then yeah, the big one returns.
Right now, everybody from Joe Sixpack to Bank of America is cutting back on spending, which includes spending on investment (stock mkt plunges), until we see what Treasury is gonne do with the $700bn credit card we gave them, and come to either trust them and their decisions, or give up on them, convert to cash, and horde food and ammo.
In my opinion. :bow:
Good thing we passed that $1 Trillion bailout bill. :juggle2:
(Actually ~850 billion but who's counting?)
I'm still not sure just exactly what it is we're witnessing now.
But it'll be one for the history books, that much seems certain.
No.
Only a few banks are falling; the whole foundation isn't crumbing, as back in the stock market crash.
Funny how that 700bn did nothing. :wall:
CR
i think were somewhere in between.....
all we can do is pray....
I don't think so because unlike back then, the politicians will at least try to do something about the economy regardless of whether it is wise or not compared to President Hoover(is that right?) and his general inaction
Roosevelt's actions caused the depression to drag on for much longer than it would have otherwise. Keynesian economics are bull.
Unfortunately, the trend seems to be thinking the government has to try to solve every problem.
CR
Wow. Just wow.Quote:
Originally Posted by Crazed Rabbit
Unemployment is hovering around 6.25% in the U.S., with localized pockets as high as 8%, such as Detroit.
At the height of the Great Depression, unemployment hit something like 28%, so I don't think we're there yet.
However, as others have wisely pointed out, everyone is trying to throttle back on spending. Graduallly raising the savings ratio is a good thing for a society, but rapidly doing it can be very painful. It remains to be seen how the current fiscal crises (plural) will play out. I don't expect unemployment to drop any time soon, not with housing prices still dropping. But whether we're talking current malaise, or even passing the 10% mark remains to be seen.
I know one thing. If you have a lot of cash around and you were thinking you needed to make a large purchase, give it 4 months and you'll be amazed at what you'll be able to get for a given price, so long as you're paying cash.
So.....had President Hoover been allowed another 2/3 terms we would have been better off? :laugh4::laugh4::laugh4::laugh4::laugh4:Quote:
Originally Posted by Crazed Rabbit
amen! small government FTW!:smash:Quote:
Originally Posted by Crazed Rabbit
If we were where we are today without the trillion dollar infusion I would say we were headed for a lot of trouble (depression) but I think a lot of the stock market woes are people pulling their money and holding it somewhere safer until the market evens out after this trillion gets divided up. There is a lot of money in there and it all didn’t just disappear, people are taking it out and putting it in their mattresses until it is safe again.
We are still in a bad place financially but not as bad as we would be if we were loosing jobs at the same rate the market is falling.
The entire situation is a big mess and it is all thanks to government pressure and greed. I think the bailout is bad and that the gov should butt out and the market should be allowed to correct itself. There are thousands of enterprising people out there ready and willing to step in and pick up the shattered pieces of the big companies and make something good from it, they should be allowed to. But by throwing money at it the gov is encouraging a broken system with the same broken players. :thumbsdown:
If this had been the predominant philosophy at the time of the New deal, we'd still be there. "Yes, President Rockefeller?"Quote:
Originally Posted by hooahguy
I couldn’t agree more. People around here are able to get screaming deals on houses around here, course if you are the seller you may not be real happy but for someone with cash in their hand now (or in 4 months) is a good time to buy.Quote:
Originally Posted by Don Corleone
Personally I think I am upside down on my house but I am not planning on selling anytime soon. :shrug:
We're not going to hit another Great Depression unless something gets much, much worse.
Keynes was better than the White plan...
This is one of those rare times that i agree with hooah...Quote:
Originally Posted by hooahguy
:yes:
oh, and Keynesian economics FTL, Austrian School of Economics FTW!!!!!
haahahahahahahah What a pile of rubbish you just came out with, ahahahah. The fact you really believe this crap amazes me everytime I see you type such a silly post. Amazing.Quote:
Originally Posted by Crazed Rabbit
Anyway, yeah SMALL GOVT FOR THE WIN!! Its not like it has got us into this situation or anything!?!?!!!! NOES!!
This is the natural re-distribution of wealth from globalization. The disappearing 2.5 trillion was just a few of the many that we overvalued our societies by on an increasingly more level playing field. It was never going to be pretty, but in the end the developing world will be better off from it. We will be worse off and regressing. Parity could have been us pulling them up or them pulling us down. It seems as though the latter is the road we have taken through our economic policies. Everyone outside of industrialized financial nations just became a little richer in relation to the rest of us.
We've lied to ourselves and overestimated our national net worth.
Oh well, back to the drawing boards.
That's right. Because a centralized economy has been very successful in communist countr... oh. damn. They're capitalizing, huh? Uh Oh. Never mind.Quote:
Originally Posted by JAG
In-between. This is definitely worse than things we have seen in quite a while, but ultimately it is no great depression.
But it could be turned into one without too much trouble.
Im not a communist nor have ever been one and have never truly argued for a complete command economy. There is a difference between state action and regulation and a 'small' state. Gah forget it, I am just a commie in disguise and should be ignored!!!! Dam those social democrats knowing what is best and all. :(Quote:
Originally Posted by Divinus Arma
People who think it started and ended with the housing market, or even with deregulation for that matter, are missing the larger picture. I believe Tuff somewhat indirectly hit upon it here. Why was the housing market so inflated? Why was home equity such a "big business" and why were so many people both trying to tie their money up in properties, and also get money out of the equity of properties? Because, IMHO, housing was the last big bulwark holding up our economy and backing up the value of people's worth and credit. And by extension of doing that, it held up the whole economy in general because people could take money out of their houses to buy all sorts of things they didn't have the money for and it was basically "free money" because the jumps in housing values would cover up whatever they took out of their house after awhile. And banks doing refinances, subprime mortgage loans, and everything in between made big money off the commissions and such. So it was happy times all around... for awhile.
The big picture is, we don't produce. We shove debt and paper around. We have magical values assigned to things with no domestic production value or promise of future goods to back it up or stand as collateral. Our economy is service based. What that means is people pushing around stock portfolios, lines of credit, mortgages, equity loans, credit cards and debt to make the economy keep moving just as if we were a producing, surplus-exporting boomer. So the housing market was going to crash, sooner or later. Yes plenty of hands helped it inflate and pop along the way because it was a way to make money. But the fact that people were cannibalizing the roof over their head to maintain economic growth and accumulation of equity and security against retirement (ultimately) was even a point of question because of how badly we have undergutted our economy.
My forty-nine and a half cents.
Oh and, if I am correct, it's not going to bounce back. There is nothing to make it bounce back, unless it's just in the form of a flush of foreign investment coming in and us slinking more and more into debt. Short of completely revamping our economy with new industries and probably a significantly large government hand in helping to incentivize and push such a change along, we are on a downhill incline.
I agree. Basically our entire economy is smoke and mirrors.Quote:
Originally Posted by Koga No Goshi
I'm pretty sure that you leaned pretty heavily towards communism when you used to post more often. I cant quite recall, but I was almost positive that you were a Communist, and I don't charge people with that too often.Quote:
Originally Posted by JAG
I think that we've all seen you swing somewhat to the right over the years. I guess there wasn't much room on the left for you to grow, eh?:clown:
Sad times when friends and enemies say the same thing, and it's bad news. ;)Quote:
Originally Posted by TuffStuffMcGruff
Not really, I used to describe myself as a socialist and to a great degree I still am, but describing yourself as that often doesn't really represent your views properly. I was never a communist who believed in command economies, people here simply give you those opinions if you are not hand in hand with the free market. I am a liberal - real liberal - social democrat, in the true sense of the word.Quote:
Originally Posted by TuffStuffMcGruff
Been reading Noami Klein's latest classic, 'The Shock Doctrine' and she has to a large extent predicted this economic crisis and the 'shock' which is going on at the moment to further push through the extreme capitalist agenda - people should read the book, it is englightening.
Public institutions > Private. Private companies debt > Public.
This is a highly pesimistic view of the American economy - certainly numerous industries in the US have been hammered over the last two decades and are hardly viable except as a niche (take car manufacturing for example), but there are plenty of other industries which the US is perfectly competitive in. Sure there has been a significant issue with the balance of exports to imports recently, but that doesn't mean the economy is fundamentally broken - it just needs restructuring. Produce what you're good at producing, not what the rest of the world is good at producing. Stop trying to build cars when it's been obvious for the last two decades that East Asia builds better mass produced cars and Europe has a much better grip on luxury cars. Decades of wastage and money has been kept trying to keep Detroit going only to finally see it collapse into a pile of non-viable industry and service industries.Quote:
Originally Posted by Koga No Goshi
for the first time that i can remember, i agree with you on something... :clown:
but ya, our economy is in chambles.
the only thing that can bring us our is a giant war, like WWII brought us outof the great depression*looks towards iran.....* (jk) :beam:
Koga et. al.,
I think you're confusing manufacturing for producing. We don't actually manufacture a lot of the goods that we used to, you're correct. But then, we also don't have everyone growing their own food. At one time, 80% of Americans were farmers. When we industrialized, was it a bad thing that that number dropped to 10%? Not really, because the loss in wealth of crops was made up for in gains in income in the new manufacturing jobs.
Globalization produces a similar 'labor evolution'. We've transitioned our economy from a manufacturing based economy to an IP based economy, sometimes referred to as the 'service economy', but since 'service' makes people think of wait-staff, I don't like using that term.
It's not that our economy is in a shambles and the American people missed all their true wealth being ported overseas. It's more a matter of the educational programs to transition our workforce into the new economy have been lacking. This is one thing I actually agree with Obama on and commend him for properly calling. He's not talking about bringing all manufacturing back to the US by executive fiat. Even he knows that's a bad idea.
What's causing the pain is 2 things: 1) the rate of transition is too fast and 2) our labor pool is not receiving the proper skills training to allow them to transition in a timely fashion.
Trust me, a nation of engineers and accountants has a better economy than a nation of press-operators. Any day of the week.
The real issue is that people around the world are becoming more intelligent. Their nations are becoming more secure in many areas as well. They are harder working on average, just as intelligent and will work for peanuts without a belief that they are entitled to anything; and they know how to live on a shoestring. You can't honestly believe that people are inherently equal and still hold on to the notion that we are somehow better "just because".
We squander life savings on sub-par education that teaches our children very little. We buy or lease cars that make us feel like we are better than other, but we can't afford them so they make us worse. Many of us pay 30% on every dollar we borrow or 4 dollars every time we go to a non-bank ATM. We spend $2.50 on bottles of tap water and $60 or more on shirts. Our health care has skyrocketed because we treat it like everyone else - have someone else be in charge of the prices you pay and never even look at them. Real world gas prices have finally come to our shores as well
We have gone insane and burned our advantage in a national bonfire.
A national correction is not the worst thing that could happen now - further travel down this delusional path is. We need to work harder, expect less and fight for the things that are most important to us while marginalizing the others.
No.
This hysteria is ridiculous.... I can't believe some of the seemingly rational people that are currently stockpiling guns and ammo over a dip in the markets. :no:
As I've said, every institution left holding the bag on the bad loans is going to take a hit. Some will and have failed, and some will make it. All the investment banks failed or were forced to commercialize because they all dealt in this securitized bad debt. After these loans - in whatever form they've taken - have done their damage and make it out of the system, the fundamentals of the market and economy will remain.
So calm down. Spreading unwarranted fears of another depression will just drive your 401Ks lower. If you know what you're doing, there can be a lot of money made in this type of situation. Ask Banquo. ~:P
Some people will always make money. I'm talking about the average Joe who will be hit hard. I've been hearing "unwarranted fears" so often that I don't know what it means anymore. When would fears be warranted?Quote:
Originally Posted by PanzerJaeger
We have serious problems that we need to look into - I hope you aren't arguing that status quo is the way forward? No one seems to understand how we will make promises happen, both in the public and private sectors. That concerns me. We don't have workable financial models in either segment, people have very little faith in their congressional or private sector leaders. We are a nation of debt who has gambled too much of the money that we do have in an overvalued system with cooked books.
Things always get worse around election time, but that doesn't mean that concerns aren't real.
The only part I really disagree with you on is 2) our labor pool is not receiving the proper skills training to allow them to transition in a timely fashion. The labor pool can not wait for someone to train them for the next hot job/career. If some of the labor pool that lost their jobs when GM left Flint would have used some of their over inflated wage* to go to college they could have prepared for the future. The labor force is… the labor force and the companies like GM don’t want to smarten them up and the government can’t be held responsible for them not being forward thinking. The labor force needs to be responsible for themselves but in many cases they don’t seem motivated enough until it is too late.Quote:
Originally Posted by Don Corleone
*if the wage wasn’t over inflated GM wouldn’t have had to leave. Which is where I think the housing mess started. Let me explain, jobs went away (southern US, Mexico, china, etc.) and the jobless or people with jobs that didn’t pay as well were forced to compromise their lifestyle. Banks and lenders saw that as the (government encouraged) opportunity to make a buck off downtrodden people who wanted to live like they were but didn’t have the means. They lowered their standards for loan approvals and the next thing you know everyone has the house they want that is just barely in their affordable range then the economy slumps and all of a sudden Joe sixpak (a wink at Palin) is spending $40 more a week on gas and another $20 on groceries and so on. So they start using their credit cards and wham-bam-thank-you-mam, default on their mortgage. The labor pool is not bright, big companies want to keep them that way and the government encouraged predators to take advantage of them. I could chain that back to the unions cutting the manufacturers too deep, or back to the fat cat manufacturers treating the labor pool lousy encouraging the growth of unions, or back to my head exploding. :dizzy2:
Got a little carried away there, sorry Don. :bow:
People say that every time there is any kind of economic crisis. And you know what? They have been wrong every time.Quote:
Originally Posted by Koga No Goshi
It isn't that bad yet and will probably bounce back eventually. The great depression did to, but not without some introspection.Quote:
Originally Posted by Goofball
I'm not fan of inevitability. I assume we've all had something similar to this happen: the incredibly kind, healthy, industrious, bright, independently wealthy friend; who if you had to bet that one person you knew would succeed -it would be him- mysteriously gets sick one day and dies 3 days later because of an undressed illness that he himself didn't realize was such a serious problem. Ironically it happened 1 1/2 years ago when he just got a job at Lehman as an analyst.
Hope for the best, but don't just expect it. Sometimes the best of us are out for the count.
Hey, I don't need to use a dip in the markets as an excuse to stockpile guns and ammo! ~DQuote:
Originally Posted by PanzerJaeger
Investment advice. :beam:Quote:
Originally Posted by drone
hahaha. When will the mogwai market return?Quote:
Originally Posted by Xiahou
Yeah, the chicken little routine is baffling to me as well. When I stop seeing people buying thousand dollar flat screen TVs two at a time from Costco along with their 80 packs of bottled water maybe I'll be able to better understand the '2nd Great Depression is looming!' angle.Quote:
Originally Posted by PanzerJaeger
:strawman1:
I'm not talking about piddly four year bouncebacks and a new industry to inflate and then pop. I'm talking long-term, big picture. I stated that explicitly. If we get into all kinds of new exportable, profitable and forward-geared industries, we will bounce back. If not, we won't. But I did also state that I don't believe any such traumatic change to the status quo loving free market will happen without considerable government-created incentive.Quote:
Originally Posted by Goofball
I think people who say "bah, this happens every 10 years or so" are really rose-shading how much we've undergutted the economy in a way that wasn't true 20, 40, 60 years ago.
Actually, I am.Quote:
Originally Posted by TuffStuffMcGruff
The fundamentals of the market economy work just fine.
The sole reason for the current mess was the bubble created through bad lending practices. As with all bubbles, it has to burst at some point. This one was especially bad because it directly affected the financials.
The market is the ultimate school of hard knocks. If we just let it work, it will punish bad behavior and lessons will be learned.
After this "crisis" passes, banks will be far more vigilant in their lending practices - just as business people now know to do solid research before investing in tech industries.
As with every bubble, sound market principles will always prevail. Just as it should have been obvious that throwing money at techs that consisted of little more than a website was a bad idea, it should have been obvious that giving people with bad credit scores credit was a bad idea. Sometimes, though, it takes a major correction to reinforce those principles and teach people that the market cannot be cheated.
But it was true 20, 40, 60 years ago.Quote:
Originally Posted by Koga No Goshi
This is nothing different.
Let me preface by saying that I think this mythos is just as fantasy-based as a pure application of socialism. In the sense that, in theory, either would work. But in practice, neither do. The free market or rather the "smart" parts of it, are constantly striving to make the market unfree, either through monopoly, or favorably influencing politics and laws to benefit one industry or hurt a competitor, or what have you. The free market wet dream assumes everyone will play by the rules, even though at the same time it argues to have as few rules as possible, and that this will somehow work. And that idea deserves every bit as much incredulousness as the idea that people will ever eliminate greed and be purely socialist and create utopia.Quote:
Originally Posted by PanzerJaeger
Now, I don't believe in the U.S. anyone is truly dedicated to the free market. I honestly don't. I really do think as Naomi Klein says that we have crybaby capitalism and that even the most dedicated anti-tax, anti-regulation free market right-wing conservative ideologues suddenly like the idea of a bailout once they've screwed up their industry. That's happened time and again. And I think as long as big corporate money funneled into lobbying can have this strong of a political effect on the market, there will never be anything close to a free market. Other examples would be companies getting together to pass through legislation (with the happy approval of the administration) to stop people's ability to file class action suits for fraud or any other abuse, or get out of credit card debts when filing bankruptcy-- even though that's more or less PRECISELY what credit industries can do as a matter of course either by filing corporate bankruptcy or getting bailouts.
I know you're just an ideologue, Panzer, so I am not expecting anything but a canned answer. But given America's economic and political and legal landscape, I do not understand how you can think a free market system could even exist or work for more than five seconds, let alone get to the point of self-correction and self-regulation.
No, it wasn't. I'm sorry but this is not correct information. ;)Quote:
Originally Posted by Goofball
Asian flu, tech bubble, Savings & Loan panic, overnight rates at 20%...Quote:
Originally Posted by Koga No Goshi
Those have all happened within the past 28 years. And there were those every time who thought that there would be no recovery.
There will always be a recovery, but no recovery is ever permanent.
The government made these loans profitable and then proceeded to deregulate the system. So while the deregulation spurred this on. It was the making of unprofitable loans profitable that did this and if you cant see that I will never talk to you again.
Small picture Goof. You're talking about various sudden bursts or pops of speculation.Quote:
Originally Posted by Goofball
My point is, the only real thing still driving the economy is speculation. It doesn't really matter if you're talking about tech, oil or housing.
Erm... That's exactly why the current crisis is no different from any that I have mentioned.Quote:
Originally Posted by Koga No Goshi
The market economy follows a set pattern. Recession, followed by cautious return to capital markets, followed by increased confidence and venture, followed by over-exuberant greed/speculation, followed by crash. Lather, rinse, repeat...
Cripes, during the end of the tech bubble none of our financial analysis models for valuing companies worked anymore, because they were all based on the rather old-fashioned idea that a company's value should be based on some sort of present value calculation of the cash flows they would generate. During that time, companies were considered a good deal if their daily burn rate was at least sustainable via further stock issues...
The current crisis was brought about by the same sort of speculative insanity. It is no different.
Im going to start a depression survival store and suck all of you dry.
I'm not arguing it's different from a similar speculation bubbleburst 10 or however many years ago.Quote:
Originally Posted by Goofball
I am not sure you are grasping my point yet. My point is, what is the value of the U.S. dollar? What backs it up? What is the promise of its value in the future?
Another speculation bubble? That will hold up exactly for as long as it takes for someone to call in foreign debt.
Well Koga, you make some good points but only if you ignore the “small business” portion of the free market. The big guys are the ones that push for the legislative changes and the bailouts and cause all the problems and do all the cry-babying. The small businesses like $25 million and under, with less than 100 employees are the ones that ride the free market like a rodeo cowboy. Even here in Michigan where the economy sucks there are still thriving small businesses all over the place. I think that sometimes we are focused on the big headline making businesses when there is probably a dozen or more small businesses that we passed while in our car on our way to work or school today that are doing just fine and laugh and call the big guys fools for collapsing in on themselves.Quote:
Originally Posted by Koga No Goshi
Good post PJ. :bow:Quote:
Originally Posted by PanzerJaeger
I think there is some risk, but mainly of talking ourselves into a significant turn down. If liquidity can be restored (admittedly quite a challenging "if") the fundamentals are actually quite strong in both the US and Europe. This is a moneylender's crisis.
As for your last point, I like Warren Buffett's philosophy: "Be fearful when others are greedy, and greedy when others are fearful." There's a lot of bargains out there for longer term returns.
Off on a tangent Koga; as an accountant, what is your view of changing back away from "mark to market"? I think a lot of the panic has been created by this change over the last few years - which seems sensible (it's the practice for those who don't know, of valuing a company's assets at current immediate market value, so when the markets tank, in theory so do all the assets) but has proven very destructive. If we went back to future marks, would that stabilise the banks without needing $700bn?
Are you telling me that small business owners don't take advantage of small business loans, small business tax incentives, or other various incentive structures where they exist, if they are available?Quote:
Originally Posted by yesdachi
Free market always seems to translate into = I want all the things that help me, and none of the things that hurt me or make me meet standards of quality/pay/confidence/whaever.
Of course they take advantage of many of the incentives and loans and tax breaks but how often are cities bending over to lure a small business into their area or to keep them in their area? Or legislators listening to the needs of a company that’s entire sales for the year isn’t enough to pay for their next reelection campaign. I bet if you add up all the small business loans they wouldn’t equal the top 5 bankruptcy cases.Quote:
Originally Posted by Koga No Goshi
Small business success is based on their quality/pay/consumer confidence and whatever. Blow a job because of poor quality or loose a couple key employees due to poor pay and the company could struggle or even fall. The upside is that if they do fall they can’t fall far and there is always another small company there in the wings, ready to take over. :bow:
New Question regarding OP Topic.
Has anyone else noticed the.... I don't know what to call it.... air of romanticism floating around about depression? I'm not talking about here, specifically. I hear it every single day at work, with all these various financial people and clients calling in. There seems to be almost a longing for something like that to happen.
What do you guys think the reason for that is? Just people feeling fed up with the corruption and b.s.?
I think it's because we like Rocky Road ice cream so much.Quote:
Originally Posted by Koga No Goshi
Well then, guess what? You won't get one at all. ~:pissed:Quote:
Originally Posted by Koga No Goshi
You must have made a killing after the first big selloff when the markets rebounded for a couple of days. :2thumbsup:Quote:
Originally Posted by Banquo
Good article from the Economist this week:
Honestly I think if you pull back far enough, the fact is, the entire system of economics the US uses is the problem. it's inherently flawed. We need an economy based on Austrian School Economics. It wouldnt fix everything, but it would help.
Austrian economists maintain that inflation is always and everywhere simply an increase of the money supply (i.e. units of currency or means of exchange), which in turn leads to a higher nominal price level, as the real value of each monetary unit is eroded, loses purchasing power and thus buys fewer assets and goods and services.
Given that all major economies currently have a central bank supporting the private banking system, almost all new money is supplied into the economy by way of bank-created credit (or debt). Austrian economists believe that this bank-created credit growth (which forms the bulk of the money supply) sets off and creates volatile business cycles (see Austrian Business Cycle Theory) and maintain that this "wave-like" or "boomerang" effect on economic activity is one of the most damaging effects of monetary inflation.
According to the Austrian Business Cycle Theory, it is the central bank's policy of ineffectually attempting to control the complex multi-faceted ever-evolving market economy that creates volatile credit cycles or business cycles. By the central bank artificially "stimulating" the economy with artificially low interest rates (thereby creating excessive increases in the money supply), they themselves induce inflation (often focused in asset or commodity markets) and speculative investment, resulting in "false signals" going out to the market place, in turn resulting in clusters of malinvestments, and the artificial lowering of the returns on savings, which eventually causes the malinvestments to be liquidated as they inevitably show their underlying unprofitability and unsustainability.
Austrian economists therefore regard the state-sponsored central bank as the main cause of inflation, because it is the institution charged with the creation of new currency units, referred to as bank credit. When newly created bank credit is injected into the fractional-reserve banking system, the credit expands, thus enhancing the inflationary effect.
Accordingly, many Austrian economists support the abolition of the central banks and the fractional-reserve banking system, and advocate instead a return to sound money such as a 100 percent gold standard, or, less frequently, free banking.
Money could only be created by finding and putting into circulation more gold under a gold standard. This would constrain unsustainable and volatile fractional-reserve banking practices, ensuring that money supply growth (and inflation) would never spiral out of control. Dr. Alan Greenspan asserts that economic liberty and Ludwig von Mises asserts that civil liberties would be protected.
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold.
If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold.
Deficit spending is simply a scheme for the confiscation of wealth.
Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.
It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs in the same class with political constitutions and bills of rights. The demand for constitutional guarantees and for bills of rights was a reaction against arbitrary rule and the nonobservance of old customs by kings.
...just my $2.22, adjusted for inflation.
*Shrug*Quote:
Originally Posted by PanzerJaeger
For years (hell, decades) anyone who even hinted that we ought to get rid of the Federal Reserve (an 'independent' central bank in its own right), fractional reserve banking and go back to the gold standard has been viewed as a being crazy as a moonbat. The populist view (supported enthusiastically by most of our elected leaders) is that the Fed has served as a bulwark against disaster, not a facilitator. Take a look at how Ron Paul was received by his fellow Republicans during the debates... they all cast him those 'nutty as a moonbat' looks when he brought the subject up.Quote:
Originally Posted by AlexanderSextus
This is amusing:
I'll sum up my views instead of making you all read a lot.
We're in trouble. We've brought others into this trouble as well. :2thumbsup:
Quote:
Originally Posted by Spino
Just because they thought he was crazy doesnt mean he actually was crazy. Hell, they're Neocons, they want us to give up as much freedom to them as we can. After all, like I said,
They dont want that to happen.Quote:
Originally Posted by ME!
And as for the Democrats,
They dont want it to happen either.Quote:
Originally Posted by ME!
Read this part again:
It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs in the same class with political constitutions and bills of rights. The demand for constitutional guarantees and for bills of rights was a reaction against arbitrary rule and the nonobservance of old customs by kings.
Neocons are pretty much bat-crazy. I think of them as elite businessmen with delusions that they can follow in the footsteps of Charlemagne. Except Charlemagne actually put funding into education didn't he? :) Of course, some people simply call them as close as you can get to an openly fascist party in the U.S. That works too.Quote:
Originally Posted by AlexanderSextus
Or just the stupid Republican form of Democratic hawks?Quote:
Originally Posted by Koga No Goshi
The only Dem anywhere near bad enough to blend in with them is Lieberman.Quote:
Originally Posted by Bopa the Magyar
Gold standard isn't actually a standard.
The worth of gold fluctuates based on emotion more so then most currency. Just look at how the gold price shot up after 9/11 and the wars that followed.
Gold isn't 100% non-useable for anything else. Gold can have a value other then arbitrary because it does have uses other then jewelry. It can be used in industry and as such its value can change with demand.
Not only can golds value change because of demand it can be supplied by other means then just from a bank. You can mine it, and as such all you are swapping is currency supplied by a government for currency supplied by a mine site. Not much of an improvement if any.
Now that is just looking at gold in the ground. If we get fusion going then we can filter the seas of the world for far more gold then we have mined yet. Add in space exploration and we can have so much gold that we could all be housed in it.
Gold has value because it is rare. In time that rarity only gets less and less. As such the gold standard is subject to the same inflationary pressures on a system as money.
Wishing for the gold standard is wishing for old times.
The problem with the gold standard and the theory of sound money is that it constrains the power of wealth generation.
How is wealth generated?
Taxation? Nope, that's just a transfer of wealth.
Government spending? Ditto.
Wages? Ditto.
Creation of goods and services? Ditto.
At the end of the day, there is only one economic activity that actually creates wealth. That is the flow of capital investment. In an economic system where specie is based off faith in the monetary and fiscal policies, one need only be a member to participate in this system.
But in a system where specie is based off of some tangible good, like gold, access to that gold controls access to the credit system.
Let me give you an example of what might happen if we returned to the gold standard.
A few banks, like Morgan-Chase, maybe Citi-group, maybe Goldman would rush out and buy every last ounce of whatever the value-backing commodity is. They would then control access to said currency. If they find it more profitable to hoard it rather than flowing it around, they simply stop lending. Think about that for a second... Morgan Chase can decide that too many people own houses in this country and the very next day, they've dried up the money supply. In fact, this very phenomenon used to happen. Do you think "Potterville" is a fantasy creation of Hollywood in "It's a Wonderful Life"?
I understand the allure of 'sound currency theory', but in fact, instead of being controlled by the federal government, you're turning the power of your financial system over to those large enough and moneyed enough to purchase a stake in it.
You, me and everyone else with less than $50 million of assets is left out in the cold. It doesn't prevent tyranny, it shifts its source from an elected government to a few autonomous tycoons.
Lieberman isn't a Dem.Quote:
Originally Posted by Koga No Goshi
I suppose this is the best thread for this one:
Not enough digits on the debt clock.
So we can claim victory? NO MORE DEBT!!!!!!!!!!!!!!!!!!!!!Quote:
Originally Posted by drone
Nobody told me that we were just making stuff up now. :laugh4:Quote:
Originally Posted by Koga No Goshi
Neoconservatism is a valid and well thought out ideology. What exactly is bat-crazy about it? Or fascist?
In any event, you do know many of them used to be democrats, don't you?
I don't want to burst your bubble but Bopa Magyar & PanzerJaeger hit the nail on the head. The Neo-Con movement within the Republican party can be directly attributed to the migration of Cold War era hawkish Democrats & like minded intellectuals to the Republican Party during the 80s & 90s. It was the total mismanagement & incompetency of the leadership of Johnson & McNamara during the Vietnam War and subsequent fallout that led directly to the creation of the modern Democratic party that you identify with. The fact that Lieberman, an archetypical Democrat in the Truman/Kennedy/Johnson mold, has become a virtual outcast within his own party shows you just how much the Democratic party has changed over the last 40 years.Quote:
Originally Posted by Koga No Goshi
A revelation for you?Quote:
Originally Posted by Koga No Goshi
So very wrong. Roosevelt's high tax and high regulation policies stunted economic growth. The protectionism of nations also served to delay the whole world's recovery.Quote:
If this had been the predominant philosophy at the time of the New deal, we'd still be there.
But go on with your fantasy world that ignores economic scholarship and history of the Great Depression. How you can ignore the fact that Keyne's theories kept us in the depression until the outbreak of world war 2 is fascinating.
It's also amusing how you sulk like the economy won't recover because we won't have new industries when the dems and socialists support the high taxes and regulations that make it so difficult to start new companies.
Another socialist type with no real knowledge of what happened. But I guess it's hard to come up with a rational response when all your favorite socialists tell you the government solves everything and the depression was such a glaring example of that being complete bullocks.Quote:
haahahahahahahah What a pile of rubbish you just came out with, ahahahah. The fact you really believe this crap amazes me everytime I see you type such a silly post. Amazing.
Anyway, yeah SMALL GOVT FOR THE WIN!! Its not like it has got us into this situation or anything!?!?!!!! NOES!!
Question: If Keyne's crap theories were so great, why did they do nothing to bring the US out of the depression?
Oh, but that'd involve facts, wouldn't it?
CR
What a loss he is not being the one running for president for the republicans. Bit too low on fanfare and hallelujah which are sadly too important in US elections which is a real shame. Can we have him?Quote:
Originally Posted by Spino
Ron Paul has some interesting ideas and wouldn’t make a worse president than the candidates we have except for the fact he acts like he is nutty as a moonbat. You can act all kinds of ways except nutty as a moonbat. :laugh4:Quote:
Originally Posted by Fragony
Ha ha, well, if we go back far enough, it was the Democrats defending slavery and the Republicans who wanted to end it. But trying to draw some illusory similarity between present-day Democrats and present-day Neoconservatives is really thin. And I am not sure how the party affiliation of some of these people back in 1954 would have any bearing on my statement that neocons are bat-crazy today.Quote:
Originally Posted by Spino
On a more "on topic" note, would the crashes in the stock market serve as sufficient reason for any of the free market ideologues out there to change their mind about social security and/or privatization of all retirement programs? I mean, if you're 40, yeah, you can probably ride this out. But what about the people who are 68 today and had a lot of their money "responsibly" invested and have lost 25% of it in three months?