The Economy

With all due respect, stuff like this can be found all over the internet. I would consider it garbage to tell you the truth and please don't take this personally because it's not. Let me explain...

What goes in is what comes out. The above is something I personally would have no interest in reading. Why would anyone for that matter?.. Of course this is my own distorted view. Actually, I watch very little news because I've been too busy working on other things. Funny thing is, it simply doesn't effect me like it used to.

During Y2K I was one of those who watched the news and prepared with extra food and all that crap. Watching every day then the 911 thing and the shootings and the OJ Trial and the war and death of Saddam... I could go on and on. Needless to say, there were times at the end of the day I could have sat in the corner of my room with a gun to my head... Not literally, but it's depressing to say the least. Then, anytime my friends and I got together we talked about what?.. The News. They still do. Just not for me anymore.

My view is, there are plenty of good things in this world and on the Internet that it's a shame to load ones mind with such pollution. If a person spends all their time and energy focused on what is in the news, it instills fear and lots of extra thoughts are entering the mind which sends the signals that create toxins within the body and actually do damage and not good.

Referring back to perception... that's all any one of us can control. Most of what's happening on the news is completely out of our control. We cannot control anyones perception but our own. Once that's in balance across humanity, then the news will change. All that news is doing is feeding off the fears of it's viewers. Realizing that some people will read that stuff and it will literally change their future based on how it effects their perception... that's not good!

News media is primarily focused on the negatives of the world we live in because people soak it up. Misery loves company and our news creates a lot of that. The more negative and gruesome the story is, the more it's played and of course it is what makes headlines. Instead of sitting down to read a book or feed the mind with positive energy, people would rather go home everyday to watch the negative pollution our news media puts out. Just not for me anymore.

There I go again beginning to ramble... 'cant sit still', please understand that this is just my opinion. We all choose our paths through life and that kind of news just isn't one of mine and I refuse to be a doom-sayer, the world has too many already.

I'll leave this "crap":rolleyes: up here but I would encourage people to look at the positive side of things in the world rather than the negative.

What we put into our minds and freely accept through our conscious decisions, will also come out in an energy that will effect our world and people in it. Essentially, we are and will create, that which we most often think... individually effecting all of humanity. :cool: :cool: :cool:

At worst, we will slip into a moderate recession over the next year. A banking meltdown? "The main crash"? People are quick to blow things out of proportion, and if your articles speak of such things, they are making such a mistake.
If you want to worry about economic meltdown, think 30-50 years in the future if the US does not adjust it's China policy, and the overbearing power of corporations in politics. The two issues are close, and not easily resolved. We have always lead the multinational economy, and no idea what will happen when a shift in power occurs at the top.

The articles that I chose were meant to be educational rather than speculative. Much of the info is historical rather than sensational. I have no interest in fear-mongering.

I am a student of history. I've travelled to hundreds of places that figured centrally in the development of mankind. From Machu Pichu to Karnak, from John'O'Groats to Siam to Byzantium to Persepolis, I've travelled there by road to see the places that shaped the men and women.

Today's travails are just another page in history. They will play out in their own good time.
I've also studied geology. In the geologic time-sense, this is all just a minor blip. We're in the late Holocene. The ice will return as it always has lately.
Homo-sapien's history is less than 1% of the history of the sauropods.
I try to be an objective spectator.

Well, you were the one who used "banking meltdown".
The banks are not going to "go under". Citi, who is probably in the worst shape, will still scrape by, even after firing their CEO. As for the depression, that was caused by speculation in the stock market. Congress enacted many laws to control that speculation, and some banking reform to help it along. The current economic crisis is the result of our trade deficit. The banks knew that if rates went up, many people would not be able to afford their payments; costly for the people and the banks (on average, a forclosure costs the bank 50 grand). The banks did not want this, billions of dollars in losses, they did not want this.

Thomas;
While you are correct about the banks preferring to avoid losing money, they got careless. With the invention of credit-default-swaps, the banks believed that there was no possibility of being harmed by defaults. Therefore, they did not maintain reserves of adequate size. It's not that the losses are that high,,,, it's that the reserves are too low. The ratio of assets to derrivatives at Merril-Lynch was 1.86% assets. Citi was marginally better at <3.5%>

That's why Citi just borrowed 7.8 billion at 11%!!! from Abu Dabai.
The Chinese government requires Chinese banks to maintain 15% reserves. The norm in the US used to be about 10%. Then it gradually fell to about 4-5% as bankers believed that risk was banished.

This site lists the major regulatory actions initiated in the '30s http://www.fdic.gov/about/learn/learning/when/1930s.html

One of the most important banking laws was the Glass-Steagall act
http://www.investopedia.com/articles/03/071603.asp
After lobbying for 20 years, the banking industry got it repealed in 1999

Bush throws out banking laws; http://query.nytimes.com/gst/fullpage.html?res=9D0CE7D61E3BF93AA3575AC0A967958260&sec=&spon=&pagewanted=all

The worst banking crash in the US history was the S&L crash brought on by irresponsible actions of the Federal Reserve. 1,000 S&Ls failed
http://arapaho.nsuok.edu/~cundiff/SavLoan.doc

Once again the FED is causing problems. Greenspan lowered interest rates too far. He said "with new technologies we can offer more products to more people" What he did was to loan money to people who could not pay it back. Not directly, of course, but the FED created so much money that the banks were forced to compete,,, so they offered loans to people who couldn't possibly qualify.

They did the same with credit cards. GOV went on a spending binge also. The combined US debt is 37 trillion dollars. I believe that the Kondratieff cycle of 56 years is partially dependent on people's failing memories. They forget why they wrote banking regulations. One of the main causes of the '29 crash was the "pools" They were susequently outlawed. With deregulation, they made their rebirth as Hedge funds.

The average ratio of debt to GDP in the US has been 160%. In 1929, it was 260%. It now stands at 370% The worldwide valus of derrivatives is 640 trillion dollars. This is <12> times the GDP. All fiat currencies have eventually failed. At the low point of the Roman empire, the previously pure gold coins were gradually reduced to 2% gold.

I find this all very interesting. It got it's modern start in the 17 century with the British banking system
http://www.rbs.com/about03.asp?id=ABOUT_US/OUR_HERITAGE/OUR_HISTORY/STORY_BANKING/BRITISH_BANKING

It was later "codified" by John maynard Keynes. Keynesian economics is the bible of most modern bankers and economists. The underlying fatal flaw in the system is that it requires unending growth. Real wages in the US started dropping after <1970>. Americans responded by having fewer children,,, smaller families. This ran counter to the needs of Keynesian economics so immigration was kicked into high gear.

This still wasn't adequate to produce the wealth that banking and GOV needed, so massive money creation and deficit spending were "institutionalised". The bubbles got bigger but the US economy couldn't sustain them. We packaged up junk mortages as AAA and sold them to foreigners to get their money. The whole world got on the derrivatives merry-go-round.

Meanwhile, in Austria, Ludwig von Misses founded a different school of economics. It did not agree with Keynesian economics. He predicted the fall of USSR and Japan <30> years ahead. The Keynesians said that they were a special exception. It remains to be seen.
http://www.mises.org/

It's one more page in the march of mankind. The only philisophical value that it has is that it shows that banks/people have to be protected from themselves.


"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved."
--- Ludwig von Mises, Human Action (1949)

Thanks for the economic history; however, there is still no "banking meltdown", and the "crash" isn't going to happen sometime in the second quarter of '08.

You are right to bring up the national debt. China owns a great deal of that debt, and we also lose more in trade with China than with any other nation. Of course the Fed has only made the situation worse, and our representatives are responsible for the mess, but what else would we expect?

We're in agreement there. GOV wants more money than we send it,,,so it just makes up the difference. Of course state GOV doesn't have that option Schwarzenegger Will 'Declare Fiscal Emergency' In Weeks - News Story - KNTV | San Francisco

It looks like lending will be a bit tighter next year too; U.S. could face $2 trillion lending shock: Goldman - Yahoo! News

China, Japan and Saudi hold most of our paper. They definitely don't like to see the dollar drop. OPEC is meeting shortly to consider dropping the dollar peg.
This too, shall pass

Jefferson argued that violent revolution was necessary every decade or so, that way the people will always maintain control over their government. He may have been right to a degree. The Washington administration was fantastic.

Didymos, If you take Jefferson's statement and couple it with the statement that "absolute power corrupts absolutely",,,, it doesn't leave a lot of doubt. Up to this point, "bread and circuses" have been available to "all" westerners. It's hard to say just how much erosion of liberty John Q public will tolerate as long as he can eat "cake".

I fear that the modern state has so many "force multipliers" that insurrection is fast disappearing as an option. North Korea is an example.
They're very quietly starving to death. Things will only get worse as the nascent industry of battle field robots improves it's products until they reach civilian and police deployment.

GOV is getting better and better at insulating and isolating itself from civilian oversight or correction. The electorate was/is very disappointed with the results of the last election.

Americans don't feel at all comfortable with the exigencies of maintaining an empire. Torture and genocide are SOP for a military empire. We're a bit too squeamish to continue with Pax Americana. Ike warned us about the military-industrial complex wanting to persue empire.

Britian killed 10 million Indians after the Sepoy rebellion. We just don't have what it takes to be great leaders/killers. The NEOCONS are souless but Americans in general don't want to sink that low.
I personally don't believe in murder to get what I want. I prefer to work for it. Call me old-fashioned.
Dan

Given the authoritarian shift in the US government, it is hard not to compare the US to Rome. Our news, like every other business, functions on supply and demand. Considering that our news outlets spend more energy on Paris Hilton and Anna Nicole Smith than they do on Darfur or any number of serious problems facing the world, I doubt John Q Public will ever notice that he has lost his liberty. Either he will not notice, or what he does notice he will find agreeable. We claim to be "the home of the brave" yet many Americans are too cowardly to keep their rights in the face of terrorism, drug dealers, minorities, flying pink elephants, or anything else the government distorts in order to scare the population.



The only thing that saves us today is that the military is still comprised of common people. Most of whom are treated rather poorly by society. Too many would refuse to fight if the civilian insurrection was broad enough. When the foot soldier is eliminated, and generals can control armies like teenagers playing video games, this defense is lost, and your fears will be a very real thing.

Then again, I'm the nut case calling for the abolition of a centrally controlled military.

We agree all around. As you say, the professionalism and objectivity of the military is all important. In Turkey, everytime that they elect some POS, the military steps in and takes control. Then, they gradually relax things as a better leader is chosen.

The US military has done a pretty good job of following orders but, at the same time, looking out for the best interests of the country. Rice, the commander in the Persian gulf told Bush that there would be NO attack on Iran on his watch.

Private groups like Blackwater are mercenaries without honor or Esprit de Corps. Americans ,who own 300 million guns, would be reluctant to shoot military or National Guard personnel. But mercenary thugs,,, no problem.

"hunger tames the savage beast" might be the road to control. The earth has only so much carrying capacity. Dirt and water are starting to get a bit short FOOD, LAND, POPULATION and the U.S. ECONOMY
If they aren't in short enough supply, I'm sure that something can be engineered. The ethanol farce for example. Cornell university reported years ago that current ethanol technology was a net energy loser. That didn't stop GOV. Turn all the corn into ethanol. That should starve out the people who won't go along with the plan. Fidel Castro said that if we tried to fully convert to ethanol, we would starve 3 billion.

The Ogallala aquifer is running very low Ogallala Aquifer
This along with the diminished flow in the Colorado and Rio Grande is causing problems in many states. Since China has 6% of the world's water and 20% of the world's people, I believe GOV is going to starve them out wherever they can.

General reading of non-western news outlets like Asia Times Asia Times Online :: Asian news hub providing the latest news and analysis from Asia seems to suggest that the east is getting ready to cut loose the US. Time will tell.

Not only do we have 300 million guns, but many of us are willing to use them. If the Federal government were to ban the ownership of guns, in spite of the second amendment, the state of Texas would enter open rebellion.

The good thing about our military personel, and especially the National Guard, is that I cannot see them being willing to fight a civilian force. If enough of the civilian population is willing to fight, the bulk of our armed forces will support them. Generals, too. Americans are loyal to their country, which they view to be the people, and not the central government. The mercenaries we hire, they would be happy to slaughter armed citizens - and judging by their track record in Iraw, they would be happy to slaughter unarmed citizens, too. Should things come to open rebellion, the mercenaries will receive no quarter from American citizens.

As for war with Iran, Rice has no authority. She has hardly been able to do her job because she is so close to Bush. Any administration closely tied to the military industrial complex will be unbrearably hawkish. Ike warned us.

Ethanol is another doomed-to-fail policy brought to prominence by big business. It's another excuse for the government to dish out giant subsidies and other incentives to giant agricultural interests.

Got my names mixed up. it wasn't Rice, It was Fallon who refused to start a war. Asia Times Online :: Middle East News - Commander's veto sank Gulf buildup
I post from memory and sometimes it fails me.
Correct again; Con-Agra and Cargil are big campaign contributors.
We have "Big Banking", Big GOV, Big pharma, Mil./Ind, AIPAC,,, ad infinitum
It feels like there is a queue of organisations waiting to screw the average guy.
Sometimes it makes you want to just join a commune and toss it all.
Intentional Communities Web Site (ecovillages, community, communes, cohousing, coops, sustainable living...)
Dan

I too post from memory - no worries

You are right to criticize the conglomorant nature of power in this nation. Corporations and government have grown far beyond the scope invisioned by Jefferson and Madison. As they warned, such development must lead to significant damage to liberty, and even the most basic means of living.

Interestingly, where I live, there are several communes within a few hours drive.

For those of you who don't watch the economy, It's getting very interesting. The FED and the european central bank have created 3/4 trillion dollars out of thin air in just the last 8 days. It's offered as 2 and 3 week loans. The FED and ECB know that heaps of bonds and derrivatives are going to mature on Dec 31. Years end is cash crunch time anyway and the central banks want to ensure that the banks don't run out of cash.
It all depends on how many people want to roll over their money in paper or just cash out. It's hard to say. The banks know that this is inflationary but they're more worried about credit flow.

"the words of Thomas Mayer, and economist for Deutsche Bank, who said the European Central Bank is compelled to cut rates immediately, regardless of the threat of inflation. "This could," he said, "go beyond just a normal recession. It could turn into a real economy-wide crunch that we cannot stop."

The problem now is that the banks don't want all this money. They've tightened up loan standards so much that they can't find anyone who can qualify. So they say.
I never gave a moments thought to Y2K. I knew that it would be a no-show. The thing that is looking rather dark is the precedent set by Japan. When their real estate bubble burst, it threw them into recession for about 11 years. They had recently started to pull out of it,,, but , wages never went up. Now, they're slipping back into recession. Even with their effeciency, they can't compete with Asian wages.
The curent world value for derrivatives is <700> trillion dollars. The current world value of the GDP is <50> trillion. It's going to take a real trick to get things back into balance.
When all is said and done, it appears that Spain is the country most at risk. I lived in Madrid for a while and I like the place.

Justin, LOL, don't you know the world is supposed to end winter solstice, 2012?

:p

Krazy Kaju, there is quite a bit of discussion about that very thing; Survive 2012 :: Index I feel confident that this ball of rock is going to be here for quite a while. Now, we all know that mother nature hates a monoculture. Ie. US. She usually produces an oportunistic predator or pathogen to exploit the niche of the monoculture.
Then, there's always the odd asteroid or whatever that's going to destroy us; EXIT MUNDI, a collection of end of world scenarios But, this good old ball of rock will keep spinning. I think homo-erectus will be here for a while. He may be reduced to hunter-gatherers. He may have to wait thousands of years to try again for the stars. Who knows?
If time is defined by entropy, we'll just keep trying until the stars go cold. In the meantime, the march of the chromosomes is entertaining, Dan

"At worst, we will slip into a moderate recession over the next year" Well,,,, I have to disagree. The US has tried to maintain both full employment and high wages. When it became obvious that the US could no longer compete against Asia in the manufacturing sector, We tried to recast ourselves as a service economy specialising in financial service. The only problem was that we didn't have any money. So, we used asia's and europe's money. They've cut us off.
Central goverments have historically produced and controlled the money supply. When private banks started producing "money", they competed with others to loan as much as possible. There is no control. The world GDP is 50 T. The world supply of derrivatives is about 700 T. There is no way for the economy to absorb this much liquidity. The producers of this liquidity will have to reabsorb it. Much of it will eventually be passed on as inflation, but the originators weren't careful of who they financed so, they will suffer greatly. For lack of reserves, they don't have that ability. GOV is bailing them out right and left but, it remains to be seen of it will work.

In the final analysis, the US can't expect to be part of the global economy and still maintain high wages and high employment. We'll have "global" wages and unemployment. I expect it to stabilise at 15% unemployed and earning power somewhere close to ,,say Italy. Interest rates will settle in close to 5% after the hyperinflation fades away. All of these prognostications depend, of course, on just how fast energy costs go up. Dan

Just you do realize that none of these end of the world "theories" have any evidence supporting them?

... and that Homo erectus has been long extinct?