The Economy

Krazy, you say that none of these "theories" have any evidence. Look around the galaxy. It's quite normal for our type star to expand and turn to a red star. I think that Sol is a G-A-O type. Dont quote me. It will happen.
Most of the other scenarios at Exit Mundi are just end of civilization, not end of earth.
The evidence for clestial impact is all around us. Barringer crater in arizona is the closest to Los Angeles. Vroodefort crater in South Africa has a 300 mile diameter ringwall. Do a search on astroblemes. We've been hit dozens of time by objects big enough to ruin your afternoon.
Reportedly the sauropods were taken out by an impact in the Yucatan peninsula that raised the air temp to <450> degrees F.
The Yellowstone caldera has erupted many times in the past. There is plenty of evidence. They've found ash from Ventura Ca. to Ohio.

I'm well aware of the different branches of the Homo lineage. When I look at George Bush, it's difficult to classify him as a "thinking man" I'll just say erect. But, you're correct,,, it's not accurate.
Science is presenting us with fascinating discoveries every day. I'm happy as a clam to be alive to see it.

... just that our star (aka "The Sun") won't put our solar system in danger for something like a few billion years and no asteroid or comet has been spotted that had the potential to end life "as-we-know-it," at least not by and certainly not on winter solstice 2012.

So radical alarmism, the same kind that existed time and time again throughout history is completely unwarranted.

I started this thread about the economy. I'd like to keep it there. Discussions about catastrophe are perhaps entertaining but off topic.
When I said bank meltdown, I should have clarified that it wouldn't be the traditional type. Most of the major banks are insolvent. They won't close. They will just sell themselves off piece-meal. Our financial institutions are being bought up with petro-dollars and Wal Mart-dollars.
You know that Citi has some serious problems when they have to borrow from Abu Dhabai at 11%.
There was 441 billion dollars worth of acquisitions made by foreigners last year. It is expected to increase greatly this year.

Michigan has been in recession for 7 years. Ohio and Minnesota are expected to follow.
The current projections are for 500 billion of write-downs and 2 trillion lost in equity. Since the bond insurers are being downgraded, there is an additional 3.5 trillion that is in jeopardy.
The problem comes in because many funds like pension funds are only allowed to invest in AAA rated securities. When a bond insurer is re-rated, their insured bonds are down-rated also. This means that the fund must automatically sell.
As consumers cut back on purchases, companies will sell less. This will result in a fall of their Price to Earnings ratio. This also causes sell-offs.
The world markets got a bit shook up yesterday. They had to close the Indian market after it lost 8.9% in the first few minutes.
Much of stock sales are "black box" sales. They're done by a computer at a certain price level. This causes a lot of sales to occurr in a very short time. When this has happened before, they have had to close the market.

Bush has a stimulus plan. After millions of good jobs were sent offshore, he plans to revive the economy with $140 billion. Wall Street freaked when they heard that and the FED had to do an emergency interest reduction this morning. The air of panic from Washington is all too palpable.
People are refusing to borrow any more money and banks are refusing to loan money carelessly. GOV is petrified that people will stop consuming so GOV will just send you some cash. Not literally of course, but GOV wants you to BUY!!!.

Keynes has been tossed to the trash heap and Mises is in charge. There is a worldwide $500 trillion supply of derrivatives looking for a safe haven. Not 1 single junk-bond has been sold since August. Nobody is in a hurry to invest in mortgages. Bonds are unwinding because super SIVs were leveraged at 100-1. As SIVs unwind, they take down everything. Commodities were doing good but are turning down now. Even oil is dropping a bit.
$500 trillion and nowhere to park it.
Argentina and Russia crashed. Japan crashed after their property bubble burst. The US has invited a crash by stealing from the rest of the world. We took liar-loans and rated them AAA.
Greenspan held interest rates unreasonably low to goose the economy so Bush could continue with military expansion.
You and I didn't cause this, but I imagine that we will be the ones to pay. Each of us owes over $441,000
Russia and Argentina defaulted. Should the US default, I imagine that it will be harder to but oil.
I agree with the post above that we should try to concentrate on the positive in the world. I also believe that we should try to help each other and keep each other informed.
Dan

There was an emergency fed funds rate cut yesterday and more are expected.

There is plenty of blame to go around. Clinton nullified the Glass-Steagal act in return for contributions from bankers.
Bush did more or less the same. It didn't help the US when he gave "most favored nation" trading status to China. THAT sure didn't help our balance of trade. Consumers bought stuff they couldn't afford. The US military spent half our budget, both seen and unseen.

Even now, with the Pentagon trying to cut programs, congress is refusing. They don't want any pork taken out of their district.
The comptroller-general David Walker said in an interview that if the US doesn't get it's financial house in order, "we will lose the country in 4 or 5 years"

It remains to be seen if predictions will come true. BUT, much damage has already happened. The uncontested maestro of this damage is the maestro himself Sir Alan Greenspan. If you care to read a long list of his distructive influences, here it is; FS Editorial: "The Financial Tsunami Part III" by F. William Engdahl 01/23/2008

I find it difficult to realisticly dispute the comptroller-general.

The most important question is wether or not the next administration will slash spending in a monumental manner or will they march us to the brink.
Clinton has promised us universal health coverage. The Reps have promised us unending war.

What will it take to get the next admin to do a complete turn around?
Seeing as how this is a philosophy forum, I should mention philosophy as it relates to our Pres. Ron Paul Online - Pathocracy - Our Global Disease
Dan

For those of you who keep an eye on the banks, there are 2 very nice graphs on this page US Banking System Teetering on the Brink of Collapse :: The Market Oracle :: Financial Markets Forecasting & Analysis Free Website They should make it easier for you to make informed decisions as to where to invest, Dan

yeah yeah. Politics isn't something I get into much because as an American it makes me ill to see what we do to our own people.

Let's not forget who's in control of the American people... the Federal Reserve. Money money money that's the philosophy behind America and it's people support it blindly. I'll leave it at that.

The worrying thing about the Federal Reserve is that it's PRIVATELY OWNED!!

As always, a link for your perusal....

YouTube - David Icke-World Banking System (pt 1 of 2)

Brett.

Yes, it is privately owned. I worked in banking for years and got to tour the Federal Reserve in Dallas. Real people are rarely allowed in their 10 story vault-forklift-like robots retrieve money on command. Anyone seen "America Freedom to Fascism"? www.freedomtofascism.com/

The FED , for all it's obvious evils, is only creating "money" at the rate of 15% a year,,,,, up from it's normal 5%. China creates at 84%,,, Russia at <50>%
The banks, through the use of "fractional reserve banking" and the creation of derrivatives have gone into competition with our central bank, the FED.
The FED made a reasonable attempt to limit "money" creation. It's true that they maintained the interest rate too low for too long. That's another issue.
The banks, on the other hand, got into competition with each other to create liquidity as fast as they could get people to sign on the dotted line.
If you look at the graphs on the link that I posted above, you'll see that the banks created liquidity so fast they made the FED look laggard.

It's true that they only created this liqudity in limited areas, but that was enough to throw the system out of whack.
Historically only <80>% of Americans have been able to afford to own a home. The percentage went up to about 85%.

The homebuilders should have been the first to notice that. If real wages have been declining since 1971, how could the percentage of eligible homebuyers have been increasing?
Well, as it turns out,,, they weren't eligible. The homebuilders had to have known about the liar-loans. They just figured that GOV would bail them out.
Greenspan said "with new technologies, we can offer loans to a larger segment of the population" He is/was way too smart to say to say "we're going to offer loans to people who can't possbly pay them back".

The US is now in a race to deflate it's curency before it's debt instruments and real estate deflate to their correct value.
It's not likely that they can win the race. With off-shoring of jobs, who's going to buy these houses before they lose another 25%?
78% of the economy is driven by consumer spending. The consumer is in no mood to take on more debt.
Keynesian economics works OK in a world without limits.
The banks made a fatal error thinking that they could rob everyone and never reach an end.
A higher and higher percentage of our wealth is made by machines. GOV figured that they could bleed the middle class interminably because the wealth was produce mostly by machines.
Well, everything has it's limits. We seem to be approaching the limit of sustainable bloodletting.
Dan

The powers that be are currently trying to engineer a "soft landing." The soft landing does nothing but give some investors time to preserve their wealth by reorganizing or dumping their portfolio. While the Enron executives encouraged employees to keep investing and stay in for the "long term," they were selling their stock as quickly as possible. The economy will still bottom out at some point regardless of how soft it is.

Chad, I'm sure that you're correct about the soft landing. While it gives investors time to try to offload bad investments, it also gives foreigners [and Americans] time to get out of the dollar. Apparently GOV prefers hyper-inflation to an outright collapse.
Bush also seems to be trying to buy time to effect an invasion of Iran before he leaves.
The U.S. intelligence agencies, both civilian and military are in full revolt.
Bush is finding it increasingly difficult to "sell" a war to America.

If and when unemployment kicks in badly, America will be in no mood for more war. Bush is vetoing a bill that includes an extension of unemployment benefits at the same time that he wants hundreds of billions for the military. He's not making any new friends.

Israel may be so desperate that they go it alone, hoping for America to blow the place to smithereens on day 2. This will collapse Japan because 100% of their oil is transported through the Straights of Hormuz.

There just isn't anything economic that isn't also political, Dan

What most of you fail to realise, or seemingly fail to realise, is that this is all the natural ebb and flow of capitalism. We Americans are only now experiencing what an abundance of nations before have experienced. Nations gain and lose hegemony according to the will of the bourgeoisie. If capitalism was more focused on national loyalties, then this type of thing would happen less frequently, but capitalism revolves around self-interest and if the markets do better in Asia than America, then the bourgeoisie will flock to Asia and vice versa. The last time this happened was just after World War 1 nearly a century ago. With Europe's loss of economic dominance, so to did Tsarist Russia and all the old countries lose most of their clout.

This is nothing to cry over, despite what the bureaucrats and nationalists might say. This is a good thing for us anti-capitalists as the reaction to economic decline is always a rise in popularity for socialistic parties. If capitalism does not end with this sway in capital then the rule of America will once again return, how long that will take is purely speculative, however.

Moreover, what this country needs is nothing less than an excruciating amount of pain as this country's youth is selfish, materialistic, and reckless. The outcome of the coming tumultuous times could be either a hardened revolutionary generation or a hollow and hopeless generation that will do nothing but sit and pout about how horrible things are just as they do today, but with more credibility.

Niemand, you're obviously correct on all counts. The current "entertainment generation" is just a bit lacking in motivation. It's said that "character is formed in the stormy billows of the world"
Like all previous civilizations that went soft, we don't have any real stormy billows.
Character seems to have been replaced by instant gratification.

Capital is flowing from the west to the east. The ebb and flow has been exacerbated by the power mad,,,, as usual. The elderly and the poor will suffer the most,,,as usual.
It's all natural, but still a tradgedy to those who suffer.

The difference this time is that far fewer people live in an agrarian setting. Far more people will starve. 13% of Americans report food insecutity. The world's food reserves have fallen from the norm of 110 days to just <40> days. The increasingly violent weather is destroying an increasing amount of the world's crops.

China has 20% of the world's population and just 6% of the water. The U.N. projects that the Indus and the Ganges will become seasonal rivers by 2025. Yes, it's all ebb and flow. I think that mother nature is calling for an ebb in the numbers of humans.
Dan

My niece is a member of this "entertainment generation" and spent the summer with us two years ago. She was under a great deal of pressure from her grandmother to get a "real job" because she was volunteering her time with a place that would likely provide no future. She was not motivated as previous generations were to get the job, husband, and kids. I thought that she probably knew at some level that this economy would not serve her well, so she made other choices, as it didn't seem to serve her father as well as it did his father. Perhaps all of these kids know that the American dream is coming to an end, so they decide to live fast before it's completely gone.

Thomas; you do not realize how quickly overdue change comes upon people. Beautiful Balls in Savanna, and four years later the South in ruins. Party hardy at the winter palace and a year later the Czar and all his babies dead. The worst mistake anyone can make when looking at the impediments to change, the symbols of power, and the great structures of beaurocracy is that it will not change. It will not change, because it cannot change itself. The people can change it by changing their perspective. The effort is minimal, and the organization needed is less. Begin thinking of how you might rebuild your society better if given a chance. Change is always in the mail.

I concurr with Fido.
The US GOV has apparently morphed from our benefactor and Pater Noster to our adversary. Everything is subject to confiscation including personal liberty.
GOV knows that psycological changes can come quickly. The physical changes follow the psycological ones. GOV is doing everything that it can to keep blowing pink smoke at the consumers. If the consumer cuts way back, our creditors will decide to cut their losses.
Some are already doing just that. Foreign investors are dumping U.S. bonds.
In the latest treasury auction only 10% of the bonds offered were sold. They were offered at 4.19% Our true inflation is about 12%,,, depends what you buy. Our stock market is at about 4200,,, adjusted for inflation. Why would anyone invest in America? The other 90% were bought by the social security fund.
All the credit rating agencies are here in America. They rated our CDOs written against "liar loans" as AAA.
As the world decides that they can't trust "The Full Faith and Credit of the USA" , they will invest in better markets.
The US survives by selling 2.5 billion in GOV bonds every day. Each of us is personally indebted for the amount of $441,000.
For every 16 baby boomers that retire , one fresh new worker takes his place to support social security.
When foreign investors decide that our outstanding debt of $37 trillion is not likely to be repaid, that will certainly cause a psycological change.
The US is just barely servicing it's debt. If GOV should declare "force majuere" and default, it will get very rocky.

As I mentioned in the beginning, the banks are a bit shakey; The Bush Financial Bust of 2008: "It's All Downhill From Here, Folks"

Since the FOREX exchange moves about 3 trillion a day in currency [3 times the stock market], any dollar problems will develop faster than fast.
The US has absorbed 80% of the savings worldwide. They want it back.
Dan

Reagan is widely credited for "breaking the Soviet Union" by outspending them militarily. However, it seems that we were broke too, we just had better credit at the time. But, debts must be paid one way or another.

Mises predicted the fall of the Soviets about 30 years before it happened. It was a command economy and could not sustain itself. Funny,,,, the US economy is gradually being distorted to a command economy. It's commanded to support the military-industrial-banking powers.

I think that history will mention that bankers and warmongers bankrupted Russia,,,, and then shortly thereafter the Anglo/American powers.
Mises has some great writings. Much of it touches on philosophy.
It's well worth a read; Economic Freedom & Interventionism by Ludwig von Mises

Maybe the next go-round will elevate Mises to where he belongs and throw Keynes to the dust where he belongs.
The IMF has just announced that it has to sell it's gold. It's going to convert it to paper bonds. Why do I have the nagging feeling that it is not doing this willingly?:confused:

The current world GDP is $50 trillion. The current amount of derrivatives worldwide is <$750> trillion. Reportedly, about $450 trillion is looking for a safe haven. Like a snowman left out in the sun, it's quite worried.

Like all the previous pageants of history, this will play out at it's own pace. Gravity and greed,,, the 2 most reliable forces in the universe.
Dan

I still don't understand how an economy can make trillions of dollars appear from thin air without diluting the existing economy to the point where the balancing effect causes the dollar to be worthless...and still think it's a good idea.
If I have ten dollars, and tell you it's worth a hundred...then each of my dollars is now stretched ten-fold, but it's actual worth according to my bank is still ten bucks. Therefore each dollar is now really only worth ten cents. I've just destroyed my personal economy for no reason.