Economic, Apocolyspe Now!

[52ndStreet]

I have made posts, with regards to the Economic catastrophe we as a nation, now find ourselves in. One of my posts, "Economic Time bomb,Still ticking", explained the fact of
a global interconnected economic systems, that invest, and borrow from each other with
no real international regulation or oversite.

I have also stated that Tax cuts, in a global environment of inflation is not econmically wise.
The situation we have now have, will leed to an economic Apocalyspe,at some point in the not to distant future. hiterto, the entire
world, has not seen.This can be avoided.But drastic measures must be taken.

 

[editec]

What never ceases to amaze me is that we so often think of the accounting as more real that what it supposedly accounts for.

The earth's economy is broken you say?

Seems rather Odd to me that essantially the same people with the same skills all exist on the same earth with the same resources this year as last but now we're all broke.

So now somehow disasterously a significant portion of us must suffer because the accounting is all wrong?

Give that just a second to sink in.

Okay, has my point sunk in yet?

Now, is it my imagination or is something is definitly wrong with this picture, folks?

All we billions on earth and most of the nations which were recently the engines of productivity are now facing bankruptsy?

And we the people are at fault because why, again? Because we purchased homes that were ridiculously overpriced at outrageous blood sucking rates of interest?

Meanwhile, for those of you keeping score, the US government has given or pledged to secure the debts to our illustrious masters of the banking world in the last couple months ..get ready for this...

NINE TRILLION DOLLARS!



Something doesn't add up, gang.

Who can we possible owe nine trillion to?

And if we owe these folks this much money, how on earth did they get to lend to us to begin with?

Do they study very very hard in school and save that money in a tin cup on the night table or something?

I grow weary of this rich man's game, folks, I truly do.

While some of you skinflinted nitwits Austrian school dupes are worrying about earmarks amounting to $ .7 trillion to be divided between the states and the people of the USA -- all 300,000,000 of us! -- the banking community has gotten NINE trillions in unaccountable cash and the government is pledging to take on lord only really knows how much of their so called toxic debts.

Well something's toxic, that's for damned sure.

But I think it's this goofy system and the freaking three piece suited gangsters running it.

I ain't buying it anymore, folks.

This is totally on the other side of the looking glass accounting.

 

[dilloduck]

What never ceases to amaze me is that we so often think of the accounting as more real that what it supposedly accounts for.

The earth's economy is broken you say?

Seems rather Odd to me that essantially the same people with the same skills all exist on the same earth with the same resources this year as last but now we're all broke.

So now somehow disasterously a significant portion of us must suffer because the accounting is all wrong?

Give that just a second to sink in.

Okay, is it my imagination or is something is definitiey wrong with this picture, folks?

Everyone on earth and most of the nations which are the engines of productivity are bankrupt?

Something doesn't add up, gang.

excellent point--the fantasy is failing and reality is staring us right in the eye. Money is a myth--it's a symbol.Those who have created value out of thin air by manipulation are being exposed. Im curious as to what we will do after it sinks in but maybe we'll find out that you really can't eat credit.

 

[editec]

Dill...thank GOD, I was afraid nobody would have a clue what I was talking about.

ANY system which rewards so few people with so much to the point where the whole world stops rolling just because they say the WORLD owes them is just too theater of the absurd for my tastes.

Nine trillion dollars? How the hell can we owe that much to any small class of people who do NOTHING productive for a living?

 

[dilloduck]

Dill...thank GOD, I was afraid nobody would have a clue what I was talking about.

ANY system which rewards so few people with so much to the point where the whole world stops rolling just because they say the WORLD owes them is just too theater of the absurd for my tastes.

Nine trillion dollars? How the hell can we owe that much to any small class of people who do NOTHING productive for a living?

Virtual is not real. It's really that simple. Even in the world of non finance people don't seem have a clue. Most likely a defense mechanism, do ya think ?

 

[auditor0007]

We measure wealth by assets. Assets are only worth what someone else is willing to pay for them. When the value of those assests is driven too high, there has to be a correction, regardless of the cause. The cause of our current problems is that those assets became overpriced because we extended too much credit. By doing so, we forced this correction; it had to come about sooner or later.

Once the price of all of these assets stabilizes, the economy will start moving forward again. Our biggest fear should be that borrowing more to try to get it moving forward again will only keep the price of those assets at inflated values. Until those assets adjust to their actual worth, we are only buying time, and delaying the inevitable.

Because we borrowed so much to pay overinflated prices for these assets, we are now bankrupt. The problem with the actions that are being taken to help at the moment, is that someone still must take the loss. By pumping more money into the economy, all we are doing is keeping the price up, but not the actual value. This is one good way to create inflation, and that is probably where we are headed next; prices going up, but the value actually remaining constant.

A loaf of bread is a loaf of bread regardless of how much someone may charge for it. If inflation drives the price of that loaf of bread from $3 to $6, what is the value of that loaf of bread? Considering you can trade a gallon of milk for the loaf of bread at any given time, the value is still the same. It's just the money has lost its value.

I'm probably beginning to talk in circles here, but basically, things of real value will hold their value so long as people need those items. When the economy tightens, the fringe products are the ones that lose value because they are the things that people can do without.

As far as the current economy is concerned, we are in a big mess, obviously. We overborrowed without the ability to pay back what we borrowed, and we created a situation where everything became overvalued. This is not the end of the world. However, someone has to take the loss; it can't just be wiped clean, and we can't cover it up by borrowing more, which is what we are trying to do. In the end, someone will have to take the loss, and that will be all of us in one form or another.

We'll get through all of this without the world coming to an end as we know it. However, growth will be extremely slow for some time to come.

 

[dilloduck]

We'll get through all of this without the world coming to an end as we know it.

The world as I knew it is already gone.

 

[Paulie]

Auditor you're not talking in circles, you're making more sense than most here could ever hope to.

 

[editec]

We measure wealth by assets. Assets are only worth what someone else is willing to pay for them. When the value of those assests is driven too high, there has to be a correction, regardless of the cause. The cause of our current problems is that those assets became overpriced because we extended too much credit. By doing so, we forced this correction; it had to come about sooner or later.

Correction for WHOM?

Once the price of all of these assets stabilizes, the economy will start moving forward again. Our biggest fear should be that borrowing more to try to get it moving forward again will only keep the price of those assets at inflated values. Until those assets adjust to their actual worth, we are only buying time, and delaying the inevitable.

Borrowing from WHOM?

Because we borrowed so much to pay overinflated prices for these assets, we are now bankrupt.

We borrowed from banks which did not HAVE that money to begin with!

Aren't you getting it, yet? I thought you UNDERSTOOD that the FEDERAL RESERVEW SYSTEM was a sham.

The problem with the actions that are being taken to help at the moment, is that someone still must take the loss. By pumping more money into the economy, all we are doing is keeping the price up, but not the actual value. This is one good way to create inflation, and that is probably where we are headed next; prices going up, but the value actually remaining constant.

Reamining constant in comparison to FIAT MONEY?

A loaf of bread is a loaf of bread regardless of how much someone may charge for it. If inflation drives the price of that loaf of bread from $3 to $6, what is the value of that loaf of bread? Considering you can trade a gallon of milk for the loaf of bread at any given time, the value is still the same. It's just the money has lost its value.

totally. Now please explain to me how, given that we still have all the same stuff, the same recouses, the same bread, the same bakers, the same cows, we all collectively owe some shadowy nobody knows who trillions of dollars.

Come on explain it to me. I'm dumb. I'm real dumb. The value of the stuff is still there, but suddenly nobody has enough money to buy it?


How'd that happen again?

I'm probably beginning to talk in circles here,

Yeah, you are.

But I do NOT blame you for that. You, me, all of us have been sold a fairy tale about money V value.

And the fairly tale is that banks which have no money, can lend us money (at outrageous interest) and we are BAD for needing it to do something PRODUCTIVE with it?!

But the banks are the good guys because why? Because they were granted the right to lend us money they didn't have in the first place?

Hey I cannot blame you for being confused, or if you think you're not confused, for not being able to explain to somebody dumb like me how this all works.

but basically, things of real value will hold their value so long as people need those items.

So given that we're in a deflationary period, then based the above, we are in this inflationary period because why?

We don't NEED homes anymore? We don't need bread anymore? We fotgot hhow to make bread and homes? What?

When the economy tightens, the fringe products are the ones that lose value because they are the things that people can do without.

Okay...so which fringe products would those be?

Gold? diamonds? Nobody really them except in very minor industrial circumstances.

Yet they appear to continue to retain value while we the people are going broke and most of the stuff we need is going down in value, too?!

As far as the current economy is concerned, we are in a big mess, obviously.

Seems fairly messy, yes.

We overborrowed without the ability to pay back what we borrowed, and we created a situation where everything became overvalued.

So...who has got all the money that we spend when we borrowed too much?

This is not the end of the world.

Okay, not that I thought it was, but I agree. The world will continue.

However, someone has to take the loss; it can't just be wiped clean, and we can't cover it up by borrowing more, which is what we are trying to do. In the end, someone will have to take the loss, and that will be all of us in one form or another.

What loss? Didn't we borrow and then BUY something? Where did the money go. Is it lost?

We'll get through all of this without the world coming to an end as we know it. However, growth will be extremely slow for some time to come.

If you say so.

But you still haven't explained how the massively productive society of the world has, in one year gone from being massively productive to being broke.

 

[auditor0007]

We measure wealth by assets. Assets are only worth what someone else is willing to pay for them. When the value of those assests is driven too high, there has to be a correction, regardless of the cause. The cause of our current problems is that those assets became overpriced because we extended too much credit. By doing so, we forced this correction; it had to come about sooner or later.

Correction for WHOM?

Once the price of all of these assets stabilizes, the economy will start moving forward again. Our biggest fear should be that borrowing more to try to get it moving forward again will only keep the price of those assets at inflated values. Until those assets adjust to their actual worth, we are only buying time, and delaying the inevitable.

Borrowing from WHOM?



We borrowed from banks which did not HAVE that money to begin with!

Aren't you getting it, yet? I thought you UNDERSTOOD that the FEDERAL RESERVEW SYSTEM was a sham.





Reamining constant in comparison to FIAT MONEY?



totally. Now please explain to me how, given that we still have all the same stuff, the same recouses, the same bread, the same bakers, the same cows, we all collectively owe some shadowy nobody knows who trillions of dollars.

Come on explain it to me. I'm dumb. I'm real dumb. The value of the stuff is still there, but suddenly nobody has enough money to buy it?


How'd that happen again?



Yeah, you are.

But I do NOT blame you for that. You, me, all of us have been sold a fairy tale about money V value.

And the fairly tale is that banks which have no money, can lend us money (at outrageous interest) and we are BAD for needing it to do something PRODUCTIVE with it?!

But the banks are the good guys because why? Because they were granted the right to lend us money they didn't have in the first place?

Hey I cannot blame you for being confused, or if you think you're not confused, for not being able to explain to somebody dumb like me how this all works.



So given that we're in a deflationary period, then based the above, we are in this inflationary period because why?

We don't NEED homes anymore? We don't need bread anymore? We fotgot hhow to make bread and homes? What?



Okay...so which fringe products would those be?

Gold? diamonds? Nobody really them except in very minor industrial circumstances.

Yet they appear to continue to retain value while we the people are going broke and most of the stuff we need is going down in value, too?!



Seems fairly messy, yes.



So...who has got all the money that we spend when we borrowed too much?



Okay, not that I thought it was, but I agree. The world will continue.

However, someone has to take the loss; it can't just be wiped clean, and we can't cover it up by borrowing more, which is what we are trying to do. In the end, someone will have to take the loss, and that will be all of us in one form or another.

What loss? Didn't we borrow and then BUY something? Where did the money go. Is it lost?

We'll get through all of this without the world coming to an end as we know it. However, growth will be extremely slow for some time to come.

If you say so.

But you still haven't explained how the massively productive society of the world has, in one year gone from being massively productive to being broke.

Let's just try to keep this simple. Any goods that are sellable have a value based on what someone else will pay for that item. When we borrowed too much money (whether it was real or not does not matter), we inflated the value of all goods, specifically housing. When all of a sudden, there weren't enough buyers, the value of those goods, specifically housing, plunged. In the process, as home values were inflated, people borrowed on those inflated values to purchase other goods. Now that the value of those homes has plunged, nobody can borrow against them, and everything came to a halt.

The main reason we are broke is because we overproduced, housing, cars, you name it, we produced too much without having enough buyers to purchase everything we produced. We weren't wealthy over the last decade like everyone thought. It was just a mirage. Now we have all this inventory and not enough people to buy it. Since there aren't enough people to buy all these goods, their value has fallen dramatically. Making matters worse, until all the excess inventory is depleted, there is no reason to produce more of these products, meaning people will now go without work. That means less people will have money to purchase even the basics, making things worse.

Your premise is that we had all this wealth last year and now it is gone. My premise is that the wealth wasn't real to begin with. We were broke after the dot.com bubble burst. We found a way to fuel the economy by overproducing, but when you do that, eventually you run into a brick wall, which is where we are now.

As much as I disagree with those who are more liberal, there is one truth. When you don't manufacture goods, eventually it's going to hurt everyone. To have a strong economy, you have to produce a significant portion of your own goods. We stopped producing but kept purchasing from other countries, sending much of our wealth out of this country. Does that mean we should have pursued more protectionist measures? I don't know. I tend to think that we allowed wages for those manufacturing jobs to spiral out of control, making us less competitive. At the same time, consumers chose to pay less for those goods, so they were willing to purchase anything and everything produced outside of the US. So the fault lies with all of us.

 

[52ndStreet]

What never ceases to amaze me is that we so often think of the accounting as more real that what it supposedly accounts for.

The earth's economy is broken you say?

Seems rather Odd to me that essantially the same people with the same skills all exist on the same earth with the same resources this year as last but now we're all broke.

So now somehow disasterously a significant portion of us must suffer because the accounting is all wrong?

Give that just a second to sink in.

Okay, has my point sunk in yet?

Now, is it my imagination or is something is definitly wrong with this picture, folks?

All we billions on earth and most of the nations which were recently the engines of productivity are now facing bankruptsy?

And we the people are at fault because why, again? Because we purchased homes that were ridiculously overpriced at outrageous blood sucking rates of interest?

Meanwhile, for those of you keeping score, the US government has given or pledged to secure the debts to our illustrious masters of the banking world in the last couple months ..get ready for this...

NINE TRILLION DOLLARS!



Something doesn't add up, gang.

Who can we possible owe nine trillion to?

And if we owe these folks this much money, how on earth did they get to lend to us to begin with?

Do they study very very hard in school and save that money in a tin cup on the night table or something?

I grow weary of this rich man's game, folks, I truly do.

While some of you skinflinted nitwits Austrian school dupes are worrying about earmarks amounting to $ .7 trillion to be divided between the states and the people of the USA -- all 300,000,000 of us! -- the banking community has gotten NINE trillions in unaccountable cash and the government is pledging to take on lord only really knows how much of their so called toxic debts.

Well something's toxic, that's for damned sure.

But I think it's this goofy system and the freaking three piece suited gangsters running it.

I ain't buying it anymore, folks.

This is totally on the other side of the looking glass accounting.

It is about 9 or 15 trillion, when you factor in for adjusted inflation.
I agree with you, this money has got to be in some ones account some where.

 

[Toro]

I'm buying stocks.

There is too much shrill hysteria and panic.

Maybe the market falls another 20% I don't know, but the financial system is repairing itself and people will look back 3 years from now and wonder why they were so foolish selling at 12-year lows.

Buy low, sell high. The public does the opposite.

 

[Paulie]

Toro I think the smart investors are just looking for a good sense of a bottom. There was a lower bottom only 13 years ago, and times are definitely worse now than they were then.

While I definitely think some great gains can be made between now and 3 years from now, I'd hate to jump in now and miss a shot at better lows.

The uncertainty in the banking sector, and the media's constant attitude changing everyday (which is starting to remind me of a fucking WOMAN) is certainly not helping matters.

One day you're left thinking things are looking up, the next day the anchors and pundits come on and pump up the fear. The media is fucking bi-polar right now.

There's too much manipulation right now, whether it be emotional/psychological perpetrated by the media, or physical by some big players/hedge funds/banks that seem to be holding the market down with shorts.

Am I wrong?

 

[Care4all]

We measure wealth by assets. Assets are only worth what someone else is willing to pay for them. When the value of those assests is driven too high, there has to be a correction, regardless of the cause. The cause of our current problems is that those assets became overpriced because we extended too much credit. By doing so, we forced this correction; it had to come about sooner or later.

Correction for WHOM?



Borrowing from WHOM?



We borrowed from banks which did not HAVE that money to begin with!

Aren't you getting it, yet? I thought you UNDERSTOOD that the FEDERAL RESERVEW SYSTEM was a sham.





Reamining constant in comparison to FIAT MONEY?



totally. Now please explain to me how, given that we still have all the same stuff, the same recouses, the same bread, the same bakers, the same cows, we all collectively owe some shadowy nobody knows who trillions of dollars.

Come on explain it to me. I'm dumb. I'm real dumb. The value of the stuff is still there, but suddenly nobody has enough money to buy it?


How'd that happen again?



Yeah, you are.

But I do NOT blame you for that. You, me, all of us have been sold a fairy tale about money V value.

And the fairly tale is that banks which have no money, can lend us money (at outrageous interest) and we are BAD for needing it to do something PRODUCTIVE with it?!

But the banks are the good guys because why? Because they were granted the right to lend us money they didn't have in the first place?

Hey I cannot blame you for being confused, or if you think you're not confused, for not being able to explain to somebody dumb like me how this all works.



So given that we're in a deflationary period, then based the above, we are in this inflationary period because why?

We don't NEED homes anymore? We don't need bread anymore? We fotgot hhow to make bread and homes? What?



Okay...so which fringe products would those be?

Gold? diamonds? Nobody really them except in very minor industrial circumstances.

Yet they appear to continue to retain value while we the people are going broke and most of the stuff we need is going down in value, too?!



Seems fairly messy, yes.



So...who has got all the money that we spend when we borrowed too much?



Okay, not that I thought it was, but I agree. The world will continue.



What loss? Didn't we borrow and then BUY something? Where did the money go. Is it lost?

We'll get through all of this without the world coming to an end as we know it. However, growth will be extremely slow for some time to come.

If you say so.

But you still haven't explained how the massively productive society of the world has, in one year gone from being massively productive to being broke.

Let's just try to keep this simple. Any goods that are sellable have a value based on what someone else will pay for that item. When we borrowed too much money (whether it was real or not does not matter), we inflated the value of all goods, specifically housing. When all of a sudden, there weren't enough buyers, the value of those goods, specifically housing, plunged. In the process, as home values were inflated, people borrowed on those inflated values to purchase other goods. Now that the value of those homes has plunged, nobody can borrow against them, and everything came to a halt.

The main reason we are broke is because we overproduced, housing, cars, you name it, we produced too much without having enough buyers to purchase everything we produced. We weren't wealthy over the last decade like everyone thought. It was just a mirage. Now we have all this inventory and not enough people to buy it. Since there aren't enough people to buy all these goods, their value has fallen dramatically. Making matters worse, until all the excess inventory is depleted, there is no reason to produce more of these products, meaning people will now go without work. That means less people will have money to purchase even the basics, making things worse.

Your premise is that we had all this wealth last year and now it is gone. My premise is that the wealth wasn't real to begin with. We were broke after the dot.com bubble burst. We found a way to fuel the economy by overproducing, but when you do that, eventually you run into a brick wall, which is where we are now.

As much as I disagree with those who are more liberal, there is one truth. When you don't manufacture goods, eventually it's going to hurt everyone. To have a strong economy, you have to produce a significant portion of your own goods. We stopped producing but kept purchasing from other countries, sending much of our wealth out of this country. Does that mean we should have pursued more protectionist measures? I don't know. I tend to think that we allowed wages for those manufacturing jobs to spiral out of control, making us less competitive. At the same time, consumers chose to pay less for those goods, so they were willing to purchase anything and everything produced outside of the US. So the fault lies with all of us.

so basically, supply side economics failed???

the economy is best driven through natural demand,

not through over supplying the market place coupled with a good advertising/marketing plan???