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Just listend to a show where one of the people wrote a book on the depression and has researched it out the wazzoo.
The fed chairman, Ben Bernanke is a well known depression scholar. He has written a number of articles and books on the topic. I wonder at times if assigning him chairman was intentionally for this reason.
The "credit crunch" is not effecting everyone in the country. It hasn't effected me one bit, perhaps in the future it will. But I still have access to over $80k in credit via credit cards. The "credit crunch" is primarily a high finance event and is not effecting the every day person. Not being able to get a subprime mortgage, auto loan or whatever else is not a "credit crunch" its sound lending.
So what? The majority of people are not going to be involved in manufacturing due to technological progress. Only around 3% are involved in farming, should we destroy the machines so farming takes up 10, 20, or perhaps 30% again?
We do need to improve the trade deficit. But part of the problem there is beyond our control, other countries need to stop manipulating their currencies.
Why would the dollar depreciate against the world currencies as a reuslt of "the fed printing money out of thin air to bail out all its banker friends" when other countries are doing the same? Perhaps you didn't catch the numerous bailouts coming out of Europe over the last week? Anyhow, look at the history of the collapse of Japan's real estate market. They dropped rates to 0%, injected tons of money into the system and yet.....not much inflation at all. Injecting $700 billion into a financial system that is bleeding billions a day doesn't cause inflation.
when i said the credit crunch is affecting everyone, i meant anyone that has investments or wants to invest in something, or anyone that depends on or has a dependent on someone with investments or who wants to invest.... this means EVERYONE. has your home declined in value? has your 401k declined in value? are you a taxpayer that will be a part of the $700 billion dollar bailout even if it will truly be in the trillions? are you an American? if you answered yes to 1 or more of these questions, you are affected.
i'm not insisting that we halt or destroy portions of our technological progress. i'm saying that a huge chunk of our economy is based off of making money off of debt (that is, mortgage back securities, banks loaning 9x + the amount they have in bank deposits, commission based off of inflated property values that have less then 20% down, multi-level marketing schemes, casinos, etc.). I can go on, but we have a twisted service economy; too many nonexportable service jobs.
other countries with fiat currencies are NOT printing money at the rate at which bernanke and company are. in fact, the european union stated yesterday that it will NOT tolerate the same kind of massive $700 billion dollar bailout the US government approved of on friday. $150 billion more in pork barrel spending was added to that pathetic bill, so technically, it's $850 billion. also, the US has spent around a trillion dollars on the war in iraq alone, and after interest, that number will easily top $3 trillion for taxpayers to pay back. and you cannot compare our system to japans system in the 90s because japan actually had a HUGE savings. we, as a nation, are BROKE! and now, nations around the world will make a run on the US dollar and we will have a hyperinflated currency because we will have too damn many of them, not including the ones the fed will continue to print.
Exactly. The doomers where wrong about $200 a barrel gas, and they'll be wrong about the Dow hitting 7,000 and the US entering a depression. A recession? Sure, they happen, but we came out of the ones in the early 90s and the 2001-2002 recession and lived, and so we will no doubt come out of this and be fine.
I do wonder what, in three years, when all of this is forgotten, what the doomers will be "dooming" about...I bet that 2012 end of the world crap, no doubt. Some people just have to doom about something.
The fed chairman, Ben Bernanke is a well known depression scholar. He has written a number of articles and books on the topic. I wonder at times if assigning him chairman was intentionally for this reason.
but then again, this is nothing new...it happened with Junk Bonds under Michael Milken, South American Bonds around the advent of the IMF, Railroad bonds during the industrial revolution and war bonds following the war...by the way...which book was that person referring to?
when i said the credit crunch is affecting everyone, i meant anyone that has investments or wants to invest in something, or anyone that depends on or has a dependent on someone with investments or who wants to invest.... this means EVERYONE. has your home declined in value? has your 401k declined in value? are you a taxpayer that will be a part of the $700 billion dollar bailout even if it will truly be in the trillions? are you an American? if you answered yes to 1 or more of these questions, you are affected.
i'm not insisting that we halt or destroy portions of our technological progress. i'm saying that a huge chunk of our economy is based off of making money off of debt (that is, mortgage back securities, banks loaning 9x + the amount they have in bank deposits, commission based off of inflated property values that have less then 20% down, multi-level marketing schemes, casinos, etc.). I can go on, but we have a twisted service economy; too many nonexportable service jobs.
other countries with fiat currencies are NOT printing money at the rate at which bernanke and company are. in fact, the european union stated yesterday that it will NOT tolerate the same kind of massive $700 billion dollar bailout the US government approved of on friday. $150 billion more in pork barrel spending was added to that pathetic bill, so technically, it's $850 billion. also, the US has spent around a trillion dollars on the war in iraq alone, and after interest, that number will easily top $3 trillion for taxpayers to pay back. and you cannot compare our system to japans system in the 90s because japan actually had a HUGE savings. we, as a nation, are BROKE! and now, nations around the world will make a run on the US dollar and we will have a hyperinflated currency because we will have too damn many of them, not including the ones the fed will continue to print.
The "credit crunch" is not effecting everyone in the country. It hasn't effected me one bit, .
It hasn't effected me either.
It hasn't effected yours because yours is so good.
It hasn't effected mine because mine is so bad.
I guess it is all those folks in the middle who are hurting.
other countries with fiat currencies are NOT printing money at the rate at which bernanke and company are. in fact, the european union stated yesterday that it will NOT tolerate the same kind of massive $700 billion dollar bailout the US government approved of on friday.
The Europeans aren't interested in the same sort of solution, they will have no problem injecting the same amount of money into their system if they need to. Iceland just had a bailout that out numbers ours in terms of population.
Its a bit amusing that you think a highly socialism union of countries is going to be less inclined to bailouts.
Quote:
Originally Posted by SouthCali4LifeSD
and you cannot compare our system to japans system in the 90s because japan actually had a HUGE savings. we, as a nation, are BROKE! and now, nations around the world will make a run on the US dollar and we will have a hyperinflated currency because we will have too damn many of them, not including the ones the fed will continue to print.
Actually, the huge savings would make the situation more inflationary. It means the real money supply was greater. You want to claim that the bailouts are going to cause hyperinflation, yet there is another country that went throw the same situation in recent history. There was no hyper-inflation, there was deflation. How does having a higher savings rate protect you from inflation? It doesn't.
Credit is being destroyed faster than the FED can throw money into the system. That is deflationary.
Additionally the "700 billion bailout" isn't a "700 billion bailout" at all. It merely allows the treasury to purchase up to 700 billion in mortgage related securities. In some cases the treasury may make money, in others it may lose money. At the end of the day the bailout could break even or perhaps some could be lost. But it is in no sense guarantees a loss of 700 billion.
Quote:
Originally Posted by victorianpunk
Exactly. The doomers where wrong about $200 a barrel gas, and they'll be wrong about the Dow hitting 7,000 and the US entering a depression. A recession? Sure, they happen, but we came out of the ones in the early 90s and the 2001-2002 recession and lived, and so we will no doubt come out of this and be fine.
This reasoning makes little sense. Firstly, not everyone was predicting $200 a barrel gas, only the the hyper-inflation types. I'm pretty doom and gloom and I predicted oil would go down... But most importantly, because some group of people were wrong about one thing doesn't mean they are wrong about other. After last months events a depression is no longer a remote possibility, its a real danger and the people steering the ship know it. But nothing in economics is guaranteed and at this point a depression is still less likely than a moderate~severe recession. Anyhow, the fact is, that we aren't going to come out of this "fine" even if a depression is avoided. The landscape is going to be bunch different in the next few years, the roaring 2000's are over.
yes, the government is going to make money off of these bad loans! ya betcha!
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