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That is Cloward-piven in action -- expand government and make impossible promises until the collapse occurs and they nationalize EVERYTHING to make essential payments. It is the recipe for collapsing a market economy into a socialist one.
As the downturn in developed-world economies once again accelerates to the downside, volatility will expand just as it did in 2007 and 2008; volatility is opportunity to the prepared investor. Markets will zoom up and down as the NEW NORMAL unfolds, thus creating HUGE opportunity’s for those who embrace absolute return investments with the potential to thrive in these markets. Buy and hold is DEAD, absolute return investing strategies need to be a part of any diversified portfolio as the global financial crisis continues to unfold. This is what I do. The competitive devaluation raceway is UNDERWAY to substitute for the policies of growth.
Ever since we went off the gold standard, government spending has been out of control and the money supply has continually expanded. Eventually we'll reach an inflection point where inflation will simply outstrip economic growth potential and wages, driving us all into the poor house.
This debt based monetary system is performing as it was designed since its inception. I try to explain how this debt based manure works but most people I know refuse to try to understand cause they think since George Bush is no longer president that everything will be well and good times will return.
Jim had been talking about this since 2006 and it seems we are at # 11 or step 12
Jim’s Formula:
September 1, 2006
1. First interest rates rise affecting the drivers of the US economy, housing, but before that auto production goes from bull to a bear markets.
2. This impacts many other industries and the jobs report. An economy is either rising at a rising rate or business activity is falling at an increasing rate. That is economic law 101. There is no such thing in any market as a Plateau of Prosperity or Cinderella – Goldilocks situations.
3. We have witnessed the Dow rise on economic news indicating deceleration of activity. This continues until major corporations announced poor earnings, making the Dow fall faster than it rose, moving it deeply into the red.
4. The formula economically is inherent in #2 which is lower economic activity equals lower profits.
5. Lower profits leads to lower Federal Tax revenues.
6. Lower Federal tax revenues in the face of increased Federal spending causes geometric, not arithmetic, rises in the US Federal Budget deficit. This is also true for cities & States as it is for the Federal government.
7. The increased US Federal Budget deficit in the face of a US Trade Deficit increases the US Current Account Deficit.
8. The US Current Account Balance is the speedometer of the money exiting the US into world markets (deficit).
9. It is this deficit that must be met by incoming investment in the US in any form. It could be anything from businesses, equities to Treasury instruments. We are already seeing a fall off in the situation of developing nations carrying the spending habits of industrial nations; a contradiction in terms.
10. If the investment by non US entities fails to meet the exiting dollars by all means, then the US must turn within to finance the shortfall.
11. Assuming the US turns inside to finance all maturities, interest rates will rise with the long term rates moving fastest regardless of prevailing business conditions.
12. This will further contract business activity and start a downward spiral of unparalleled dimension because the size of US debt already issued is of unparalleled dimension.
Therefore as you get to #12 you are automatically right back at #1. This is an economic downward spiral.
I heard all this “slow business” as negative to gold talk in the 70s. It was totally wrong then. It will be exactly the same now.
For those just joining the deficit debate, the first thing to tease out is the difference between short-term deficits and long-term structural deficits. The former are necessary. The latter are pernicious. This year's projected $1.7 trillion short-term deficit has many parts, but the most important are (1) collapsing tax revenue from the recession and (2) growing public spending to reverse the death spiral of private sector thrift. In the next few years, some tax revenue will return and public spending will draw back. But it won't be enough.
That is Cloward-piven in action -- expand government and make impossible promises until the collapse occurs and they nationalize EVERYTHING to make essential payments. It is the recipe for collapsing a market economy into a socialist one.
As the downturn in developed-world economies once again accelerates to the downside, volatility will expand just as it did in 2007 and 2008; volatility is opportunity to the prepared investor. Markets will zoom up and down as the NEW NORMAL unfolds, thus creating HUGE opportunity’s for those who embrace absolute return investments with the potential to thrive in these markets. Buy and hold is DEAD, absolute return investing strategies need to be a part of any diversified portfolio as the global financial crisis continues to unfold. This is what I do. The competitive devaluation raceway is UNDERWAY to substitute for the policies of growth.
Whenever money is CREATED or TRASFERRED without a corresponding creation of wealth, the money supply is diluted. Money represents wealth, but when it is created or transferred san's wealth, it is reduced overall.
Very good points in this thread, but good luck getting most people to understand them. They will absolutely 100% continue to act and vote against their best interest because they don't/can't/won't make the effort to learn about how they're getting screwed.
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