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Old 12-17-2012, 08:28 AM
 
Location: Delray Beach
1,135 posts, read 1,531,512 times
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War Beagle.. I see no stomach - or backbone - in either political party, to do what needs to be done to prevent a currency collapse because the payoff for political promises is re-election, and power is the ultimate aphrodisiac for politicians.
The US is not Greece because we can print ad libitum. With massive unfunded liabilities and no will to control spending, raise taxes, or curb borrowing, print we will.
The relevant question is not so much what will happen, but when.
To that end, I established a strong position in physical gold in 2004.
And I have a good stock of popcorn for the show.
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Old 12-17-2012, 09:24 AM
 
621 posts, read 591,950 times
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Medium to long term economic outlook.


Baring everyone waking up and deciding to take responsibility for our problems and doing something about them, In the long run we will be the second largest economy in the world and with that no longer the world's reserve currency. When that happens we will have to have our debts valued in other countries currency not our own. Baring taking responsibility for our economic mess we will then face hyper inflation. Or more correctly hyper stagflation. Downwards pressure on wages and rapid inflation with high unemployment.


In the medium term we are having a new bubble. Housing will bubble slightly it may reach its old peek but something else will bubble up instead.


Quote:
Originally Posted by Hamish Forbes View Post
Yes, and also former Vice President Dick Cheney, a mighty Republican and righteous conservative, who opined that "deficits don't matter; Ronald Reagan showed us that" or something to the same effect.
http://www.bearishnews.com/wp-conten...l-debt-gdp.jpg Well I care to differ. Just look at the shape of this curve. We are facing a day of reconing. When? Well my Cristal ball is out for recalibration.
Quote:
Originally Posted by Hamish Forbes View Post

Regarding the course of the economy -- nobody knows, and anybody who makes a prediction now and gets it right will simply have been lucky.
I care to differ. You can look at what is happening and why and make reasonable prediction about the consequences.
Quote:
Originally Posted by Hamish Forbes View Post
The best an individual can do is to consider the various possibilities -- for example: inflation, deflation, stagflation, or muddling through -- and have some idea of how to deal with each, at least to the extent that his actions don't preclude him from dealing rationally with any of the plausible outcomes. For example, if you think that inflation is a possibility, then don't buy and hold long-term bonds.
What is happening is this. The Fed is actively engaging in bubble blowing. Also in stock price manipulation. Short term the Fed is defining the coarse things are going. Their tack is not likely to change. They are supporting the financial sectors stock prices. This gives the impression of strength where there is actual weakness. They are not likely to change this any time soon. The Fed is committed to getting inflation. QEIII is the irreversible printing of money. The Fed can't resell the bonds they are buying to pull the cash out of circulation. This is hyper-inflationary. The labor cost differential is going to continue to drive outsourcing. This will continue the contraction in the base economy.


Top Marginal Income Tax Rate


http://www.bearishnews.com/wp-conten...l-debt-gdp.jpg


If you want to visualize the effects of reducing the top tax rate this is a good way to look at things. Cutting the top tax rate blows debt bubbles. So I say key the top tax rate to the total debt % GDP. With that down around 125% of GDP then you can have a very low top tax rate. If the total debt as % GDP gets above about 150% of GDP then we are starting to have a debt bubble and we need to stop this so a high top tax rate is in order.
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Old 12-17-2012, 10:47 AM
 
2,988 posts, read 3,758,103 times
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Quote:
Originally Posted by pie_row View Post
I care to differ. You can look at what is happening and why and make reasonable prediction about the consequences.
It's really too bad that most of the people who can tell the future course of our economy are busy driving cabs, cutting hair, and posting on the internet.
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Old 12-17-2012, 11:28 AM
 
Location: Delray Beach
1,135 posts, read 1,531,512 times
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Hamish..that is not a nice post. I never drove a cab or cut hair (my mom did), but I do post because I have experienced much prior to my early retirement in 2006. I was a career computer programmer/systems analyst for one of the largest banks in the US for 29 years. I saw the RE bubble. Many others did also. I did NOT buy into it but I waited and got a screaming deal 4 years later. I exitted stocks in early 2007 as I saw clouds on the horizon and my risk tolerance in retirement is much different than when I was making a good salary. That saved me hundreds of thousands of dollars. Others made billions.
One may not be able to predict the details, but some trends are hard to ignore unless you try real hard or believe that nothing has changed and America is on a solid road to economic recovery. Because I feel that money printing in a highly indebted economic environment is ultimately a negative feedback loop and that the Fed has no exit strategy except "hope" (with Plan B being "panic") I will act, as I have always done, with the prudence that my analysis dictates.
I expect pie_row and many others will be doing the same.
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Old 12-17-2012, 11:40 AM
 
2,988 posts, read 3,758,103 times
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Shuussh! -- I am busy posting just now . . .
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Old 12-17-2012, 12:09 PM
 
2,988 posts, read 3,758,103 times
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Here's another way to look at the situation: Paul Krugman disagrees with you about exiting the current Fed policy. He is a professor of economics at Princeton, and winner of the Nobel Prize in economics. Is Krugman right? I don't know. Other accomplished, authoritative people have yet other ideas. Time will tell -- finance is very complicated now, as we all should understand from the recent past.

But history does not teach any lessons regarding the future. There is too much uncertainty in the state machine. Rather, we can use various historical anecdotes to understand what has happened, after it has happened, tracing backward into the state machine.

In an earlier life I worked professionally as a futurist for a large division of a "Fortune-10" corporation for about five years, and published in the professional literature. One lesson that I came away with is that humans cannot tell the future. The best we can do is identify what seem to be the several most likely outcomes, and try to plan accordingly for each. Deciding that one particular outcome is the future is called suicide. Regarding past successes, my suggestion is "don't confuse being lucky with being smart."
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Old 12-17-2012, 12:29 PM
 
8,277 posts, read 6,674,372 times
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Quote:
Originally Posted by Hamish Forbes View Post
In an earlier life I worked professionally as a futurist for a large division of a "Fortune-10" corporation for about five years, and published in the professional literature. One lesson that I came away with is that humans cannot tell the future. The best we can do is identify what seem to be the several most likely outcomes, and try to plan accordingly for each. Deciding that one particular outcome is the future is called suicide. Regarding past successes, my suggestion is "don't confuse being lucky with being smart."
Given that economics is referred to as "the dismal science" I agree that we can only plan for multiple likely outcomes. But while we may not know exactly what events transpire, but given past experiences we should be able to tell when we are going down a problematic road.

Anyway, I obviously never intended for people to say exactly what would happen. I just thought it would be fun to read peoples' various opinions about the US's medium to long term economic prospects.
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Old 12-17-2012, 12:42 PM
 
Location: Londonderry, NH
41,478 posts, read 53,792,588 times
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Default The economic future

Extrapolating from current trends the workers, including the working middle class, will be squeezed out of the economy by the owners and financiers until the rich have all the wealth and the rest of us rent or starve in the dark. What will happen after the financial bubble bursts will be more like the panic of 1897 than the great depression as by then all the social and econo0mic safety nets will have been eliminated by the greed classes.
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Old 12-17-2012, 06:50 PM
 
982 posts, read 1,457,108 times
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Quote:
Originally Posted by pie_row View Post
Medium to long term economic outlook.


Baring everyone waking up and deciding to take responsibility for our problems and doing something about them, In the long run we will be the second largest economy in the world and with that no longer the world's reserve currency. When that happens we will have to have our debts valued in other countries currency not our own. Baring taking responsibility for our economic mess we will then face hyper inflation. Or more correctly hyper stagflation. Downwards pressure on wages and rapid inflation with high unemployment.

What nation out there is going to make us use their currency? What other countries out there are not engaged in currency debasement right now? The US is the world's largest military power many times over. Who the heck is going to force the USA to do anything?
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Old 12-18-2012, 05:20 AM
 
Location: World
4,079 posts, read 3,884,243 times
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Quote:
Originally Posted by GregW View Post
Extrapolating from current trends the workers, including the working middle class, will be squeezed out of the economy by the owners and financiers until the rich have all the wealth and the rest of us rent or starve in the dark. What will happen after the financial bubble bursts will be more like the panic of 1897 than the great depression as by then all the social and econo0mic safety nets will have been eliminated by the greed classes.
Thats a very dark future you are predicting for the economy.
America has so many Nobel prize winners in Economics-so called best brains in the financial world.
Is there an attempt by the RULING CLASS to pull us out of this Financial Crisis or it is more about its NOT my job.
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