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Hyper inflation or a depression? Clearly, hyper inflation is the lesser of the two evils. Could you imagine paying $15 for one can of Spam? Ouch! But it's better than not having any Spam.
Hyperinflation is eminent. At the very least- large scale and unavoidable. This happens when you print and infuse $825 Billion from thin air. Now they're talking in the trillions. Multiply that by 10, and that's the effect on the economy via the cash flow principle. The economy is run by supply and demand. Increase the supply of money, and the value of the $ goes down. If you double it, theoretically, you'll eventually get 50 cents on the dollar.
This is how the Federal Gov't controls inflation, by changing interest rates. The higher the interest rates, the more money is taken out of circulation and deposited in banks. The Fed has lowered interest rates to rock bottom to encourage $ circulation. They have no other option now, but to print more money for bailouts. Both of these actions are causing the dollar to plummet. Of course, there's a lag effect, so you won't feel it right away. But when it happens, you'll begin to see price spikes, just like the price of gas over the last year.
The time to prepare is now. By the time reality hits, it's too late.
Last edited by 7th generation; 01-27-2009 at 02:36 PM..
Reason: please do not post copy right material
Thing is, most of these economists that are projecting a short ride with a bright future are the same ones that gave a positive economic forecast not less than a year ago. I recall reading in the paper last year that the State Economist predicted a speed bump, but otherwise a strong economy. I mean, if they failed to predict what's happening today, even a few months ago, what makes anyone think they even have a clue what's going to happen tomorrow? Their credibility is shot, as far as I'm concerned. I'd rather listen to a weather man.
I listen to guys like Peter Schiff and world reknown trends forecaster Gerald Celente who have reputations and great track records of predicting future trends. Both have been on all the major news networks, on television and radio for years saying this was going to happen. These are documented on Youtube. I liked what Schiff quoted about this bailout thing- "If these guys in Congress never saw it coming, then what makes you think they have the answers?"
I've been reading Schiff among others and he rightly predicted this recession but has been wrong about other issues, including global monetary policy. I'm in agreement with you that this is going to be a protracted scenario, but I don't see complete collapse as inevitable. I don't agree with economists who see this as a "short ride" either. This economy is putting REAL hurt on many, many people.
There's no glee in being right about the current economic climate, and I started worrying about a global depression in August of 05 when real estate started to flounder. I hope you're wrong Lopaka, but you might not be far off the mark.
I've been reading Schiff among others and he rightly predicted this recession but has been wrong about other issues, including global monetary policy. I'm in agreement with you that this is going to be a protracted scenario, but I don't see complete collapse as inevitable. I don't agree with economists who see this as a "short ride" either. This economy is putting REAL hurt on many, many people.
There's no glee in being right about the current economic climate, and I started worrying about a global depression in August of 05 when real estate started to flounder. I hope you're wrong Lopaka, but you might not be far off the mark.
7th Generation- You're right, but it's difficult to isolate our national economy from what's happening to us. Home Depot and Costco might be booming, but it doesn't reflect how they're doing on the mainland. If they fall there, we fall here.
Not sure what Schiff said about global monetary policy, but we are moving toward a one world monetary system, the New World Order, if you will. I've known about this for decades. The only way "they" are going to make it come to pass is if they bring the U.S. to its knees. Can't say Schiff is 100% accurate, but his understanding of history and economic principles are outstanding and based on reality, not greed-driven optimism.
Congressman Ron Paul was on either Cavuto or Glenn Beck's show the other night. Said he couldn't get in touch with Bernanke because he was somewhere in Europe discussing new currency matters. It's on Youtube. Glenn Beck mentioned months ago that China was hinting at a unified currency, and France was demanding it. Not "if", but "when" the depression hits. They're also talking about going back to the gold standard.
Governor Lingle's state of the State speech was clear that we're in big doo-doo. Politicians always try to stay positive like economist with an agenda. So her statements about the economy indicate to me that things are going to get real bad. When the Governor is pushing to grant local farmers a 10-15% bid advantage over mainland food suppliers, that's not only a concern for the economy, but also our reliance on food imports. Desperate times call for desperate measures. Some may call it political posturing ahead of union negotiations. Uh-uh. Not this time. They're not asking to suspend hiring and pay freezes like before. They're gearing for pay cuts and benefit reductions. This is unprecedented. Even Senator Calvin Say anticipates the March economic report to be worse than projected.
One thing that has really started to stand out here in Kauai is the rise of petty crime. Every day the Garden Island paper seems to report a different break in somewhere and doesn't even cover the smaller crimes that take places. I know people in the past two weeks who have had things stolen from their locked vehicles, the back of their trucks (which in all fairness, is a stupid place to store things!), have had gas siphoned from their trucks and purses stolen from a wagon at a store. While petty crime has always taken place, I would say things are on the rise, which is kind of scary. First we only had to deal with the ice addicts stealing from you but now you have those who are desperate and without a job...
I think the break ins are a part of the current economy - or rather the lack there of. We are on the edge of change and increased financial desperation seems to be part of the new order. Up until this year, folks could find work if they wanted it, if they didn't like their job, they could quit and find another without much difference in pay or benefits. Most of these jobs are the low paying service jobs but folks had their living situations arranged so they could survive on low pay. Now what is happening is folks are losing their jobs entirely or getting less hours so they are having to live on about thirty percent less income to no income at all once unemployment runs out. Each household generally has several workers in it, but now they are getting less money and more than likely one of the workers isn't working now. Folks are still trying to live like they did before the downturn and either don't see the economic downturn as affecting them or just don't look at the overall economics when making financial choices. You can't always make the same choices you did before your income changed. Sometimes it is little stuff like changing to cheaper groceries but folks have been living off of whatever savings or unspent credit card balances they had to continue living like "normal". Now, when their income gets reduced by either job loss or less hours, they don't have the reserves to fall back on since they were already spent trying to maintain their previous lifestyle.
We are also an island, when there is no work, there is nowhere else to go to find any except one of the other islands or the mainland. At the moment, the outer islands have higher unemployment rates than Oahu. When the sugar plantations closed (the major economic mainstay of the Big Island at the time) went down in '95, a LOT of folks went to Oahu to find work. This downturn seems more wider spread across the employees, though, with folks gone from many different sectors so it is harder to see where they are all going.
The unemployment numbers are on the front page of the newspaper this morning. I don't know if they count the folks who couldn't find work yet who's unemployment has run out or the folks who had a full time job and could only find a part time job to replace it with.
Is there anything we can do to increase our economy? My neighbor and I have been hatching out chicken eggs and selling the chicks. It's not a lot of "production" but we are at least producing a little something to sell. If everyone produced something, would that be enough to increase the local economy?
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