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WA Mozart
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Posted: Tue Sep 8th, 2009 05:36 pm |
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Hughmac wrote: maxim wrote: WA Mozart wrote: There will never be such a thing as a "world currency." There will always be competing currencies such as the Yen, the Euro and the Dollar.
If only all of us had as much foresight as you...
US Economy is Booming, the figures are just out.....
"For all of you European non-economists, take a look at these figures! This is how an economy is supposed to run."
Priceless!![[grin]](/forums/themes/default/grinning-smiley-007.gif)
Maxim links to a 2005 thread where Mr WAM a crooning about just how well the US economy was going...
Priceworthy....!
Gosh, it's so nice when people take the time to pull-out some of my old posts. Many thanks. I enjoyed reading them again. Maxim should be thanked as well for the time to look for them and post them!  . I'm so honored. Stating observable facts is a passion of mine. Er, and, ...the problem here is exactly what? "Crooning" about the US economy? The US economy was booming in 2005. You betcha. It was the strongest and most robust economy in the western world. It pulled most of western Europe and China along with it. By the year 2007 we, the United States, had almost reached a balanced budget. Perhaps Maxim could look-up my excellent threads on that subject as well? He's so dilligent on these matters. Gosh, there was so much to write about.
We had discussed this topic on a number of different threads. The destruction of the US economy, and the poison pill planted within our economic system, was the result of Democrats on Capital Hill using the federally owned mortgage guarantee organizations, Fannie Mae and Freddie Mac, to underwrite low income loans to unqualified recipients. Do you understand that? Rather than pass a law on Capital Hill allocating funds for such a project, they (the Democrats) cunningly used Fannie Mae and Freddie Mac to accept such mortgages, with the full faith and power of the US government ( not private industry ) guaranteeing what would normally be worthless mortgages. These highly dubious mortgages were guaranteed to the tune of several trillion dollars. When it collapsed, it collapsed big time, .....as well it should have. That's the story in nutshell. The lesson here: Socialists (mostly US Democrats) were allowed to undermine the workings of a capitalist economy through a government controlled poison pill, Fannie Mae and Freddie Mac.
Mozart
Last edited on Tue Sep 8th, 2009 05:38 pm by WA Mozart
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WA Mozart
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Posted: Tue Sep 8th, 2009 05:50 pm |
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Hughmac wrote: WA Mozart wrote: We have, at this very moment, a Chucklehead-in-Chief who is systematically destroying the foundation of our very nation, the US currency. Even the Chinese have stood-up and taken notice....
Mozart
Come now, Mr WAM, the Fed has been undermining the dollar for decades, regardless of which party has their man in the Whitehouse. The only reason that the dollar hasn't burst like an over-ripe zit before is because of the petro-dollar.
I am not an economist, but I do know that you can't keep writing cheques on an account without sufficient funds to honour them, which is precisely what the Fed has been doing, before the manager calls you into for an appointment...
Cheers
Hughmac
Ah, ....no.
What you're referring to above is the purchase of US Treasury bonds by the Chinese. In other words, they, the Chinese, are financing our debt. The problem here is that the Chinese have chosen to purchase these bonds on the open market rather than using their accumulated dollars to buy US goods and services. Why? Were they, the Chinese, to do the latter, the value of the Yuan would increase in value, ...a big no - no. They are desperate to keep the value of the Yuan low in order to remain competitive with other low cost economies in Asia, such as Indonesia or Vietnam. It's their choice to buy US Treasury bills instead...
Mozart
Last edited on Tue Sep 8th, 2009 05:51 pm by WA Mozart
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The Engine
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Posted: Tue Sep 8th, 2009 05:55 pm |
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PATruth wrote: Even the communists understand wealth is not created by a printing press, something Obama still needs to learn. Obama and the fed are quickly beginning to realize they NEED to create inflation and they need to do it soon. It will soon be impossible to pay back todays debt in todays dollars. The problem with inflation is rising interest rates which will require even larger interest payments. The balance between the lesser of two evils is now the ONLY choices left to the Obama administration.
I personally hope the rest of the planet denies the Obama administration more money. It would be a sobering wake up call that's long overdue. As the song goes, California here we come, right back where we started from .....................everybody.......
The warnings of a major financial disaster continue to be ignored by the Obama administration.
Or perhaps he is gleefully pouring gasoline on a burning building, with hopes of rebuilding it in the shape of his communist vision?
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quantumystic
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Posted: Tue Sep 8th, 2009 07:15 pm |
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The Engine wrote: So do any of you financial wizards know what will happen when hyperinflation begins? The stock market and the price of gold have both been rising at the same time over the past few weeks. Don't they generally work like a teeter-totter? When one goes up the other one goes down?
As I understand it, "Hyper-Inflation" is when countries/economies begin seeing inflationary instances in excess of 50% within a brief period of months or even weeks.
Short of some spectacular additional crisis event, I don't see that happening. But we've got plenty of tough times ahead even absent that, because corporate management greed has all but destroyed American industrial manufacturing.
Shareholder profits in a company have to come from one of two places. Increases in product demand revenues, or decreases in operational expenses. The executives weren't about to accept any pay cuts themselves, so they began cutting labor expenses. Which led to poorer customer service and product quality... and less demand. But the executives were determined that their own salaries must not be cut.
So they cut into American Labor even more. Making things even worse. Until they finally just "outsourced" everything (except their own jobs) to third world sweatshops overseas. Bringing us back around to the real problem.
The American dollar is weakening because it is no longer backed by anything substantial.
The rest of the world is keenly aware of the extent to which our corporate management has become vulnerably dependent upon foreign Labor. And the access to it. As such, our GDP figures become less and less meaningful, even as they drop. Because much of it represents no actual thing of value. Merely the manipulation of monetary figures and futures via the financial services industries.
Gold is flirting with record prices at the moment. It rose this morning to $1,006/oz. listed on MONEX. Personally, I have silver bullion. Which is rising as well, though not to the same near-record levels as gold. But it is easier to buy and sell in large quantities due to its far lower price, and is presently outperforming gold in the G/S index. Meaning how many ounces of silver would a single ounce of gold buy. At the end of 2008, 1 oz gold would buy 85 oz silver. Today it would buy 61 oz silver. A 16.5% gain in a mere 9 months. Wish ALL investments came with that kind of short term return! 
Typically, precious metals, and many other rarified/exotic commodities appreciate in direct contrast to weakening currencies. This is an observed "tradition", but by no means a "rule".
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maxim
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Posted: Tue Sep 8th, 2009 07:19 pm |
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WA Mozart wrote: The US economy was booming in 2005. You betcha. It was the strongest and most robust economy in the western world. It pulled most of western Europe and China along with it. By the year 2007 we, the United States, had almost reached a balanced budget. Perhaps Maxim could look-up my excellent threads on that subject as well?
Maxim wouldn't want to subject you to more of your past writings just yet, right now he'd like to figure out when exactly between 2000 and 2008 did it seem that the US economy was booming.
Attachment: useconomy.png (Downloaded 58 times)
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O.Bender
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Posted: Tue Sep 8th, 2009 08:01 pm |
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The Engine wrote: I've done a lot of research on this subject during the past year or so. I had no idea how bad things were for our currency before that. Here are some additional points of interrest:
-When our national debt surpasses our GDP (which it now has), our credit rating will begin to be eroded. (our GDP was 14 trillion a year ago. It's under 10 trillion now, thanks to the recession. The national debt is just under 12 trillion, if you don't include debt obligations (trillions of dollars owed for Social Security, Medicare, Medicaid and the prescription drug benefit known as Medicare Part D).
-According to the web site http://www.usdebtclock.org/, our interrest on the debt has gone up from 310 billion per year to 325 billion per year in only the past ten days. That's an increase of almost 5%! The debt, on the other hand, went up only a fraction of that. This indicates that the interrest rate on the debt has climbed signifigantly. It continues to climb by the hour. If it raised at this exact same rate for one year, it would increase by 176.6%.
-The Federal Government is currently collecting approximately 1-trillion in taxes per year. At 325 billion, the interrest on the national debt alone consumes 32.5% of all tax revenue (1 year ago, it was collecting 2 trillion per year). If interrest on the debt continues to climb at a rate of 5% every ten days, in one year, the interrest on the debt will consume 89.895% of all tax revenues.
Basically, what this indicates is that a catestrophe is headed our way, in the form of the collapse of the dollar. This is not good. Looking at historical examples, such as the USSR, you're talking about a possible breakup of the country, severe economic turmoil and a period of chaos, like that which followed the collapse of the Iraqi government (looting and murder were commonplace).
Golden words. It seems you have calculated already that 2 plus 2 is four but is too shocked to beleive it. Yes, the USA may collapse, but it will be next stage after the World currency system collapses, World trade stops and most probably major developed countries will sink in riots and revolutions. The USA will not be the first and even may benefit from it and even survive.
As for your question what will happen when hyperinflation starts - it's obvious. Race of hyperinflations and currency devaluations start all over the world. Because if Europe doesn't start hyperinflation it automatically means stronger Euro - export falls - production stops - devastating deflation, which is much more a threat.
Even more - the US will manage to use hyperinflation as a weapon, destroying the rest of the world.
The model has been already given, I will put it here -
http://perspectives.com/forums/view_topic.php?id=212165&forum_id=71
Last edited on Tue Sep 8th, 2009 08:03 pm by O.Bender
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WA Mozart
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Posted: Tue Sep 8th, 2009 08:20 pm |
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maxim wrote: WA Mozart wrote: The US economy was booming in 2005. You betcha. It was the strongest and most robust economy in the western world. It pulled most of western Europe and China along with it. By the year 2007 we, the United States, had almost reached a balanced budget. Perhaps Maxim could look-up my excellent threads on that subject as well?
Maxim wouldn't want to subject you to more of your past writings just yet, right now he'd like to figure out when exactly between 2000 and 2008 did it seem that the US economy was booming.
Well Done!
Ya dug-up all those nice charts for me? Gosh, what a pal.
Er, but, I hate to tell you. Most of those economic charts you posted are not reflective of whether or not an economy is booming. Yup, the accumulated national debt does go up over time. Yup. But so does the national GDP. In context, what's the percentage rise in national debt vs. GDP? That would be the only meaningful chart here. The US trade deficit has also been slowly increasing. Yup. And this means what? More US dollars are flowing out of the country than flowing in. There are hundreds of billions of US dollars in foreign accounts. Up until a year or so, the US dollar was the 'unofficial' currency of many countries.
By a booming economy you look at the GDP: (See how simple this is? .... )
Last edited on Tue Sep 8th, 2009 08:23 pm by WA Mozart
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George Aligator
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Posted: Tue Sep 8th, 2009 08:40 pm |
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The Chinese Communist Party is right to be "alarmed," Uncle Sam has 'em by the short and curlies. They are holding a trillion dollars in T-bills that may have value only as bumwad if we let the dollar fall. Beyond that, they now have a large middle class and lots of billionaire Chinese who need to trade with the USA to keep Chinese growth around 10% or face massive popular unrest.
And do we need the Chinese? Hell no! There is nothing we import from China that we can't make here. The USA is the most advanced economy in the world. We have no need to borrow from the Communists, we can raise the marginal tax rate back to what it was in the Eisenhower boom years and everything will be hunky-dory. The only folks who need to worry are those who have gotten rich pimping out the American consumer to the Chinese.
So long, Oooh-Long, how long ya gonna be gone?
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WA Mozart
Member
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Posted: Tue Sep 8th, 2009 08:44 pm |
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O.Bender wrote: The Engine wrote: I've done a lot of research on this subject during the past year or so. I had no idea how bad things were for our currency before that. Here are some additional points of interrest:
-When our national debt surpasses our GDP (which it now has), our credit rating will begin to be eroded. (our GDP was 14 trillion a year ago. It's under 10 trillion now, thanks to the recession. The national debt is just under 12 trillion, if you don't include debt obligations (trillions of dollars owed for Social Security, Medicare, Medicaid and the prescription drug benefit known as Medicare Part D).
-According to the web site http://www.usdebtclock.org/, our interrest on the debt has gone up from 310 billion per year to 325 billion per year in only the past ten days. That's an increase of almost 5%! The debt, on the other hand, went up only a fraction of that. This indicates that the interrest rate on the debt has climbed signifigantly. It continues to climb by the hour. If it raised at this exact same rate for one year, it would increase by 176.6%.
-The Federal Government is currently collecting approximately 1-trillion in taxes per year. At 325 billion, the interrest on the national debt alone consumes 32.5% of all tax revenue (1 year ago, it was collecting 2 trillion per year). If interrest on the debt continues to climb at a rate of 5% every ten days, in one year, the interrest on the debt will consume 89.895% of all tax revenues.
Basically, what this indicates is that a catestrophe is headed our way, in the form of the collapse of the dollar. This is not good. Looking at historical examples, such as the USSR, you're talking about a possible breakup of the country, severe economic turmoil and a period of chaos, like that which followed the collapse of the Iraqi government (looting and murder were commonplace).
Golden words. It seems you have calculated already that 2 plus 2 is four but is too shocked to beleive it. Yes, the USA may collapse, but it will be next stage after the World currency system collapses, World trade stops and most probably major developed countries will sink in riots and revolutions. The USA will not be the first and even may benefit from it and even survive.
As for your question what will happen when hyperinflation starts - it's obvious. Race of hyperinflations and currency devaluations start all over the world. Because if Europe doesn't start hyperinflation it automatically means stronger Euro - export falls - production stops - devastating deflation, which is much more a threat.
Even more - the US will manage to use hyperinflation as a weapon, destroying the rest of the world.
The model has been already given, I will put it here -
http://perspectives.com/forums/view_topic.php?id=212165&forum_id=71
I read that stuff...
A Russian economic Rasputin? Oh please.....
Empires? Financial taxes? It's ridiculous stuff. The coming world economic catastrophe will be as a result of politicians incurring debt. Look at California as an example. Look at New York state and city. Politicians wanting to spend other people's money. (mostly Democrats, by the way) The fact that the United States is facing precipitous federal revenues, coupled with high unemployment, along with a charlatan for a President, is all pointing to a major economic train wreck. Read Engine's post again. It should make everyone, including the Europeans, petrified as to what is taking place. It's the debt!
Mozart
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George Aligator
Member
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Posted: Tue Sep 8th, 2009 08:53 pm |
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While frustrated Death Panel Loons are getting their rocks off predicting the total collapse of the world economy, T-bill prices are falling as investors scramble to get into the stock market and investment capital from around the world is pouring into US banks. China bought 25 billion at the last Treasury sale -- does that sound like they are worried about US debt? They can't buy it fast enough.
All this faded hooey about debt and the Weimar Republic is testimony to the Model-T era economic theories which the birthers and tea baggers blabber about along with the rest of their crazy ideas. Buy Alcoa, boys, the tinfoil hat business is booming!
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O.Bender
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Posted: Tue Sep 8th, 2009 08:58 pm |
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According to Muraviev, hyperinflation of dollar will be organized and well controlled, because:
- if not, it will lead to catastrophic devaluation of dollar in global market and exemption of dollar from international trade, it will consequantly lead to devastating deflation in the US and probably collapse or at least mass riots
- But if the US first draw most of the world capitals into dollar nominated instruments (bonds, shares, treasury bills etc) and then unleash fast hyperinflation - all these capitals will be distroyed. The only big capital will be newly printed - i.e. Fed and its banks as Goldman etc.
The only way to attract these capitals, having problems in US economy and obvious threat of inflation in the US - is to make situation even more dramatic in the rest of the World.
Since the beginning of the year we see rally on BRIC and 3d World markets, oil and minerals also grow (i.e. Middle East and Latin economies) - despite fall of GDP and other problems there.
Who is doing this? Why? And most important - what will happen if all these markets suddenly fall to let's say 50% of theit present levels? Where capitals will rush? Right - into US treasuries.
It will be this autumn, anyway this year.
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WA Mozart
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Posted: Tue Sep 8th, 2009 09:00 pm |
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George Aligator wrote: While frustrated Death Panel Loons are getting their rocks off predicting the total collapse of the world economy, T-bill prices are falling as investors scramble to get into the stock market and investment capital from around the world is pouring into US banks. China bought 25 billion at the last Treasury sale -- does that sound like they are worried about US debt? They can't buy it fast enough.
All this faded hooey about debt and the Weimar Republic is testimony to the Model-T era economic theories which the birthers and tea baggers blabber about along with the rest of their crazy ideas. Buy Alcoa, boys, the tinfoil hat business is booming!
When, in the very near future, the Feds grease-up their printing presses in Washington D.C, the cost for a roll of Alcoa foil wrap will be way beyond the means of most ordinary people. There is only one other solution. I would suggest that people be taught how to make paper hats, instead of tin foil, from the pages of the bankrupt New York Times. ..... .
Mozart
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maxim
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Posted: Tue Sep 8th, 2009 09:19 pm |
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WA Mozart wrote: Most of those economic charts you posted are not reflective of whether or not an economy is booming.
And a one half of one factor - the slight decrease in budget deficits is?
Yup, the accumulated national debt does go up over time. Yup. But so does the national GDP.
Which by the way, also isn't a great factor, since most of US GDP is consumption, which is based on imports and debts. While GDP growth, living standards, stock prices and budgets can be artificially stimulated over a long time, debts and trade deficits can't, which is why I'd rather look at how sharp the needle is, than how big the balloon has become.
The US trade deficit has also been slowly increasing. Yup. And this means what? More US dollars are flowing out of the country than flowing in.
That's the first time I've heard that particular "silver lining to a hurricane" argument. The trade deficit means simply that the US economy sells less than it buys, often with money it doesn't have. If more dollars are being printed, borrowed or imagined into existence, either at the expense of debt and future servicing costs, or inflation, does it matter if they're a bit more popular for a while? Simply put, just because America demands more and more dollars to give to someone else, it doesn't mean the dollar will benefit from that higher demand, much less that the economy is booming.
It's not hard to see that you keep making nearsighted and overly optimistic predictions related to the future of Capitalism, as Capitalists do, while other Capitalists listen and applaud until reality smacks them in the face. When that happens, it's time to blame someone else.
Last edited on Tue Sep 8th, 2009 09:23 pm by maxim
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O.Bender
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Posted: Tue Sep 8th, 2009 09:26 pm |
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WA Mozart wrote:
A Russian economic Rasputin? Oh please.....
Empires? Financial taxes? It's ridiculous stuff. The coming world economic catastrophe will be as a result of politicians incurring debt. Look at California as an example. Look at New York state and city. Politicians wanting to spend other people's money. (mostly Democrats, by the way) The fact that the United States is facing precipitous federal revenues, coupled with high unemployment, along with a charlatan for a President, is all pointing to a major economic train wreck. Read Engine's post again. It should make everyone, including the Europeans, petrified as to what is taking place. It's the debt!
Mozart
I uderstand that it is hard to accept for an american. I agree that financial taxation is only part of the picture. To complete it (and now I repeat the second economist Mikhail Khazin) -
Nature of capitalism presumes cycles and crisises of overproduction. The US economy
faced one of them in 1970s but instead of suffering all problems to fall and start to grow afterwards, the US monetary authorities decided to overcome crisis (i.e. fall of demand=privat consumption) by stimulating that very consumption by easing credit policy. Before 70s everage level of savings of an american family was 10% of an income. Debt level was very low. Since 80-s all went opposite - savings were falling, debts were growing. It became possible only because the government eased credit policy and because interest rate was constantly declining all years from 1980-s till this year so that families could refinance their debts by new credits. This year interest rate has come to 0. The end. There s no possibility to refinance debts, government can't stimulate consumption any more by new credits otherwise it will have to give money for free and even pay for giving it.
And , returning to that very policy of the government to stimulate consumption - it would be impossible without massive finaning from abroad - you may call it financial taxation. I hope you will not refuse to admit that the US has unprecedented monopoly here (why - read Muraviev)
Last edited on Tue Sep 8th, 2009 09:30 pm by O.Bender
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O.Bender
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Posted: Tue Sep 8th, 2009 09:34 pm |
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read the post "Genesis of the crisis" here
http://perspectives.com/forums/view_topic.php?id=212165&forum_id=71
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George Aligator
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Posted: Tue Sep 8th, 2009 09:44 pm |
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Nature of capitalism presumes cycles and crisises of overproduction.
Now there's a thought from the Wizards of Moscow that has been so often verified as to have become a commplance since Karl Marx first pointed it out in Das Kapital.
If only Lenin had grasped the fundamental principles of Marx's dialectic, the USSR might not, almost a century after his arrival at the Finland Station, have bequeathed to Russia a legacy of millions of murdered citizens and a lumbering economy that still cannot hold its pants up.
BTW for those of you who missed Comrade Obama teaching Marxism to the kiddies today, the prefered antidote to the recurrent crises of late state capitalism is WAR. Now you know why we just can't seem to say good-bye to Iraq, Afghanistan or a hundred other countries.
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Hughmac
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Posted: Wed Sep 9th, 2009 07:15 am |
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WA Mozart wrote: Priceworthy....!
Gosh, it's so nice when people take the time to pull-out some of my old posts.
Whether or not it was accurate, inaccurate or just plain labourious cherry picking, it was devastating. God knows it would be easy enough to do the same to me, given the time and inclination to sift through yards of back posts. It was funny, my friend, that is all.
Cheers
Hughmac
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Hughmac
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Posted: Wed Sep 9th, 2009 07:19 am |
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WA Mozart wrote: Come now, Mr WAM, the Fed has been undermining the dollar for decades, regardless of which party has their man in the Whitehouse. The only reason that the dollar hasn't burst like an over-ripe zit before is because of the petro-dollar.
I am not an economist, but I do know that you can't keep writing cheques on an account without sufficient funds to honour them, which is precisely what the Fed has been doing, before the manager calls you into for an appointment...
Cheers
Hughmac
Ah, ....no.
What you're referring to above is the purchase of US Treasury bonds by the Chinese. In other words, they, the Chinese, are financing our debt. The problem here is that the Chinese have chosen to purchase these bonds on the open market rather than using their accumulated dollars to buy US goods and services. Why? Were they, the Chinese, to do the latter, the value of the Yuan would increase in value, ...a big no - no. They are desperate to keep the value of the Yuan low in order to remain competitive with other low cost economies in Asia, such as Indonesia or Vietnam. It's their choice to buy US Treasury bills instead...
Mozart
I don't know why I get into these financial discussions because I am completely out of my depth over economics.
Having said that, I was refering (in my first paragraph) to the Fed's tendency to create dollars out of nowhere; i.e., a dollar bill now has absolutely nothing behind it, other than faith, hence it being a fiat currency, I suppose. I watched a couple of videos on the Fed and was left gobsmacked!
Cheers
Hughmac
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O.Bender
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Posted: Wed Sep 9th, 2009 09:54 am |
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George Aligator wrote: Nature of capitalism presumes cycles and crisises of overproduction.
Now there's a thought from the Wizards of Moscow
Sir, having America deep in shi* up to the neck (and still going down) will all it famous economists, I think you should start paying attention to alternative points of view from the rest of the world, which might be not only correct but very useful even in planning your own personal financial actions.
Of course it's a common thing I've said, but it was nesessary to start with that very thing, because it's esensial.
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maxim
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Posted: Wed Sep 9th, 2009 10:11 am |
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| Mister Ostap Bender, I personally hope none of the hawks in US politics look at the strategy described by mr. Muraviev, because they might actually use it.
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