The deflation time bomb »
Posted By jovial 8 months, 3 weeks ago in Business & FinanceWe are to about see how much George Bush really believes the "supply side" mumbo-jumbo he's been spouting for the last seven years.
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jovial
Grew up In Brooklyn. Joined the Navy in 1976 stayed in 10 years. Aircraft Electronics tech. Worked for Major Govt. contractor then settled in California ...
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cowboygrandpa8 months, 3 weeks ago
jovial:
Good article.
The writer said by 2009 bankruptcy will be the largest fad. God I hope not.
Thanks Bush you incompetent, unreliable, lying, treacherous thief. How much are you and Shotgun Dickie leaving with?
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dunkirk8 months, 3 weeks ago
That seems to be the pattern with the Republicans, they seem totally incapable of running a fiscally conservative and responsible show and then blame the Dems for the messes they cause. It reflects the big business influence the Republicans covet, American business is greedily cutting its own throat all to make a buck today followed by blaming ewveyone else for its plight tomorrow because they didnt stop them.
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Centinel8 months, 3 weeks ago
I don't know what kind of engineer you are but it doesn't really matter. Engineers deal with facts and manipulate physics and nature to accomplish their goals.
This aspect of their profession is why they seem to be able to accurately anticipate "effect" when they analyze actions as "cause".
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not2needy8 months, 3 weeks ago
It's going to get a lot worse before it gets better, that's for sure.
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bluetexasvalley8 months, 3 weeks ago
FTA: That's right; the price of gas today is attributable to war, tax cuts and the relentless expansion of credit by the Federal Reserve -- NOT OIL SHORTAGES!
Well, now we've gotten that straight. :)
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ETproductions8 months, 3 weeks ago
FTA: "That means if the dollar had remained as 'good as gold' since 2001, oil today would be selling at about $30 a barrel, not $99." [WSJ; 1-4-08]"
Ron Paul is dead right. Our monetary problems stem from taking the dollar off the gold standard (gold, or some tangible worth). As he points out, without a tangible backing for the dollar, politicians can just print more whenever they want more money -- which is ALL THE TIME.
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cowboygrandpa8 months, 3 weeks ago
ETproductions:
Yeah, that and selling out our manufacturing base which gave us something to build our GNP on. When it is baed on a service economy you have to keep spending no matter what.
Haven't the Republicans shown the error of their thinking with the trickle down on us until it is a flood of debt with no goods or base to support it?
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hyperbola8 months, 3 weeks ago
Actually the Republicans have been repeating the same ponzi schemes that they also ran during the Reagan/Bush daddy administrations. And, once again it will be the tax payers that will pay for their corruption.
Brace yourselves, taxpayers of America. You're going to help Bank of America finance its $4 billion buyout of Countrywide.
http://money.cnn.com/2008/01/11/news/companies/...
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Centinel8 months, 3 weeks ago
Uh, It wasn't the repubs who initiated all those unfair trade agreements. It was Bill Clinton. NAFTA passed by one vote. Ross Perot was right about that big sucking sound of our jobs being flushed to Mexico. No GNP without manufacturing. They don't use "Gross National Product" any longer. I I can't recall what they use now, "Gross National something or other intangible"
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Centinel8 months, 3 weeks ago
One can only hope that what this author outlines occurs soon so the people of this nation will come to realize that maintaining the status quo is not the answer.
Hopefully they will recognize "lip service" does not get the job done. Action does.
Ron Paul is far from the perfect answer but he is a good beginning toward reversing economic disaster.
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antitrust8 months, 3 weeks ago
This is scarier then when I saw Jaws at age 10! Great article! Makes you think how greedy America really is. They screw you from behind and when it comes time for them to pay, they ask the for leniency. Why should the feds bail them out for mistakes that they made? Aren't we giving them enough money w/ credit card interests rates at 22% (for most). Guess not...
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jovial8 months, 3 weeks ago
Without consumers buying on credit, our economy falters. Some say now that people shouldn't have bought if they couldn't afford, but people's borrowing is what kept the economy afloat. If they tighten borrowing too much they, kill the economy and if they just give away money, like they did with these sub-prime mortgages, the economy soon falters anyway. Only the consumer recourse was bankruptcy. Bush took that away. The banks get government welfare. Wouldn't it be nice for the government to inject a few billion to the people so they could keep their homes.
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antitrust8 months, 3 weeks ago
Great post jovial. I can see credit expenditures on large ticket items but even daily spending has an impact when the interest rates are soaring. Watching the movie "Maxxed Out" they show how our government bends over backwards for the credit companies, even with a large body of the congress opposing some of their actions. It is a delicate system for sure as you described in your post. As always, there is responsible spending and then there is not.
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simonsez8 months, 3 weeks ago
The sub prime situation is no more Bushes fault than the internet bubble was Clinton's fault.
The fault lies with the financial entities that traded common sense for profits, designing such instruments as SIV's to avoid responsibility for their actions.
What were these banks and investment houses thinking?
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jovial8 months, 3 weeks ago
Profit, plain and simple. This is part of the Reaganesque form of politics. Let the corporations prosper and eventually the food scraps will drop from the table down to the people.
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Obaku8 months, 3 weeks ago
The fault lies with the Federal Reserve, first and foremost, for printing 'money' backed only by lies and delusions.
Second with a Congress - AND a President - who cut taxes and increased spending. And the worst sort of spending, the kind that has bankrupted governments and kings for millenia - WAR SPENDING. Every dollar spent on war is UNPRODUCTIVE, in fact the whole object is that it is DESTRUCTIVE - of infrastructure, productivity and industrial capacity.
Might as well just burn the cash as send a million dollar cruise missile exploding in the desert!
Pay the soldiers, and in return, the economy receives not a single minute of productive work. Soldiers make no goods, provide no services, and they don't even bring home loot and plunder anymore!
A warship is a lovely thing, but it carries no cargoes, and earns not one penny for it's owners - US!!!
Hear that .50 cal rattle and roar? It might as well be the sound of a cash machine, spitting out $5 bills - directly into a shredder!
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markmawn28 months, 3 weeks ago
The S&L crisis of the 80's was on Reagan's watch. It was a direct result of de-regulation. Government regulation has always been Neocon's favorite pariah.
It serves no ones best interest to do a Ponzi scheme, except those on the top of it. As a results we get MORE regulation so it forces rules on everyone. My job has gotten a bit more difficult due to Sarbanes Oxley, but I know it is a necessary, yet forced solution to illegal disclosure.
It appears to me that wishing to circumvent bureaucracy results in more bureaucracy and autocracy.
Thanks Neocons!
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Obaku8 months, 3 weeks ago
"Money and credit creation."
Fiat money (debt based) will fail, as it always has.
Real money (gold and silver) will hold it's value, as it has for thousands of years - because it has no counter-party, represents NO debt, does not depend on the financial credit of any bank or any government, which is precisely why we say, "GOOD AS GOLD."
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Dionys8 months, 3 weeks ago
Unfortunately (or fortunately) it generally only appreciates during the worst of times. It makes for a nice counter-balance.
Then again I'd be willing to bet when we plummet into another depression you'll still have a hard time trading gold for food at a reasonable exchange rate.
When that time comes, I'll happily sell you an apple for an ounce of gold. Or a sheep for a pound.
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Obaku8 months, 3 weeks ago
Money is not supposed to appreciate - investments in capital goods - land, equipment, livestock - are.
Money is supposed to HOLD it's value through time and space, so that rather than trade a bushel of corn for a chicken, I can sell a bushel of corn today, and buy the chicken in the next town, next week. Inflation destroys all that, essentially it is a fraud on the most basic function of money itself.
Unless you own an apple orchard, or a flock of sheep, I am guessing that I will be the one selling, and you will be the one looking to extract your gold fillings to pay for it, since I DO own a flock, and a farm. These things are sometimes referred to as 'the means of production' a phrase you might have heard.
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ML2007Comment removed: User banned.
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canadianrancher578 months, 3 weeks ago
Thanks for this artical jovial, this is the best ecomonic artical I've seen in a long time. The picture that it paints is about the most realistic that could have been presented. I hope I don't seem to happy by all this doom and gloom talk but I have been living within my means since the seventies and wondering when reality would set in.
I have a neighbor who turns 95 this year and has lived through the great depression and even road the rails looking for work, for years we have talked of when it might happen again, he felt that the way things kept recovering that maybe it might never happen again but he may get to see a second great depression.
One thing that I have learned from being a farmer is income and wealth is obtained by production and being finacially responsible, this is something that many countries have forgotten and now it's time to pay the piper. One thing I will not do though is put all the blame on politicians, there is enough blame here for all of us.
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DarkWizard8 months, 3 weeks ago
Great post jovial! This article explains the dilemma very well.
Unfortunately, the only ones who will be surprised by this deflation will be the loyal Bush followers who hang on every word the Neanderthal says.
I believe we will be going into a depression. Whether it will rival the Great Depression is to be seen.
Our government, the Federal Reserve, and big business have been playing an economic game of "prop up the economy" since the dotcoms went belly-up. The dotcom fiasco was more devastating than Wall Street wants to admit. Sure, Enron, Worldcom, Qwest, and other companies have hurt the economy through pilfering pensions, causing unemployment, and decreasing consumer confidence in corporations and in stock values, but the dotcoms sent a ripple through the system.
Many of the money making schemes have come about in hopes of generating the kind of money the dotcoms did. This "easy money" is driving the market. Except it is false.
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