Thê Rêcession That Breaks The Empire?

[itstippy]

"Technology . . . allows you to read statistical data you could readily observe just by looking out the window."

Nonsense. If I merely observe, I draw the wrong conclusions. Observations:

Unemployment is rampant, housing has collapsed, and federal, state, & local tax revenues are way down. Food pantries are swamped, bankruptcy filings way up, and corporate revenues are down. Mere observation would lead me to conclude that our Gross Domestic Product must be nowhere near where it was in the booming years of 2005-2006.

Wrongo! Feed the numbers into the techo-cruncher, and we find out that the GDP is actually higher than it's ever been. I'd be lost without the GDP app to tell me we're doing great and getting better.

[vl]

March 4th. If the government gets shut down, what happens to the Internet? You can't have world wide web accessibility when national security has been compromised.

Me personally, if it happens, I stoke the BBQ and enjoy a camp-style vacation. Millions of button-pushers however, will be forced to look ahead instead of down and think outside the app. It will be fun to watch!

[nicomachus]

The Internet wasn't shut down during the Federal Government shutdowns in 95 (or was it 96?) nor is that usually considered a national security issue, since security continues to operate even during government shutdown.

Regarding a comment made above about WalMart: Working for a large, immoral corporation doesn't make a worker immoral. More often than not, the worker is the victim. I spent 6 years of my life working as a telemarketer and then collector for MBNA (later bought out by Bank of America). I was very poor and struggling through college. I helped the extra wealthy and super greedy become much richer by making the poor and middle class much poorer. I made very little money and slept on the floor of a friend's apartment. But what choice did I have? Everyone has to eat.

I saw the high point of American avarice and now I'm watching the empire crumble. This is history, folks.

[verrip1]

The sky is falling! The sky is falling!

It's the end of the world as we know it!!

YAAAAAAAAAAHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!

[Aman A.K.A. Ahamburger]

Not just this country Impaler.. the world.. Everybody needs everybody, and companies need customers!!! Someday they will see because what is going on is an inevitability!!!

[verrip1]

I notice that the elimination of the capitalist system has yet to hit ThinkProgress. How could they have missed this important event?

Well, with the capitalist system gone, I guess all those gold and silver holders just took another one up the ass. That stuff ain't worth diddly any more in a system where 'wealth' is meaningless.

[Aman A.K.A. Ahamburger]

LOL!!! Excellent point dude!! It's a perfect hiding spot for it anyway!!

[domeasingold]

As Mark Twain said........

[dumdeedoe]

As Mark Twain said........

Stupid is as stupid does?? or was that Forrest Gump???

[Tesla_DC-meme]

Well, with the capitalist system gone, I guess all those gold and silver holders just took another one up the ass. That stuff ain't worth diddly any more in a system where 'wealth' is meaningless.
Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3520&page=2#ixzz1EHEcXns0

[decoy409]

Not for insiders and dirty money remember!

[nicomachus]

Saith Frank "t"

You want to make people here belive that somehow this time is different you going to have to think up an event that wipes out this country physically not financially.

The power of evil always manifests itself first transcendentally, but the evil one can destroy even flesh.

[Aman A.K.A. Ahamburger]

You know. I feel the same way about that.. It's the one two knockout punch.


China's Consumers Eat Up Yum Brands Restaurants:
www.pbs.org/nbr/site/onair/transcripts/yum_brands_restaurants_china_110216/

[mikec]

I went to start my car this morning and the battery was dead....
that is what happens when you keep a car for 7 years and put 80K on it with the same battery

NEVER would have happened if I was riding a horse to work.....

[neohguy]

Soneleigh's (Nicole Foss) opinion of this cycle: (bold by me)
theautomaticearth.blogspot.com/
Stoneleigh: The deflation/hyperinflation debate with Gonzalo Lira was an interesting experience. I wanted to give readers of The Automatic Earth a flavour of what was said, what issues were raised and how they were addressed....
The major hurdle in the debate hinged on the definition of inflation, as such debates often do. Financial analysts who expect deflation typically do so because they recognize the critical role of credit in the effective money supply and the effects of credit implosion. With a natural focus on the money supply, they typically (but not universally) define inflation and deflation as monetary phenomena - as an increase or decrease in the effective money (and credit) supply relative to available goods and services.
Analysts who anticipate inflation or hyperinflation typically focus on nominal prices, which they expect to increase, likely concurrent with a loss of confidence in the currency. As I am in the deflationist camp and Gonzalo is a hyperinflationist we naturally defined inflation/deflation differently....
My view is that movements in nominal prices are of limited interest by themselves, as nominal prices say nothing about changes in affordability. It is not how much something costs that matters, but how much it costs in relation to how much purchasing power people have, and that will depend largely on changes in the effective money supply. In order to understand what is happening to affordability, one has to adjust nominal prices for changes in the money supply and thereby express price changes in real terms.

There are many drivers of prices, but changes in the money supply constitute a major one, often the primary one in fact. Changes are an effect, not a cause, and a lagging effect at that. In order to understand the world, it is better to look at the causes than the effects, and to look at leading indicators rather than lagging ones.
Deflation involves a massive change in the money supply due to the collapse of credit, which constitutes in excess of 95% of the effective money supply. Credit expansion is a ponzi scheme, and like all ponzi schemes will reach a maximum and then implode. Unlike currency hyperinflation, which divides the underlying real wealth pie into more and more pieces, credit hyper-expansion creates multiple and mutually exclusive claims to the same pieces of pie through leverage. The best analogy is a game of musical chairs, where there is only one chair for every hundred people (or so) playing the game. It is not too difficult to imagine what happens when the music stops, when the difference between getting a chair and not getting a chair is the difference between making a fortune and destitution. At TAE we suggest that people cash out, in other words take a chair and sit on the sidelines before the music stops. The game is not compulsory, but it is addictive, and it is difficult to walk away, but ultimately it is a matter of choice whether we play or not. Given the low odds of winning after the fact, and the possibility of avoiding the that particular risk in the first place, it seems a sensible approach to stop playing.

Gonzalo’s view is that we are looking at a commodity-driven hyperinflation, where investors becoming increasingly wary of financial assets, particularly treasuries, and the dollar, and will opt instead for something tangible. He says that the Fed has monetized the debt. His advice therefore includes taking on debt in order to purchase commodities. I believe this view is distinctly premature, and the advice therefore completely wrong. While I have discussed the likelihood of a bond market dislocation myself, and have noted that all fiat currencies expire eventually, I do not believe this is at all imminent. On the contrary, in my opinion treasuries and the dollar are likely to do very well over the next year or two, and I believe that commodities are topping or close to topping.
I would point out that the Fed has not monetized the debt, but has merely taken on a tiny percentage of the debt through quantitative easing. It might have monetized 5% of the US debt, if one does not include the unfunded liabilities of the US government, namely Medicare, Medicaid and Social Security (which together represent at least half of the total debt to GDP ratio for the US). There is no provision for a meltdown in the derivatives market or other categories of debt which are international. The notional value of the derivatives market is estimated at anywhere between $600 trillion and $1600 trillion dollars. No one has pockets deep enough to monetize that, and if they were minded to try they would find out that it is impossible to get ahead of credit collapse. It will proceed faster than any reactionary (as opposed to proactive) party can act.

Attempts to monetize in the teeth of a powerful deflationary wave are destined to fail miserably. The apparent success of the last two years owes its reputation to the supportive psychology of a rally, which makes central authorities appear wise and in control, when in fact they are not. When that rally is over, as I believe it will be soon, that support will be lost, revealing central bankers to be the little men behind the curtain that they always have been. Contractions are very unkind to those in positions of power, or apparent power.My reasoning for a dollar resurgence is twofold. First, we are on the verge of a large deleveraging of dollar-denominated debt, of which there is more than any other kind of debt worldwide. This will create demand for dollars. I also think we are going to see substantial capital flight from Europe as a result of their looming sovereign debt default crisis. That capital flight is very likely to find its way into the US as the least worst option, on a knee-jerk flight to safety into the reserve currency. While the finances of the US are obviously dire (at least as bad as the European countries at the centre of the incipient sovereign debt contagion), it is not reality that drives markets, but perception, which is emotionally-driven rather than rational. If we assume markets will behave rationally, we will be wrong-footed every time.It is important to look at where the markets perceive risk to lie, and where they demonstrate fear. For this, one must look at credit default swap spreads. Like any good predator, markets will pick off the small and sick first and move from the weakest to the next weakest victim. The markets are currently very concerned about the situation in Greece, and increasingly concerned about the remainder of the European periphery. They are not at all concerned about the possibility of a US default, despite the obvious evidence of risk. Human beings are either in a state of complacency or one of panic at any given time, and they are currently extremely complacent about the possibility of US debt repayment difficulties. There is a perception that the US is far, far too big to fail and will therefore not fail no matter what the circumstances....
Commodities top on fear of scarcity, and that is exactly what we are seeing now for oil, gold, silver and agricultural commodities. An unfortunate dynamic sets in under such circumstances. Speculators see momentum develop and begin to pile into the sector chasing that momentum. This rapidly drives prices higher by creating artificial demand. As with all market moves, the resulting speculative fever is grounded in ponzi dynamics, meaning that only those who get in early and out early will make any money.
The much larger majority becomes the group of designated empty bag holders when the speculators the sector, having wrung every last ounce of profit from it. This is what happened in 2008 (when oil went from $147 a barrel to $35 in a matter of months), and what is shaping up to happen again. How quickly investors forget when there appears to be money to be made.

The effect of (monetary) deflation is to lower prices across the board, at least initially, while simultaneously rendering almost everything less affordable, as purchasing power falls faster than price. The collapse of credit, combined with increasing income insecurity and loss of benefits, reduces the effective money supply, and therefore purchasing power, very sharply and rapidly. It amounts to having the rug pulled from beneath a society’s feet. Under such circumstances there is simply no price support at anything like the current level. Demand, which is what one can pay for rather than what one happens to want, will fall very sharply, and so will prices, but those lower prices will be less affordable than the previous higher prices in the easy credit era we have lived through. The essentials will, however, receive relative price support as a much larger percentage of a much smaller money supply begins to chase them. As we move further into depression, and essentials likely become increasingly scarce, their prices could even rise in nominal terms. Against a backdrop of money supply collapse, that would mean real prices were going through the roof, and it could happen in a few short years....
If my position is correct, then Gonzalo’s advice to take on debt in order to purchase commodities would be disastrous in two ways. Firstly, it would be a bad bet if commodities in fact fall. Secondly, the debt assumed would come to respresent a tremendous burden in a deflation when real interest rates would be punishingly high, even if nominal rates are low (ie the nominal rate minus negative inflation is always a larger number).

My advice is quite the contrary. I would suggest cashing out of stocks, most bonds (except short term teasuries), commodities, real estate and collectibles etc, and sitting safely on the sidelines out of the game (while not, of course, trusting one’s newfound liquidity to an insolvent banking system). While there is no no-risk scenario, cash and cash equivalents (ie short term treasuries) represent the lowest risk in an increasingly risky world. Cash is king in a deflation. It is not a long term solution, but it is the least risky means to ride out a great deleveraging as the giant overhang of debt we have built over at least the last thirty years comes crashing down around our ears like a tidal wave finally reaching the shore. Our current phase of extend-and-pretend represents the period where the tide mysteriously withdraws and the curious public ventures out on to the newly exposed sand in search of pretty shells. The wave is coming though, and its force will sweep all before it.

[verrip1]

Looked at Nicole Foss' bio.

BS Biology. Post grad in air and water pollution. Law degree. Blogger.

IOW, zero training in economics or finance. I see no reason whatsoever to give credence to anything she says about economics. Her opinion has the same value or lack thereof as any post from any member of this board. Not one iota more, nor one iota less.

This is like me copying a post from Traelin here and suggesting it is somehow authoritative.

Have we lowered our standards to this?

[Tesla_DC-meme]

My advice is quite the contrary. I would suggest cashing out of stocks, most bonds (except short term teasuries), commodities, real estate and collectibles etc, and sitting safely on the sidelines out of the game (while not, of course, trusting one’s newfound liquidity to an insolvent banking system).
Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3520&page=2#ixzz1EKoX3GFu

Extremely extreme advice.

I wonder if there is a practical way to follow this approach.

Is it really practical to (literally or figuratively) bury your cash in the backyard?

[neohguy]

Feb 18, 2011 12:52:34 GMT -5 verrip1 said:

Looked at Nicole Foss' bio.

BS Biology. Post grad in air and water pollution. Law degree. Blogger.

IOW, zero training in economics or finance. I see no reason whatsoever to give credence to anything she says about economics. Her opinion has the same value or lack thereof as any post from any member of this board. Not one iota more, nor one iota less.

This is like me copying a post from Traelin here and suggesting it is somehow authoritative.

Have we lowered our standards to this?

I like Traelin's posts. If you want to see low standards then listen to CNBC.

[verrip1]

Burying money in one's yard would be foolish.

You'd miss out on that giddy 0.7% money market interest rate. That could easily add up to the price of a can of Alpo when needed in one's retirement years.

[frankq]

Hey! No reason to talk trash about Mrs. Decoy!

[comokate]

Feb 18, 2011 12:52:34 GMT -5 verrip1 said:

Looked at Nicole Foss' bio.

BS Biology. Post grad in air and water pollution. Law degree. Blogger.

IOW, zero training in economics or finance. I see no reason whatsoever to give credence to anything she says about economics. Her opinion has the same value or lack thereof as any post from any member of this board. Not one iota more, nor one iota less.

This is like me copying a post from Traelin here and suggesting it is somehow authoritative.

Have we lowered our standards to this?

Thank you for your illuminating opinion Verrip; it will be filed away with the rest of the opinions expressed on this board.
There is really no way to safely authenticate the education, experiences, or for that matter, gender, of anyone on this board.
As usual, instead of attacking an idea you disagree with, you make a personal attack against the person,in this case a woman for whom you really have no proof of your allegations that she does not have training/education or experience in economics or finance. Do you know the intimate details of her life? Where she volunteers? Who are her professional associates in her law firm? What are their specialties? The educational credentials you listed this woman as having appear to rank her far above what most of the people on this board appear to possess. That hasn't stopped anyone from posting an opinion, has it?

[nicomachus]

Feb 18, 2011 8:03:29 GMT -5 @neohguy said:

If we assume markets will behave rationally, we will be wrong-footed every time.

Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3520&page=2#ixzz1EL56SUpo

Precisely my point. The reification of the market itself has become a source of the problem. The market is nothing more than an arbitrarily chosen set of data. Whether it corresponds to rational beings (people), upon whom it is predicated in principle, is a whole different question. And a far more important question.

And if the Natural Law theorists have anything to say about it, then an empire built up on this very false premise is one which must break as the absurdity of the market assumptions are proved wrong.

Over the past 30 years of corporate welfare schemes (banking scandals, wall street bail outs, shifting the tax burden from rich to poor in the trickle down interest, deregulation, etc) I think it fair to say we have become such a market based empire. But the market we've created is an illusion without any real people behind it.

[verrip1]

Feb 18, 2011 13:39:33 GMT -5 @comokate said:

Feb 18, 2011 12:52:34 GMT -5 verrip1 said:

Looked at Nicole Foss' bio.

BS Biology. Post grad in air and water pollution. Law degree. Blogger.

IOW, zero training in economics or finance. I see no reason whatsoever to give credence to anything she says about economics. Her opinion has the same value or lack thereof as any post from any member of this board. Not one iota more, nor one iota less.

This is like me copying a post from Traelin here and suggesting it is somehow authoritative.

Have we lowered our standards to this?

Thank you for your illuminating opinion Verrip; it will be filed away with the rest of the opinions expressed on this board.
There is really no way to safely authenticate the education, experiences, or for that matter, gender, of anyone on this board.
As usual, instead of attacking an idea you disagree with, you make a personal attack against the person,in this case a woman for whom you really have no proof of your allegations that she does not have training/education or experience in economics or finance. Do you know the intimate details of her life? Where she volunteers? Who are her professional associates in her law firm? What are their specialties? The educational credentials you listed this woman as having appear to rank her far above what most of the people on this board appear to possess. That hasn't stopped anyone from posting an opinion, has it?

Take a chill pill. I didn't try to DIScredit her. I only pointed out that she had nothing in her bio which SUPPORTED any abilities in economics. Therefore her words carry no more weight than anybody else's.

Now, you can go speculate allllll you want about life experiences and any additional knowledge base that Ms. Foss has. But you're just wildass guessing.

Then you go on to state that her qualities are "far above what most of the people on this board appear to possess". Absolute bullshit. So she puts words together well. So freakin' what? That gives absolutely no credence to the QUALITY of her opinions.

Stop being so damned defensive. From your post above, it appears that YOU give her credit based on her gender and nothing more.

[neohguy]

Verrip, if I quoted someone with a PHD in economics would you find that to be more credible or would you deride that by saying economists are dumb? Who do you listen to and why?

[Aman A.K.A. Ahamburger]

I'll tell you why I don't like Nicole Foss. All last year she was playing the same tune as the one above. Now she is saying that she's right, it's just that the powers are making it so she is off. Plus she swore up and down that the Canadian housing bubble was popping in 2010. How many more times does she have to be wrong??

My question Neoh, are you following her advice and hiding your money in your house or yard??

[dumdeedoe]

Man, vripp sounds like my Doctor when I google my symptoms and show up at his office telling him what meds I need...... Some people think that 8 years in med school and 2 years interning can overcome my google power.......PFFTTT stupid monkees.......

[nicomachus]

Feb 18, 2011 21:23:31 GMT -5 Aman A.K.A. Ahamburger said:

I'll tell you why I don't like Nicole Foss. All last year she was playing the same tune as the one above. Now she is saying that she's right, it's just that the powers are making it so she is off. Plus she swore up and down that the Canadian housing bubble was popping in 2010. How many more times does she have to be wrong??

My question Neoh, are you following her advice and hiding your money in your house or yard??

Seems to me she could be wrong many times (as many are): The comment should be considered on its own merit (preferably with some premises to back the conclusion, though few around here take much time with that, including often myself). Ad hominems are still not a valid form of argument.

[itstippy]

"Seems to me she could be wrong many times (as many are): The comment should be considered on its own merit (preferably with some premises to back the conclusion, though few around here take much time with that, including often myself). Ad hominems are still not a valid form of argument."

Well said.

Nicole Foss is bright. She has something to say on the subject of economics. Read it, think about her take, and add her viewpoint to your own knowledge base. She wouldn't be writing about economics if she didn't feel she had something worthwhile to say, some insight worth sharing.

Followers of the "soft science" of political economy are prone to the dangers of group-think syndrome. It's easy to form conclusions about underlying principles, then judge others' intelligence based on whether or not they think like you do. For example:

A group of Poli-Sci grad students are sitting around in a coffee house deriding the likes of Dick Cheney, Karl Rove, Alan Greenspan, etc. as stupid people who cannot see the reality of the World beyond their little group. Simultaneously Dick, Karl, and Alan are in a Washington think tank deriding today's Poli-Sci grad students as stupid people who cannot see the reality of the World beyond their little group.

Should either group decide to publish an opinion on political economics it's a good idea to follow nicomachus' advice quoted above. Maybe you learn something. At least you learn how others think.

[vl]

"Capital must protect itself in every way... Debts must be collected and loans and mortgages foreclosed as soon as possible. When through a process of law the common people have lost their homes, they will be more tractable and more easily governed by the strong arm of the law applied by the central power of leading financiers. People without homes will not quarrel with their leaders." JP Morgan


Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3520&page=3#ixzz1EPYDpqCP

When the "letter of the law" spell "trouble" for the common person, it becomes time for the common person to remove the letters and replace them with common sense laws.

[itstippy]

Don't you love that quote? "People without homes will not quarrel with their leaders." It's priceless!

It's good to understand how JP Morgan thought. An absolutely fascinating man.
en.wikipedia.org/wiki/J._P._Morgan