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And this is just the beginning. Chairman Ben has yet to be fully unleashed.
Courtesy of Sean Malone at Mises Institute
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LOL
ZeroHege featured on Alex Jones Infowars.com
http://www.infowars.com/racketeering-101-bailed-out-banks-threaten-syste...
That's what you get for featuring articles by Bob Chapman -- you are now an official InfoWarrior (not that there's anything wrong with that)
and here's the comment thread on your post at
http://www.infowars.com/racketeering-101-bailed-out-banks-threaten-syste...
Everybody has equal right to read and discuss the truth.
I lurk here and learn. I don't comment much anywhere. To discount infowarriors and Alex Jones is stupid. I have tried to debunk his facts and other than the occasional spin (which I notice here also)I have not been able to disprove any of his allegations. He does tend to be over the top a good bit of the time, but if he is waking people up to the corruption that is permeating every aspect of modern day life, WTF mate. Pull the dick out of your ass and get over yourself.
The comment thread to Zero Hedge’s "101 Racketeering: Bailed Out Banks..." on Inforwars was mind riveting. I couldn’t stop reading. Here are just a few comments at random :
Beau Deters: The “harm, real or speculative, to the banks is irrelevant and immaterial to the suit at hand, as the action before the court involves not the financial interests of the banking industry, but the freedom of information of the plaintiff having to pay interest plus principal on the loans to these financial institutions. The needs of the banks, the damage to the banks, is frivolous compared to the ripe environment for fraud, lack of accountability, and general transparency. It is the tax payers’ money that is being spent, beggars can not be demanders.”
Williamwallac:“How to pay back all the money that is still out standing as debt”? “Just inflate the currency so that 24 trillion debt buys a loaf of bread. Soon,” he said, “ we will see the magic of the banker magicians at work--nothing into something and back again into nothing.”
Feared and loathed: “Ultimately we will have to hold these crooks responsible ourselves. I think the reality of this revolution (if there is to be one) exists in our willingness to commit to our goals. What we want for this country we must demand, and harness, through whatever means possible. They would send you away in a heartbeat to fight and die in their war; why not do that for ours!”
Neocon Narc : “They tell you…
Paulson threatens martial law if TARP money is not approved.
Bernanke threatens financial disaster if they are audited and tries to say the bill wants to control them.
Geithner says that is a line you do not want to cross.
They are the ones who are threatening us… Jason Bermas hit the nail on the head this morning in his coverage of the transparency Geithner and Bernanke tell the public… ‘As transparent as an iron beam…’”
Hologram: If these banks were to fail then that would most likely be for the best. If they are “Too Big TO FAIL” then they shouldn’t be there at all. That is called monopoly and if I remember correctly monopoly is illegal in this country.
Bad Slave : “I like how these banks cry about a ‘negative inference’ related to disclosure of their borrowing activities, yet they access millions of customers’ credit reports every day in order to screw with people’s interest rates and credit ratings. They get away with this argument only because our courts are completely crooked. Federal judges are the worst—whores.”
All of which was fairly well summed up by Robert Henry, who wrote: So they can gamble with the bailout money plus manipulate the markets to their satisfaction then keep it all secret as well? What a sick joke, also known as having it ALL WAYS! However, the game is pretty much over when all they have left to sell is FEAR!
It always seems so amazing that people can try to discredit someone because they raise their voice. I guess when you have a kid in the street about to be run over by a MACK truck, you should just politely, and gently say, "oh dear you might want to stop playing in that street" that way even thought you have a dead child, no one can accuse you of being outrageous...
Same with infowars.com, these folks are really being mild and very appropriate when expressing their outrage over the privately held Federal Reserve and the bank cartel it heads.
When someone breaks into your home invading it to steal everything you have, you have a right to defend yourself, and for people who have guns, intruders get shot...the difference between the home invaders and the privately held Federal Reserve and their cartel is that this group buys the politicians, then gets laws passed so that they can claim that what they do is "legal".
So when you hear people have outrage when they hear about what this group and all their cartel agents have been doing since 1913, outrage is mild to consider having been robbed for generations.
In fact, "they" are banking (pun not intended) on you keeping your protests mild, so they can continue looting and pillaging with abandon. The looting will not stop until an example is set.
Having successfully implanted the principle of National Security as a legal basis for a democratically-elected government to refuse to tell its citizens what military and police actions it is taking, we have now entered a new era in which the principle of National Financial Security is implanted as a legal basis for a democratically-elected government to refuse to tell its citizens what monetary and fiscal actions it is taking. Time to abandon this sinking ship, or find yourself chained to an oar.
great. just when ZH escaped from the fringe of being labeled conspiracy theorists.
lol everyone features Zero Hedge content now. That's cause it's so damn good.
agreed - but to on the same page as headlines that read Invisible Empire and Forced vaccinations, quarantine camps, health care interrogations and mandatory “decontaminations” is perhaps a little too much
You don't know about the forced vaccinations?
Get with the program dude!
A new law just passed in Massachusetts imposes fines of up to $1000 per day and up to a 30 day jail sentence for not obeying authorities during a public health emergency. So if you are instructed to take the swine flu vaccine in Massachusetts and you refuse, you could be facing fines that will bankrupt you and a prison sentence on top of that.
The YouTube video below is of a news report about this disturbing new law. In particular, pay attention at the 1:40 mark when the anchor and reporter discuss the new penalties for not obeying the health authorities during an emergency.....
If you have not realized it yet, the controversy over swine flu vaccinations is about to get very, very real. The authorities know that a lot of people are extremely concerned about the safety of the swine flu vaccine, and they are putting the infrastructure in place to deal with those dissenters.
Let us hope that the worst case scenario with the swine flu does not take place, but the reality is that health authorities across the United States are gearing up for the biggest vaccination campaign in the nation's history. It looks like this fall could be very, very interesting.
http://globalresearch.ca/index.php?context=va&aid=14899
There is no swine flu law in Massachusetts
Quickest link I could find as I am heading out the door.
Obama Grants Immunity to Baxter International from Litigation Arising From Swine Flu Shotshttp://alligatorfarm.wordpress.com/2009/08/17/immunity-baxter-obama/
Good info here also:
http://drtenpenny.com/default.aspx
LOL! I hope that shut Mr. Anonymous up for good.
now we have maha denniger picking on my main man jim willie for the last two weeks. karl needs to get over himself.....:)
i think that denninger is too full of himself
to get over himself....
and yet that is not to say that he has not
published a lot of good material....
Never! I will continue to prove his allegations are baseless by promoting my own baseless allegations. I will also continue to offer specious arguments and nonsequiturs to counter his bruising of my whale-sized ego.
- Karl Denninger
Karl can no more get over himslef than he can get over the massive turd that seems to be permanently stuck in his rectum.
I am Chumbawamba.
I thought they were the same person. Just difrent outfits.
The bill specifically mandates the following:
(1) to require the owner or occupier of premises to permit entry into and investigation of the premises;
(2) to close, direct, and compel the evacuation of, or to decontaminate or cause to be decontaminated any building or facility, and to allow the reopening of the building or facility when the danger has ended;
(3) to decontaminate or cause to be decontaminated, or to destroy any material;
(4) to restrict or prohibit assemblages of persons;
(5) to require a health care facility to provide services or the use of its facility, or to transfer the management and supervision of the health care facility to the department or to a local public health authority;
(6) to control ingress to and egress from any stricken or threatened public area, and the movement of persons and materials within the area;
(7) to adopt and enforce measures to provide for the safe disposal of infectious waste and human remains, provided that religious, cultural, family, and individual beliefs of the deceased person shall be followed to the extent possible when disposing of human remains, whenever that may be done without endangering the public health;
(8) to procure, take immediate possession from any source, store, or distribute any anti-toxins, serums, vaccines, immunizing agents, antibiotics, and other pharmaceutical agents or medical supplies located within the commonwealth as may be necessary to respond to the emergency;
(9) to require in-state health care providers to assist in the performance of vaccination, treatment, examination, or testing of any individual as a condition of licensure, authorization, or the ability to continue to function as a health care provider in the commonwealth
Just say No
a little about the UK corp. ltd. but it can just as easily be applied to USSA inc.
http://www.youtube.com/watch?v=ZxfwOzlUg-s&feature=sub
You should look at the death rate vis a vis the hospitalization rate for Week 17 through week 32 of this Spring into middle of July when they decided NOT to continue reporting how many were reporting in from Drs' offices as sick. Zoikes!! See the AMA and CDC site for more details but go to the more technical parts of their sites. death rate of those hospitalized last Spring into this Summer was roughly 6%. CDC has declared the Pandemic Severity Index a 2. # of deaths for that is WAY above the 90000 figure recently reported.
But sorry to digress.
Every state has legal exceptions for vaccinations, even in emergencies. I suggest you look them up. Google it b/c I recently saw a site summarizing this state by state.
FEMA camps are coming to a empty field near your nearest metro area.
Lets assume (just for the sake of my argument) that swine flu ends up being much ado about nothing.
You now have a law on the books declaring that a government can inject people against their wishes for the good of society.
And boy is it a slippery slope from here to "population control".
Don't forget Rahm's Emmanuel's brother Zeke is the one who has provided significant support to those who have been working to develop a theoretical framework for population control delivered via food or drugs (implying unwillingness on the part of the recipients).
Obama wanting a law that allows him to control the internet,
http://news.cnet.com/8301-13578_3-10320096-38.html
in the interest of "national security". Of course when extreme left-wingers leaked things duing Bush 1 and IIthat that a strict read of the laws would classify as treasonous that was o.k. Because Bush was a warmongering idiot. If these laws had been proposed during the last administration, the MSM would have been screaming bloody murder.
So, you have to ask yourself, why would Obama & Co want these laws, if they could be voted out of office in an presidential election or two and have the government in the hands of another party?
Why would you willingly put these in place knowing you ultimately, sooner or later, hand the government over to Republicans.
I am constantly amazed at the connections that can be made in plain sight, yet so many are so willing to dismiss them as "tinfoil". And I don't include you in those doing the dismissing.
Why would you willingly put these in place knowing you ultimately, sooner or later, hand the government over to Republicans.
The obvious answer is that the Dems and Repubs really want the same thing, work for the same interests toward achieving the same goals. They only seem to disagree, and they do so by disagreeing in big ways on issues of large public import, pumped by the MSM, but of little matter to their ultimate agenda. In this way they keep the revolution within the walls of the prison (props to Krishnamurti).
FWIW, I now consider many things facts that only 18 months ago I would have dismissed as raving conspiracy theory.
Still, I would be carefull before taking one of those "vaccinations", but then again you might not have a choice.
Do what? You ALWAYS have a choice. Just load up your 30.06 with your favorite flavor of "Hell NO!" In this case, you're probably looking at a clear-cut case of self defense.
Also, given the gangs obviously still here, I'd like an answer to my comment on the latest "Dear Senator" article. Thanks.
My pewpew is already loaded with my favourite flavour of 'hell no'. Sorry boys I ain't taking a dangerous shot!
Seriously even - when the vaccine kills someone (which absolutely will happen), you're off the hook. Let them prove you won't die from it without injecting you.
I don't even have a gun actually - but I did when I lived in NYC where it was illegal. I wonder why...
Of all people, I really thought PM would take time to respond. Larry King can go fuck himself - but Tyler Durden, whoever the fuck he/she/they be, better deflate that big head and come on back down to hang with the rest of the serfs. If you think I'm gonna support the creation of yet another class system, you can kiss my fucking ass. Anonymity don't play that way, bitch.
Again, I'm kinda drunk. Actually, I was headed out - then I got caught up in this bullshit and drank too many fucking white russians.... 'Cuz I care SO much.
So as Mr. Dead Gen X put it so wonderfully for the Baby Boomers who crowned him our dead leader, "Entertain me!" (Cobain reference)
HEY! It's the DUDE!
What's going on, Dude?
Um...I'm not scared of Swine Flu OR the supposedly scary vaccines. I get my flu shot every year - always have, always will.
Remember what they said about Edward Jenner when he developed vaccines - they thought he was going to get them all sick. He saved millions of lives.
I'd rather risk myself with a vaccine that has a .1% fail rate than Swine Flu that has a .2% chance of infecting me.
As an esteemed gentleman (semi-sarcasm) recently said, and I'm paraphrasing, but it had something to do about a dinning room table.
Springfield Armory M1A1, CA residents get em while they are legal, short trip to Nevada or Arizona for the 20 and 30 shot "felony" clips.
You don't need 20 and 30 shot clips if you know what you are doing.
so all the military operators must have no clue what-so-ever because all they seem to carry is 30 round clips.
You will be killed while you are having ideas about shooting others.
I'll take my 30 ROUND MAGAZINES please.
Another Orwellian thing of note: H1N1 is the same name given to the 'normal' flu virus... so by calling Swine Flu the Normal Flu, we're making the stock markets more valuable AND strengthening our immune systems at the same time. And we didn't even have to get another loan!
Participate by suspending your disbelief in the government's omnipotent status, and create a little bit of the new 'good reality' we all elected to have in '08! Believe in the crystal ball, and it will show you the future! (Now I think I'll write my congressmen about shortening the season of winter, or at least putting a cap and trade system into effect on snow fall.) (edit: sorry for the typo, it's fixed)
AK47 with 10k rounds...check
Tactical Vest...check
Gas Mask...check
Ready to take down anyone trying to inject me with a needle or at least die trying...check
We always DO have a choice.
Here is the problem as I see it with the 30.06 answer:
When lefties raise a ruckus and you have protests on the front steps of major corporations during the Monday - Friday 9-5 hours its inevitably mostly made up of unemployed/underemployed people (who are admittedly a growing population these days). Yet during Bush I and Bush II these protests were covered by the MSM as if they represented the Will of the People, which is Nonsense, since the average American was working during those hours.
Now take "Teaparties", which the MSM completely fails to cover, except in a derisive fashion. These typically occur on Weekends, and the growing phenomenon is one which should concern the "powers that be", due to the undeniable fact that from the perspective of the MSM, the average American, (mostly made up of the white working class) should have nothing to complain about, and HASN'T had anything to complain about for decades.
And yet, here they are, protesting, getting up off their couches and getting involved.
I personally think its great. It IS the elephant in the room that no one wishes to discuss.
Tieing this back to the 30.06 - the lefties absolutely VILLIFIED those who attended the protests - wasn't it Gloria Vanderbilt's son, Anderson Cooper, who referred to them as Tea Baggers?
Can you guess what the move will be against gun rights if/when things get more volatile? If the MSM beat these people up just for ASSEMBLING and waving home-made signs, it will only get worse as the intensity level ratchets up.
The wildcard is the military and law enforcement. I'll leave it at that.
I would expect any attempted broad seizure of weapons during civil unrest would result in periodic "outbursts" from the broad populace here and there.
By the way, observing (or failing to observe) things in plain sight:
Executive order 11051 signed by William Jefferson Clinton:
11051--Provides FEMA complete authorization to put
Federal "seizure orders" (many of which have been on the books for decades, some new as well) into effect in times of increased international tension of economic or financial crisis (FEMA will be in control in case of a "National Emergency").
FEMA can do whatever it WANTS under this. Who heads FEMA? Not an elected official, but an appointed one.
Are the tumblers falling into place? What happens when they all do?
As Mulder said, The Truth is Out There.
And I personally weep for the idea of the Republic, and where it has gone.
"The wildcard is the military and law enforcement. I'll leave it at that."
I find it difficult to imagine a situation where American military forces, except perhaps those made up principally of foreign inductees, would fire upon American citizens. Besides, the U.S. military in all its monstrous power cannot effectively subdue a land mass the size of Texas.
From Federalist 8, this is a fair description of the situation:
The smallness of the army renders the natural strength of the community an over-match for it; and the citizens, not habituated to look up to the military power for protection, or to submit to its oppressions, neither love nor fear the soldiery; they view them with a spirit of jealous acquiescence in a necessary evil, and stand ready to resist a power which they suppose may be exerted to the prejudice of their rights. The army under such circumstances may usefully aid the magistrate to suppress a small faction, or an occasional mob, or insurrection; but it will be unable to enforce encroachments against the united efforts of the great body of the people.
The police, on the other hand, owe their existence and allegiance strictly to the state, and IMO can be counted on to attempt to repress outbreaks of liberty early on. Their numbers are insufficient to this task long term.
The US military has and will fire on it's own citizens. Look at Lincoln's time, there was a protest and thousands were shot at. Look at Waco for more recent times. And when I was in the military one thing they posed to me was "if you were ordered to fire on your own countrymen, for example in case of an epidemic... would you do it?" So there are examples, and probably will be more in the future...
"Forced vaccinations, quarantine camps,...."
Too much?????
Google "massachusetts forced vaccination" dumbass.
One of the hospitals in my area is advertising that all their staff will have a flu vaccine by the end of October or will be fired.
Wait till they force circumcision on everyone. Google it if you don;t believe me.
I suppose some people on this board will argue that telling me I MUST amputate part of my fucking DICK is NOT over the line. Such people were referred to by Lenin as "useful idiots".
And sorry Obama/Nancy/Bawney/Harry my sons' dick is off limits.
It is the international system of currency which determines the totality of life on this planet.
i wish it were too much....
as history has shown all collaborators with totalitarianism -
and that means you - will find themselves the
victims of their hero.....
these activities are in place and being exercised
in test marketing fashion....you are just way
too stupid...or ill-informed....
That is the same complaints I have about fox news, and especially Glenn Beck. Even if he does get some good shit out of his mouth, he'll follow it up with some shit about death panels or whatsherfuck from alaska. why don't you just hand out straw men that are ALREADY ON FIRE.
100% agree... the MSM is an appendage of the Messaih and Helicopter Ben propoganda lies machine.. MSM cannot be trust any longer.. liars ... ALL OF THEM!
The MSM has been controlled by large corporations for a least a couple of decades. They are no more liberal than they are the Dalai Lama. They didn't cover the protests against Bush seriously. (People who were opposed to Bush's policies often complained that they made protests look much smaller than they really were, that they only interviewed the idiots, etc.) Now they don't cover the protests against Obama seriously. The MSM were generally as uncritical of Bush as they are of Obama. IMO that's because they were very happy to have either of those controllable mouthpieces "running" the government (for the benefit of the big corporations that own the MSM). (And they did a lot to help insure that both would win: they marginalized Gore just as they did McCain.)
What they don't want is any real conversatition about how the government is looting the average person for the advantage of big corportations and a few ultra-rich, whether through the military-industrial complex, bailouts of financial firms, kickbacks to (contracts with) a few favored companies or big unions, etc. They certainly don't want people to look behind who is really running government or the media. They want the "conservatives" to fight with the "liberals" and neither to fight against the group that's controlling the economy, the political system, or the media.
Also I love how that chart makes the link between the economics and politics (in terms of war). I think that's really important. I will take this opportunity to pimp an article I just finished.
http://www.zerohedge.com/article/dpj-set-win-japan-election-may-issue-seppuku-bonds
it's not just war but freedom which is at stake
with money.....most people don't realize
the connection which is why most americans
don't know that a central bank exists and of
those who do they don't have a clue about the
nexus between freedom and money....
as one of the rothschilds claimed, "i care not
who makes its laws so long as i control its
money."
The dollar does not relate to economic growth. For instance the 1840's was a period of persistent real estate deflation and general stagnation. Far be it from me to defend Bernanke or the monetary-credit and general economic status quo. That isn't my point.
Money, all money, is an abstraction, even gold backed money, for the 'value' of gold itself is an abstraction. The beach of Nome was saturated with gold flakes and the shores of today Zimbabwe litttered with diamonds. Many saw them and thought so what. Certainly a far simpler one that todays money but the fundamental point remains.
The transactional function of money long ago overwhelmed its store of value function. For better or for worse and that is a democratic imperitive.
Bingo.
the value of gold is not an abstraction - not
even close....such an utterance is an ignorant
utterance of a bovine mind maddened with
diseases most likely caught in academia from
charlatans and quacks selling medicine for your
soul.....
the transactional function of money is a chimera
which the charlatans' sleight of hand has
successfully bamboozled the public....
gold is still very present in economic life and
its absence will spell the end of organized
and prosperous economic life...its disppearance
is a recidivistic and atavistic regression
back to primitive and ignornant economic
organization....just such an arrangement is
exactly what elists want so that the low
iq serfs can be more easily subjugated....
the obsession with transactional functionality
is precisely an anti-democratic imperative
of elistist snobs who are hellbent on subjugating
the mass of unwashed humanity....
absence of gold will never occur except for
the proletariat....the elite will never and have
never given it up....when it is taken from
the hands of the people it will reside firmly
in the hands of elite who will use it to
advance their own evil schemes....
gold and only gold is the defender of liberty,
freedom, and civilization....
Gold is the oldest currency around, and like all currency, its value is based on faith that other people assign value to that currency as you do. Gold doesn't rust so using it as a store of value is logical. Gold will always be there; the same can't be said for all the pieces of paper flying around and electrons blazing down the wires of the NYSE with the same confidence.
However, you can't eat gold, you can't fill up your gas tank with gold and you can't use it as a liquid form of exchange in today's world. The certainty of everyday life rests in dollars, while the certainty of next year rests in gold. As unemployment continues to rise (or it doesn't but that doesn't seem too likely to me) the day to day certainty will be in much higher demand. The change will come when we stop to think about the future.
martin armstrongs latest on gold
http://www.scribd.com/doc/19199220/Will-Gold-Reach-5000-809?autodown=pdf
You can't eat your dollars, you can't fill your tank with dollars (you can heat your home or wipe your ...) And the certainty you reference is the decrease in the VALUE of the dollars you save. For those who would hold "wealth" in dollars, money is not wealth. Assets are where wealth is stored and created, and dollars are a depreciating asset (oxymoron?)
The transactional function of money long ago overwhelmed its store of value function. For better or for worse and that is a democratic imperitive.
Personally, I love it when people make this argument, because it is so popular, and so obviously wrong.
If they are just tokens, why not print up enough to make us all millionaires, then no one will have to work, right? We'll all just agree to accept the unlimited tokens, swap them among ourselves, and slap each other on the back for being so damned clever.
Taken to an absurd conclusion, which we admittedly are or were well on our way to, yes, the conclusion is absurd.
Maybe somebody smarter than me can imagine a system where the total marked to market price of assets approximates the amount of money. Which I think would be necessary to have the store of value function of money reign absolute, carried to an absurd conclusion.
The less absract problem than the function problem of money and of more practical importance is who controls money. It's creation and it's 'value'. No sneaking the pure market into it either because some group will always arise that has market power.
It is admittedly my Catholic upbringing speaking but there is no such thing as a perfect system because people are imperfect. Eventually the time comes when the imperfections of any system become almost too much to bear and the keepers of that system insist that people must sacrifice to serve the system. This is when the worst evil always rises.
And therein lies the problem - to the extent that the money supply overstates the value of underlying assets, you've got inflation, an asset bubble, or any of a number of things that can rationally be deemed "bad" for the owners of capital.
The point isn't to avoid that bubble effect (it can't be avoided), but to be able to measure how inflated it's become. And for that, some concept of stored value of money, aside from its transactional value, is a requirement.
the store of value function of money has
absolutely no connection with the market value
of all assets - which seems to be your objective....
it is the fiat regime which makes this assertion
because dollars are created based upon someone's
idea of economic output and productivity....and
then the currency is backed by the full faith
and credit of the united states....which is
implicit confiscation and emminent domain over
all property in order to sustain the value of
the fiat...thus is removed the barrier - gold -
which protects property rights and freedom....
having currency approximate mark to market value of
all assets is an exact specification for the
monetization of all things....but all things
do not make good money.....thus it is not a sound
idea...
you justify the exclusion of the "pure" market
because you imagine that it is not perfect but
perfection is not necessarily the basis for
selection or operation of a system....
the goal is to find a better one or the best
of all available systems....often this selection
is informed by justice....it is just for the
people to own their money which must be
a store of value...
this is precisely where fiat regimes fail....it
is not just to let a cabal of people control
money and its value....the exclusion of a free
and open market in forming the value and use of
money is to keep a cabal firmly in control
of fiat money....
there is no reason to exclude market forces....
our consitution gives the people - not a cabal -
control of money - not its value
per se - who may release and horde it as
economic conditions
justify....this brings discipline to the
management of currency (as opposed to money)....
the purpose of this scheme is to regulate
the interest value of money and to provide
a bulwark against the establishment of feudalistic
and totalitarian regimes.....
he who owns the gold owns the money and he
who owns the money makes the rules....you will
never see any government dump gold to the bottom of
the ocean - giving lie to the idea that gold
has no monetary value.
it should be firmly evident that gold is money
and that it is the best money possible....
"this is precisely where fiat regimes fail....it
is not just to let a cabal of people control
money and its value....the exclusion of a free
and open market in forming the value and use of
money is to keep a cabal firmly in control
of fiat money...."
Powerful statement, that!
rapier,
Well spoken. Yes, credit DOES run around and act like money, having its influence on price. Which means that leverage acts like money, and the right to create leverage is equivalent to the right to print money. This leads us to the awful (but true) conclusion that when banks ask for increased leverage they are asking, in a nice way, for the right to print more money (well, to print credit-money-thingies).
There is no perfect system. This system of fiat money and credit-money-thingies, though, has revealed its fatal imperfection so many times in history, and yet the "authorities" cling to it as gospel. One must ask: why? The answer, of course, is as simple as it is obvious: it gives them the ability to steal from the masses unseen through inflation, and to use the loot to cement their own places at the top, pay bribes to legislators to keep the system going, start foreign wars, pay the dependency classes to keep the votes rolling in. This is exactly the thing that is better-resisted (not perfectly, but better) by a precious metal currency system. And that is exactly why one is so vigorously opposed.
Get thee to a nunnery with this short-sighted claptrap!
I am Chumbawamba.
I could see what you are saying as making sense and it is true to a certain extent. Paper money is great for trade - even in the old days because gold/silver cost so much to ship via boat.
However, it all depends on your meaning of "growth." During the GD, Americans consumed more luxury goods (meat, butter) than any other time. This is the so-called dreaded deflation. If the perpetual image of "growth" is proved by stock markets and prices nominally going up, how come it seems that regular consumers have much more trouble making ends truly meet (not including credit) at these times? Personally, I'd prefer to be wealthier by just having valuable money instead of being forced to enter the Wall Street casino just to try to maintain a standard of living.
Persistant inflation is nothing more than an obtuse yet clever mechanism for handicapping those who make a living working and get paid in dollars relative to those who already own assets denominated in dollars. Wages always have a hard time keeping up with the printing press for some odd reason.
via the infowars site there is also this (so I was wrong about the conspiracy thing)
Study Says World's Stocks Controlled by Select Few
http://www.insidescience.org/research/study_says_world_s_stocks_controll...
Yeah this article will be fascinating when it comes out. It will be published in an upcoming issue of Physical Review E. We will be watching for it!!
http://pre.aps.org/
You don't have to wait. You can get it at:
http://arxiv.org/abs/0902.0878
I think the dollar will do OK medium term. The reason I think that is that I think private sector deleveraging (through defaults and debt pay downs) will exceed the amount of government re-leveraging that the public and the bond market will tolerate. Roger Altman (Clinton Treasury guy, and founder and Chair of Evercore) was on Charlie Rose in July, saying Obama/Summers/etc wanted to run big time deficits, but Altman and they were afraid the public or the bond market would shut them down.
Given the level of rage building up in the public, and the shortening average maturity of the debt held by foreign investors in US treasuries, I have trouble betting against the dollar. Much easier to bet against sterling, or whatever. Also, the last time the Japanese started buying non-USD denominated treasuries was in the Carter days (some called them Carter bonds), and that marked a major low in the USD.
the dollar will continue to debase over the long
term without pause....
unfortunately you are confusing currency
convertibility vs domestic purchase power...
whatever the relationship between the two may
be they are distinct and separate concepts....
the dollar will continue to debase over the long
term without pause....
unfortunately you are confusing currency
convertibility vs domestic purchase power...
whatever the relationship between the two may
be they are distinct and separate concepts....
Can somebody explain to me the author's assertion that a move from a relative value of over $2 to $0.08 is "-196%"? What a fucking idiot.
Well $0.08 is 4% of $2.00.
Who was the idiot again??? :-)
Evidently, both you and the author.
Sean Malone, the author, thinks this:
"From 1900 - 2008 with a baseline of 1800 dollars, it did lose 196% of its value. With $1 set at 1800, up to $2.04 by 1900 and plummeting all the way down to $0.08 (still in 1800 dollars mind) is that big of a drop."
http://blog.mises.org/archives/010553.asp#comment-588240
losing more than 100% of anything takes you negative. Seriously, no shit. You can rise more than 100% but you can only fall a total 100%, making the 196% loss completely idiocy
a drop from 2.04 to 0.08 is a $1.96, not 196%. In percentage terms is 1.96/2.04 = 96.08%.
author = idiot
it's math
stop being a bitch....
2.04 -> .08 is -96%....i would assume it
to be a typo...
LOL!, wow...
You're the idiot. If you take '1' as par then going from 2 to 1 is 100% and down to near zero is another 100%. Get a clue.
Remember you are talking about the dollar! !
1.00 is the basis = 0 reference ("relative value")
let’s go through it:
1.00 + 104% = 2.04 (no one argued that, or called any one stupid – so far)
2.04 – 104% = 1.00 (inverse)
thus
1.00 – 92% = .08
thus
-92% + -104% = -196%
Now then, you either learned something about relative dollar value, or you could begin working for the fed (or you could just lie and work for the fed anyway).
I'm a financial guy. I do this in my sleep. Here is the formula to use for calculating the change in percentage terms:
Percent Change = ([Ending Value / Starting Value] - 1) x 100
So,
Percent Change = ([$0.08 / $2.04] - 1) x 100 = -96.078%
In brief, the Sean's chart is wrong (I suspect in more ways than one).
Vaccinations. In "The Diamond Age" that's one way they put the nanosites in you. (Hooray! a math question.)
The chart is rather misleading. First of all, before the war of 1812, the dollar wasn't accepted for international trade - it was seen as unstable and unreliable. Then during the War, the US SCOTUS stated that even by law that British Debtors were still to be paid - that accounted for the steep rise in the value of the dollar at that time, which 'worsens' the US trade balance. Foreign investors would finally trade the dollar and consider investing in the US - whereas before their interest was next to zero. So the initial level of the dollar is VERY misleading. In addition, most local commerce was conducted in numerous private currencies - issued by individual banks. The dollar wasn't the sole currency till 1863. Anyone think that might cause some 'distortion'?
Secondly, I'm not sure about all the data, but the chart presumes to show the relative value of the dollar - but does so without regard to the true measure of value - the average workers time. You can take any era and look at goods purchased, and the simple fact is that an average worker can NOW purchase more goods, have more choices and more leisure time than ever before. So as a percentage of the average workers time, goods in fact cost less - MUCH LESS. So ultimately the BUYING POWER of labor has shot thru the roof. Chart that.
Next: the chart borders on the intentionally misleading. It shows M2 - why not M3 - which is the gross money supply. I know why - it has crashed the last few years while M2 has increased - kinda selective stats if you ask me.
Fourth - it's devoid of context. After WWII we'd destroyed the industry and manufacturing capability of the rest of the world. We had the only viable market - so what should happen to the value of the dollar??? And what should one expect as the rest of the world regains manufacturing/commercial capability and their economies strengthen?? In the 80's/90's - many of the mises institute were bitching about the strength of the dollar and how it needed to weaken or we were all gonna die. Now it's weakened and they're yelling we'e all gonna die.
Gimme a break. They do von Mises a great disservice with their rhetoric and abuse of statistics.
if this organization does a disservice to von
mises you do a great disservice to logic....
the initial level of the dollar is not misleading -
you are obfuscating distinctions between
international currency convertibility and domestic
purchasing power...the chart seems more concerned
with domestic value and debasement far more so
than with international convertibility concerns....
the us ran a chronic current account deficit until
around the turn of the 20th c. but never became
a problem because international settlements were
conducted in terms of bills of exchange which were
resolved in gold...the same was true for the baskin
robbins collection of currencies you cite which
in terms of gold resulted in no distortion....please
don't play cutsie with the details....
the buying power of labor has increased but it
is a big whoopdee doodah day....the issue is the
protection of that buying power which cannot
be done with a fiat currency and which the chart
so amply documents and contrary to your ideological
preferences....only gold can preserve that
power over time....
i can't speak for the preference for m-2 over
m-3 but i would be happy to speculate that it may
be due to the fed dropping the series a few years
ago because "it was too expensive to produce."
lmao...what
a fucking goddam lie....if john williams can
continue to publish it with his liimited
resources and lack of recourse to claims of
executive privilege i am sure that the fed
could produce the number....besides your much
vaunted 4th branch of government states that
m3 is a useless number - another reason for
not publishing it....not sure the mises org
agrees but certainly you cannot quibble where
your masters decree otherwise....sounds like
the selectivity is more with your central planners
than with the gold standard bearers....
again, your 4th point is nothing but a conflation
of the international convertibility of dollars
into other currencies with some implied loss
of domestic purchase power....please keep the
terms of the discussion to the point....
you make a great apologist for the fed as
you know that since you can't dazzle them with
brilliance you can baffle them with bullshit....
i am not baffled but you can keep on bullshitting
all you like...
The buying power of labor is irrelevant - the buying power of labor can stay constant in a hyperinflationary environment as well as a deflationary environment. What is at issue is the buying power of the store of value, in our case, the USD. That is anything but constant.
Any more pundits on this subject of the value of money? I'm thinking - the value of money could fluctuate every moment given a number a complex factors simultaneously at work: supply/demand of goods, necessity of a particular good, urgency, money supply, confidence in the currency, inflation expectations, historical context, amount of coercion, etc.
Bottled water seems like one of those things that could vary in price by a factor of 100...
Years ago I read a history of monetary systems, conclusion: all monetary systems fail, most of them fail rapidly, unexpectedly, and catastrophically.
doublepost
triplepost
Hmm. Your ideas are intriguing to me and I wish to subscribe to your newsletter.
Zimbabwe had to repay it's foreign creditors in their own currencies. So whenever Zimbabwe printed to pay, they had to go to the international market to exchange their failbucks for dollars. The US will face a similar situation if Japan demands to purchase Tbonds denominated in yen.
I'm not sure why Tbonds continue to act 'well' -- in my opinion the whole Tbond complex is controlled by the trillions upon trillions in interest rate swaps as reported by BIS. So my main indicator is to watch currencies and gold.
I could see that. I'm hedged in cash (USD) and gold because I am tired of trying to predict, haha.
(As y'all may have already guessed) I'm just long Gold right now - really, truly and WAY THE F**K LOOOOONG. Hard as it may be to believe, I am usually not THIS long, but right now I am. To quote Prof. Antal Fekete (from one of his recent articles):
"The gold corpse still stirs. When it rises from its prostrate position it will, like Gulliver, dust off the Lilliputians who like ants have been scurrying all over his body. The day of reckoning will have dawned."
Even if the DXY rises, it doesn't mean Gold will fall, although stocks and other commodities may. We had USD and Gold rising together at the beginning of this year, when the stock market was taking it's worst pounding. A similar situation happened in 2005 (i.e. Gold and DXY rising together). If this happens, it shouldn't surprise us in the least because this economic crisis is at heart a currency crisis, and Gold is strongest currency there is - BELOW all the paper currencies in the inverted liquidity pyramid. Frankly, I'd rather it happen this way since it means I'm getting the best of both worlds.
So Gordon,
Tell me HOW you are long gold. I have been working through the options on paper before taking on exposure and have had a rather tiring internal debate on physical vs. "financial" exposure to gold (aka shares in GLD or LEAPS on GLD).
Maybe a bit of each is the answer.
I have bets on physical, mining shares, options and futures. No exposure to GLD since I am 100% sure it is a complete fraud and will blow up in the face of its investors most unexpectedly. Plus, I believe that it's another tool designed to help the powers-that-be manage the Gold price, so I won't invest in it just on principle.
I could agree with that if we are talking about the recent strength in the bond market.
So if bonds are any indicator you think an equity sell off (of around 20-25%) in which gold will follow suit followed by an extended period of inflation? This about right?
It is?
I have noticed a different trend.
t is ecological balance! You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples.
And no such thing as sigmadelta.
if your thesis is true expect dow below 6k perhaps hit 5500 and oil in the upper 20's. do you envision that? tough call...i personally dont expect gold at 8 or the euro hitting 1.20...however i would love it and unload my toilet paper into bullion...imagine the price of quality gold stocks in that scenario. even better than last fall...
Bingo!
Can you imagine being on the winning end of that trade around the end of '08 when it took only 10,000,000,000,000,000,000,000,000,000 ZWD to buy 1USD right before it shot back up to over 10,000,000,000,000,000,000,000,000,000,000 in January of '09, talking about making your whole year in one month. Full disclosure - I'm short ZWD.
I believe Gideon just proposed to back Zim's notes with gold or something else they can dig up locally.
I suppose the fact that locals are already using gold dust as currency is helping that decision along. Nothing like retroactive rationalization in action.
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=87825&sn=Detail
Go Antal. Go Lilliput.
Now I do wonder whether the rocks featured in the illustration on Zimbabwe's $100 trillion bill are worth more than the money itself. Hmmm....
A little off topic but I wanted to bring this hilarious (and true) site about relevant people in business today. I saw it on another board today.
http://www.dickipedia.org/dick.php?title=Jim_Cramer
http://www.dickipedia.org/dick.php?title=Henry_Paulson
What are they basing the value of the dollar on, is what I'd like to know?
Gold?
Bacon?
How much of what the dollar can buy is dependent on a variety of factors:
supply of money (point being made above)
availability of product in question (if this is all based on the value of a bottle of snake oil, then .08 is a fair price today)
demand for said product (I'm sure there's little demand for that snake oil, but bacon's making a huge comeback).
quality of said product (a steamship in 1800 is quaint by today's standards, but was making the DeWitt Clinton back then was probably WAY more expensive then).
Point is - while I don't disagree the Fed is out of control, you can't make a realistic statement like "the dollar is worth .08 versus a dollar from 1900" unless you define the point of comparison. For all intents and purposes, a dollar is a dollar until you define the value of the merchandise or currency you're comparing it to.
I like comparing it to bacon. Most people like it, it tastes good, and there are plenty of pigs in the world. Particularly on Wall Street.
PowerWealth.com shows the comparison against gold. I think that site's "A Million Bucks Ain’t What It Used to Be" article is a better depiction of what has happened to the dollar as a store of value. Here it is:
http://www.powerwealth.com/?p=9
The author has better financial credentials anyway.
Seriously - I have NO problem taking Wall Street Pro's little bat and beating the shit out him with it. The site admins have my information, pass it on to the MF.
But - given I've allowed for that, let's set the record straight on some fight club. Eventually, some MF would figure out that Tyler was crazy and FUCK him up. Enter me.
But he hides behind some fucking character he didn't even have the originality to create to carry that fictional weight. In my sad little world, that's called MARKETING. Which is fine by me if it's for the greater good.
But cop an attitude, and I'll call your ass out, bizzzzzzzzzatch. And I don't need to know shit about finance or law to do it. All I need to know is that you're copping a fucking attitude.
And yes, I really do wish that you'd take me down, proving how you're so much better than me. Seriously even. But at this point, I'm starting to doubt it.
I thought that, in Fight Club, he took on all comers? Is this some pussy version where he only takes on bankers? If so, I'm bored.
I think the content here might be above your head.
May I suggest UFC?
If the author angers you so, it is only your stupidity that continually brings you here (unless your steroid induced anger has complete control over you)
It's really sad that it actually took me a moment to decipher UFC :) Those pussies :)
I'm not actually angry. And even if I was, you could wave your little Harry Potter wand and pull off some serious damage, right?
Unless you come back with something even SLIGHTLY entertaining, I'm just gonna have to pass in the future.
By the way, my Mom takes steroids to battle cancer - so thanks so much for bringing it up, asshole.
Okay, that's a lie - but probably would have been effective if I hadn't admitted it. I really need to step away from the 'pooter.
I think your are particularly amusing. You're bashing TD's anonymity using the monkier "ReamUs"
Looks like you're the pussy.
p.s - Even if your mom was taking steroids for cancer I wouldn't give a shit because you're an asshole.
I don't like how this is represented but to explain the chart..
the 196% value is based on the total rise and decline on a $1 denominator
The rise to $2.04 is a 104% increase hence ($2.04-$1.0)/$1.0*100%
The when the value falls back to $1 then the %change is negative 104% (the $1 dollar remains the denominator)
Thus when the value falls to $0.08 the change is a negative 92% by ($1.0-$0.08)/1.0*100% the sum of the total change in the dollar value is 92%+104% = 196%
Although really the decline is only 92%
LA times mentions ZH, (4 th paragraph)
http://latimesblogs.latimes.com/money_co/2009/08/speculators-are-having-...
Stupid article and dumb quote. Zero deserves a better honorable mention than that.
Blame it all on the skateboarder turned day- trader. That argument has been played out.
The 70% volume done by bots has nothing to do with anything.
I thought that too. That LA Times article was bullshit. They were taking robottrader's quote out of context. The day trading kids are a symptom of the disease, not the cause.
Of cause it is full of BS, what else would you expect from LA Times; The fact that LA Times follows ZH speaks for itself though.
1st post cause I just cracked up in front of the wife after reading that.
You know what.....? It's happened... and everybody is still in denial....
Totally Kafkaesque bro......
Ciao,
Econolicious
U.S. Dollar is at or is near a bottom. Deflation just beginning. Return to inflation is years away. Watch your ass.
No use trying to predict where the dollar is going.
Its all dependent upon the SPY.
Which happens to depend upon the EUR/USD.
Which seems to move in the same direction as crude oil.
Which is led by the nose by the dollar.
Which in turn follows the SPY.
Virtually everything is traded in lockstep, all inextricably linked to the Skynet Robot
The only way to understand it is to study Goethe's Faust.
You are trying too hard. Lockstep action is what you get when a lot of money rotates out of market neutral and conservative long-short funds and vanilla long investments.
LOL. It's like surreal march of the penequins. It's all migrating to someplace stupid and when it gets there everybody is going to get screwed.
Wanna hear something creepy....? Check this out...
Hitchens on Hitchens.... Oh I mean Hitchens on Orwell....
http://www.econtalk.org/archives/2009/08/hitchens_on_orw.html
Ciao,
Econolicious
as an FYI (hot off the presses)
a new BBC series
Introducing the BBC's Aftershock serieshttp://news.bbc.co.uk/2/hi/business/8225610.stm
BBC editors and presenters explain what viewers, listeners and readers can look forward to on BBC TV, radio and online during this series in September.
Hot off the presses no doubt! Not sure whether to be pleased or offended when BBC flacks anonymously pimp their programming on ZH comment threads...and can't wait for the Lehman One Year Out media crunch that will surely grow tiresome before it begins. Hey BBC America - tell me why I have to stay up til 3 am to watch Graham Norton? That queer is a genius!
Let's see, the value of the dollar has almost disappeared since the sacrosanct saviors of all of us and the grand puppetmasters to all elected officials and legislation to legalize their criminal endeavors, namely, the privately held Federal Reserve corp, started skimming with their what they think 'fair operational charges and charging interest for all currency in circulation that is not backed by gold or silver' for printing money and controling money supply, and all monitary policy....it is time to take back what belongs to our country and not to this thieving operation...
It is like trying to find a needle in a hay stack to get to the truth about how much this privatly held corporation has sucked off of the backs of all US citizens for this almost 100 years, but when you consider that the estimate is that the owners own more than half of the DOW components that may give you an idea of their monopolistic power--still the whole operation, all the laws that they create to back their interests which are against the interest of everyone else, all stealth, very few people even know it is a privately held corporation.
Add the loss of all value of the dollar except for goodwill which was destroyed completely when Obama decided to fully back the Paulson and Bernake plan effectively making this new administration accomplice to all the crimes of this big bank heist, and the negative 6% interest effective right now, and one can see how we are enslaved by this criminal syndicate.
This is digressing quite a bit, but I think it's important that this video gets passed around:
http://www.youtube.com/watch?v=hIKPKjl0-pg
That video incites much anger in me. What about you? I think it's time to restore our constitutional rights.
I loved this "I'll charge you for whatever I wanna charge you with"
Isn't it funny how the amount of trouble america has and causes is historically so much higher under central bank control or when central bank is pushing hard to get back in control. Ok. When Jackson finally killed the BANK we expanded and took over tons of america and caused alot of grief to the indians. So that side affect wasn't so wonderful but.
How do you know it's not tied to, say, giving women the vote?
With logic and such mastery of the facts such as yours.....
it well could be that giving women the right
to vote was a calculated political maneuver
on the parts of the oligarchs to better
control elections...it was peter (?)
rockefeller who admitted
that equal rights was a ruse to pull women into
the work force in order to increase gdp and
corporate profits as well as to take control
of kids' educations - it had nothing to do with
ethical concerns for women....so your example
may be closer to the truth than you imagine...
with logic and such mastery of the facts such
as yours.....you can keep baffling them with
bullshit....
your straw man argument was just loverly....
You know this guy is really trying hard to compress an understanding into a narrow confine and it's just going to make things tough on him if you keep sticking the library of congress up his ass. When people want other people to live within narrow confines of understanding they don't like people who are able to step outside the confinement prison. Unfortunately our "guard" is not very good i guess they must be overworked.
Oh so you're saying I don't understand rudimentary causation. You could be right. Are you feeling really confident that you are right or a tad insecure about it? I also understand empathy. So be careful about your answer. It might get checked through clairsentience.
I do hate it when people try to connect Jackson's taking down the central bank wtih the trail of tears though. Keeping those things together in conversation is a way of discrediting what he did with the central bank...so i do think it is better to give him credit for the central bank period, even though it was tragic what he had a hand in doing to American Indians..
The two events are connected though. Ah, someone hasn't studied their early American legal history, has they?
honestly -- this chart is a bit deceptive....
I think you can make the case by starting around WWI to the present.
Certainly in the last 30 years -- purchasing power of the dollar has dropped rapidly.
Anyone with lots of savings can't make shit safely -- interest rates are at historic lows.... almost forcing people to play the casino market... and keep Ponzi financing of America alive.
I think the articles about how it takes 4 or 5 dollars of debt now to generate a $1 in GDP are really indicative how screwed up the American economy is. How the Fed hopes to keep this kind of status quo alive is ridiculous.
I'm wondering if the big plan is to simply super inflate the markets so that the top 1% can get ultra-rich again and start spending like mad. Tail wags dog sort of thing.
I don't know... the world has certainly become much more Matrix-like than I would have thought.
A picture is worth a thousand words. Still betting on a 100 year trend reversing, Mr. Prechter? The flawed DXY may well rise due to CB manipulation, but the dollar ain't got a chance IN HELL of rising against Gold - the true measure of the dollar's worth as opposed to the misleading DXY.
Dollar would likely rally HARD if we get panic deleveraging, debt destruction, and flight to safety. Impending hyperinflation seems to be the consensus view right now, which should make you skeptical. It would not be surprised if dollar rallied hard and gold fell into the $600's or lower, a total shakeout that turns off everyone to gold except for the most committed. If that happens use the opportunity to load up on physical, because the $50+ trillion unfunded liabilities of the US demand eventual mega-, if not hyper-, inflation. It might be more than 10 years before that happens though.
To paraphrase the top of this page, on a long enough timeline all fiat currencies drop to zero. But that doesn't preclude a massive final shakeout head fake.
Count me in as most committed. Gold @ $600 would be a God-send. I'd go rob a few banks to buy me more.
I am Chumbawamba.
The existence of this much cash was a gigantic fireworks display that something absurd was going on.
Gold. LOL.
How people can openly admit that markets are rigged, and then turn around with a straight face and claim that the gold market cannot be rigged for 10, 20 or even 100 years, just don't realize how hilariously easy it is to suppress the price of gold.
Gordon, don't hold your breath.
If Prechter is right, AARP will be rich with their social security checks!
A monthly check will suffice to buy a whole year's worth of stuff - LOL! USA's deficit problems - solved! Oil - free! My wages purchasing power - skyrocketing! Instead of $trillion deficits, we'll start having $billion deficits again.
Judge said: "an average worker can NOW purchase more goods, have more choices and more leisure time than ever before....So ultimately the BUYING POWER of labor has shot thru the roof. Chart that."
Real wages have been going down for most workers for the past few decades. The cheap goods from China and Bush's tax cuts have made people oblivious to the fact that the downward trend has been accelerating over the last decade.
During the false boom of 2001-2008, worker productivity increased dramatically yet none of those gains were passed down to the workers in the form of higher real wages. You can check this for yourself over at bls.gov where they track both productivity and wages. This was covered by the financial press during those years as a footnote and not the major story it was. It should be no surprise that people were tapping home equity lines of credit during those years to support spending. It wasn't coming from wages.
Check out what the minimum wage was in the 60s and 70s and then adjust that for inflation using REAL inflation figures like those from shadowstats. I'm not going to do the work for you, but I guarantee it will be an eye opener.
Is Krugman a shill for the bond market, or what? This little hyena is out of his mind with corruption. Off with his head:
So new budget projections show a cumulative deficit of $9 trillion over the next decade. According to many commentators, that's a terrifying number, requiring drastic action — in particular, of course, canceling efforts to boost the economy and calling off health care reform.
Click to enlarge
Paul Krugman The truth is more complicated and less frightening. Right now deficits are actually helping the economy. In fact, deficits here and in other major economies saved the world from a much deeper slump. The longer-term outlook is worrying, but it's not catastrophic.
The only real reason for concern is political. The United States can deal with its debts if politicians of both parties are, in the end, willing to show at least a bit of maturity. Need I say more? Let's start with the effects of this year's deficit.
There are two main reasons for the surge in red ink. First, the recession has led both to a sharp drop in tax receipts and to increased spending on unemployment insurance and other safety-net programs. Second, there have been large outlays on financial rescues. These are counted as part of the deficit, although the government is acquiring assets in the process and will eventually get at least part of its money back.
What this tells us is that right now it's good to run a deficit.
Consider what would have happened if the U.S. government and its counterparts around the world had tried to balance their budgets as they did in the early 1930s. It's a scary thought. If governments had raised taxes or slashed spending in the face of the slump, if they had refused to rescue distressed financial institutions, we could all too easily have seen a full replay of the Great Depression.
As I said, deficits saved the world.
In fact, we would be better off if governments were willing to run even larger deficits over the next year or two. The official White House forecast shows a nation stuck in purgatory for a prolonged period, with high unemployment persisting for years. If that's at all correct — and I fear that it will be — we should be doing more, not less, to support the economy.
But what about all that debt we're incurring? That's a bad thing, but it's important to have some perspective. Economists normally assess the sustainability of debt by looking at the ratio of debt to gross domestic product. And while $9 trillion is a huge sum, we also have a huge economy, which means that things aren't as scary as you might think.
Here's one way to look at it: We're looking at a rise in the debt/GDP ratio of about 40 percentage points. The real interest on that additional debt (you want to subtract off inflation) will probably be around 1 percent of GDP, or 5 percent of federal revenue. That doesn't sound like an overwhelming burden.
Now, this assumes that the U.S. government's credit will remain good so that it's able to borrow at relatively low interest rates.
So far, that's still true. Despite the prospect of big deficits, the government is able to borrow money long-term at an interest rate of less than 3.5 percent, which is low by historical standards. People making bets with real money don't seem to be worried about U.S. solvency.
The numbers tell you why. According to the White House projections, by 2019, net federal debt will be around 70 percent of GDP. That's not good, but it's within a range that has historically proved manageable for advanced countries, even those with relatively weak governments. In the early 1990s, Belgium — which is deeply divided along linguistic lines — had a net debt of 118 percent of GDP, while Italy — which is, well, Italy — had a net debt of 114 percent of GDP. Neither faced a financial crisis.
So is there anything to worry about? Yes, but the dangers are political, not economic.
As I've said, those 10-year projections aren't as bad as you may have heard. Over the really long term, however, the U.S. government will have big problems unless it makes some major changes. In particular, it has to rein in the growth of Medicare and Medicaid spending.
That shouldn't be hard in the context of overall health care reform. After all, America spends far more on health care than other advanced countries, without better results, so we should be able to make our system more cost-efficient. But that won't happen, of course, if even the most modest attempts to improve the system are successfully demagogued — by conservatives! — as efforts to “pull the plug on grandma.”
So don't fret about this year's deficit; we actually need to run up federal debt right now and need to keep doing it until the economy is on a solid path to recovery. And the extra debt should be manageable. If we face a potential problem, it's not because the economy can't handle the extra debt. Instead, it's the politics, stupid
Is Krugman a shill for the bond market, or what? Off with this little hyena's head:
So new budget projections show a cumulative deficit of $9 trillion over the next decade. According to many commentators, that's a terrifying number, requiring drastic action — in particular, of course, canceling efforts to boost the economy and calling off health care reform.
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Paul Krugman The truth is more complicated and less frightening. Right now deficits are actually helping the economy. In fact, deficits here and in other major economies saved the world from a much deeper slump. The longer-term outlook is worrying, but it's not catastrophic.
The only real reason for concern is political. The United States can deal with its debts if politicians of both parties are, in the end, willing to show at least a bit of maturity. Need I say more? Let's start with the effects of this year's deficit.
There are two main reasons for the surge in red ink. First, the recession has led both to a sharp drop in tax receipts and to increased spending on unemployment insurance and other safety-net programs. Second, there have been large outlays on financial rescues. These are counted as part of the deficit, although the government is acquiring assets in the process and will eventually get at least part of its money back.
What this tells us is that right now it's good to run a deficit.
Consider what would have happened if the U.S. government and its counterparts around the world had tried to balance their budgets as they did in the early 1930s. It's a scary thought. If governments had raised taxes or slashed spending in the face of the slump, if they had refused to rescue distressed financial institutions, we could all too easily have seen a full replay of the Great Depression.
As I said, deficits saved the world.
In fact, we would be better off if governments were willing to run even larger deficits over the next year or two. The official White House forecast shows a nation stuck in purgatory for a prolonged period, with high unemployment persisting for years. If that's at all correct — and I fear that it will be — we should be doing more, not less, to support the economy.
But what about all that debt we're incurring? That's a bad thing, but it's important to have some perspective. Economists normally assess the sustainability of debt by looking at the ratio of debt to gross domestic product. And while $9 trillion is a huge sum, we also have a huge economy, which means that things aren't as scary as you might think.
Here's one way to look at it: We're looking at a rise in the debt/GDP ratio of about 40 percentage points. The real interest on that additional debt (you want to subtract off inflation) will probably be around 1 percent of GDP, or 5 percent of federal revenue. That doesn't sound like an overwhelming burden.
Now, this assumes that the U.S. government's credit will remain good so that it's able to borrow at relatively low interest rates.
So far, that's still true. Despite the prospect of big deficits, the government is able to borrow money long-term at an interest rate of less than 3.5 percent, which is low by historical standards. People making bets with real money don't seem to be worried about U.S. solvency.
The numbers tell you why. According to the White House projections, by 2019, net federal debt will be around 70 percent of GDP. That's not good, but it's within a range that has historically proved manageable for advanced countries, even those with relatively weak governments. In the early 1990s, Belgium — which is deeply divided along linguistic lines — had a net debt of 118 percent of GDP, while Italy — which is, well, Italy — had a net debt of 114 percent of GDP. Neither faced a financial crisis.
So is there anything to worry about? Yes, but the dangers are political, not economic.
As I've said, those 10-year projections aren't as bad as you may have heard. Over the really long term, however, the U.S. government will have big problems unless it makes some major changes. In particular, it has to rein in the growth of Medicare and Medicaid spending.
That shouldn't be hard in the context of overall health care reform. After all, America spends far more on health care than other advanced countries, without better results, so we should be able to make our system more cost-efficient. But that won't happen, of course, if even the most modest attempts to improve the system are successfully demagogued — by conservatives! — as efforts to “pull the plug on grandma.”
So don't fret about this year's deficit; we actually need to run up federal debt right now and need to keep doing it until the economy is on a solid path to recovery. And the extra debt should be manageable. If we face a potential problem, it's not because the economy can't handle the extra debt. Instead, it's the politics, stupid
so, you're saying you don't hold gold?
I knew the world was fucked up, but after watching the documentary 'The Corporation', I realized its even worse than I thought. There are much bigger problems confronting us than just the financial arm. If you haven't seen this documentary, rent or download it from somewhere, parts of it will blow your mind.
Here's most of it on youtube:
http://www.youtube.com/view_play_list?p=86F331AB3A6C526C&search_query=th...