I agree mostly with ptunic. (I'm completely setting aside the point that his post was specifically aimed at the original topic in the thread, and now discussion has veered off into who's to blame, and somehow trying to associate ptunics post with that...) Owning the world's reserve currency gives the US much more flexibility than say Zimbabwe to monkey with money supply with fewer immediate implications. I worry when I hear the radio entertainers/finance experts call for expanding the availability of consumer debt, as high debt levels is already part of our systemic problem. It's a shame that our economy has become so dependent on consumers spoending $ they don't have and then rolling their debt forward. If banks are slowing velocity and reducing money in the economy (by hoarding govt handouts or returning to more prudent lending practices, depending on your viewpoint) the fed has the ability to step in and make it availble by printing $/buying treasuries. The fed would do best in "steering" this replacement money to places where it doesn't exacerbate problems like consumer over-indebtedness. That's why I think the idea of selectively buying longer term business debt can work. Lending overnight to large businesses' treasuries simply for cash management purposes is also good idea, for the time where the legacy players in the corp debt market are holding back. The key is that the fed has to withdraw all of these injections as the traditional market participants re-enter and make side-line money available to the economy again. As a complete aside, I have hope that a targeted government investment in nanotechnology could make a huge difference for our economy and country (world, for that matter) about 15 - 20 years out. I've been privately advocating this for years. There'd be too much lag between investment and return to help us out of he current mess, but it would revolutionize our economy more than electricity or internet. I'm dissappointed that there isn't anything in the stimulus package for nanotechnology.
It will be worse for me Not worse for the average American. No dust bowl, no food shortages, no police brutality, no cholera or other diseases rampant, no spike in infant mortality... Just a lot of bankruptcies and people struggling with downsizing their lifestyle.
they could care less, and most of them have never heard of anything besides what they remember from the useless books they supposedly studied at universities, the reality is majority of the world population are morons regardless of their position in society, they can barely think beyond the limited number of words they have learned by the age of 20, this has always been the case and most likely will be the case for a very long time, or maybe even till the end of the human race. Their stupidity is evident in their day to day actions, the way they speak, the useless subjects they speak about, the amount of time they put into thinking about what matters least, the way they handle their lives, their carelessness and ignorance about the world structure and what it means to their existence, their inability to comprehend systems beyond their basic system of daily tasks, their inability to maintain most aspects of their life and so handing it over to others (government etc) to maintain it for them all in all one can't have any hope in the human race, I don't recommend isolating oneself from them, but if you see that you understand what they do not, and your level of comprehension is above them, then take advantage of it
US economy is mainly based on debt, the main percentage of money in circulation is some type of debt, basically any entity or group of entities who can lend out money from thin air, can lend so much of it that eventually the income level of the majority of people is not sufficient enough to even pay the interest rate on the debt, let alone the debt itself, this eventually spells mass default, lowering asset prices to levels so those who created the huge amount of debt in the first place can purchase them at decent prices, and then start the debt cycle anew. Basically it's like giving support to the society in order for them to work for years and create assets in the process, and then taking over most of it at once, but without war and bloodshed, plus no lives are lost, so those who have lost everything can and will start anew. Honeybees collect pollen and periodically someone takes the honey they have made for himself or to sell, and they start anew each time. âI would rather earn 1% off a 100 people's efforts than 100% of my own efforts.â
WRONG. According to Friedman the money supply did decrease by 1/3---but it wasn't caused by the Fed. It was caused by the string of bank failures. The Fed's fault according to Friedman was not doing enough. So when you see Helicopter Ben showering money and loosening the spigots it's because he is following Uncle Milton's advice. Since the beginning of this current financial crisis an estimated $60 trillion has evaporated. There is reason to believe the proposed stimulus even when taken in concert with the rest of the world is nowhere near enough to stanch the bloodletting. It is being adopted to alleviate the pain but it's not going to be enough to fix the problem. A blood transfusion isn't enough if the arteries are also clogged. If you cannot get such simple elementary facts straight you don't stand a chance of understanding what's really going on. Judging from most of the responses in this thread you have a lot of company.
where are the facts to back this statement, where do you get the number from had $60T evaporated the $ would have collapsed
I got the figure from Marc Faber on an interview on Bloomberg. Couldn't find the link to that so I'll link to this instead which shows the 30 billion loss in market cap on world stock markets sourced also via Marc Faber: http://forum.globalhousepricecrash.com/lofiversion/index.php/t45670.html If a lot of US dollars disappeared that would mean the supply of dollars would have diminished and according to the law of supply and demand you could anticipate the dollar gaining value. Guess what has happened? The dollar has appreciated. Marc Faber was one of the few commentators to correctly diagnose beforehand that the immediate result of the financial crisis would be the appreciation of the US dollar. He is a long term gold bug though.
dollar is appreciating against other currencies, because other currencies are depreciating at a faster rate, but even this I believe is temporary, there will be a sudden reverse within a year and the dollar will depreciate against almost all other currencies in the end I think this seems to be the problem; the dollar is fucked
One of the closest financial collapses in terms of similarity to the current one is that of Japan circa 1990. Please take a look at the chart of the Japanese yen since then and give us your thoughts.