Why I think this will be worse than the Great Depression

jueco2005 · Feb 24, 2009

Latest news only confirm this thread title. The govt keeps creating credit through its bookkeeping entries and putting it in the wrong places.

As the market is trying to clear away those toxic nominal values to real ones, the govt is swimming against the current.

Main points:
- Worrying about deflation and fighting with more credit.
- âStimulusâ money allocated to âkeyâ economic sectors.
- The banking industry has become a hole impossible to fill out.

At the beginning of this crisis banks did not know what the value of their MBA wasâ¦â¦â¦â¦â¦.I believe at the end of this crisis NOONE will know the value of the dollar.

will848 · Feb 24, 2009

Quote from gnome:

One obvious example... the Toyota Land Cruiser. First time I saw one was 1970. It cost $2795. By 2006, $56,000.
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Worst example ever.

stock_trad3r · Feb 24, 2009

so many noobs

this recession is very shallow. Doom and gloomers will be forgotten in 3 years

jueco2005 · Feb 24, 2009

In three years I would like to punch in the face.

Quote from stock_trad3r:

so many noobs

this recession is very shallow. Doom and gloomers will be forgotten in 3 years
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Trendytrader · Mar 1, 2009

See the irony?

San Francisco last month.

75 years ago.

gnome · Mar 1, 2009

Quote from will848:

Worst example ever.
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You're not allowed to "call bullshit" without making a case.

jueco2005 · Mar 3, 2009

STOCK BELOW 7000.

I think floor is 6000

ehorn · Sep 13, 2009

Quote from Cheese:

....There is no depression and there will be no depression. Recessions periodically arise as the current recession has arisen and with them comes increased unemployment. Governments use increased spending to revive retail demand thereby reviving economic activity and employment. ...
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How is that method working out...?

<a href="http://www.shadowstats.com" title="Visit ShadowStats.com"><img src="http://shadowstats.com/imgs/sgs-emp.gif?hl=1" border="0" alt="Chart of U.S. Unemployment" /></a>

<a href="http://www.shadowstats.com" title="Visit ShadowStats.com"><img src="http://shadowstats.com/imgs/sgs-gdp.gif?hl=1" border="0" alt="Chart of Growth in U.S.Gross Domestic Product (GDP)" /></a>

ByLoSellHi · Sep 13, 2009

Quote from kalzayani:

hehe
well they can not mess with things that are free from god

incase we do go into very bad times..here is how to handle it
gl

===============
Handbook 2009

Health:
1. Drink plenty of water.
2. Eat breakfast like a king, lunch like a prince and dinner like a beggar.
3. Eat more foods that grow on trees and plants and eat less food that is manufactured in plants.
4. Live with the 3 E's -- Energy, Enthusiasm, and Empathy.
5. Make time to practice meditation, yoga, and prayer.
6. Play more games.
7. Read more books than you did in 2008.
8. Sit in silence for at least 10 minutes each day.
9. Sleep for 7 hours.
10. Take a 10-30 minutes walk every day. And while you walk, smile.

Personality:

11. Don't compare your life to others'. You have no idea what their journey is all about.
12. Don't have negative thoughts or things you cannot control. Instead invest your energy in the positive present moment.
13. Don't over do. Keep your limits.
14. Don't take yourself so seriously. No one else does.
15. Don't waste your precious energy on gossip.
16. Dream more while you are awake.
17. Envy is a waste of time. You already have all you need.
18. Forget issues of the past. Don't remind your partner with his/ her mistakes of the past. That will ruin your present appiness.
19. Life is too short to waste time hating anyone. Don't hate others.
20.. Make peace with your past so it won't spoil the present.
21. No one is in charge of your happiness except you.
22. Realize that life is a school and you are here to learn. Problems are simply part of the curriculum that appear and fade away like algebra class but the lessons you learn will last a lifetime.
23. Smile and laugh more.
24. You don't have to win every argument. Agree to disagree.

Society:

25. Call your family often.
26. Each day give something good to others.
27. Forgive everyone for everything.
28. Spend time with people over the age of 70 & under the age of 6.
29. Try to make at least three people smile each day.
30. What other people think of you is none of your business.
31. Your job won't take care of you when you are sick. Your friends will. Stay in touch.

Life:

32. Do the right thing!
33. Get rid of anything that isn't useful, beautiful or joyful.
34. GOD heals everything.
35. However good or bad a situation is, it will change.
36. No matter how you feel, get up, dress up and show up.
37. The best is yet to come.
38. When you awake alive in the morning, thank GOD for it.
39. Your Inner most is always happy. So, be happy.
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I don't know where you got this or whether you made it up, but it doesn't matter, it's really quite good.

the1 · Sep 13, 2009

This experiment has already been tried -- it was called Zimbabwe

Quote from ptunic:

The Fed is easily capable, willing, and has already begun to address aggregate demand for money (money supply * money velocity).

They brought short term Fed rates to near 0%.

They are in the process of bringing long term debt to under 2%.

If needed, they will increase direct purchases of other long term debt such as mortgages, including sub-prime and junk bonds, as needed, to reduce interest rates closer to 0%.

If that still isn't working, they will electronically print more money and buy S&P futures and stocks.

If that still isn't working, they will work with the federal government to distribute the money more directly through tax rebates, as well as construction and other public works projects (this is already happening).

If that doesn't work they can give every citizen $20,000.00 USD, electronically printed by the Fed.

If that doesn't work, they can give $1 million. Then $1 billion per citizen. Then $1 trillion. They electronically printed $1 Trillion in under 6 hours at one point already (AIG etc). At one point, that is vastly under $100,000/citizen imo (probably closer to $20,000 at the maximum), inflation in housing prices and other asset values will take hold again and money velocity will decrease at a lower rate than money supply increases.

While I totally agree, money has different forms today than it used to, that can easily be correct by the Fed simply adding 1 digit to the amount it normally prints. This is an oversimplification and is of course done over months, hopefully it makes my point

Not that I am recommending this in the slightest, just the power they have is unlimited in terms of creating inflation, and with Bernenke the will is there. They would rather cause 20% annual inflation than risk default for example, and this probably is a smart move.

The real solution involves making inflation-adjusted cuts to government spending and moving closer towards a budget surplus instead of away from it. The big problem now is we have been living way past our means.. and the government's solution to bad debt has been to replace one form with another, instead of face the politically challenging true solutions. If we want to spend so much money, we need to increase taxes for it. If we are past the Laffer curve, then spending has to be cut. 10% deficits are unsustainable, and may put us at risk of shocks even greater than those recently experienced. Thailand, Argentina, and Iceland have some experience in this. We are a larger economy and the world's reserve currency, which is a huge help in reducing default risk, but this advantage does not confer unlimited resources to us. We must pay the piper, and we will, the only question is when and it what form and with what pain. The longer the delay, much like a rubber band snapping, the bigger the pain of adjustment when it comes due.
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