tag:blogger.com,1999:blog-27697009.post6830909709603571776..comments2024-02-29T03:21:35.007-08:00Comments on The Great Depression of 2006 : We Have Been Here Before (Reprinted)Jim in San Marcoshttp://www.blogger.com/profile/09435296419912935381noreply@blogger.comBlogger18125tag:blogger.com,1999:blog-27697009.post-23651760522417457372010-07-18T20:39:04.028-07:002010-07-18T20:39:04.028-07:00Hi Frakrak
Thank you for the links. Maybe I am j...Hi Frakrak<br /><br />Thank you for the links. Maybe I am just being stubborn, but I see no deflation anywhere. There has been no debt destruction.<br /><br />The US has millions unemployed and all sorts of transfer payments to keep them afloat. These people do not represent taxes coming in to the federal government.<br /><br />Without the debt destruction, everyone still has all of their dollars. The question you have to ask is: How you can have such a massive loss of investment funds in real estate and bank finance and no one has lost a dime? The conflict demonstrates the impossible.<br /><br />With the actual destruction of debt, deflation would follow; less money following less goods. In our present case; we have more money following less goods.<br /><br />Either one of us could be right, this is just how I see it. <br /><br />Take careJim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-66892338740035880922010-07-17T15:31:16.420-07:002010-07-17T15:31:16.420-07:00This capital would have marched overseas when the ...This capital would have marched overseas when the U.S. greenback had value, here's another take on retirement in the U.S.<br />http://www.marketoracle.co.uk/Article21189.htmlfrakrakhttps://www.blogger.com/profile/10110027067402980842noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-77620621712538179872010-07-17T15:19:23.924-07:002010-07-17T15:19:23.924-07:00Jim the next step should be deflation. Selected en...Jim the next step should be deflation. Selected entities have been "reflated" by your Fed and the massive debt these entities have created has been "passed" on to the tax payers. I guess the question I would be asking is: "where do these giants of American capitalism invest their money now?" If it is off shore in large quantities then the game is over for the tax payers. Perhaps the U.S. is screwed, and these companies will come back in and pickup the spoils for peanuts?<br />Here's a link:http://www.philstockworld.com/2010/07/04/america-is-234-years-old-today-is-it-finished/frakrakhttps://www.blogger.com/profile/10110027067402980842noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-44731306138854747622010-07-15T14:24:12.263-07:002010-07-15T14:24:12.263-07:00Spectre,
the money has been printed/borrowed alre...Spectre,<br /><br />the money has been printed/borrowed already ... how and when they will come into the market is just a matter of time.<br /><br />As for alot of ppl and companies defaulting i.e. fictitious money collapsing, this is temporary thing (even that it is strong at the moment).<br />Yes it does shrink credit money, but it also causes two other things that increases the possibility of inflation :<br /> 1. Lower production capacity i.e. lower supply of goods i.e. higher price.<br /> 2. Currency depreciation. How strong currency is depends on the long term import/export balance..i.e. perceived ability to pay back in real terms which is dependent to the first one.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-26854857352089107732010-07-15T08:51:32.311-07:002010-07-15T08:51:32.311-07:00High spending on products produced overseas + extr...High spending on products produced overseas + extremely low savings rates = poor long-term economyGriffin T.http://www.personalloans.org/noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-42269191714618650792010-07-14T17:36:27.141-07:002010-07-14T17:36:27.141-07:00Hard not to see the irony of the mess the banks ar...Hard not to see the irony of the mess the banks are in. They are invested heavily in asset classes that are depreciating in value (homes, cars and credit cards)all the while the politicians continue to write cheques to large sectors of society who produce nothing of value for them to use as collateral for loans. A couple of years ago when I was in my conspiracy phase of my life I thought banking was the perfect business. Seeing as they could create money out of thin air. Oh how times have changed.<br /><br />These days I wonder if it isn't us, John Q. Public, that is the tail wagging the dog rather than other way around like I used to think. <br /><br />robAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-7103868902526940702010-07-14T08:30:16.752-07:002010-07-14T08:30:16.752-07:00Hi Spector
I disagree the bank depositors have be...Hi Spector<br /><br />I disagree the bank depositors have been made whole, the bank owners are being trashed every time the FDIC takes over a bank. The stockholders lose everything. If your bank loses all of the depositors money and then the FDIC comes in and bails them out, was there actually ever a real economic loss?<br /><br />It's kind of like your son squandering the family fortune and then the government makes you whole again. He got to consume product and then you get the same chance also. The only problem is there is now twice as much money in the system and half of it was not earned, it is counterfit.<br /><br />The bankers might have made money while times were good, now they can't even find anyone that can qualify to borrow money, so as a business, they are screwed. It kind of like being a dentist now, no customers.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-52380193347739706632010-07-14T06:22:16.774-07:002010-07-14T06:22:16.774-07:00"Step forward to today and you will find that..."Step forward to today and you will find that the government has bailed out the banks and paid off the bad housing loans with printed money. No one has lost a dime. In this case there has been no destruction of debt. In essence, government has taken the risk out of investments and interest rates have dropped to very low rates."<br /><br /><br />Paid off the housing loans? Nothing has been paid off. It's extend and pretend which works till it doesn't. I can show you lots of stats where many people have lost much more than a dime. Are you kidding me? The only thing that has happened is that the banks have been made whole on the backs of taxpayers. Now money becomes dear, and the bankers buy everything up just like the last time. We have been here before.SPECTRE of Deflationnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-85176793646858012382010-07-13T22:00:16.198-07:002010-07-13T22:00:16.198-07:00Hi Rob
I also see food prices rising dramatically...Hi Rob<br /><br />I also see food prices rising dramatically. That is the exact opposite of the Great Depression of 1930. From 1910 to 1930 we transformed from a nation of farmers 80% down to about 20% with the advent of the industrial age and the assembly line.<br /><br />The people that had quit the farm could still return. But farmers were pouring milk in the streets in the 1930's. The government had to step in with price supports.<br /><br />I tend to believe as you do, that the increases in food prices demonstrate that inflation is the direction we are traveling in.<br /><br />Housing as you suggest is not an item of concern, we produced too many of them and to point to them as a sign of deflation is foolish. There is no real demand for something that is still dropping in price. The reason we are in this mess is because we built too many houses. Now we are going to make it worse with the government buying up the surplus to try to keep the price artificially high and that has me scratching my head wondering why.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-70261904400059329722010-07-13T21:36:25.050-07:002010-07-13T21:36:25.050-07:00Hi Ca
In the last depression housing collapsed an...Hi Ca<br /><br />In the last depression housing collapsed and it took the banks with it. 90 percent of saving in the banks were lost. 4,000 banks closed and none of the money that was lost was ever recovered. There was no bail out of the banking system or real estate.<br /><br />Note though after FDR got elected they passed bank insurance. There were no real losses to cover here all of the bad banks had already dropped dead. The FDIC insurance gave people confidence to deposit their funds.<br /><br />Step forward to today and you will find that the government has bailed out the banks and paid off the bad housing loans with printed money. No one has lost a dime. In this case there has been no destruction of debt. In essence, government has taken the risk out of investments and interest rates have dropped to very low rates.<br /><br />The government is trying to print its way out of this mess and as I have suggested in the past, you can print dollars, but you cannot print food; dollar bills have no nutritional value.<br /><br />The total retirement savings of this country is around 17 trillion. The government is pretty close to borrowing all of it. At some point everyone will rather spend their dollars rather than save them with this paltry return. That's when you will see inflation. There is no problem as long as the money is "safe in the bank." It's the withdrawals down the line that will bring the game to an end; too little product chased by too many dollars.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-12505876371002517172010-07-13T21:13:37.620-07:002010-07-13T21:13:37.620-07:00Hi Poly
If you go back to The Great Depression, ...Hi Poly<br /><br />If you go back to The Great Depression, it actually started in 1926 with the hurricane that hit Florida, housing there collapsed in 1927 and 1928. The stock market crashed in 1929 and everything was still OK. By 1932 most of the banks had collapsed and by 1933 people knew they were in depression. People tagged the great depression with the year 1929 because of the stock market crash.<br /><br />The biggest thing was that no one accepted that there was a depression until 1932. The title to my blog using the year 2006 is a reference to the fact that it will take several years for what is happening to sink in just like back in 1933. At that point in time, all hope was gone.<br /><br />This depression will evolve slowly over time just as the last one did.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-45808839937480711102010-07-13T21:11:11.667-07:002010-07-13T21:11:11.667-07:00The White House, Congress and the judicial branch ...The White House, Congress and the judicial branch is your enemy. The military-industrial complex is your enemy. The power elite is your enemy. The big multi-national corps are your enemy. Organized religion is your enemy. Pharmaceutical companies are your enemy. Big Agri and food processing companies are your enemy. The media is your enemy.<br /><br />Only thing you can do is observe their destructive actions and figure out how you can profit for it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-69640863543998856272010-07-13T12:02:34.023-07:002010-07-13T12:02:34.023-07:00I want to ask one question in regards to deflation...I want to ask one question in regards to deflation/inflation. At the grocery store are we spending more or less as compared with five years ago. Yes I agree that some items have gone down in price. However the vast majority of people live hand to mouth with food being a major portion of there budgets. The things that they need to buy are going up in price. Spectre I think you underestimate the resolve of politicians to cover their collective behinds thru this mess. It is easier to print money and hand it to people than to let them dangle in the wind.<br /><br />People tend to stay off the streets as long as they have a little food in their stomachs. So far, I'd have to say that plan seems to be working. Housing prices and new cars are the last things people worry about when they don't know where their next meal is coming from.<br /><br />The government back in 30's had the luxury of a populace that was much more self sufficient and could practice "tough love" because most people grew up or knew somebody who had a farm. Nowadays people don't know how to make french fries and even less know how to grow them.<br /><br />robAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-16168356812836963852010-07-13T06:10:40.732-07:002010-07-13T06:10:40.732-07:00We had our inflation already. It was inflation in ...We had our inflation already. It was inflation in asset prices instead of wages/asset prices like we had in the 1970s. The problem with asset inflation of the type we experienced is that assets can also fall and not always rise, although this is a blue moon/black swan event usually. You are left with J6P being unable to service his/her debt because wages didn't keep up with the asset inflation, and they are stuck with depreciating assets which are no longer marked to make believe. Only the banks get to keep pretending and extending, or if you like, praying and delaying. <br /><br />Debt saturation is a real be-atch when it shows itself. Welcome to Depression II.SPECTRE of Deflationnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-38955011286803074092010-07-12T12:33:57.881-07:002010-07-12T12:33:57.881-07:00Jim --
As indicated by his post today, Charles Sm...Jim --<br /><br />As indicated by his post today, Charles Smith believes there will be deflation. I was wondering where/why you opinion diverges from his?<br /><br />Thankscanoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-66525925422572893112010-07-12T12:23:11.343-07:002010-07-12T12:23:11.343-07:00It's never different "this time", th...It's never different "this time", this blog wouldn't exist if it was :)<br /><br />As for 1932 being 2012, what's your basis? <br /><br />The 2008 crash would match the 1929 crash making 1932 equal to 2011.<br /><br />OR, if you start with the official recession, 2007, it would make 1932 equal to 2010.<br /><br />Or, using your blog title (Great depression of 2006 as the start), 1932 would equal 2009 and we're in recovery :)Polyhttps://www.blogger.com/profile/01101104361466256156noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-53783572829637809022010-07-12T08:14:42.734-07:002010-07-12T08:14:42.734-07:00The last 18 months has been all about transfering ...The last 18 months has been all about transfering private losses to the public debt of the United States. It was never about helping Main Street although most everyone bought this trojan horse hook, line and sinker. Now that they, the power elite, have tranfered their losses and been made whole, it's time for a shopping spree with assets going for pennies on the dollar. Did we learn nothing from the last Depression?SPECTRE of Deflationnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-50221537081261665392010-07-12T08:05:22.031-07:002010-07-12T08:05:22.031-07:00It will play out as deflation, as the power elites...It will play out as deflation, as the power elites control the strings of govt., and a hyper inflation would screw them royal. What is in their best self interest? Allowing debtors to pay off loans with ever depreciating dollars, or would they like money to be very dear which allows them to pick off assets at pennies on the dollar? Remember that all the losses have been transferred to the poor schmucks called taxpayers.<br /><br />This will play out as it always does. We are nothing special from a historical perspective. No empire has ever run more than 40 years once they go pure fiat. We came off the gold standard in 1971.SPECTRE of Deflationnoreply@blogger.com