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silatix

economy in crisis..

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Of course ideas are infinite, but the earth isn't. That's more of an empirical fact then the former, and i'm not sure if disregarding newtonian physics in this case is a good idea. Economics is a science in hind-sight. Nassim Nicholas Taleb has a nice book about that, wich i reckon you are well aware about.

 

I agree that ideas will lead to innovations in the system itself, but 'ideas' are 2nd level resources. It will turn out that innovation will solve this crisis in the long term, but we need to reconsider the ROI (i stands for innovation in this case) currently achieved in society.

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When we run up another $1-2 trillion in debt, are we really stealing from our grandkids? That's what John McCain's been saying all over every major TV network for a few days. But is he speaking truth or out of his ass?

 

Not so much speaking truth: Economist Mark Thoma shows why not.

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Kansas is considering withholding salaries for teachers and govt employees, as well as tax returns for all residents. Coming soon to a state near you!

 

Time to trim down those quarterly estimated payments...

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A couple of thoughts hit me regarding what Thomas says in that article:

 

As long as the national debt is owned by domestic citizens, as the majority of the U.S. debt is, future interest payments transfer money from one group of Americans to another. These transfers mayor may not be desirable, but they hardly constitute a burden on the nation as a whole.

 

1- How much of our national debt is domestically owned? Is it truly a majority? We hear horror stories about China buying it up and holding it over our heads, for example. Or...(see #2)

 

2- "Transferring money from one group of Americans to another" creates more of those god-awful Rich People™ that the left rails against. So they're convenient when justifying national debt, but fodder for vilification when it's convenient for populist political gain? Couldn't one make the argument that acquiring such wealth, while not necessarily altruistic, benefits the public good as well as collecting wealth over time for the investor?

 

3- The same argument McCain is making now is the one that liberal opponents of Reagan were making when he ramped up military spending. Was it a valid argument then?

 

I'm not really picking sides here, just wanted to throw those questions out there.

 

Cf

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A couple of thoughts hit me regarding what Thomas says in that article:

 

 

 

1- How much of our national debt is domestically owned? Is it truly a majority? We hear horror stories about China buying it up and holding it over our heads, for example. Or...(see #2)

 

2- "Transferring money from one group of Americans to another" creates more of those god-awful Rich People™ that the left rails against. So they're convenient when justifying national debt, but fodder for vilification when it's convenient for populist political gain? Couldn't one make the argument that acquiring such wealth, while not necessarily altruistic, benefits the public good as well as collecting wealth over time for the investor?

 

3- The same argument McCain is making now is the one that liberal opponents of Reagan were making when he ramped up military spending. Was it a valid argument then?

 

I'm not really picking sides here, just wanted to throw those questions out there.

 

Cf

 

It is completely against China's best interest to do anything that would be detrimental to the US economy, as their economy is very dependent on US consumers. If our economy or dollar fails, so goes China. (A failed dollar would also make all of our debt that they own worthless.) The horror stories are just that, fear mongering stories.

Edited by faustfire

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can someone explain why the government cant print its own money and has to have the private federal reserve loan it to us at interest?

 

weren't the founding fathers trying to get away from the same thing in the Bank of England?

 

"I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies" -Thomas Jefferson

 

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning" -Henry Ford.

 

 

I just started reading on this today. Still trying to sort it out. Informations sourced on the intrawebs are dubious at best.

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"I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies" -Thomas Jefferson

 

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning" -Henry Ford.

 

 

I just started reading on this today. Still trying to sort it out. Informations sourced on the intrawebs are dubious at best.

 

oh christ, you didn't watch zeitgeist did you? execrable. I felt like washing my eyes and brain after watching it.

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Well off the top of my head... What Jefferson thinks about banking--might as well ask him what he thinks about quantum tunneling. Two hundred years of data gathering since he said that, and he'd probably be the first to change his mind if he were alive today. As for Henry Ford, we're talking about an anti-Semite's opinion of banking and money. If you give me only one guess about what he's really talking about when he talks about money and the banking system, I'd have to say Henry is getting his cues from the Protocols of Zion and not for the first time.

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It is completely against China's best interest to do anything that would be detrimental to the US economy, as their economy is very dependent on US consumers. If our economy or dollar fails, so goes China. (A failed dollar would also make all of our debt that they own worthless.) The horror stories are just that, fear mongering stories.

 

If the US economy tanks, there's nothing China can do about it. What you got to ask yourself is when does a sound investment no longer becomes a sound investment. China will not dump their US treasuries, but others might. If enough market players do the same, China, Japan, and the fed will have no other alternative than to follow the lead of the markets. China is only but a piece of the puzzle, the same way Obama is just a bureaucrat(albeit a powerful one.)

 

This crisis will have a number of fundamental changes in American's standard of living, it is how we handle this transition that will determine how we will live in the future.

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Well off the top of my head... What Jefferson thinks about banking--might as well ask him what he thinks about quantum tunneling. Two hundred years of data gathering since he said that, and he'd probably be the first to change his mind if he were alive today. As for Henry Ford, we're talking about an anti-Semite's opinion of banking and money. If you give me only one guess about what he's really talking about when he talks about money and the banking system, I'd have to say Henry is getting his cues from the Protocols of Zion and not for the first time.

 

Well I'm glad to hear that its all okay then. Carry on!

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I sure as shit wish I knew more about economics...but I don't. SO I'm going to go get a 45 cent snickers bar from the vending machine at work, and cry that my 401k lost $35,000.

 

I bought "personal finance for dummies" about 4 years ago...I guess I should actually read it and then throw out all of the ideas it tells me.

Edited by Firebetty

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The other day, Nouriel Roubini and Nassim Nicholas Taleb were on CNBC being questioned by idiots. The best line in the entire thing was when Taleb said that he was 'between 100% and 200% invested in cash.' What he means is, he's not investing at all.

 

I'm out of the market for a long time, like since 2000. Back in April I tried to get my dad, my brother and a few other family members out of the market and into cash, but it didn't work. Their loses total nearly a million bucks since then.

 

Knowing that, it's really painful to watch the douchebags on CNBC with their business-as-usual glibness. Right now, in these conditions, there's no reason for CNBC to exist whatsoever. By all rights it should just take a year-long hiatus. In the meantime the CNBC hosts are in the grips of some serious imposter syndrome, which has turned them into even worse fools than normal.

 

The best advice I ever heard about investing: when you get stock tips (or home-buying tips) from your hair stylist, you should run from the hills. Fast forward to Rudy's Barbershop on Sunset Blvd, late 2007. Hair stylist is telling me she's buying a house to flip it. By all rights, THAT should have been on CNBC. It was the surest sign I ever got that our huge house of cards was about to fall.

 

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can someone explain why the government cant print its own money and has to have the private federal reserve loan it to us at interest?

 

weren't the founding fathers trying to get away from the same thing in the Bank of England?

 

In the case of a country, the value backing its currency is (roughly) the strength of its economy and the size of its GDP, or all the goods and services it produces.

 

If our economy grows, our dollar stays strong compared to other country’s currencies. But if we just started printing paper, the value of those dollars would fall and we’d see prices rise at the same rate.

 

So printing more dollars might help you pay a debt that was incurred in “old dollars,” but everyone would get hurt. People holding debt would lose because they'd get paid in worthless currency. Consumers would have to go shopping with a suitcase instead of a wallet. And the U.S. Treasury would have a hard time ever borrowing again. So as bad as deficits and debt are, inflation is worse.

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@knarfie

 

here comes America's first dose of hyperinflation since the 30's. Everyone knows that the Federal reserve isn't backed up and that the federal deficit is trillions down - I don't see China bailing you guys out any time soon. Are America's banks getting nationalised like in the UK or here in Germany?

 

BTW - mograph related - here's a nice spot on the topic, if it hasn't already been posted here: http://vimeo.com/1816558

Edited by iline

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iline,

 

Hyper-inflation?! The 30's were hyper-deflationary, and you got a good chance for that scenario to repeat. Hyper-inflation is what paved the way for Hitler's rise, I just can't see anyone letting that happen again.

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@knarfie

 

here comes America's first dose of hyperinflation since the 30's. Everyone knows that the Federal reserve isn't backed up and that the federal deficit is trillions down - I don't see China bailing you guys out any time soon. Are America's banks getting nationalised like in the UK or here in Germany?

 

BTW - mograph related - here's a nice spot on the topic, if it hasn't already been posted here: http://vimeo.com/1816558

 

soon...Bank of America will become The Bank of America...

nationalization may be a good idea.

 

and..that is one sweet video :)

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it's funny to read the replies on the first page of this thread: september: the dow ended 409 points higher today, the worst seem to be over.

 

HA!

 

Work seems to have picked up, the clients just changed from cars and electronics to food and medicals.

 

But seriously until every currency is devalued to zero and we all have one currency it's all gona keep getting worse. I mean stupid american dollar cut into 50% of my margin on some projects, as i pay outsourced peeps in USD.

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govinda, i tried the same with my family

 

my folks listened, my grandma continued to ride the elevator, was pretty elated by where she was at, but i can imagine some serious value has been sucked out by now

 

i'm just ticked because I've been saving like a madman, and I'm worried this bailout will make my cash savings less valuable.

 

it's crazy how systemic the leveraging/economic gambling is/had gotten to be

 

i like the comment in the other thread about how wrong forbes was. generally the mainstream media has been balls this last decade

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