It seems on September 18th America almost saw total economic collapse. 550 billion had been drawn out of banks in the span of 1-2 hours and there was an estimate that 5.5 trillion would be taken out soon after. That would had meant total economic collapse people. This is when the government guaranteed ever bank account worth $250,000, so the people would stop pulling the all the money out of there bank accounts. [ame="http://www.youtube.com/watch?v=INAGMSARPYw"]YouTube - Congressman Explains Hijacking of the US Economy by the Federal Reserve & Treasury[/ame] Quote from Rep. Kanjorski Now while I don't believe in any bailouts, at ALL. There were some serious problems happening and about 99% of America didn't know what was going down. http://www.dailykos.com/story/2009/2/9/234340/6189/142/695504 Most of this is stuff most people here know, I figure I would make it a discussion, what do you think?
This statement speaks volumes. Even the supposed experts, i.e. Greenspan and Bernanke don't seem to have a clue.
That is why it is so easy to question what they are doing, but in the same sense, not come up with a better idea. People of America only worry about Economics when the system is fixing to collapse, and even then the news comes to late for them to really worry. What is going to be done is done long before the public and even congress knows what's happening.
What we're seeing happening is your government spending money it do not have. What is different this time, is that the rest of the world is neither willing nor able to pick up the tab. The rest of the world is not willing, because it knows the US will not be able to pay back, and is not able because no country got the trilllions needed slushing around. So what about the existing (and rising) debt? Essentially the US have put the money printing presses into high gear. Which is why already inflation is at over 15%, and rising. At some point, this inflation will reach a critical mass. Just about any event can trigger this. When that happens, hyperinflation sets in. This is monetizing debt. Because the debt is in USD, reducing the value of the USD might seem like a good idea. In reality, it means the dollar will become worthless. At that point, the US will become a banana-republic. Unable to pay for just about any imports. That includes oil people, the lubrication of any industrialized society. Imports will have to be paid in currency that is stable. Only two contenders exist, Euro and Chinese Yen. What about the rest of the world when the US economy goes over the cliff it is balancing on right now? In the short term it will have a significant impact, as the Asian and European economies restructure financial operations and industrial output to meet a global marked sans the US. But in the medium to long term, it won't have that great effect. Remember, already there is little profits to be gained by trading with the US. All we get back essentially are IOUs. Having global trade backed by currencies grounded in actual production of goods, will have a positive effect on the world economy after that first period of restructuring. Living standards will rise throughout the world, as we are no longer burdened by giving our profits away to the US. As for the US? It took a broke UK and Germany post WW2 about 15-20 years to reach pre WW2 economic standards. Starting from the ground up with rationing and severe ecenomic restraint. I'd expect it'd take as long for the US to rebuild after the collapse and being given a clean slate. With a strict focus on building infrastructure, industry to meet foreign and domestic markeds and encouraging saving, not consumerism.
We'll see about that. Collapse of the nation and national currencies, next. Or withering away. With the first, there's more resistance. With the second, there's more acceptance. People will choose, and it won't be people in just one country... the Internet will facilitate.
My prediction is the economy will recover a little bit in about a year or so and then totally crash. The Democrats will say "well obviously we didn't spend enough!" because no political party can do no wrong in their eyes. Should be interesting. If the economy collapses before I move back to the US I might stay here in Germany even though it probably won't be any better here because they have a lot of debt too.
The solution to the world's debt problem is obvious, and is contained in some versions of the lord's prayer. "And Forgive us our debts, as we forgive our debtors"... They changed that phrase to "Trespassers" in many newer bibles, but I've seen the phrase, printed that way in my mom's old Family Bible, King James version. Was Jesus trying to tell us something economic, when he cleared out the moneychangers in the Temple? Hell, yes he was! These guys are ripping you off, and you let them, then you are guilty of theft, too. You have to stop them, even if you get hung for it. So, what would Jesus do to fix the economy? He might just say... "All debts, public and private, should be forgiven, by the order of the people, and we'll start the monopoly game all over, because this currency is only monopoly money anyway..." So let's just eat the rich, and move on, bitch! 5% cant hold on to 95% forever, power to the people!
Now while I would love to agree with you about US plight, what makes you so sure the Euro and Yen are so stable. Most products China sell are sold to who? America That means that if America can't afford to pay for imports like you say, they will lose out. That is why they have been buying our bonds, they need us as a buyer. Same can be said for Coca-cola buying large shares of McDonalds, they prop up there buyers in when times get tough. As for Europe, I heard on BBC that most investors in Europe invest American because the turnover has been so good for years. This economist through out a statistic that he estimated half of the sub-prime mortgages were owned by European investors. That means Europeans helped get us into this mess, they are a big reason why the cost of housing in America is more than Americans can afford, which intern hurt our whole economy. This isn't even counting all the European investors and Asian investors who have stock in almost every American company. They do so because our stock market is the best in the world. Now while I am not trying to be spiteful about this, I just want to point out, you guys helped us get into this mess, might want to help us out or your going to be worse off for it. Now I agree with you that we need to build more industry, the biggest problem facing America is our damn largest companies being so greedy. Instead reaching out to grow, manage there previous royalties and sell paper to each other, which has lead to all the largest companies in America having a 0% net growth rate average for the past 10-15 years. That is unacceptable. If this problem is going to be solved, spending money on infrastructure is the least of our worries, our companies need to grow. While I hate Lincoln, one thing I can never show disdain for is the way he kept funding the intercontinental railroad, during the civil war. That was probably one of the best things a president has ever done. Also sorry if I add a history lesson, UK's currency was fucked because the Nazi's flooded there currency with counterfeit bank notes, it actually crippled England's buying power and led to there huge problems funding there war effort. You being European, I thought you would know that. How do you think the Nazi's were able to pay for all that, they had Jews in concentration camps working night and day making notes that they later put into Swiss bank accounts. It may not of been the sole reason but like most economics it's like domino effect, devalue currency in time of strife, people take money out of banks, more and more fails and eventually it hurts the country as a whole.
Because both are backed by export oriented industry. Furthermore, the Eurozone and China have inflation under control. Though the Eurozone is falling behind in economic growth, it has not, as in the US, led to inhibited spending and growth of disparity between GDP and debt. And I'd like to correct a mistake I made in previous post. It is Chinese Yuan, not Yen, that is Japan. Confusing sometimes It is true that the Chinese very much want to keep the US as a market for their products. Near all of their industry in consumer goods are oriented towards exports. But you'd be wrong thinking the US is their only export market. Though it is their biggest. When the US cannot any longer fund imports, it will set back the Chinese economy some, nobody is denying that. But at the same time, they will unpeg their Yuan from the US dollar, floating it on the market like all other currencies. That means overnight the Yuan will soar. Enabling China to spread more of their wealth around domestically, rather than financing US overspending. Their domestic market will grow as a result, and eat up a lot of the vaccuum left by the disappearing US market. The reason all these countries have invested in US firms and US bonds, is because they got a mountain of US dollars from their export to the US that cannot be used in any other way. They have to spend their surplus holdings of USD to buy up real assets before the USD sinks into hyperinflation. I think you will find that Lincoln spent all those money on rails, was to better the turnaround of resources and troops. It is not the biggest army that wins a war, it is the one with the best logistics. Erm, no, the UK was essentially bankrupt after WW2 because it imported enourmous quanteties of weapons from the US under the Lend-Lease deal, paid for in gold I might add, to pay for its defense. Whilst counterfitting the pound was done, it did little to hurt the UK foreign trade. It had a greater effect on the domestic trade because of the inherent mistrust in the Pound amongst your ordinary Joe Citizen. Sound familiar, destroying the nations wealth to pay for military-expenditure? Today, the US use more on its military than the rest of the world combined. This year alone, an estimated 1 trillion USD. That is 1.000.000.000.000 dollars. If every dollar was say a second on a clock, that would amount to about 32.000 years in total time. Difference is, the UK at the time had no choice, they were fighting for their very existence. Since the collapse of the Soviet-bloc in 91, there have been no justification for the US extreme military expenditures. Another differense, is that the UK paid for its overexpenditure by using real assets, not by letting their printing presses run hot. As such, the UK experienced near zero inflation even during WW2.
Great post, other than this: A world war was the last thing Hitler wanted, and he especially did not want war with the UK: "The blood of every single Englishman is too valuable to shed... Our two people belong together racially and traditionally. That is and always has been my aim, even if our generals can't grasp it." It was Churchill that doomed Britain by commiting suicide out of fear of death. Germany was becoming an economic threat to the already fleeting British Empire.
I agree... they only hold power when we believe the money is worth something. The "financial crisis" the Republicans are worrying about is actually twofold: 1. People don't believe in the market (values) they cherish anymore, and people are getting so fed up they will give up on the "gift" of the Fed. 2. When one nation's economy fails because people know the money means nothing at all (BECAUSE they understand the truth, and their TV no longer satisfies), all nations with the capitalist fever will collapse. So will being richer than everyone else.
What we have here is the New World Order. No suprise, its right in front of us, we are just to blind to see it. Kill the tv and start living a life without the control of the elite. Big shout out to alex jones, hes been covering these guys for a long time, and the evidence is there, we have a corrupt elite (mainly international bankers) and they have tremendous control, its scary. Prisonplanet.com infowars.com
1. If I said America was China's only one who bought imports, my bad, I meant like you said #1 importer. 2. If you haven't noticed but every country that America has not gone to war with because of "terrorist" or overthrowing a dictator, those countries that are not doing business with US that have large oil reserves are now doing large business with China. These wars have been a fight for resources, it's only instead of the other side being our enemy(USSR) it's our business partner(China). The cold war is now the capitalist war. I'm not justifying it, I am just pointing it out. America had no choice. 3. Aaronman said it for me, Germany had just seen the worst economic diaster out of any developed country in modern history ever. Somehow only a few year they rose to the might they did. Like I said, like most things in economics, it becomes a domino effect, you learn to undermine a currency in times of strife and the rest of the system goes. http://en.wikipedia.org/wiki/Operation_Bernhard 4. I don't agree with this because I don't think it is this simple. There are hosts of factors affecting this, if the export business to US drys up where are these investors going to go? Even then, Europe imports alot if not more than America in it's goods, and even with our large debt accumulation the past couple of years, we have beem growing faster. What makes Europe so resistant to an American collapse?
Europe do indeed import a lot, but then again, europe also exports a lot. There is not a huge gap between exports and imports in the european economy. And that the US economy have been growing, is just an illusion. A numbers trick. In real terms, the US economy have shrunk by over 50% in the last 8 years. The trick is as follows: Pump more money into the economy, you get inflation and an illusion of growth. More dollars slushing around in your economy, do not mean your economy is growing. It just means things cost more, and thus more dollars are shifting hands than before. Resulting in an image of growth (in GDP) where in fact there is decline. A dollar is not a fixed measurment of value. Gold is to a large extent. Which is why it once was the security behind all currency. (Notice the significant dip in 71. That was when your friend Nixon unhinged the dollar from the gold standard, aka Bretton Woods system of fixed exchange. Though to be fair, various other calamaties happened around the same time. Like the oil embargo and ensuing recession.) Lastly, Europe is much better equipped to handle the US collapse, because, again, europe got the industry to not only service domestic markets, that is, is not dependent upon imports (except oil and LNG), but also got a strong industrial sector to service foreign markeds, thus having some real assets behind its economy, and not just an illusion.
Look while I would love to go back to the stone age with the backing of a precious metal behind my currency, that is a stoneage way of going about a currency. That's why the EEC decided to drop the gold standard. As for the import export market, Europeans have gotten real smart at putting up there own smokes and mirrors. Ireland is the biggest exporter of Bananas in the world, does that mean Ireland grows Banana's...no, it means that Ireland is just the country that Banana's stop at from South America before they go to the rest of Europe. America's imports and exports are different, once they enter US borders, if something trades hands from Texas, all the way up to New York, that is not counted. Even though technically it is a import and an export. Europe props up those exports buy drastically raising the price, allowing Ireland to make a profit. This does not mean that we don't have serious problems with creating more exports, but we definitely have the infrastructure just like Europe to make the changes. Nixon ended the gold standard to make it so the oil embargo and recession would be less of an effect, not to undermine our currency, and for what it is worth it worked, the hard times in the 70's were near no existent. Europe imports more than it exports just like the united states, I don't see the disconnect. If you count every state in united states as a individual country, the import exports market between US and Europe would be on par with most of rest of European and US statistics with Europe slightly better.
Man, I loved the stone age. Things like "economic collapse" didn't happpen... USA Was 3 hrs away from total Economic, Political collapse September 2008
No, no and again no. The eurozone trade numbers are concerned only with the total export and import to and fro the eurozone, not internal trade in the eurozone. Latest figures: (numbers in billions of euros) As you can see, it is on average at a balance/a small surplus. It do swing a bit up and down, but that is to be expected. Even now, in this recession, trade balance is on its way up in the eurozone, and at a surplus. What is more interesting, is that at most the trade deficit was at -11bn euro. Peanuts compared to the US trade deficit that is around 500-600bn euros (too lazy to do the accurate math). For comparison, the US trade balance from roughly the same period: (numbers in billions of USD) That is not a trade balance at all, it is a huge trade deficit, to the sum of over 800bn dollars. In 2006, which is the latest figures I could find. There is good reason to believe it is even worse now.
European banks only have over £16 TRILLION in toxic assets. Euro bank bailout could push EU into crisis
ASIAN MARKETS CRASHING MUCH WORSE THAN THE WEST Japan is contracting at a double digit rate, South Korea is losing jobs, Taiwan's dollar is crashing, and China is so bad a revolution might come soon. It looks like the Yuan will soon lose all those backbone when China actually distributes assets fairly among it's citizens interms of higher wages, and also more entitlements that are inevitable when there revolution happens. Entitlements will so excede what the countries slave labor prices, and it cannot afford to possibly create as many exports as before. All those factories will go bust, and we are looking at a global economic crisis. How do they come up with these numbers? I was under the impression this was not trackable, do you have information that proves quote. That is peanuts bro, he will show you some kind of graph done by some kind of reliable source from google image search, because you know it's it has a graph backing it up it is set in stone to be true. /Sarcasm, don't take offense Zylark, I am just skeptical.
