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PostPosted: Sun Nov 18, 2007 7:10 am 
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My old thread was deleted from the forum during April 2006, so here's a new one. 8)

"It's The Economy, Stupid," Circa 1996

Presidential advisor James Carville, the highly regarded Democratic political operative from Louisiana's bayou country, helped keep the 1992 Clinton campaign in focus and "on message" with a simple four-word phrase, "It's the economy, stupid."

http://www.heritage.org/Press/Commentary/ED051696b.cfm

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PostPosted: Sun Nov 18, 2007 7:24 am 
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Which continues to rouse American reaction thus:


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PostPosted: Sun Nov 18, 2007 8:02 am 
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America's vulnerable economy

Nov 15th 2007
From The Economist print edition


Recession in America looks increasingly likely. Can booming emerging markets save the world economy?

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IN 1929, days after the stockmarket crash, the Harvard Economic Society reassured its subscribers: “A severe depression is outside the range of probability”. In a survey in March 2001, 95% of American economists said there would not be a recession, even though one had already started. Today, most economists do not forecast a recession in America, but the profession's pitiful forecasting record offers little comfort. Our latest assessment (see article) suggests that the United States may well be heading for recession.

Granted, GDP grew by a robust 3.9%, at an annual rate, in the third quarter. Granted also, revisions may well push this figure up. But that was the past. More timely signs suggest that the economy could stall in this quarter. By early next year, output and jobs could be shrinking. The main cause is the imploding housing market. Experts said that house prices could never fall nationwide. But fall they have, by 5% in the past 12 months. Residential investment has collapsed, but a glut of unsold homes means that prices have much further to drop. Americans' spending is likely to be dented much more by a fall in house prices than it was in 2001 by the stockmarket's collapse. With house prices lower and credit conditions tighter as a result of the subprime crisis, households can no longer borrow against capital gains to support their spending.

Dearer oil is set to squeeze households further (this week's drop in crude prices notwithstanding). Consumer confidence has already fallen sharply. It cannot be long before consumer spending stumbles, which in turn would hurt companies' profits and investment. The weak dollar will boost exports, but at only 12% of GDP, exports are too small to make up for a weakening of consumer spending, which accounts for 70%.

I want to break free

Will an American recession drag the rest of the world down with it? The economies of Europe and Japan rebounded strongly in the third quarter, but look likely to slow down. Although both should be able to keep chugging along, neither is likely to set any great pace. Strengthening currencies will hurt exporters in both places. Europe's own housing hotspots are cooling, and some of its banks have been sideswiped by America's subprime ills.

The best hope that global growth can stay strong lies instead with emerging economies. A decade ago, the thought that so much depended on these crisis-prone places would have been terrifying. Yet thanks largely to economic reforms, their annual growth rate has surged to around 7%. This year they will contribute half of the globe's GDP growth, measured at market exchange rates, over three times as much as America. In the past, emerging economies have often needed bailing out by the rich world. This time they could be the rescuers.

Of course, a recession in America would reduce emerging economies' exports, but they are less vulnerable than they used to be. America's importance as an engine of global growth has been exaggerated. Since 2000 its share of world imports has dropped from 19% to 14%. Its vast current-account deficit has started to shrink, meaning that America is no longer pulling along the rest of the world. Yet growth in emerging economies has quickened, partly thanks to demand at home. In the first half of this year the increase in consumer spending (in actual dollar terms) in China and India added more to global GDP growth than that in America.

Most emerging economies are in healthier shape than ever (see article). They are no longer financially dependent on the rest of the world, but have large foreign-exchange reserves—no less than three-quarters of the global total. Though there are some notable exceptions, most of them have small budget deficits (another change from the past), so they can boost spending to offset weaker exports if need be.

This does not mean emerging economies will grow fast enough to make up for the whole of a fall in America's output. Most of them will slow a bit next year: for instance, China's growth rate may dip to “only” 10%. So global growth will ease—which, after five years at an average of almost 5%, close to its fastest pace ever, it needs to do. But thanks to the vigour of the new titans, it will stay above its 30-year average of 3.5%.

A tale of two prices

The rising importance of the world's new giants will not only boost growth. It will also shift relative prices, notably those of oil and the dollar. And the consequences of this will be less comfortable for developed countries, especially America.

The oil price has risen mainly because of strong demand in emerging economies, which have accounted for as much as four-fifths of the total increase in oil consumption in the past five years. In past American recessions the oil price usually fell. This time it is likely to hold up. That will not only hurt the finances of Western consumers, but may also make the jobs of their central bankers harder, by combining inflationary pressure with economic slowdown.

The enfeebled dollar—lately in sight of $1.50 to the euro—would be weaker still without enormous purchases by central banks in emerging economies. This support is now waning. China and others are putting a smaller share of increases in reserves into the American currency. And Asian and Middle Eastern countries with currencies linked to the dollar are facing rising inflation, but falling American interest rates make it harder to tighten their own monetary policy. They may have to let their currencies rise against the sickly greenback, meaning they will need to buy fewer dollars. More important, as international investors wake up to the relative weakening of America's economic power, they will surely question why they hold the bulk of their wealth in dollars. The dollar's decline already amounts to the biggest default in history, having wiped far more off the value of foreigners' assets than any emerging market has ever done.

The vigour of emerging economies is good news for the world economy: for its growth, it has much less need of a strong America. The bad news for America is that this, in turn, may mean that the world also has less need of the dollar.

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PostPosted: Sun Nov 18, 2007 8:51 am 
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Batchain1001 wrote:
Which continues to rouse American reaction thus:


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hahha! EXACTLY!

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PostPosted: Mon Nov 19, 2007 4:28 am 
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good one king!
thanx!!
u don't get more credible in today's news market than the economist 8)

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PostPosted: Mon Nov 19, 2007 8:42 am 
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king wrote:
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IN 1929, days after the stockmarket crash, the Harvard Economic Society reassured its subscribers: “A severe depression is outside the range of probability”. In a survey in March 2001, 95% of American economists said there would not be a recession, {baddy's note: The central banks caused the depressiopn by suddenly tightening money so they could collect everybody's farms, (an earlier warning of this tightening went out, including the day it was to happen, to "certain families" at the top...who cashed out in the last days before the crash). In the next years following the crash the central banks tightened money further until the money supply had been reduced by 1/3rd, severely deepening the depression...a few families collected a windfall at their debtors peril.} even though one had already started. Today, most economists do not forecast a recession in America, but the profession's pitiful forecasting record offers little comfort. Our latest assessment (see article) suggests that the United States may well be heading for recession.

Granted, GDP grew by a robust 3.9%, at an annual rate, in the third quarter. Granted also, revisions may well push this figure up. But that was the past. More timely signs suggest that the economy could stall in this quarter. By early next year, output and jobs could be shrinking. The main cause is the imploding housing market. Experts said that house prices could never fall nationwide. But fall they have, by 5% in the past 12 months. Residential investment has collapsed, but a glut of unsold homes means that prices have much further to drop. Americans' spending is likely to be dented much more by a fall in house prices than it was in 2001 by the stockmarket's collapse. With house prices lower and credit conditions tighter as a result of the subprime crisis, households can no longer borrow against capital gains to support their spending.

Dearer oil is set to squeeze households further (this week's drop in crude prices notwithstanding). Consumer confidence has already fallen sharply. It cannot be long before consumer spending stumbles, which in turn would hurt companies' profits and investment. The weak dollar will boost exports, but at only 12% of GDP, exports are too small to make up for a weakening of consumer spending, which accounts for 70%.

I want to break free

Will an American recession drag the rest of the world down with it? The economies of Europe and Japan rebounded strongly in the third quarter, but look likely to slow down. Although both should be able to keep chugging along, neither is likely to set any great pace. Strengthening currencies will hurt exporters in both places. Europe's own housing hotspots are cooling, and some of its banks have been sideswiped by America's subprime ills.

The best hope that global growth can stay strong lies instead with emerging economies. A decade ago, the thought that so much depended on these crisis-prone places would have been terrifying. Yet thanks largely to economic reforms, their annual growth rate has surged to around 7%. This year they will contribute half of the globe's GDP growth, measured at market exchange rates, over three times as much as America. In the past, emerging economies have often needed bailing out by the rich world. This time they could be the rescuers.{baddy's note: boy, i hope that's not the way out we're counting on}

Of course, a recession in America would reduce emerging economies' exports, but they are less vulnerable than they used to be. America's importance as an engine of global growth has been exaggerated. Since 2000 its share of world imports has dropped from 19% to 14%. Its vast current-account deficit has started to shrink, meaning that America is no longer pulling along the rest of the world. Yet growth in emerging economies has quickened, partly thanks to demand at home. In the first half of this year the increase in consumer spending (in actual dollar terms) in China and India added more to global GDP growth than that in America.

Most emerging economies are in healthier shape than ever (see article). They are no longer financially dependent on the rest of the world, but have large foreign-exchange reserves—no less than three-quarters of the global total. Though there are some notable exceptions, most of them have small budget deficits (another change from the past), so they can boost spending to offset weaker exports if need be.

This does not mean emerging economies will grow fast enough to make up for the whole of a fall in America's output. Most of them will slow a bit next year: for instance, China's growth rate may dip to “only” 10%. So global growth will ease—which, after five years at an average of almost 5%, close to its fastest pace ever, it needs to do. But thanks to the vigour of the new titans, it will stay above its 30-year average of 3.5%.

A tale of two prices

The rising importance of the world's new giants will not only boost growth. It will also shift relative prices, notably those of oil and the dollar. And the consequences of this will be less comfortable for developed countries, especially America.

The oil price has risen mainly because of strong demand in emerging economies, which have accounted for as much as four-fifths of the total increase in oil consumption in the past five years. In past American recessions the oil price usually fell. This time it is likely to hold up. That will not only hurt the finances of Western consumers, but may also make the jobs of their central bankers harder, by combining inflationary pressure with economic slowdown.]{I wish to make their job nonexistant.}

The enfeebled dollar—lately in sight of $1.50 to the euro{baddy's note: Some say a two dollar per Euro is a trip point...I've been watching with interest the Euro's recent rapid climb against the dollar.}—would be weaker still without enormous purchases by central banks in emerging economies. This support is now waning. China and others are putting a smaller share of increases in reserves into the American currency. And Asian and Middle Eastern countries with currencies linked to the dollar are facing rising inflation, but falling American interest rates make it harder to tighten their own monetary policy. They may have to let their currencies rise against the sickly greenback, meaning they will need to buy fewer dollars. More important, as international investors wake up to the relative weakening of America's economic power, they will surely question why they hold the bulk of their wealth in dollars. The dollar's decline already amounts to the biggest default in history, having wiped far more off the value of foreigners' assets than any emerging market has ever done.

The vigour of emerging economies is good news for the world economy: for its growth, it has much less need of a strong America. The bad news for America is that this, in turn, may mean that the world also has less need of the dollar.


Yeah, nice find king. I agree with all but I would add one thing that not only shifts the weights around in the above topics, but becomes important when one considers candidates that wish to kill the Fed, (such as Ron Paul)....

The thing I would add is in reference to where the article wrote:
article wrote:
The main cause is the imploding housing market


This is the biggest symptom, but NOT the root or main cause, (later the article becomes concerned with the price of the dollar which is very close to the root, or main cause).

The ROOT cause is the Federal Reserve, and especially it's policies proported by folks like Alan Greenspan, (and his successor Ben Bernanke). The Fed has had the money printing presses roaring for 15 years and they are speeding up now. Roaring printing presses not only mean cheap money is available for investing, but it also means the value of the money becomes cheap, (and how often do we hear Wall Street, the second tier, looking up at the top tier, The Fed, saying "all eyes are on the Fed).

Housing is by far the biggest area to take advantage of borrowing cheap money for investment, and a lot of other sectors depend on the housing market for growth, but much other shakey investment has also taken advantage of the Fed's cheap money. It is not the housing market that is the source of the problem, it is the Fed.

The importance of this distinction is that one would realize that to magically fix one symptom (which can't happen), may improve the situation, but it fixing the CAUSE would fix all of the situations simutaneaously. For example the wars are being financed by our youth promising to pay back Japan and China with a lot of cheap money, (plus interest). This is just one other example of another symptom...and there are many other symptoms.

The other distintion to make from recognizing the root cause brings the realization that SOME combinations of symptoms WILL eventually get us (and I have no clue when), and even if we survive the housing bubble pop, it will be ANOTHER symptom taking it's place as the biggest symptom.

As long as the music keeps playing there are no losers, but if it stops, we're all severely fucked. This all depends on the confidence in the dollar, and with MORE dollars shifting to China and Japan this means more precicely it mostly now depends on China and Japan's confidence in the dollar. The ending paragraphs in kings article above rightly go into this. Eleven months ago China started slowing their buying of the dollar, (triggering 30% of my personal savings to detach from the dollar and go into into gold related munies...lol, my money is where my mouth is). The recent reelings in the stock market have beem largely caused by China recently diversifying (selling into other currencies), their holdings of US dollars.

To better understand the core problem it's necessary to understand where our money comes from. Almost all of our money has no dollar bills to back it, the "paper money" for 95% of it has never been printed, it is just numbers in the banking system.

For example: when someone takes a loan out for a housing project, almost all of that money is NEW money, created by that bank, at the time of the loan, out of thin air. The only thing backing the new money is the investors debt, or his promise to repay. This is the essense of our debt based economy. The numbers representing the new money is put in the investors account, and he writes checks from it to pay the builders, and they in turn deposit the checks into their accounts where it becomes just numbers in THEIR accounts, (the made up money in the original account becomes distributed downward).

Most of this money remains just numbers, only when people go to the bank and draw on their accounts for cash are the "funny money" numbers converted to cash. This is a SMALL percentage of our total money, and the printing presses are roaring just to keep up with this small percentage. By far MOST of the money remains just numbers, there is nowhere near enough printed dollars to cover it, (it's why recently the central banks have been scrambling to infuse the banks with cash, people are already being told they can't cash out their investments).

Now here is the kicker, this is the part to really get your mind around:

Because most of the money created is for the principle amount of the loans only (the money from air they type into borrowers bank accounts), and NO MONEY IS CREATED FOR THE INTEREST on these loans, then only enough money exists to repay principles, there is not enough money in existance to pay back the interest. But the investors must pay back the principle PLUS interest, where's that money going to come from, it was never created? Answer: it must come from NEW LOANS, NEW DEBT. In fact the growth of debt must be exponential in order to repay the exponential debt. The only way this monetary system can be sustained without crashing is for us worker bee's to continually owe more, and more and more and more to the central banks.

This is in fact exactly what is happening.

The growth of debt is the exact reason that the economy must grow year on year, (as you see the article above's closing paragraphs correctly tying the value of the dollar to growth). It's important to understand that a 3% year on year growth of our economy IS NOT A STRAIGHT LINE. It ia a 3% growth on last years 3% growth on the year before's 3% growth. The result is exactly an exponential curve. What economy can maintain exponential growth...yet if we don't, we crash under exponential debt.

That's the situation we are in. The housing bubble is the biggest symptom, but by far not the only one, there are other huge symptoms as well... and none of them are the root cause. The root cause is the Fed lowering interest rates for the last 15 years (so they can lend more money for their own profit, they profit in BOTH recession and inflation), causing the huge increase in the debt of Americans.

The way out is painless. It requires two basic steps, (and involves removing power from the top tier is elite).

1. Decharter the Federal Reserve and return to Congressional control of the money supply.

2. (Necessary to prevent inflation caused by Congress printing money), incrementally raise the reserves necessary by banks when creating new loans until 100% reserve is required, (meaning banks could no longer loan out money they don't have as they do now in our fractional reserve system now). In the first year make 10% reserve necessary, in the next year 20% reserve nessary, and so on until 100% reserves are required and banks can no longer loan out money they don't have.

For an intro to more information on this, see the animation Money as Debt

Lol, how about a little picture association king...the central banks and the rest of us, their debtors:
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Ron Paul want's to abolish the Fed.
What kind of president would Ron Paul make?
An assasinated one.

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Last edited by baddy on Thu Nov 29, 2007 6:27 am, edited 1 time in total.

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SwaggartDecisions wrote:
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OOO-GUH-LEE!!! BLECHH!


Oooguhleezza Rice?

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STOCK MARKETS IN A FREE FALL !

THANK YOU SO MUCH AMERICA !!!

FUCK !!!!

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Now, I'm not entirely sure of this but I'm assuming that whatever's gone on between America and china also has a lot to do with this?

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The_Acadian_2 wrote:
STOCK MARKETS IN A FREE FALL !

THANK YOU SO MUCH AMERICA !!!

FUCK !!!!


Lol, that's OK, we saved it yesterday by pumping more air into the bubble (rate cut)..of course that makes it leak faster, but hopefully in the future we can print money faster than it can leak out.

There ain't nothing we can do about it until we kill the Fed (and that way out is relatively painless, but the course we're on now is quite painful for the middle and lower classes)....presently if the Fed cuts rates it directly devalues the dollar, it is directly inflationary, (buy gold). You can't print our debt based money faster without devaluing it, it's a direct link.

Also, if the gov't tries a tax cut (to be paid for later with interest by a larger tax increase), it increases the deficit which slows further investment in the dollar, thus this is inflationary too, plus the money is owed back later anyways. The answer is kill the Fed and cut the insane empire spending, (we're like a crack addict who doesn't buy food but needs more and more expensive crack...the crack addicts (Wall Street), just got a cut in the price of crack yesterday.

There is no "stimulus plan" that can make a shit of diffrence save for a short term blip...

MONEY AS DEBT

The plus side is when the fed contracts (stops cutting rates), the economy crashes and foreign investors will no longer loan the government money to continue it's overseas violence. The sheep won't stop voting for assholes, so it seems a tanked dollar is only way to stop the wars.


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jimmie d killed the forum wrote:
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It's rising around you....rising around you...

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This just in....French Bank Societe General announced this morning that they have discovered a "fraud" by one of their traders....the amount of the "fraud" is.....wait for it.....

4.9 BILLION EUROS (7 BILLION DOLLARS)

When the french do it, they do it in a BIG way!

http://edition.cnn.com/2008/BUSINESS/01/24/societegenerale.fraud/index.html

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The_Acadian_2 wrote:
This just in....French Bank Societe General announced this morning that they have discovered a "fraud" by one of their traders....the amount of the "fraud" is.....wait for it.....

4.9 BILLION EUROS (7 BILLION DOLLARS)

When the french do it, they do it in a BIG way!

http://edition.cnn.com/2008/BUSINESS/01/24/societegenerale.fraud/index.html

I saw that on the news, this morning. He made a bad investment, then kept making more desperate/bad investments to try and cover up/make up for it. Reminds me of Basil Fawlty....unable to admit to making the original mistake, and then just gets deeper and deeper into shit trying to "fix" it. :D

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just plain doug wrote:
The_Acadian_2 wrote:
This just in....French Bank Societe General announced this morning that they have discovered a "fraud" by one of their traders....the amount of the "fraud" is.....wait for it.....

4.9 BILLION EUROS (7 BILLION DOLLARS)

When the french do it, they do it in a BIG way!

http://edition.cnn.com/2008/BUSINESS/01/24/societegenerale.fraud/index.html

I saw that on the news, this morning. He made a bad investment, then kept making more desperate/bad investments to try and cover up/make up for it. Reminds me of Basil Fawlty....unable to admit to making the original mistake, and then just gets deeper and deeper into shit trying to "fix" it. :D


Yeah! that's the official story as told by the president of the bank. However, most experts here say that it doesn't hold and that there is something smelly lurking in the banks vaults. The 31 year old trader was free to leave the premises and it took 4 days for the bank to even press charges against the guy. They say he was loosing money for a year before they found out about it! :roll: I doubt it. we'll see in the next few days. How many million euro's would you want for taking a fall and doing 3 or 4 years time in the can?

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