I would really appreciate it if you could give me and the readers here an indication of what we could likely expect next. Here is my prediction by ranking of which will happen next which are major landmarks on our road to chaos. Could you please rank them according to your own understanding of our situation? Please add what I have failed to identify.
1. China reduces or fails to purchase US Treasuries
2. Real unemployment hits >25% www.shadowstats.com
3. Commercial Realestate hits major new lows
4. Fed increases the money supply again by >10%
5. Obamaites increases deficit by another 2 Trillion, we will have to have a few more bailout, commercial real estate, newspapers, airlines, etc.
6. US becomes majority owner of more than 50% of Banks
7. few 3rd world countries experience governmental collapse, food riots, tin pot imperialism(land grabs)
8. Huge rapid(days weeks?)currency devaluation ala Iceland
9. Union strikes
10. Russian debt default(intrade.com/widgets/crisis/WorldCrisisIndex.html)
Thank you for your informed opinion. I am bullish on the U.S. People’s capacity to grow our way out of this if the voters were to change direction and demand a laissez faire government, no capital gains tax extreme turn to free enterprise. However, I don’t see that it is likely that people will demand such a change when its much easier to vote gutless and continue voting for a handout, “welfare state” etc. If anything, people will be crying for more handouts and the government to do something, just fix it.
It is on this basis that I can see no other possibility for our country’s financial future than major inflation, currency devaluation, and being hobbled with a European kind of socialist welfare state, no? My only confusion about what scenario is most likely is that even though the US will be undesirable, it’s the only game in town for international investors. That’s because most all the other countries in the world will just be worse off than the US.
First - China has already reduced their openness to purchasing US Treasuries. Note their attempts to introduce ‘Global Currency’ along with Russia at the next G20 Meeting. OPEC countries are looking for something other than US $ to settle with. This hints at their unease with the stability of our currency.
The Trillions being put into the system are not going into the area that it is needed. Obama’s ‘Recovery’ programs put the lion’s share into the M3 category. For it to functionally stimulate the economy it has to work its way into M1.
I see the various monetary categories as:
M1 Volitile cash base
M2 adds Fungible cash base
M3 adds Static cash base
Unemployment
U1? U2? U3? U4? U5? U6? I don’t put much stock in them. U3 is what they use, but U6 is a better reflection of actual case at hand.
They can’t be reconciled within even a million jobs of actual.
Don’t really account for multiple jobs by same person.
Inflation
Do you, or anyone really believe the finagling they do with this one? Food, Clothes, Gas, etc, etc. 3% range is bunk.
I see more inflation increase than money supply increase.
GNP
While this figures in a major way into the necessary comparisons, the figures are intentionally overstated. (just like the Chinese do)
I regularly am asked what ratio or what index or what sign should I be looking for.... I don’t trust any of them! You almost have to observe, listen and ask questions all around the country to get a gut feeling of where we are... Totally unscientific but you get a feel for the most important aspect - public inclination.
I know this isn’t a straight answer to your questions - no ranking 1-10 but when you are dealing with fudged figures and when you have to distrust every motivated quotation.
Sorry I am short on time to fully get into it tonight, but will try to answer more as I can.