Posted on 04/24/2011 9:42:07 AM PDT by library user
Or SNAP, or government schools, or AFDC, or WIC, or public housing assistance, or.....
Sorry, there is a difference. I paid into the first two my entire working life. You are too. The rest are handouts via our taxpayer dollars. And let me add SSI, the new welfare.
“Well, I was optimistic about Paul Ryan’s plan, but now I’m starting to think that we’re in for such a mess”
Ryan’s plan has the cuts in later years. We need to cut NOW.
Forget the new taxes. The government should start cutting. We’ll let them know when it’s enough.
Geithner parrots policy. Hes a horrible treasurer. Bernanke is more independent. He may be able to calm fears.
I would point out that the WSJ ran this article a few days ago so this isn’t some weekend bombshell. The markets been ignoring everything but earnings for months. At some point the macro stuff will leak into the picture but i have no idea when.
Commodities, Stock Market and Bank Reserves.
Our REAL economy is 60-70% of what it was 5 years ago and our stock market is at record highs along with commodities. However, the combined value of stocks and commodities is dwarfed by the scale of mortgage defaults past and future.
Deflation combined with sovereign default will be the outcome.
If we have a collapse (social as well as economic) of the proportions you anticipate, I see the formation of enclaves of armed and determined folks. Middle America is a lot more well armed than most realize. And there are of lot of us in that group.
A key variable here is the fascists in DC and their efforts to disarm us before the crunch arrives. If the general situation in this country is still relatively peaceful and they ban firearms, or stop production of ammunition, will the people actually promote and participate in genuine resistance?
I think the inclination of most people is to hope for the best and not actively resist until it is too late. At least that is the consistent historical pattern.
We’ll see. No doubt about that.
Central banks do not move quickly, this announcement is in regards to China's central bank's outlook on 3yr and 5yr Treasuries and Agencies coming due in 2Q 2011 through 2017ish.
Which means the recession for the vast majority of the people in the United States will now continue until 2017ish. The whole time the ability of the Federal government to continue to pay out redistribution payments will be stressed and reduced and the purchasing power of the redistribution chits will steadily fall at a logarithmic rate. Jubilee Now!
Of the almost 100 corn to fuel ethanol distilleries built with government subsidy and speculator leveraged financing in the Midwest, with only 3 distilleries have either broken even or made money so far, I’m now convinced that the Agro-Industrial folks, such as Cargill, ADM, etc have plans to be self sufficient in the near future when oil from Houston/New Orleans/Cushing energy complexes and the Alberta pipelines are both blocked from reaching the MidWest without brutal concessions demanded against the farming communities, in efforts to feed the starving masses in North America’s urban areas.
So the ethanol plants will sit there mothballed, while the price of corn, and the energy it provides, be it calories or octane, continue to soar relative to USD and US Treasuries yields’ purchasing power.
IMO, we aren’t quite at that point yet. I’m willing to fight for America. I think America is worth fighting for, and I think she’s much tougher than we give her credit.
Who’s lasted as long as she has besides England? England’s been as it is since 1688, as the only free nation that’s never been conquered.
That is why we need a restoration of God given spiritual wisdom and a recovery of our common sense to stay one step ahead of what the fascists might do. I think of the courage of the Hebrew midwives who feared God and refused to follow the Pharoah’s edict to kill the newborn Hebrews. That is the type of faith and courage we must recover...when the government of Man has gone rogue beyond the government of God, the government of God must become foremeost in the minds of Christians, indeed it must always be foremost! Our freedoms and rights are God given...no man must take them away. Only God can take them away in judgment for our disobediance!
“Commodities, Stock Market and Bank Reserves.”
I would agree with you if we were talking M2 or M3. But I’m not. M1 is the total currency held by people outside of banking institutions plus checking accounts. And M1 has been going up hugely as compared to M2.
I believe you are both absolutely correct. I don’t think the that either the policians or the American people have the fortitude to do what would be necessary to save our economy even if it could be done at this point.
“Sorry, there is a difference. I paid into the first two my entire working life. You are too.”
A tax is a tax is a tax.
It won’t happen because of who it would hurt. It would hurt the folks who are trying through QE to try to save themselves.
Who does QE hurt? Everyone who has income, or is at the stage of their life where they are trying to earn more.
Who does QE help? The folks who already have theirs and are trying to protect theirs. Default would mean destroying the bond holdings of the biggest owners, which are the unions.
This government would sooner hit 15 percent inflation than default.
No, the cost of their products won’t go higher. They have the yuan pegged to the dollar. The dollar goes down, the yuan goes down.
Their biggest hit would be in the cost of dollar-denominated goods that they import, especially oil and diesel fuel.
This is why there is no such thing as “Free trade” with China. As long as they maintain the currency peg, they have the upper hand.
The currency peg costs them money. Just as this move costs them a huge amount of money.
If they were to float their currency, they would actually be better, not worse off. By doing forced devaluation, they are actually hurting their domestic economy.
Basically the currency peg is no different than setting fire to your money and watching it burn.
This is what is causing such consternation abroad-- large US debt holders are effectively being shafted by a low rate of return and an effective currency devaluation by the Fed.
It's a Mexican standoff between the US and China, and the more likely result is a moderate but inexorable decline in the dollar. If at some point there is a sufficient amount of another currency in international circulation, the dollar may lose its reserve status, but that is unlikely as the other major currencies all play a mercantilist game that restricts the availability of the Euro or Yuan or Yen to be used as a reserve currency by others.
Any sudden change could prove catastrophic for China or Germany as their currencies rise to the point that exports are choked off.
I suspect the Chinese will push development of their internal markets as well as a 'Yuan Zone' of dependent commodity producing states in Africa and elsewhere to guarantee commodity imports and a limited export market.
If enough dollar holders decide to dump dollars into hard assets like commodities, then the US is screwed because we cannot afford to pay for the imports, and our deranged ruling class here will not allow the exploitation of our natural resources.
The only real answer is the removal-- root and branch-- of the current political establishment and a re-ordering of Federal priorities and expenditures.
Your payments to SS/MC paid the benefits of those who were drawing on the systems at the time you were working. It was a transfer out of your pocket into theirs. If there was any excess left over, it was used to finance the deficit at that time by buying the current issuance of US Treasury debt.
What I’m telling you is that the money you put in is gone. Spent.
More deflationistas!
Imagine a great big rock that people are trying to hold back. Then China throws in everything they’ve got to try to push the rock back.
Once this stash of China’s is done, that’s it folks. This is all they’ve got.
I'm starting to feel the same way. Let it collapse under the rats and we'll sweep 2012.
The problem is that even if commodities spike, who does it cripple? Not the US. Remember commodities are fungible. If the Americans can willingly pay higher prices, what happens to the rest of the world, especially China?
China’s best move for the long run was to hold, not sell. Now that they’ve sold, their entire influence over US policy is gone. They’ve got to find space for that cash, and commodities isn’t going to be able to soak it all.
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