Posted on 07/11/2008 4:18:12 PM PDT by politicket
Just wanted to jump in for a moment and add a tidbit. Huge amounts (billions) in foreign capital being sought to support these troubled institutions.
I'm not an economist, but this is troubling that foreign entities are buying up cheap real estate holdings across the country.
Foreign countries (Saudi, UAE, Kuwaiti, Chinese) buying American debt as well. This is a concern that our country is being financially infiltrated so heavily.
We won't know for some time. The FSLIC will have to sort it all out and it is obliged to repay all depositors with 150K or less in the bank.
God has lifted His hand from our country
If not completely, pretty close to it. The Lord gives endless opportunities to come to Him.
Other great empires that came before us have bitten the dust because The Lord was blocked from their affairs.
Shumer isn't stupid. I have to believe IndyMac ticked him off (maybe denied him a preferential loan?) and he struck back.
Only problem is he may not have expected a vindictive bureaurcrat to put blame where it's due.
Michael Perry the Chairman & CEO of Indymac Bank gives money to the Dems especially those who BENEFIT from those loans...like this bum:
Chris Dodd
$2,300
Mish makes a great case for deflation, he’s very convincing. I read him every day.
But I can still see Obama and the ‘rat congress trying to print their way out of deflation with massive WPA type govt spending boondoggles. I can see more and more “stimulous” packages, including schemes such as reparations for slavery, the “Indian genocide” etc.
Perhaps we’ll have hyperinflation followed by deflation, or just years of stagflation, due to commodity inflation on the global stage. Food, fuel etc are going to be in demand globally no matter what happens in the USA.
But Mish does make a great argument and I would not bet against his deflation scenario.
I think you are correct. The PTB will try to inflate their way out of the crisis with cheap dollars, but it won’t work in the long run. Hyperinflation or stagflation will both in the end result in the black hole of deflation.
Hyperinflation and deflation are both sides of the same broken coin of crack up boom fiat folly.
LOL! Sure as hell ain't a problem for ME! :-D
(Worth reading)
Demand Destruction Stops at the Border
Peter Schiff
July 11, 2008
As the price of oil reverses course again and closes in on the unheard of price of $150 per barrel, Americans are finally responding to the pressure and have cut back on gasoline consumption. According to a report this week, Americans used 3.3% less gasoline than at the same time last year and usage now stands at a five-year low. Although the relative merits of slowing energy consumption is a subject upon which reasonable minds can disagree, the drop is nonetheless an extremely rare event in American economic history. Many on Wall Street are cheering the possibility that further “demand destruction” will ultimately lead to significantly lower oil prices. After all, this is basic economics. Prices are a function of supply and demand, and as demand drops, prices must follow. This is simple logic, wrongly applied.
What is missing from this analysis is that oil is a global commodity, and its price is not simply a function of demand in America. As demand is destroyed here, it is being created abroad. The result will be rising oil prices, despite the fact that Americans will be using much less.
In countries where currencies have risen against the dollar, oil price rises have been much milder. Given the strengthening economies overseas, and the slower price increases in those markets, foreign demand continues to rise, just as higher U.S. dollar prices cause it to fall here. In addition, central banks in nations where currencies are pegged are continuing to print huge quantities of money. This huge monetary stimulus is feeding oil demand, as foreign consumers use the new cash to buy gasoline.
In addition, as economic growth abroad far exceeds it here at home, foreigners are using their increased wealth to buy more automobiles. So while car sales are falling though the floor in America, they are rising briskly around the world. Take a look at what is happen in Russia, where booming car sales have resulted in Russia surpassing Germany as Europe’s largest automobile market. We are talking about the former Soviet Union, where not too long ago many comrades still traveled in mule-drawn buggies. So as poor Americans drive fewer miles, wealthier Russians more than make up the difference.
Here lies the source of our problems. When the dollar was king, demand here was strong. American consumers, armed with the mighty greenback, flexed their muscle and priced foreign consumers out of the market. Now that the dollar is a 98 pound weakling, foreign consumers are returning the favor, and are kicking sand in our faces. So as more goods and resources are consumed abroad, Americans will be forced to consume less. Demand creation abroad leads to demand destruction at home.
More importantly, demand destruction in America will not be limited to gasoline, but will encompass a wide variety of resources and consumer goods, as strong demand abroad prices more Americans out of more markets. In the end, America’s gargantuan trade deficit will return to surplus, not because of a highly overhyped export boom, but of an import bust.
Just before the great depression hit, my great grandmother’s dad who was a contractor told her to take all of her money out of the bank. I remember telling me that she did and was so glad because the money they kept in jars helped the survive. They had to sell off most of their land of grape vineyards which was over 2000 acres at the time. Also, at the time, they grew all of their own food, raised chickens and cows and my great grandmother made all of their clothes, shoes from leather, soap.......you name it by hand. Still, they barely survived the depression.
Other than the fact that I know how to use a gun, I don’t have the skills that my great grandparents had as a result of the suburban environment I was raised in. Our country is a macrocosm of the average person who could not survive on their own. I have a skill that allows me to make money so that I can buy food, shelter, etc.....but that is not the same as being able to build myself a cabin in the woods, hunt for food, etc.
I’m not saying I know enough about economics to think we are headed in a worldwide depression, but if it does happen, how does the U.S. go back to being self sufficient when we’ve now outsourced so much? I’ve always thought that it doesn’t really matter that I couldn’t survive out in the wilderness as long as I have a skill that is in demand in the job market because the scenario of having to survive on my own is not the world we live in. In the same way, what does it matter that the U.S is no longer a country where we make all of our own things? That’s not the world we live in. If it should all go to hell tomorrow though, how does the U.S. go back to making all of its own things when we’ve lost the skills and know how to do a lot of things. Just like I don’t have the skills my great parents had. What has been lost over time might not be a good replacement in another world depression. Luckily, I do have a husband that could build us shelter in the woods, hunt, fish, etc......but I still don’t think it would all work out too well in a nation of over 300 million all trying to do the same.
Candidate? There are many to chose from nation wide. What is lacking is CONSERVATIVE turnout at the polls.
If you're talking about this presidential election, we are of course stuck with McCain. We can only try to push him in the right direction if he's elected (and that's a BIG "if").
interesting....did not think of that.
Yes - the logic is that for those who have nothing to invest anyway, it doesn’t matter that the market is tanking.
When I originated loans, IndyMac was one of the banks we sold loans too. They did do "regular" loans but the majority were those that didn't verify income and/or assets, and even three years ago, as I got wind of what they would do in those situations, I felt they wouldn't be around long.
[The director of the Office of Thrift Supervision, John Reich, blamed IndyMac’s failure on comments made in late June by Sen. Charles Schumer (D., N.Y.), who sent a letter to the regulator raising concerns about the bank’s solvency. In the following 11 days, spooked depositors withdrew a total of $1.3 billion. Mr. Reich said Sen. Schumer gave the bank a “heart attack.”]
Imagine Shumer as Fed Chairman.
Thanks for the reply. If Bernanke tries to keep inflation at 10% for a couple of years, wouldn’t countries that peg their currency to the dollar be inclined to let loose? I can just see countries like China deciding that they are losing too much value and maybe pegging to the Euro, or not pegging at all. What would happen if they did?
What in the world happened to that once great state of Colorado? A great western state that now might as well be up there next to Vermont. My husband’s grandma gave us some newspapers that had never been opened that she had saved to one day give to her grandkids. They were with some huge headlines such as when JFK was assassinated. One of the articles was about Colorado and how all these “gypsies” were moving there from California and were stealing from the residents. That they didn’t work, lived in communes, didn’t bathe, had long hair, and were drug users.
I laughed so hard......I said to my husband who was reading the article with me, “those weren’t gypsies, they were liberals, and they’ve now grown in enough numbers that people like Pat Shroeder and worse were able to get elected”.
It was also interesting to read articles showing that even back then, conservatives were pointing out how treasonous the NY times was and considered it a huge threat to the future of the U.S.
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