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Wednesday, June 27, 2012 - 11:22 am  With America's economy souring again, Europe still cemented in place by debt, China slowing and India slipping, where do you all think the global economy is headed? Is it another recession? Is it another depression? Should we consider that the economy for the past 4 years has been in a depression, but we haven't recognised it yet? Furthermore, with the powerhouse of the world, China, starting to slow thanks to reduced demand for their manufacturing, what does this mean for the 'new world superpower' and 'second cold war'? Does China's slowdown benefit America in some aspects? How will this impact on resource dependent nations such as Australia? In my opinion, China was always a timebomb. A massive housing bubble where entire cities lie empty, sluggish overseas demand, and a frugal society means China can no longer sustain economic growth of 8%+. Furthermore, if China does land hard, don't expect the Chinese Government to stimulate the economy aggresively. Since China's Government is largely reliant on selling land to private enterprise and taxes for income, a large dry-up in tax revenue would be disasterous, and would leave regional governments unable to afford ambitious infastructure projects. Greece and the Eurozone is a basketcase. Discuss.
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| Wednesday, June 27, 2012 - 04:37 pm Worldwide economic collapse! The likes of which haven't been seen since the fall of the Roman Empire.
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| Wednesday, June 27, 2012 - 06:17 pm The USA are dragging the whole world in chaos due to their inability to stop borrowing. Pathetic really.
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| Wednesday, June 27, 2012 - 08:48 pm I'm not sure that a forecasted .5% drop in growth will raise that many alarms. This also reflects much of what Mr. Morgan was discussing - as China begins to turn inwards away from foreign markets, and begins developing domestic ones. I see bleak prospects for American advancement - unless this is a protracted process. America has already lost a huge measure of the industrial capacity. Resource based economies will be impacted, and probably hard. Even a small down turn adversely affects them. I'd look for political maneuvering on their part to keep some kind of subsidy operation running with China or other large manufacturing nations. Not sure how that ties into the process of China reaching out to Russia and the Eastern European nations of broadening trade ties. I'm not sure we've hit the depression benchmarks yet. But I don't stay up with currency fluctuations on the world market. If European countries such as Greece and Portugal head into that, and start dragging everyone down - we're definitely in for a historic depression. Maybe some good will come out of that - with stricter limits on government borrowing.
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| Wednesday, June 27, 2012 - 08:51 pm that makes no sense, how does the usa borrowing to much money cause other countries to borrow money there economy can't handle. if any thing its pathetic on the other nations who went bankrupt and others who need massive sums of money to bail their entire country out.
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| Wednesday, June 27, 2012 - 09:02 pm Americas largest trade partner is the e.u. and american business are now expanding in many more developing countries like Brazil, Argentina and India. and china isn't going any where as long as it remains communist.
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| Wednesday, June 27, 2012 - 11:13 pm Forecasts for Brazil's economic growth continue to be downgraded. - some indicators already have been downgraded 7 times this year, with more on the horizon. Argentina, 25% inflation, severe economic growth problems, people being restricted from leaving the country without reporting to tax collecting agencies their tax number, where they are going, and length of stay etc. To fight the flight of currency. India again, inflation problems. Massive borrowing for social programs, along with red tape, corruption, and the declining value of it's national currency. It's in for more shocks. These are not good markets for expansion. China's slight drop in growth rate pales in comparison.
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| Thursday, June 28, 2012 - 12:01 am "The USA are dragging the whole world in chaos due to their inability to stop borrowing. Pathetic really." "Americas largest trade partner is the e.u. and american business are now expanding in many more developing countries like Brazil, Argentina and India. and china isn't going any where as long as it remains communist. " WOW LOL these posts are in all respect stupid. You all need to pick up some books on economics and if you have time some history books as well. Some points before I finish this post. The biggest trading partners of the US as a single economy is North America, being mexico and canada, with 1,056T in total trade compared with 636B for EU. Also pacific trade now totals more than atlantic trade. Europe will not pose a significant trade dent to the US and will not harm US growth. Also although the US has more debt since george w bush, and obama took office going from 5T to more than 13T. This also does not pose a significant problem. We spend less on debt servicing than we did when we had 5T in debt the reason is low interest rates. The average 10 year bond used to be 5-7% today it is at 2-3%. WE can spend another 30T and still be okay. Also the reason the federal reserve is keeping interest rates low and injecting money into the economy is to keep the price of the US dollar low compared to other currencies. This cuases our products to be cheaper increasing exports and makes imports more expensive. This also has another good affect, it creates inflation in other economies such as china, russia, brazil, and other emmerging economies. Today is the perfect time to invest in the US, i have 90% of my money in US equities and 10% in US futures for the long term. And for those who think chinas military is also on the rise and that our influence is going away let me remind you that china recently placed a woman in space and docked with a capsul. Something we did in the late 70's and early 80's. Today we have something way better, X-37C and also the Falcon 10. Technology that is 30-40 years ahead of china. To all those that think that the US economy and military might is going away I say pick up a book and do some research, the US will continue to be the worlds sole superpower for the foreseeable future.
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| Thursday, June 28, 2012 - 12:24 am usa spent more on military than the rest of the world's countries, that ought to teach us something in sc? aussies are just have too much "no worry" atitude, that's what has been dragging its economy down china could probably sustain its own survival even if the rest of the world falls apart. it has a quarter of earth's human population, and is still a sleeping giant.
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| Thursday, June 28, 2012 - 01:36 am I agree with Phoenix King. Investing in American companies is a good idea, and many people forget that the United States prints its own money, and thus can't go bankrupt like any ordinary company can.
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| Thursday, June 28, 2012 - 02:09 am Printing your own money is not a guarantee for survival. Most countries print their own money. In fact, printing your own money could be extremely dangerous, provided that the central bank's policy is not independent from political wishes. There are numerous examples where national governments thought to solve their problems by printing more money, not knowing that this would create hyperinflation (see: the Weimer Republic in the 1920s, or Yugoslavia in the 1990s).
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| Thursday, June 28, 2012 - 03:49 am non of the countries i mentioned have any where close to 25% interest rate the highest is about 9% most have had a resent slow down but for the most part they all have been growing at a yearly gdp average of 5-7% they all have high business and consumer confidence. they have unemployment rates all lower than 9%. so american companies have been trading increasingly with them, and according to the census bureau for this year so far, Brazil is the us's 9th largest trade partner. and phoenix you got me of the trading part but everything else i said is accurate. the u.s isn't losing any power its just that these countries are starting to realize their economic capabilities. and yeah china is a sleeping giant but as long as it stay communist it isn't going to realize its full capability. it has about 20% of the world population, it should be an economic powerhouse.
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| Thursday, June 28, 2012 - 03:49 am i meant inflation rates.
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| Thursday, June 28, 2012 - 03:53 am China isn't Communist. It is a single-party capitalist country. Communism is a economy in which everything is owned and distributed by the Government, and all companies are state owned. China allows foreign and private enterprise, and thus is a mixed market capitalist economy.
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| Thursday, June 28, 2012 - 04:29 am according to any official documents china is a communist part. its is kinda starting to loosen up a little bit economically. it allows more foreign development of private companies but domestically it has little privation so for the most part it is still a communist state and until it changes that it won't reach its full potential.
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| Thursday, June 28, 2012 - 04:38 am From a political point of vies, China is indeed a socialist country. However, economically, it has a mixed economy with elements from capitalism and socialism. This discrepancy between the political and economic systems enforce the already present social unrest and discontent in the Chinese government. Nevertheless, there is another, much bigger time bomb under China: ageing.
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| Thursday, June 28, 2012 - 04:40 am vies = view And no, the difference in systems do not lead to a discontent in the government, but within the society. Sorry for the mistakes. It is 4.40 AM here.. (still have to finish an essay)
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| Thursday, June 28, 2012 - 05:20 am The world bank is sending america broke and the rest of the world whom most have fallin into the trap of the central banks
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| Thursday, June 28, 2012 - 08:28 am I was going to bring up hyperinflationary problems dominik waves fist! hehehe Phoenix king you are wrong on so many levels, what you are saying is the entire cause of building the bubbles. Debt carries interest, interest is a steady payment sure, but we aren't paying it we're hedging it. These interest payments are becoming more debt that carries more interest. Take the Obama Administration for example he has made several moves to limit the deficit but our debt grows faster than before? because sheer volume increases our interest levels. To anyone who is uncertain of the whole depression thing, there are two common real definitions for a depression that mean close to the same thing. Bassically if a society is void of expanses and the norm of life is downgraded that is a depression, well until it becomes the new standard of living that is. So yeah we were in a depression but not anymore, depression is a scary word but there are recessions that are worse then depressions, such as Yugoslavia as stated earlier. Anywho world wide economic collapse is imminent, there are a few first world countries I see immune to it South Korea, Singapore, Luxemborg, and Qatar. But war can certainly mess every one of them up. The catalyst is obvious too, nobody has a clear sense of value at all! No first world country cares about building efficiency at all anymore. Take outsourcing to China for example. It cuts labor costs, good thing? No not for anyone! There is the obvious fault of taking jobs away from the consumers, but thats not all of it. Without the need to cut labor costs we no longer need to invest in robots to take those jobs, there is no need. That is one mere example, I can supply others. If we consume more but don't increase our efficiency we are stagnating ourselves. The only reason those 4 countries stand a chance is because they are more self sufficient then any other first world country, but if SK doesn't quit it with this technocrap they too are going to become more dependant. I'm sure I sound like a conspirasist right now, but a full explanation would be way to long for you all to read. But I'll just do a name drop of wealth disparity, and class welfare to add to the conversation.
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| Thursday, June 28, 2012 - 08:37 am Oh yeah and China China isn't any economic system, they are a short term oppurtunistic aristocracy. They work like a communist system in which the government is at the root of all the money, and they torment there people with that power. But they aren't communist because they lose sight of the only reason marxian materialism (communism) works. The stregnth of the people not the government is what empowers industry. But that really isn't the problem either, the problem is China doesn't own anything really. No communist country would ever allow the bourgeious to be from another country, that makes no sense, there is no growth. China is more doomed then even Greece in the long term, if they do build their infrastructure they lose the low labor rates and they have absolutely no foreiegn or ummm... well any large industry. Also if consumer levels fall anywhere in the world China is affected, big time. These contracts to get quick buck are counteractive. These low interest securities are counteractive, China is becoming the most dependant country in the world, and that carries so much risk, it's what is going to be the big bubble burst, leading to mass war. So China's goverment should really be classifed as a retarded tyranny if anything.
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| Thursday, June 28, 2012 - 12:43 pm "WARNING: Tony Robbins issues dire predictions on the coming collapse": http://www.youtube.com/watch?v=TRaLytkf6vU&feature=share
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| Thursday, June 28, 2012 - 07:53 pm WOW, really you think im wrong, let me remind you that i am the lead fund manager for an insurance company and i handle a big portion of their investment porfolio. Saying your wrong and explaing why i am right will take to much time, so i will prove it by saying this. Wait 5 years from now, the US will grow faster than 4% in GDP and china will slow below 4%, emerging markets will slow below 3% amd the US energy market will double greatly reducing our need for oil from other countries. The US is in the best strategic postion both economically and militarily than in the past 30 years. If you think the US is going to fall than invest in china and other emerging economies but if you think im right than place 100% of your assets into US equities and futures and we will see in 5-10 years who was right.
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| Thursday, June 28, 2012 - 08:34 pm You're forecasting Chinese GDP growth under 4% in the next 5 years? That seems positively radical. I like a classic mixed risk asset portfolio, of 30% US Large caps, 30% US mid-small caps, 30% Foreign (although, i'm thinking of cutting that back a bit to 20 maybe), and 10% in bonds. It seems like PK is saying to go all in on the US stock market. I'd say he might be right for this reason...as the rest of the world looks less attractive, money doesn't die, and isn't lost, its like energy, it has to go somewhere. American companies, with their huge cash hordes and relatively decent regulatory environments, are very safe places to put money compared to other places to put money.
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| Friday, June 29, 2012 - 12:24 am I don't think China will have the hard landing many think will happen. They will slow drastically but 5-8% growth is not unreasonable. Europe is a joke indeed and the US will follow if we don't change our spending patterns but we do have a bit further to go before we have to start comparing it to the Europe debt crisis. Most of the issues here in the US are caused by do nothing congress and won't change until there is a clear majority with a clear direction on where this country needs to go.
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| Friday, June 29, 2012 - 01:35 am The US Dollar will become worth less than the paper it's written on because printing money devalues the worth of that money as you can see with oil prices going up. Oil prices are set in US$ around the world. The oil isn't going up the US$ is going down. Gold, silver, food, water, and energy will have far greater value than a US$ in a post economic collapse. The US is heading for disaster for 2 reasons: The huge debt which has become a debt trap and to just even balance the payments would cause civil unrest like what you're seeing in Greece now but with no one to bail the US out! The rest of the countries in the world would follow and civil unrest would follow. There isn't enough money in the world to pay all of the debts.
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| Friday, June 29, 2012 - 01:38 am and how many times has economic growth been downgraded in the world.
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| Friday, June 29, 2012 - 01:39 am It might even be worth in 5 to 10 years.
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| Friday, June 29, 2012 - 01:47 am Hyper-inflation is on the way.
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| Friday, June 29, 2012 - 01:52 am @lord lee, maybe society will be heading back to the days of trading real goods, without the need for currencies then. currency should be base on a real base within the country. basing the country's currency on theory would certain make it worthless. if i'm very very hungry, i rather take the apple then the $1 currency. that's just reality, when comes to the decision of survival.
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| Friday, June 29, 2012 - 01:59 am King. How do you compete with a country that just borrows its way out of a economic collapse without borrowing yourself? The USA's strategy is to try and be the last man standing. Like a load of gamblers around the Black Jack table, their are some who have their budget and will leave the table when they are spent out. Their are some who will borrow some, but when thats gone they leave the table and you have the crazy ones who will borrow and borrow because to leave the table a looser is just not acceptable. Now you said:- 'The average 10 year bond used to be 5-7% today it is at 2-3%. WE can spend another 30T and still be okay.' King. Bond yields tend to go up when economies are growing rapidly and financial markets catch a whiff of inflation. Bond yields tend to fall when growth is weak and they fall a lot when there is a perceived threat of deflation. Japan lost its AAA rating a decade ago and has national debt of 225% of GDP, yet Japanese 10-year bond yields are 1%? USA debt to GDP ratio is around 73% (that we know of). The problem will be when the world looses faith in the dollar due to QE, which in turn will weaken the 'safe haven' reputation of the USA and its ability to start paying the debts off without borrowing more than its paying. Just a couple of % on the 10 year bonds would place the USA in a position of default, which in-turn would result in the complete melt down of the financial system and a debt that would take generations to pay off. Do you really want your children/grandchildren to be paying for your gambling and lifestyle habits for the rest of their lives? As for The Euro LOL. It was created through fear of the unification of Germany but it back fired. Germany took the rains and with the ECB, flooded Europe with cheap money. This was done for two reasons. 1) So each country would be economically strong enough to contribute to a unified strategy to compete with the emerging markets and a USA which would rather borrow than reduce it's standard of living (for that just would not be the American Dream would it?) 2) When someone owes you, you own them. So unification of a German ran Europe, without the means of war, would be a possible out come. Europe was doomed to fail. King. You have been suckered mate. Capitalism is a ponzi scheme. And like all ponzi schemes, it eventually collapses leaving the many with nothing and the few with everything. It was started by the Industrialists and the Federal Reserve in the 1930's. King. I hope you don't include the hedge as one of your financial tools? Hedges were created as a tool of last resort. It was never created as a tool to make money due it being too risky.
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| Friday, June 29, 2012 - 02:40 am Shallom, the 25% figure may indeed be in error. I didn't check the sources beyond the June 2nd issue of the Economist. If you have other figures, or a better source, please share. Argentina has been a basket case since the Gilded Age, with only a few years in that time of not being a third world country. Shame for a country that was once one of the top 10 economically in the world. (Pre-WWI). The US being the last man standing is an intriguing thought. Provided it happens before too much longer. Be nice to offer to write a check cancelling out all our debt, and then close the bank. Of offer a nuclear baseball bat to any who decline or threaten to step in US oil deposits. Especially those countries who had the misfortune to locate themselves on top of them. The Federal Reserve- I thought that predated the 1930's. 1913 for one benchmark. Or even further back to the panic of 1907, albeit in a different form. Capitalism as a ponzi scheme. No argument from me there. Perhaps I don't understand wealth creation. Good word that. Creation.
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| Friday, June 29, 2012 - 02:43 am http://www.tradingeconomics.com/
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| Friday, June 29, 2012 - 06:11 pm Link took me back to simcountry. But I visited the site. (and many thanks!) If you don't mind a noobie question, why the huge disparity in rates between the economist 25%, business week 24%, and the wall street journal (also 25%). Are the figures in tradingeconomics the ones reported by the country itself? Argentina has a history of low balling those figures, according to Argentinian economists.
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| Friday, June 29, 2012 - 07:54 pm yeah the information from the economics i believe are mainly just predictions of what they think will happen although i haven't read any of their articles lately. but yeah all the information on trading economics come from the each country's economic reports. that why some of the information about the us goes all the way back to 1917 and some information like India's unemployment rate is kind spotty. but i get all my economic information from that website.
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| Friday, June 29, 2012 - 07:55 pm i meant the economist
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| Friday, June 29, 2012 - 07:57 pm Nod. As I mentioned, though, you should take any source like that with a grain of salt. They are very interested parties. I've found the WSJ to be a great source of news, in many respects better then CNN, Fox, or any of the other "infotainment" industries. M. Ney
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| Friday, June 29, 2012 - 08:20 pm well yeah but the difference with this website is that it isn't a journal, it just states facts, it gives no opinions.
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| Friday, June 29, 2012 - 10:30 pm Nod. But the facts are wrong.
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| Friday, June 29, 2012 - 11:14 pm how
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| Saturday, June 30, 2012 - 02:06 am the wall street journal does have a conservative bias, you will find it if you look hard enough, but generally eh its fine. Phoenix king I don't care what your occupation is how long you've been doing it, or how many people think you are awesome. My post stated that our current way of evaluating the economy and currency is creating a bubble, so no matter what you do if you use stock indexes or GDP or if you believe that an economy can grow endlessly or if you believe spending on credit with no concept of repayment you are wrong. GDP/GNP - doesn't matter it is how many exchanges not wealth creation Indexes S&P, DOW etc - doesn't matter, it is only useful on nontangible exchanges. Nontangible exchanges doesn't hep the economy only personal finances. And before I hear guff about the importance of investment dollars most of the trade volume in the markets are of corps that have hit saturation in the market so its simply a tool to redistribute wealth and not build the economy. The stregnth of an economy is simple to evaluate, which countries are securing the most resources and using them most effectively. Buyig stuff doesn't build anything, your iPad doesn't build the economy. Until we realize and utilize the very basic principle of taking something useless and making it useful we will be vulnerable to inflated values bursting the bubble and the effects will be global. Once again China doesn't own anything! They have a retarded economy when 90% of the revenues come back to the global conglomarates the 40 cents they get for each employee can't build their economy very much longer. If they fix it, America and Europe will move more heavily into the Phillipines, India, Thailand, and if need be Africa instead of Asia. China is a pawn used by the super rich, and only because the chinese government doesn't give a damn about the well-being of their populace.
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| Wednesday, July 4, 2012 - 04:57 am I think some of you need to read a little Rothbard, Mises, or a bit more Austrian economics. Phoenix King, you are very quick to put people down when they disagree with you. The reason for this is that your limited brain can not fully calculate how others have examined the same data as you, but have reached a different conclusion. If they concluded different from you, it is because they are less, stupid, idiot, so on and on. It can never, not once in a trillion years, be that you, Phoenix King, are wrong. Anyhow, read some Rothbard, please. It's good for you. 
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| Sunday, July 8, 2012 - 02:48 pm Really? Runaway inflation, is it? Why don't you people put your money where your mouth is? Make a prediction and place a bet.
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| Friday, July 13, 2012 - 05:33 pm All page numbers mentioned are from the eighteenth edition of the McMconnell Brue Flynn economics textbook. Yeah. I'm afraid the Phoenix King is one of the few persons on here actually making economic sense. And at that all he has really done is pulled out facts on how an economic system works from an econ 101 textbook! Really rudimentary stuff that I am afraid most of you people don't seem to understand. And as for Austrian economics, we tried that, twice! Take a guess what happened? Yeah guess who now, not once in a trillion years, could be wrong. And if you still don't know what I am talking about... does depression ring a bell. Unfettered markets are pernicious. That you should know. King says that the U.S. government could go up to 30T in debt which is about 200% of GDP. nix001 says that our children/grandchildren will be paying of the debt. Quick question, when did the U.S. pay of the debt form WWII? The answer is never! The government ran consistant deficits every year up until the later years of Clinton's presidency. Yet our debt relative to the size of our overall economy shrank. We will NOT be paying of this debt in the future due to inflation (gasp! he'suggesting inflation is good). By the way an industrialized nation rarely defaults. The U.K. had a debt to GDP ratio of well over 200% at the end of WWII. The U.S. 120%. Neither of these countries defaulted. The bond market going up will cause the U.S. to default? Yeah ok. That explains why we set up a central banking system, so we could let that sort of stuff happen. yeah ok sure. The federal reserve will step in to take on the new debt as they always have. Yet the chances of the bond market going up through the roof, miniscule. A bond market going through the roof in this situation would only happen if our government was preparing to default (much like the GIPSI countries). Something that the fed would prevent. And for capitalizm being a ponzi scheme, give me a break. Ever heard of circular flow? Probably not. You must have been the person in econ101 sleeping/talking/scoffing. If you were aquainted with this extreemly basic concept I could elaborate further as to exactly why you are full of garbage, but until then I'll ask you to read page 40. Once you have mastered circular flow (don't worry I'll be patient) we can elaborate on concepts like expansionary monetary policy, expansionary fiscal policy, and the basic theory behind them. "GDP/GNP - doesn't matter it is how many exchanges not wealth creation. You're right!!! GDP is not a measure of wealth!!! That would be GDPr or, if your prefer, rGDP. That stands for real gross national product. That's a term you probably don't know the definition of. The definition is the sum total of all NEW goods AND services produced in a country (or just some type of area) in a year (or any other specified time). IT IS NOT THE NUMBER OF EXCHANGES!!!!! Now to be fair you hit the stock exchanges pretty well. Now as for buying stuff doesn't build anything I'm again going to say please read page 40 in your book. That will illuminate the circular flow to you. From there we can make some interesting extrapolations. Lord Lee. Correct! There isn't enough money in the world to pay off all the debt... now. If your apocaliptic message of hyper inflation doom and gloom comes to fruition, then we'll have enough money to pay off that debt. The same debt that for some reason has caused the massive inflation. But until then I guess we'll just have to wait until regular inflation runs its course and reduces our debt for us. And another error. A depression is a period of time when an economy consistantly produces below its full production. Page 12 of the econ book illustrates the concept of the production possibilities curve. When the point lies inside the curve for a long time, then you may have a depression. More offten than not, however, you have a recesion, a short period of stagnation or contraction caused by regular fluctuations in what's called the business cycle p521. The problems of very high inflation are real (Weimar Republic) but what happened to that same country only this time with deflation? Deflation racked the young republic hard. Extreme unemployment, reduced growth, and of naturaly deflation. Far worse than the hyper inflation a decade before. People were in a panic, and rightly so. They turned to radical leaders. Yeah you know. And those leaders lead the world to the most destruction, pain, and suffering ever brought on by man to himself. That war spured on the development of atomic weapons as well. Needless to say, deflation is something to fear far more than inflation. Ok for homework everyone please have mercy and take an intro to macroeconomics and an intro to microeconomics class. If you have already, shame shame shame. And oh yeah I was going to make a prediction. Anemic growth for this decade with marginal improvement. Unless we get a major tax hike or a massive debt reduction move that is dependent on spending cuts. If either of those two things happen then expect to see another dip in economic health. I can't wait to get called an idiot/moron/crazy/stupid. Go ahead light it up. It doesn't make any of your wacky "theories" correct. (and theory is used in the absolute loosest of ways) And if King does what he says he does then go with him. I work for a small start-up business investment group. The manager who has worked with start-ups for almost 50 years reaches similar conclusions to my own. Listen to the businessmen. (not the ultra mega rich naturaly. Their incentives are often perverse and detremental to overall economic development) For some reason, maybe it's because of being in business for so long or the econ classes they had to take in college, they seem to know what they are talking about! P.S. If anyone would like to talk real econ we could just disregard all of the superflous theories and have a nice chat.
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| Friday, July 13, 2012 - 08:27 pm idiot......lol i liked your post ceebass very interesting i will be researching more in depth some of this stuff...over the internet though....is that alright i dont have the book
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| Saturday, July 14, 2012 - 12:06 am You're just perpetuating the built in flaws with the system. Just because economists say something is correct it doesn't mean it to be true. There are very steady economic principles involved in the prime mortage default swaps also, but I doubt anyone would agree that it is now okay, to package mortages now give them a AAA bond rating insure them and watch them explode. I think you fail to see the big problem here, and I won't call you an idiot, because you are a good student, or at least a good parrot. The big problem is that everything is overvalued and everyone is overconsuming because of it is. The idea that money is worth stuff, and as long as you have money you can buy whatever stuff that money will buy you, makes sense. But what if money is worth the number on it? Because it's not. As for circular flow, I fail to see the relevance. that's just people work for a check and pay taxes, and those taxes supply services. Not complicated at all. hmm.... there is so much to say here but i'm not sure how. Ok rant over... Let's take the stock market, the commodity market works the same except with slightly more price regulation. So if I buy a share of let's say headbook(hypothetical). Headbook is a company that is superior to facebook in everyway except 0 ads and 0 revenue. I buy it for 20 cents with 100000 shares outstanding the corp is worth 2000 bucks. They have 1 server worth 2g's and that is their only asset. I succefully bought 1% of their realizable value. Now someone wants in and buys my share for 24 cents. The company is now worth 2400$ with only 2000$ dollars of assets. This can continue endlessly until the company is worth a million dollars. It doesn't change the intrinsic value of the company but the market value will continue to change. Eventually people will find themselves stupid and the price will plummet and drop to nothing as the company goes bankrupt. So now I have an argument base for actual commodities, things we use. The corn we make and eat, and use for random things, is not immune to this. This price gets manipulated continously as oil lobbyists want this price high, farmers want their corn to sell higher, so they manipulate the supply to control prices. As corn escalates in value what really happens? You then create an imaginary value for corn. Eventually the supply of corn regualtes and the price of corn drops, many farmers lose their farms. This has happened THOUSANDS of times! But the investors in the commidity markets only keep their investments for one season, or one season of product. So why are other goods any different? What is the value of a Nike shoe? try to legimitimize the ciruclar flow for Nike. Shoe is worth 8 cents of material, but sells for 60-300$. If that exchange of recources is not standard with everything. Eventually people are going to realize that Nike shoes aren't worth that much and people will stop buying them. So Nike's price will drop then? But that also means they stole how many billions of value to consumers? The value they supply to people is maybe 2 bucks but they make 60$. This is a consumer bubble. Their are millions of consumer bubbles. These won't cause any stress on the economy though. What will cause stress on the economy is... yup back to the stock market, when Nike's market value drops from I don't know 50 billion maybe down to 50/30= 16.67Billion dollars. Now if that happens to Apple, Microsoft, Grangers, Walmart, Samsung, Toyota, General Motors, Honda, many others all in the same year what happens? Instantly there is Trillions of dollars less in the global economy. What would cause such a thing to happen? Stagnation in buyers. What will cause that to happen, less buying power by the general public. What is happening now? As the quanity of dollars is being forced up the system is stagnating the largest buying force in the world. BUBBLES WILL BURST!! it is there. When credit and imaginary value are allowed to continue these actions will happen. As for debt never has to be paid. This is so easy to debunk. All you have to do is use a controlled environment. A society of 10 people where one does the farming, for all 10. One person asked if he can get twice the food, and he will give the farmer a shed. This happens every year. How long will it take the builder to chop the head off of the guy who owes him years of food? Now whatabout a monetary society? Well what if those 10 people had 1 million dollars, that they traded for goods, this way the farmer could instead pay for those additions on his house instead. Well what if someone decided to print out an extra million dollars, now there is 2mil. All money is worth half the price because their is more money in the system. It won't really make a difference right? The answer is no, but what if the farmer asks for the addition but doesn't have the money to pay for it? The builder agrees and asks him to pay it later. The other 8 people will assume that their is the same amount of money in the system, despite there is now also debt. So more value in society and more debt. As that debt becomes bad debt, the builders prices will raise and deflate the dollar. If you spend 30T dollars those owed money will increase prices and deflate the buying power of the dollar. So umm... PK is wrong, Ceebass you're wrong. The whole ____ system is wrong. Peel apart every lesson you've learned. If something is not creating value where there was none they are not improving society. You are wrong on real GDP it just makes exchanges immune to price fluctuation. It still accounts for many things that don't have a real wealth generating impact on society, such as service occupation.
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| Saturday, July 14, 2012 - 05:07 am "The big problem is that everything is overvalued and everyone is overconsuming because of it is." Flawed logic. If something is overvalued, then a correction is likely to take place. Econonomics 101. Also, if something is overvalued, then how can one overconsume? You've connected the wrong dots.
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| Saturday, July 14, 2012 - 05:15 am Also, I hardly see any sense in your post, Drew. Everything is everywhere, except logic which is no where. You remind me of Glenn Beck. *muddlehead* Wow.
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| Saturday, July 14, 2012 - 09:17 am um... wrong. if price is overvalued, and money is overvalued. But quanity of money is static or growing slower then this paired overvaluation, due to hidden inflation the economy doesn't know the money is missing. Furthermore if there is extra money in the system due to excessive use of credit people lose concept of the buying power of a dollar. In essence the market is built to correct itself, but too what scale? The correction will always happen to late, the past 20 years is an example of this. But alas you are right, that was nonsense. I'm sure you've ran into a situation were you know the facts, but there are so many things to say you don't how to order them, or explain them in a coherent way. The whole economy thing is simple, we use resources to distribute, market, and in many other ways waste and don't populate anything of reasonable value back. Money itself doesn't make a stable economy, what creates a stable economy is a self sustaining resource cycle, in which what we used is replenished to a greater level then what is consumed. It doesn't neccessarily have to be on a national level, but it has to be done. When it isn't done anything reliant the resource will crash. The presence of modern day economic thinking will work to reffirm these issues and offer a correction to those issues. However if we lose concept of our buying power the correction will come to late. If gasoline should be 1$ per gallon but society pays 4$, then as gasoline approaches that real 4$ it may still be most profitable at 5$ the market won't adapt like it's supposed to. Many industries can't adapt to an enlarged shortage which will bring that price upto 7-10$ The correction will be too late. Hypothetical obviously, to paraphrase rex tillerson. It doesn't make any sense to raise the price of gas we make 2% off the price of oil we stand too lose when gas goes upto 4$. If that doesn't spout nonsense nothing does. Before you tell me I'm wrong though, why don't you test what I say? Take any two industries and make one a currency for the other. Like chicken for shoes. How many chickens does it take to buy a shoe in 1995 how many chickens does it take to buy a shoe now. It may very well be more valueable to you to keep the chickens compared to just the difference not even the price, but the difference alone. ANY TWO different industries. You may get lucky and get one close but... try again you won't. The reason for this isn't laced in simple economics it's all about marketing, and finding the point of diminishing returns. Which leaves the economy essentially out of the equation. only a few factors to determine which way to maximize profitability. So if price points don't mirror (exactly represent) what is happening in the market place you have skewed data. Where is the correction? Too late is where it is. This is such a complex issue, and economics makes sense it really does, but it is a dated concept. No one can measure the economy because no one has enough information. Privately held non commercial banks don't have to report their holdings for example. But umm before I turn this nonsensical again, I'll defend my claim. ""The big problem is that everything is overvalued and everyone is overconsuming because of it is." Flawed logic. If something is overvalued, then a correction is likely to take place. Econonomics 101. Also, if something is overvalued, then how can one overconsume? You've connected the wrong dots." Cash buys stuff, things are overvalued. I'll leave those my fixed variables. The addition of credit increases the supply of cash too allow people to buy stuff. However the supply of cash shouldn't be increased credit isn't a substitute of cash, it isn't based on any economic growth, or anything really. So as credit is used as a substitute of cash, the supply of cash increases. As the supply of cash increases things appear less expensive, and people buy them, whether they can afford them or not. Furthermore as the supply of cash increases the value of cash decreases, as people realize that homeless guy just bought an XBox. So though the supply of cash never truly increased the buying power of real cash is decreased as people buy more and more frivelous things.
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| Saturday, July 14, 2012 - 10:09 am So, essentially, you're implying that the problem is the interest rate attached to available credit is too low. Interesting.
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| Saturday, July 14, 2012 - 05:45 pm tough love, ha. I would never admit to such a thing, those banks make too much as it is, and trade intangibles. Intangible exchanges are dangerous. But, ummm... not gonna answer that interest rate question. Well unless banks are deprivatized, and run by the fed then the answer is a big yes
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| Saturday, July 14, 2012 - 08:07 pm Place your bets here: Phoenix King: 90% US Equities, 10% US Energy Market, Natural Gas bought at 1.95, April. 3-5 years from now we will see who is correct and who is wrong. Copy and repaste
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| Sunday, July 15, 2012 - 06:16 pm then we'll see who is wrong in 15
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| Sunday, July 15, 2012 - 07:42 pm hahaha! Yes Shamus, quite alright that you don't have the book! Just look into legitimate sources writen by real economists. Although I myself am critical of an Austrian perspective, it serves as a much more solid economic reference than these pseudo theories. Look into the two different groups of economist that we have today. The "saltwater" and "freshwater" economists. When we listen to what politicians promulgate as "good" for the economy, we find that their theories are more or less pernicious towards economic growth. These policies disregard years of economic theory and thought and surrender to the vicissitudes of fickle public opinion. But I suppose that's politics. Tom Morgan. Let me respond to the very first post you made a time back which for some odd reason was actually about economics. I believe that what we have experienced over the last four years qualifies as an economic depression. Not as severe as the 30's but still rather bad. A recesion is a simple contraction in the economy. The fed buys bonds and lowers the interest rate. Easy! The only side effects are some mild inflation and a few less than happy lenders but that's not bad. This has been the standard cure for decades! But what was different this time? The fed did the same things but we're still in a mess! Provided below are two links that provide some interesting graphs. http://research.stlouisfed.org/fred2/series/HDTGPDUSQ163N/ http://www.tradingstocks.net/assets/images/household_debt_to_gdp_ratio.jpg These data show that the average household debt to relation to rGDP has consistantly risen post WWII. Recently, however, people have been what's called deleveraging, or paying off debt. Not only have a few people been deleveraging, but also everyone else! This is known as the Minsky moment or movement if you prefer. People have become so infatuated with deleveraging that no matter how low the fed sets interest rate, people will refuse to take on more debt. As you can also see, the only other time in recent history were we can find a Minsky moment is, you guessed it, the Great Depression! The Minsky moment creates what is called a liquidity trap. No amount of interest cuts or monetary policy can help now! No matter how much money is put into the system, people, en mass, won't take it! In part because they are already to far along in debt to take on more. So now what must be done? According to a Keynsian ideology only one other thing can be done. Direct government stimulus. This is because of that damned circular flow thing I was talking about earlier. Consumption encourages production. To produce more you need more workers. When you hire more, more people have jobs. When more people have jobs, more people can go out and buy junk. When more people go out and buy stuff, companies are encouraged to make more stuff. When companies need to make more stuff, they hire more people. You get the picture. Problem is no one is spending like they should. Everyone is deleveraging at the same damn time! Frustrating isn't it? Well good news. If the government can successfully mimic the actions of a regular consumer, the economy will begin to add jobs. Those workers in turn begin the circular flow cycle at which point the government can step out of the way. This brings into question the stimulus bill passed several years ago. http://upload.wikimedia.org/wikipedia/commons/3/36/Investmentbubble.jpg We can now see how the funds we divided up within the bill. State and local fiscal relief, protecting the vulnerable, health care, and education and training all exist to help programs already in place continue to function. Tax relief does what it says it does and makes up the largest portion of the bill. We are now left with Energy and Infrastructure and Science. So how much of this bill mimics a consumer? Not much at all. In fact only the Energy and Infrastructure and Science catagories come close to regular consumer spending. Cutting taxes while not bad is rather overated. Who cares if taxes are low for your store if nobody is buying things from you! But we know that the Great Depression did end. And while the government programs of FDR did help, we all know that the knockout blow was from WWII. But why? That was the time when government spending most matched that of a regular consumer. Think who bought all the boats, fuel, radios, vegtables, fruit, meat, bread, milk, lard, boots, pants, shirts, jackets, socks, underwear, jackets, coats, glasses, helmets, cantines, shovels, bullets, M1s, carbines, pistols, bullets, artilery, shells, tanks, trucks, jeeps, fighter planes, bombers, bombs, radar, destroyers, aircraft carriers, subs, torpedoes, depth charges, and grenades? Even though regular consumers don't buy these things (except you all who complain about the end of civilization) most regular factories that can produce consumer goods are easily converted to produce weapons. I mean come on! You guys play sim country! Set up any corporation and see how many products need to go into that corporation until it can produce any product. Select at randon one of the many products that probably goes into what that corp makes. There are also input goods for this product. And even inputs for those inputs! As you can see this can go one for quite a long time. So, in conclusion, I assert that the government should start to buy things that will improve our daily lives. Such as roads and schools. At the same time they could agressivly ramp up efforts to develop some scientific or technological achievment. Soon the private sector will take over and, with other changes to taxes (eventualy less) and regulation (not more or less just commonsense). The economy will be back on its feet, strong and powerful enough so that we can pay off our government deficit.
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| Sunday, July 15, 2012 - 07:43 pm BTW king is right in 3-5 or in 15.
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| Monday, July 16, 2012 - 04:45 am May I point out Ceebass that your solution runs into the problem of how "the government can successfully mimic the actions of a regular consumer". Given the essentially complex situation, the only people that can mimic the actions of consumers are the combined economic decisions of each consumer. Decisions made by a centralized authority will necessarily be arbitrary and without sufficient knowledge to determine which goods or services to purchase, at what price, or from which companies. It seems silly to have a centralized authority attempt to mimic the actions of consumers when the consumers (be them individuals, businesses, or organizations) could accurately "mimic" their own actions without error every time. I find it surprising that anyone would think that the public sector could mimic the economic actions of the private sector better than the private sector. If I may be so bold, I would like to counter-propose that each dollar that you propose to increase government spending by be instead turned into a dollar decrease in government revenue. Anyway, this point is mainly that your argument does not lead to your conclusion. May I suggest that you reframe your argument?
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| Monday, July 16, 2012 - 05:54 pm Perhaps I should not have said mimic. And I certainly do not believe that the government can act as well as the private sector! What I'll be talking about now is what happens in the middle of a typical economic predicament. I'll diregard the causes of this depression. What I am trying to explain here is something called the spending multiplier. The spending multiplier will calculate how many times any dollar amount will be spent in the economy after the initial expenditure. (for this disregard all tax for now please) Example: I have $1,000. I take this money to the furniture store and spend it on a very nice sofa. This $1,000 is now the store's. The store must buy new inventory and pay its workers. Let's say they spend $500 dollars on new inventory, $400 on wages, and save $100 as profit. Our original $1000 spent into the economy has added $900 more into the economy for a total of $1900 in total expenditures. All the workers go out and spend $360 of their money and save $40. The factory that produces nice sofas spends %250 on new matierials, $200 on wages and save $50. We could continue this on until all the money has been saved by either the workers or the firms. So the problem? People are saving too much and paying off all of their debt. Frightened by a sour economy, they save and prepare for the worst. So instead of going out and buying the nice sofa, they buy the cheaper sofa. Lets say $500. As a result the furniture store generates less income, and as a consequence workers at the store are laid off. Money spent by the workers is now greatly reduced simply because there are less workers. Same thing for the sofa factory and their workers. So what can be done? I think we both concur on monetary policy. So now all that is left is expansionary fiscal policy. The government follows through and cuts taxes and raises spending. I don't believe that cutting taxes helps as much as solid government spending but I doesn't hurt. In addition to that, lower taxes will provide a significant boom after a recesion. Lower taxes will not help as much because they are not a guaranty that consumer spending will be raised. Consumers have no incentive to reduce how much they save and firms have no incentive to produce more. Because the firms have no incentive to produce more there is no incentive to invest more into those firms. What these firms need are customers! So what I propose is that the government picks up the $500 not spent by the sofa shopper. This is of course an examination on the microeconomic level. We need to look at the macroeconomic level in order to understand what the government must do. Let's say the the total sum of consumption expenditures every year is $100B. However, a recesion has taken hold and consumption is down to $75B. As we have seen on the micro level, this can be devistating to a business and their workers. What I am saying is that the government tries to pick up that missing $25B dollars. Of course you are absolutly right, there are many efficiency problems associated with government expenditures. But it remains the most effective tool if monetary policy has failed. However, where the money is spent doesn't really matter as much as you might think. So long as there are a great deal of workers being paid from these expenditures. By the government acting as if they were a consumer means that they create demand much like that of a consumer. Now the government should be providing demand for things like roads, high speed rail, schools and school teachers, parks, police officers(espcially important in times of high crime as a result of economic difficulties), fire departments, upgrading our military even more, fixing up worn down buildings, and funding basic scientific reasearch. These things will create safe jobs, encouraging spending and revitalizing private firms. When the private firms have come back to their original strength, the government steps out of the way. Yes the system is complex, that is the exact reason why government spending works well. The complex overlappings create an environment where money spent goes about everywhere.
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| Monday, July 16, 2012 - 06:08 pm Until the Govt has such large debt it cannot spend anywhere and has to CUT spending...
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| Monday, July 16, 2012 - 06:11 pm Just because this is how things work doesn't mean it accounts for things that are invisible in the system. It is foolish to think that it doesn't matter what sells as long as it sells. Building roads costs money, it doesn't make money. If a mile of road costs 10k and the suppliers make 9k and and the employees make .5k. Then 500 dollars is lost. Our planet is moving into this deficit where the things we create don't add value. Roads may not be the best example, because they improve infrastructure (but it was an example given). As long as roads sell though for the price market demands economists won't see a problem. Our society will see a problem if the value added model doesn't get extended to every exchange of goods and services. This gets sped up even moreso without regards to the negative effect of debt people or society will be able to justify purchases that add even less value to society. When you think of just hiring extra piggies that is useless metal for guns, useless material for uniforms, useless materials for squad cars, useless materials on extensions of buildings. If there is no significant difference in productivity those are sunk costs that will add up. So I stand strong on we overconsume as a society. And that Phoenix King is wrong, it all is an economical illusion.
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| Monday, July 16, 2012 - 08:05 pm People, please! Keep your posts small and short on cuckiness!
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| Monday, July 16, 2012 - 10:05 pm First, economics is a complex subject. Brevity will be of no use. Second, If a mile of road costs 10k I can hardly believe that the company that builds the road has a profit margin of 90%! A great profit margin is more like 5%! That profit of course goes to the owner. That is his or her income that they spend or save like anyone else. The rest goes towards purchasing whatever the heck a road is made of. Profit isn't bad it's just someone's income. And a massive point that I think you are missing Drew is that the usefullness of something is totaly subjective. Microeconomics has tried to objectify it with the concept of utility but it is still highly subjective. Value can and is only determined by the consumer. Finally...Really Crafty? The government will run up such a large debt that it will cut spending? Tell that to the U.K.. In WWII they racked up a deficit over 200% of GDP. The U.S. went to about 120% of GDP. (the U.S. is about 100% now) To get to WWII levels the U.S. would need to see a 3T increase in the deficit. Inflation helps the debt holders. If we kept debt constant until ohh about 35 years, then we would expect our debt to GDP to be anywhere from %40-%60. Of course raising spending now would increase debt but we all know that after the recovery we would raise more revenue and therefore lower the debt.
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Monday, July 16, 2012 - 10:34 pm
Here, have a tip from Krugman:
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| Monday, July 16, 2012 - 10:53 pm Applauds Laguna for stating to KEEP IT SHORT! I've got a headache now! THX ALLOT!!! you long posting people with too much time on your hands! :P ~A friendly message from your neighborhood Spiderman
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Monday, July 16, 2012 - 10:57 pm
Indeed. Here in the UK essential services are being slashed to the bone. Health, police, fire, education, pensions, transport... and on and on, because there is no money. They even try printing more, "quantative easing" - have you ever heard of such a bull shit name for something? We have another bull shit word here too - "Austerity", or - 'go without people, the coffers are empty'. Now look to some other countries in Europe, they find it hard to borrow, and thats at ridiculous interest rates. Dunno, but if you're American then maybe you should join the amazing low percentage of Americans that hold a passport (30%, up from the teens a few years ago) and get out to see whats going on in reality. Your concepts are great and well put, if a little long winded (\me waves at Laguna), but belong in a theorists text book.
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| Tuesday, July 17, 2012 - 12:57 am Once again, stop with the theory, Place your bets here: Phoenix King: 90% US Equities, 10% US Energy Market, Natural Gas bought at 1.95, April. 3-5 years from now we will see who is correct and who is wrong.
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| Tuesday, July 17, 2012 - 06:03 am if the world goes back to the basics, there will be less stresses if you don't have $1 to buy my dozen eggs now, then you cannot take it with you. sorry, you cannot take my eggs and pay me tomorrow, or sometime in the future, even if you will pay me $2. keep things simple and stupid, everyone will be better off. the cleverness of taking something you don't have the money for is what's causing so much stresses in the world.
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| Tuesday, July 17, 2012 - 03:20 pm Alright I concede that I am long winded. I'll make it short. Sorry Crafty. In Europe they needn't commit to austerity! Although I recognize that the Euro puts you in a tight squeeze. QE is rather a joke and has created little help. Europe needs more fiscal and monetary solidarity if they are to even begin to aliviate their economic woes. Please tell me further why the U.K. cannot find money though. I am curious. Their bonds seem cheap, and I don't think that the U.K. is nearly as frightening as the GIPSI countries. This cure works fine in the U.S.. (I am American) We can and regularly do make more money to be able to function.
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| Tuesday, July 17, 2012 - 08:52 pm I'm sure you know the downsides of devaluing your currency. I guess the current UK policy is to shy away from this course (though the UK has had several rounds of QE since 2008). Probably a good policy although the alternatives are painful. Too much easy life living, the world needs to respect the true value of its assets and get away from the numbers some. I read some off the wall stat that said if Americans were prepared to accept 1% tax increase, your national debt or borrowing or something would be eliminated in a matter of a few years (something like that anyway, cant remember the source). Would you be willing to accept that?
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| Tuesday, July 17, 2012 - 10:12 pm I'm not going to stop with my theory because it's not a theory it is common sense. Common Sense that the economy decides to ignore. I'll stick with my point. Correction I meant that 9k goes to the road maker, that would further get divded of course into labor material etc. But I phrased it funny. Anywho if a society doesn't create more value then the consumption costs of its production it is doomed. If I shift away from roads and refer to diamond teeth on rappers, or collars on dogs. It doesn't matter what individuals value it at, those are just non-important exchanges. All of the consumed time, energy, and material that can't be salvaged is lost. Making robots that use resources but save resources have to be higher than the resources wasted on diamond teeth. This concept is ignored by economics. If we waste more resources then we generate we are moving towards an inflated economy. Personal value doesn't matter societal and global value creation is in a deficit. Bubble burst is inevitable. Don't know when though.
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| Wednesday, July 18, 2012 - 12:37 am the amazing views from different people on sc i highly doubt that increaing the tax rate will eventually eliminate the deficit of the country. doesn't this mirror sc countries already, that if your tax rate is too high then no one wants to be in your country? otherwise the people in government would just find other things to spend the new tax amount, rather then pay off the deficit of the country. in sc, you are the decision maker for your people, and higher tax rate doesn't help. imagine on an earth country where every one has different ideas of how to use the money. in the USA, perhaps it's time to revisit the industrial revolution of the nation. what did america done to elevate it to be a top country on earth? or even look at a country like japan, how did it become what is today since it was atomic bombed? it's just reality, that you cannot produce more than you consume, then you will be doomed. america is becoming or has became a service industry nation. so as a person, can you live without a service for a few days and can you live without say your favorite food for a few days? which would you prefer if you're trying to survive, your telephone service or your bread? or perhaps our leaders have forgotten adam smith's "wealth of nations"
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| Wednesday, July 18, 2012 - 10:58 am xiong, it isn't easy to become rich. America only became "super wealthy" after the Texan Oil Boom of the early 20th Century, and then again during WW2, when they supplied the Allies with everything. Unless the US sets the Germans against the Russians again, don't expect them to become a manufacturing powerhouse. The Industrial Revolution made the rich richer and the poor relatively less poor. It did improve things, but only slightly. Japan, as a country, was flushed with American investment after the war. China today is basically what Japan was back in the 1960s and 1970s.
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| Wednesday, July 18, 2012 - 04:21 pm Ceebass. You are very optimistic. But then most money motivated people are. What makes you think there will be a recovery? The World has never gone through such a intensely interlinked financial realisation that its all Bull Shit. And that the only thing that seems to work in this Bull Shit situation is manipulation and lies (which in-turn makes the Bull Shit worse) The fly has hit the window and trust in freedom, for the fly and truth for us has been shattered and the lube for the financial machine (peoples trust and assets) has dried up. I guess by now you would have heard of the phrase being used to sum up the situation the banks are in? The tobacco moment. The realisation that you are going to have to admit the things you have been fighting so hard to keep concealed. For the tobacco companies it was admitting that smoking causes cancer and for the banks its admitting that the banking system and financial system is corrupt. Unfortunately in the UK the government has given a 'get out of jail free card' to all financial leaders who break the law in the pursuit of profit. So until the governments deal with these capitalistic greedy soulless excuses for life, nothing will ever change and our future generations will be left with nothing because the capitalists are not only taking everything from them (environment, resources through waste, wealth ect) but they are also borrowing from them. And why? so they can feel the power of having everything now. Selfish B~st~rds
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| Wednesday, July 18, 2012 - 07:58 pm +1000
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| Thursday, July 19, 2012 - 11:11 am Crafty, I read in the Enquirer that the Queen shafted William of the throne!!! What is up wif that?!!! Jan
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| Thursday, July 19, 2012 - 03:04 pm If you read it in the Enquirer it must be true.
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| Thursday, July 19, 2012 - 03:23 pm Nice play on the Nat Gas Phoenix! I shorted at 2.32 and it stayed +/- .05 for a week so I moved on. Next day it started its move down to near where you bought. Now it has just shot up like crazy. I am never patient enough 
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| Friday, July 20, 2012 - 01:59 am Common sense is the collection of prejudices acquired by age eighteen. -- Albert Einstein
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| Wednesday, July 25, 2012 - 01:04 pm "Evil Capitalism... Ponzi Schemes... Corruption... Blah" ---Nix Oh, so you think capitalism is bad and corrupt? Tell me more about how communism and every other economic theory is perfect and has no corruption whatsoever? Just saying...
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| Wednesday, July 25, 2012 - 06:46 pm Communism is far from perfect. The issue with communism it is far too difficult to motivate people. Without proper compensation people will not strive to innovate. I recently wrote an essay that got published in "The Progressive" about what happened to the American Dream. The point of it was that the largest stregnth of capitalism is that it combats that motivational threat giving the opportunity to make endless amounts of money. However it no longer works! How could it when the average lawyer makes 95k per year and the average corporate lawyer makes 400k? When teachers make 34k but brokers make 295K. Engineers, architects, programmers, etc can't motivate people because their wages have become stagnated and price of living increases. No one can be motivated anymore to bring value to this country. So if you want to compare it to communism. With communism you have lack of innovation but a higher standard of living, with capitalism you have lack of innovation and a lower standard of living. Why should only the few that feel profits are the end all be all of occupation be the only ones that have thier life validated by society? That's not the issue though, really. The topic here is the state of the economy. Small businesses can't start up with an unmotivated workforce that won't obtain money to buy. The entire economy can't create any value if the majority of the economy involves intangible trades. Buying 1m shares then selling 1m shares doesn't do anything to secure the state of the economy. Theorhetically if you take out those exchanges you will find ambitious people that will work their buts off adding value to make up the difference from their lack of unethical intangible trade wealth.
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| Wednesday, July 25, 2012 - 10:08 pm I think the opportunity given to us in a capatalistic system is amazing it is possible through my own ingenuity hard work cleverness and luck to be a completely filthy rich son of a bitch in communism I would have to work with other people like they are equal blah get told by the government what to do blah make an average (mediocre) living dependent upon how well my government is doing blah maybe I'm not as good a person as you communists...maybe I'm just more fascinated by the opportunity's available and freedom given to me on the other hand I find our society very depressing with such blatant inequality between education in city schools vs rural schools...American education between European education.......I think the only thing the government owes me is roughly equal education with my peers a good living working learning environment and to stay out of my damn bussiness oh yah and to deport all the crazy left and right wingers
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| Wednesday, July 25, 2012 - 10:12 pm oh yah and our roided military 40% of worlds military spending yet noone feels safe and we have a 15 trillion dollar debt wtf obviously the defense of our nation needs to fall to our nations people and not some jacked up 1% (good way to cut spending) and for all I know all these weapons are going to be obsolete in 10 years and we will be overrun by China while Europe mocks us
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| Thursday, July 26, 2012 - 02:13 pm Gunther, you spend your 40% there on the military to ensure an oil/energy supply for as long as it can be eeked out of the ground. Good investment?
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