chiggerbit wrote:
And the media says experts keep calling this the worst that's happened since the Great Depression. Yet, unemployment is still relatively low, inflation is low.
That's a temporary matter. The GD crash was in 1929, the depression hit fully in 1931. Today is faster. It will happen in '09.
The number of banks that have gone under are still quite low compared to the recession of the early eighties (although, I realize, that could be because there have been so many mergers into bigger and bigger banks that we have no clue how many banks we're really talking about compared to original numbers)
Bigger banks, as you say. We may see the failures at an end for a while, because they just dispensed with the step-by-step process and preemptively bailed out the whole thing. Then again, watch what happens on the weekends, like this one with WaMu.
Maybe the bailout will have become so astronomical by next week that it will fail on first try?
Nordic wrote:
Inflation is NOT low. The CPI is a lie deliberately designed to cover up the truth.
The official CPI doesn't include food or fuel or housing.
You know, those little things called "necessities".
If you look at the real cost of living, real inflation, it's very very bad right now.
I think it' going to get really bad. All the historical precedents for this kind of thing usually involve out-of-control inflation being a result.
Point well taken. That's been true for many years now. But we're talking bad cost-of-living inflation as opposed to hyperinflation. Like, 10 dollars to the euro, $30 for a gallon of gas.
But Argentina was business as usual. If the US held the same place in the world economy, Argentina would have happened here already in 2002, I figure. The US however is the global power, the dollar is the global currency, its economy provides the lion's share of world demand and has been used as the investment vehicle of first and last resort. The world didn't hold pesos, but it does hold dollars. The incentives for the rest of the world are enormous in both directions; to try to sustain and rescue the US, and to find a way the hell out.
barracuda
Bernanke has already said what his plan is, and he is carrying it out as we speak:
Monetization of the Himalayas of debt, yes.
Overall pressure has been deflationary in the extreme, but that can change fast, and will as trillions of dollars of debt is monetized and payed off with printed notes.
And then what will those whose credits are redeemed in that fashion do with that? Buy groceries and gas? Reinvest it in suddenly wonderful US assets? Hold on to it and pray no one notices there are suddenly four or five times more dollars in circulation than before?
The end of entitlements is also very near.
Yes and maybe no. Risky. They've spent 30 years talking about the imminent Social Security insolvency (in, um, 2042 or something) as a prelude to the inevitable crash of the real Ponzi scheme, the investment economy. Hard to imagine, given a depression, how this flies in anything but a full military-police state, which is not the sure number many of us have thought, despite decades of preparing the apparatus. Question: Will US troops shoot at the people? (Unfortunately, we have a partial answer: National Guard will shoot black people, no question.) I suppose question 2 also arises: Will US people ever rise up in the first place? What would it take? I think Social Security would be the break point.
sfnate wrote:
The whole thing is a textbook example of "privatize the gains, socialize the costs".
These "bold" government moves to bail out the crooks and assume a boatload of bad debt will result in a staggering and debilitating financial blow for ordinary people and local & state governments.
We will pay for this mess, beginning this April and continuing on for many tax seasons to come.
The Third-Worldization of the US has surged forward with these events. The rich have their dedicated staffs of accountants and lawyers to see them through to safer havens; we have only our own wits and whatever resources are left to us when this economic riot ends.
Hard days ahead. For ordinary folk I mean.
Oh yes, that's all true.
isachar wrote:Both, obviously.
Heh. As ninakat says. Take it away.
ninakat wrote:My guess is continued price inflation (goods, services) possibly even hyperinflation considering how many dollars are being "printed," and continued asset deflation (housing obviously). But frankly, the whole system is so incredibly convoluted and manipulated, that how things actually play out seems to be a tough call. Regardless of the specifics, the middle class is toast.
If you haven't watched the Democracy Now! interview, I highly recommend it. Here's the thread:
http://www.rigorousintuition.ca/board/v ... hp?t=20383
Will do!
chiggerbit wrote:
Quote:
The official CPI doesn't include food or fuel or housing.
I don't know what you consider the inflation rate to be today, but in 1980 it hit 13.5%, and interest rates reached over 21% in '82. And don't forget--housing values are going down. Well, except here in this area. I think corn prices are keeping real estate values up, even residential.
Inflation's been faked since around that time, or even earlier. They separated food and fuel from "core inflation," which is supposed to be some kind of unfolding revelation of the sacred capitalist truth that thanks to technology everything always gets more valuable and lower priced. One technique is the "hedonic deflator," which takes the real numbers for some sectors (in dollars) and reduces them on the basis that, well, your computer is faster now, so you're paying less per bit or something. (I call it the Megahertz Bonus.) It has the effect of lowering inflation, and thus also fakes GDP. GDP in turn has at least 15% imputed income, like crediting you for rent you don't pay because you own a house. This is all nonsense, as it has nothing to do with real dollar amounts going around.
Everyone read this if you have not:
http://harpers.org/archive/2008/05/0082023Kevin Phillips wrote:Numbers racket:
Why the economy is worse than we know
By Kevin P. Phillips
Kevin Phillips’s new book, Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, is published Viking.
Almost four decades have passed since the United States scrapped its last currency ties to precious metals. Our copper and nickel coinage still retains some metallic value, but not nearly enough for the purpose of currency tampering—the historic temptation of inflation-plagued or otherwise wayward governments, including, at times, our own. Instead, since the 1960s, Washington has been forced to gull its citizens and creditors by debasing official statistics: the vital instruments with which the vigor and muscle of the American economy are measured. The effect, over the past twenty-five years, has been to create a false sense of economic achievement and rectitude, allowing us to maintain artificially low interest rates, massive government borrowing, and a dangerous reliance on mortgage and financial debt even as real economic growth has been slower than claimed. If Washington’s harping on weapons of mass destruction was essential to buoy public support for the invasion of Iraq, the use of deceptive statistics has played its own vital role in convincing many Americans that the U.S. economy is stronger, fairer, more productive, more dominant, and richer with opportunity than it actually is.
The corruption has tainted the very measures that most shape public perception of the economy—the monthly Consumer Price Index (CPI), which serves as the chief bellwether of inflation; the quarterly Gross Domestic Product (GDP), which tracks the U.S. economy’s overall growth; and the monthly unemployment figure, which for the general public is perhaps the most vivid indicator of economic health or infirmity. Not only do governments, businesses, and individuals use these yardsticks in their decision-making but minor revisions in the data can mean major changes in household circumstances—inflation measurements help determine interest rates, federal interest payments on the national debt, and cost-of-living increases for wages, pensions, and Social Security benefits. And, of course, our statistics have political consequences too. An administration is helped when it can mouth banalities about price levels being “anchored” as food and energy costs begin to soar.
Go to link and read it!
My question still hasn't been answered.
I know fuck-all.
Where's Nathan28, the deflation guy?
