explain some stuff to me in broad terms
03-16-2011, 09:03 AM
#1
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When the lower value of the dollar, unrest in the middle east, increase in fuel prices (and therefore increase in shipping prices), and now disruption of industry in Japan, will we see a return to more goods produced and purchased domestically? Or am I lumping together a bunch of events that really have no cumulative effect?
Keep in my I have, at best, a loose grasp on world events and economy. I don't pay attention to what "markets" are doing, and I never watch the news. I just get snippets here and there.
Keep in my I have, at best, a loose grasp on world events and economy. I don't pay attention to what "markets" are doing, and I never watch the news. I just get snippets here and there.
03-16-2011, 11:31 AM
#2
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If more things were purchased here, they should be lower priced. Unfortunately due to overpaid corporate bosses and unions, everything gets outsourced to china where they can pay their workers in pennies and undercut the domestic product price and still pull a decent profit, even after shipping.
That's what I've seen anyways
That's what I've seen anyways
03-22-2011, 03:52 PM
#3
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possible that you're right baldy, but yeah nothing has happened to china yet. it will eventually though, the chinese are already wanting more $ per hour.
i think what hurts us here, especially in CA, is that we have some bizarre rules, and there is a dizzying array of agencies to satisfy to actually have a legal business.
i think what hurts us here, especially in CA, is that we have some bizarre rules, and there is a dizzying array of agencies to satisfy to actually have a legal business.
03-22-2011, 05:38 PM
#4
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The short answer NO. We simply don't have the manufacturing capability at this point and it would literally take years for us to get up to speed with the production facilities in China and Japan. Companies don't make things in Japan because labor is cheaper, fact is it isn't cheaper. They manufacture them there because the factories are 40 years more advanced then ours. Even our labor force is behind as far as skills, tried to find a good machinists lately? You know anyone who can work on the robotic machinery found in modern factories. Even if we built the factories we'd have to hire labor from japan just to run them!
Again with China the advantage isn't the cost of labor, it's the modernization of the facilities and the capability of production. China initially gained the business with cheap labor, but once they got companies there they modernized their factories to the extent that they use even less labor then ever.
We have effectively become a service nation and what's even worse, with modern technology we are losing our grasp on the service industry, with the exception of things like auto repair and construction technology service, etc, etc... can be handled just as easily in a place like india for 1/5th the price.
Now let's talk about the dollar. The USD dollar is in the process of total destruction, planned destruction. The monetary policy set by the federal reserve is a blatant effort to destroy the dollar, it is in reality the only option we have at this point. We are the largest debtor the world has ever seen and the only hope we have to pay back our debts is to print our way out of it, which is precisely what they plan to. Never fear we will pay china every dime we owe them, unfortunately for them it will be essentially useless.
Inflation/dollar destruction is in no way good for the working man. Inflation AND TRUST ME INFLATION IS HERE is nothing more then a tax. Wages are going down, prices are going up. You tell me, what does that do to your savings account? What does it do to fixed income earners?
In order to prop up the economy helicopter ben and his federal reserve boys have used quantitive easing, round one looked great, but it didn't last long, round two didn't do so much and it's already looking like round 3 is going to happen soon. Eventually quantitive easing, or the flooding of money into the system won't be numbered by rounds, soon they will open the flood gates and just keep them open, PRINT PRINT PRINT. Do you know who the largest holder of US Treasuries is? It's not china, it's not japan..... its US. We have monetized our own debt (printed money) to such a degree that we are our own largest debtor.
Keynesian economics, in it's basic form uses three things to control the economy 1) interest rates.... guess what, those are almost at zero, can't do any more adjustment there 2) stimulus to spur spending (how's that working out so far) and 3) (this one is the one they've really been relying on) "positive attitude" we'll just keep a positive attitude and hopefully americans will keep spending and not realize they are ******* broke.
Keynesian economics and fiat currencies don't work. Soon, very very soon americans will learn this lesson in a horrible way. The american way of life is about to change and in a very big way, it doesn't take a degree in economics to understand that things simply cannot go on like this.
At this point it is not a matter of IF, but WHEN.
Again with China the advantage isn't the cost of labor, it's the modernization of the facilities and the capability of production. China initially gained the business with cheap labor, but once they got companies there they modernized their factories to the extent that they use even less labor then ever.
We have effectively become a service nation and what's even worse, with modern technology we are losing our grasp on the service industry, with the exception of things like auto repair and construction technology service, etc, etc... can be handled just as easily in a place like india for 1/5th the price.
Now let's talk about the dollar. The USD dollar is in the process of total destruction, planned destruction. The monetary policy set by the federal reserve is a blatant effort to destroy the dollar, it is in reality the only option we have at this point. We are the largest debtor the world has ever seen and the only hope we have to pay back our debts is to print our way out of it, which is precisely what they plan to. Never fear we will pay china every dime we owe them, unfortunately for them it will be essentially useless.
Inflation/dollar destruction is in no way good for the working man. Inflation AND TRUST ME INFLATION IS HERE is nothing more then a tax. Wages are going down, prices are going up. You tell me, what does that do to your savings account? What does it do to fixed income earners?
In order to prop up the economy helicopter ben and his federal reserve boys have used quantitive easing, round one looked great, but it didn't last long, round two didn't do so much and it's already looking like round 3 is going to happen soon. Eventually quantitive easing, or the flooding of money into the system won't be numbered by rounds, soon they will open the flood gates and just keep them open, PRINT PRINT PRINT. Do you know who the largest holder of US Treasuries is? It's not china, it's not japan..... its US. We have monetized our own debt (printed money) to such a degree that we are our own largest debtor.
Keynesian economics, in it's basic form uses three things to control the economy 1) interest rates.... guess what, those are almost at zero, can't do any more adjustment there 2) stimulus to spur spending (how's that working out so far) and 3) (this one is the one they've really been relying on) "positive attitude" we'll just keep a positive attitude and hopefully americans will keep spending and not realize they are ******* broke.
Keynesian economics and fiat currencies don't work. Soon, very very soon americans will learn this lesson in a horrible way. The american way of life is about to change and in a very big way, it doesn't take a degree in economics to understand that things simply cannot go on like this.
At this point it is not a matter of IF, but WHEN.
03-23-2011, 07:51 AM
#5
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Nice, thanks!
I really think the "positive attitude" has some merit. After all, isn't that how some recessions begin? People think bad things are going to happen, so they cause it. You can always rely on people spending the money they get, immediately.
I really think the "positive attitude" has some merit. After all, isn't that how some recessions begin? People think bad things are going to happen, so they cause it. You can always rely on people spending the money they get, immediately.
03-23-2011, 09:14 AM
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REALLY? That's what you gathered from everything I posted? You think the recession began because people had bad attitudes?
03-23-2011, 09:57 AM
#7
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This recession as with any recession before has nothing to do with "consumer confidence" or a positive attitude. Just like cancer you can't "Wish" the economy into recovery. It's a bit more complicated then that.
I call that concept "perception economics". It's an attempt to convince everyone to spend money they don't have (AKA credit) to buy things they can't afford and stop saving. Perception economics is nothing more then the gov't and the media feeding the american people a bunch of bullshit and hoping they don't wake up one day and realize they are ******* broke. Hoping americans don't realize that every month they are able to afford less then they could the previous month. IT DOESN'T WORK. Perception economics banks on the principle that in general americans are absolutely retarded when it comes to the economy.
Let's go back to the financial collapse. What really happened? Do you really believe that people decided to save more money and suddenly stopped spending? That would mean that millions of americans suddenlt started savings accounts. Do you think that's the case? Put 50 americans in a room I bet you one of them has enough money saved to last 90 days without a job. I bet 5 of them have enough money to last 30 and the rest are living paycheck to paycheck. There is a big difference between not spending and saving... enter perception economics, look how easily it convinced americans that people were saving instead of spending when in all reality they weren't saving, they just didn't have any money to spend or more specifically they didn't have any credit left in which to use to spend. Most americans spend every dime they make (living paycheck to paycheck) so the concept of them magically saving and driving the economy to ruins is ridiculous. Under the current system where inflation is driving the economy it only gets worse if wages don't keep up. Because americans spend more money on ridiculous **** like food and less on the important stuff like new cars and iphones.....
While the recession (i have to grit my teeth to call it that at this point) is somewhat complex as to what led to it, there are some simple things. First and for most DERIVATIVES, DERIVATIVES., DERIVATIVES. Now it derivatives are pretty complex investment vehicles and even the people who invest with them will have a hard time explaining them to you, but suffice to say they are essentially like gambling on an underlying investment. You can turn 100,000 into a million, maybe even 10,000,000 worth of paper. You can borrow against it 100 times over, but what happens when the underlying investment turns to ****? Someone is left holding that bad. So now you've kept easy money flowing using these derivatives and one day investors start to realize the risk. Money expansion, nay credit expansion comes to a grinding halt. When 90% of americans are driving the economy using credit in some form or another, what happens when that credit is no longer available? Are they spending? No are they saving? No The money is gone.
Americans used to buy a house as a place to live, many folks in the early days of america lived in one house for most of their lives, however in the last 10 to 20 years the ownership of a home became an investment vehicle, unfortunately many americans that were buying houses and selling them shortly after to make profit have no concept of how investing works. As soon as your house went from being shelter to being an investment vehicle it entered the exact same paradigm that every investment does. We call it SUPPLY AND DEMAND. It doesn't take a genius to realize that at the rate houses were being bought and sold, supply had exceeded demand. Do you know what happens to every investment when supply exceeds demand? The price goes down and as sellers have a harder time finding buyers, the price goes down even faster. What's even worse is that banks allowed americans to effectively use their home as an ATM machine. People were allowed to use the "equity" in their home in order live beyond on their means. So not only are these people not saving they are doing quite the opposite, they are spending money on debt SOUND FAMILIAR? Our gov't again, using perception economic has hoodwinked the majority of americans into believing that there is nothing wrong spending money on debt.... money you don't actually have. Don't believe me? Well guess what we've got almost 15 trillion in debt to prove it and you rarelyt hear a peep from american about it when they should be absolutely pissed off storming the capital.
This leads me to a basic conclusion, easy money came to an end. That's the recession in a nutshell. However you want to crack it, that's the reason the Keynesian house of cards started to crack, that's the reason the "recession" began and still exists today. In every sector, in every aspect bankers, home owners, credit card users credit contracted, it became less available.
Savings is good, not bad. Amazing how effective perception economics has been in convincing americans that people who save their money are somehow to blame for a recession.
You simply cannot have an economy that is based on perception. Even though you may be able to fool some people some of the time, you can't fool all of the people all of the time. Eventually people realize they are unemployed, they are barely getting by, they have no savings, they've lost their house, etc, etc.... An economy cannot be based on wishes and positive thinking.
You need to look no further then the federal gov't. They have spent/printed so much money on debt that they are barely able to pay the interest on the debt they have accumulated..... now keynesian's believe that if inflation takes hold, they will be able to control it by raising interest rates. Here's the kicker, if they raise rates, the cost of servicing their debts will rise and they will be unable to afford to even pay the interest on the mess they've created.... sound familiar? Like gov't like citizen right? Americans with adjustable rate mortgages ran their equity lines up and bought more house then they could afford, then the rates ticked up and they couldn't afford payments....... guess what the entire ******* system is based on the same garbage. The federal gov't at this point is basically a guy using one credit card to pay the monthly bill on another credit card. Then that one fills up and he gets another credit card and starts using that one to pay the existing two... and on and on.
There is no way to stop inflation, it's here and it's going to get worse, so much so that you can't even imagine. There is no way to stop it. If we raise rates we destroy the "recovery" and at the same time make it impossible to service our existing debt.
I call that concept "perception economics". It's an attempt to convince everyone to spend money they don't have (AKA credit) to buy things they can't afford and stop saving. Perception economics is nothing more then the gov't and the media feeding the american people a bunch of bullshit and hoping they don't wake up one day and realize they are ******* broke. Hoping americans don't realize that every month they are able to afford less then they could the previous month. IT DOESN'T WORK. Perception economics banks on the principle that in general americans are absolutely retarded when it comes to the economy.
Let's go back to the financial collapse. What really happened? Do you really believe that people decided to save more money and suddenly stopped spending? That would mean that millions of americans suddenlt started savings accounts. Do you think that's the case? Put 50 americans in a room I bet you one of them has enough money saved to last 90 days without a job. I bet 5 of them have enough money to last 30 and the rest are living paycheck to paycheck. There is a big difference between not spending and saving... enter perception economics, look how easily it convinced americans that people were saving instead of spending when in all reality they weren't saving, they just didn't have any money to spend or more specifically they didn't have any credit left in which to use to spend. Most americans spend every dime they make (living paycheck to paycheck) so the concept of them magically saving and driving the economy to ruins is ridiculous. Under the current system where inflation is driving the economy it only gets worse if wages don't keep up. Because americans spend more money on ridiculous **** like food and less on the important stuff like new cars and iphones.....
While the recession (i have to grit my teeth to call it that at this point) is somewhat complex as to what led to it, there are some simple things. First and for most DERIVATIVES, DERIVATIVES., DERIVATIVES. Now it derivatives are pretty complex investment vehicles and even the people who invest with them will have a hard time explaining them to you, but suffice to say they are essentially like gambling on an underlying investment. You can turn 100,000 into a million, maybe even 10,000,000 worth of paper. You can borrow against it 100 times over, but what happens when the underlying investment turns to ****? Someone is left holding that bad. So now you've kept easy money flowing using these derivatives and one day investors start to realize the risk. Money expansion, nay credit expansion comes to a grinding halt. When 90% of americans are driving the economy using credit in some form or another, what happens when that credit is no longer available? Are they spending? No are they saving? No The money is gone.
Americans used to buy a house as a place to live, many folks in the early days of america lived in one house for most of their lives, however in the last 10 to 20 years the ownership of a home became an investment vehicle, unfortunately many americans that were buying houses and selling them shortly after to make profit have no concept of how investing works. As soon as your house went from being shelter to being an investment vehicle it entered the exact same paradigm that every investment does. We call it SUPPLY AND DEMAND. It doesn't take a genius to realize that at the rate houses were being bought and sold, supply had exceeded demand. Do you know what happens to every investment when supply exceeds demand? The price goes down and as sellers have a harder time finding buyers, the price goes down even faster. What's even worse is that banks allowed americans to effectively use their home as an ATM machine. People were allowed to use the "equity" in their home in order live beyond on their means. So not only are these people not saving they are doing quite the opposite, they are spending money on debt SOUND FAMILIAR? Our gov't again, using perception economic has hoodwinked the majority of americans into believing that there is nothing wrong spending money on debt.... money you don't actually have. Don't believe me? Well guess what we've got almost 15 trillion in debt to prove it and you rarelyt hear a peep from american about it when they should be absolutely pissed off storming the capital.
This leads me to a basic conclusion, easy money came to an end. That's the recession in a nutshell. However you want to crack it, that's the reason the Keynesian house of cards started to crack, that's the reason the "recession" began and still exists today. In every sector, in every aspect bankers, home owners, credit card users credit contracted, it became less available.
Savings is good, not bad. Amazing how effective perception economics has been in convincing americans that people who save their money are somehow to blame for a recession.
You simply cannot have an economy that is based on perception. Even though you may be able to fool some people some of the time, you can't fool all of the people all of the time. Eventually people realize they are unemployed, they are barely getting by, they have no savings, they've lost their house, etc, etc.... An economy cannot be based on wishes and positive thinking.
You need to look no further then the federal gov't. They have spent/printed so much money on debt that they are barely able to pay the interest on the debt they have accumulated..... now keynesian's believe that if inflation takes hold, they will be able to control it by raising interest rates. Here's the kicker, if they raise rates, the cost of servicing their debts will rise and they will be unable to afford to even pay the interest on the mess they've created.... sound familiar? Like gov't like citizen right? Americans with adjustable rate mortgages ran their equity lines up and bought more house then they could afford, then the rates ticked up and they couldn't afford payments....... guess what the entire ******* system is based on the same garbage. The federal gov't at this point is basically a guy using one credit card to pay the monthly bill on another credit card. Then that one fills up and he gets another credit card and starts using that one to pay the existing two... and on and on.
There is no way to stop inflation, it's here and it's going to get worse, so much so that you can't even imagine. There is no way to stop it. If we raise rates we destroy the "recovery" and at the same time make it impossible to service our existing debt.
03-23-2011, 10:22 AM
#8
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Haven't read your other wall of text yet.
03-23-2011, 10:58 AM
#9
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That wall of text makes a lot of sense. I know there's more to it than that, I've just always heard people blaming it on the wars. Although I'm sure they didn't help, I thought that wasn't the complete cause so what you said ave me a lightbulb moment lol