Scary thoughts--the next bailout

[mrs reb77]

Ok, I opened this article expecting to be told how the 'stimulus' is really a bailout etc. etc.
I don't know if this guy is anywhere near the truth but I do know I really don't want him to be.

http://www.cnn.com/2009/POLITICS/02/06/smick.bailout/index.html
It's a commentary by: David Smick, a global strategic adviser, is author of "The World Is Curved: Hidden Dangers to the Global Economy" (Penguin Portfolio). He is chief executive of Johnson Smick International, a financial market advisory firm based in Washington.

[Gib's Son]

A little know secret is that our govt. actually has 3 set's of balance sheets that they have been keeping for years and they just shift the books around to make things look better than they actually are. ( We would be jailed for such practices, but that's another issue)

My prediction: This stimulus will pass, China and all the others that are floating us money may call in their loans, the credit rating of the U.S. will be downgraded from A1 and we will end up paying higher interest rates for our loans, driving us further into the abyss. The United Nations will ( and already is) scream for a new currency similar to the Euro because nobody will want to base the value of their money on ours. We will no longer be the "gold standard".

[joe123]

AThis stimulus will pass, China and all the others that are floating us money may call in their loans, the credit rating of the U.S. will be downgraded from A1 and we will end up paying higher interest rates for our loans, driving us further into the abyss. .

Ah, a person who knows the economics of the game.

Very few people understand how much of the toxic notes are being held by places like China.

Piss off China and have China call their loans and the house of dominos falls. Thus why the 1-Trillion "BailOUT" wont help the economy in general.

[scrogdog]

Very few people understand how much of the toxic notes are being held by places like China.

Of course we know. I just don't think that the scenario that you present is very realistic, to be honest.

Let's look at this logically.

First... why does China buy our debt? Simple. Interest income. In other words, we buy a lot of Chinese "stuff". But they don't want our stuff. So, they have lots of US dollars.

To buy US debt, one needs to pay in US dollars. Which the Chinese have. We don't accept anything else.

What do the Chinese get in return for these US dollars? Pieces of paper which accrue interest known as IOUs.

Now, let's say that the Chinese decide to call the loans. Under the terms of the IOU agreements, what are the loans payable in?

You've got it; *other* pieces of paper with pictures of dead freemasons on them. If we don't have enough, we'll print more.

You know, sort of what happens when you run out of money while playing monopoly. You grab some paper, draw some values on them, and everyone accepts them as valid.

The whole world is playing monopoly.

China may not demand gold just as we cannot (but once could) in lieu of paper notes. This is called "fiat" money which is only backed by legal force and tender law.

The gold standard collapsed in 1971. For the world, not just us. We all use fiat money now.

[joe123]

Now, let's say that the Chinese decide to call the loans. Under the terms of the IOU agreements, what are the loans payable in?

You've got it; *other* pieces of paper with pictures of dead freemasons on them. If we don't have enough, we'll print more.



You missed the critical point.

If the Chinese were to call on the loans for breach of contract (notes not being paid by terms of the agreement), the US economy will collapse - forgert terrorism. Printing more money has already been abused and why the US dollar is so weak against the world, so that option left the table years ago.

Just like nature, parasites need to suck but not destroy their host because parasites want to live too. The Chinese will do as they please and suck every last penny out of the US because they now hold the bigger stick. So if they demand $350 Billion dollars NOW, we will give it to them no questions asked.

Hey, now we know where that missing $350 Billion went! :D

[scrogdog]

You missed the critical point.

One of us did, that's for sure. :)


If the Chinese were to call on the loans for breach of contract (notes not being paid by terms of the agreement), the US economy will collapse - forgert terrorism. Printing more money has already been abused and why the US dollar is so weak against the world, so that option left the table years ago.

No it wouldn't. The collapse of the US economy gets predicted about as much as the world coming to an end does. And both groups of proponents have been correct precisely the same number of times. :)

As I said, we'll print anything we need. The danger is inflation and even that would depend on how (and even if) that paper found its way back to our more local economy. That's because four factors dictate inflation... not one.

The dollar is not weak versus the world. Other markets have gained against it. Big difference.

In fact, this article marvels at how strong the dollar remained DESPITE the massive influx of cash by the feds. Oct 2008.

http://www.dailymarkets.com/forex/2008/10/22/reasons-for-dollar-strength/

The dollar declined in the 70s and again in the 80s. And again from '91 to '93. Each time we heard about the collapse of the dollar and the resulting collapse of the US economy. Just one problem though; the US dollar was, is and will continue to be for some time, the world standard. There was no real substitute then... and now.

Of course, there is always the Euro and I agree that it could replace the US dollar at some point. However this will happen slowly if at all or else it would have already happened. Why? Easy. :) We are the world's best customer. It is in no one's best interest to see the US economy collapse, regardless of ideology.

I don't care what anyone says, the loss of the US as a world and economic power would devestate this planet. On more fronts than just economic, too.

We've not only got "the stuff" we've got the delivery systems as well.

Which, btw, is also why China is not at all scary with thier little stick. They may have a big army, but they can't project it.

[joe123]

You bring up lots of good points, but I think you are living in the past.

The US dollar is very weak and yes, we used to be a great "customer", but that is fadding fast. Non paying customers are never a good thing no matter how good they been in the past, especially if the customer is currenly in a coma.

Go visit Europe and see how far your US dollars goes - it's sad.

Leverage is king and the point I was trying to make. The Chinese, and others, will not allow the US financial collapse, but they can suck us dry because they know have the leverage and can do as they please.

Seriously, where do you think that $350 Billion from the last "bailout" dissapeared to? Is just like hush money and how the mafia operates, but in grand scale and the new mafia are not from Italy.

As for the US dollar becoming part of the Euro, if that happens, the Bible was right on target - a new world economy, one currency system. The next step is the mark where you cannot buy nor sell without it. Amazing how correct the Bible is if we the US currency is converted the the Euro...:eek:

[harry baldini]

It's an op-ed, so I'm sure there are some elements of truth combined with some elements of fiction.

[scrogdog]

You bring up lots of good points, but I think you are living in the past.

The US dollar is very weak and yes, we used to be a great "customer", but that is fadding fast. Non paying customers are never a good thing no matter how good they been in the past, especially if the customer is currenly in a coma.

What makes you think we are non-paying customers? Can you cite an example where we have failed to make good on an IOU to the Chinese? You know, they aren't stupid, if they didn't believe we could pay they'd stop buying it.

Plus, the whole world is in the same boat as us right now. Banks on the brink of collapse are being subsidized around the world, not just here. The Chinese are reeling worse than we are because business is way down for them too and, unlike us, they don't have internal demand for a LOT of thier goods. Whoops.


Leverage is king and the point I was trying to make. The Chinese, and others, will not allow the US financial collapse, but they can suck us dry because they know have the leverage and can do as they please.

Seriously, where do you think that $350 Billion from the last "bailout" dissapeared to? Is just like hush money and how the mafia operates, but in grand scale and the new mafia are not from Italy.

Leverage would be something indeed IF the Chinese had it. They don't. No international contract does because the party in default does not surrender true assets except in war.

I would say that the 350 billion went to things other than what Congress wanted them to go to so it's being hidden. Of course, this makes no sense as we KNOW how fantastically awesome Congress is in matters of economics. :rolleyes:

:D

[harry baldini]

The US economy is definitely failing worldwide and the main reason is because of our loan/debt ratio and our production/consumption ratio.
Sure, the US Military is superior in every way.
There's no question about that.
But when the economy suffers because of apathy and greed, it's a perfect excuse for our leaders to grow government as a means of control....and there are some markets in the world that the dollar can no longer control.
It's a real problem and there is a real chance for a depressed market and a growing dependence on nations like China to finance even more of our debt.
And not only has depression and recession in our market been predicted in the past...but we have witnessed those predictions happen.
I have parents that lived through the depression. There are some distinct similarities between the market collapse then a what we are seeing now.

The chickens are bound to come home to roost at some point.

[joe123]

What makes you think we are non-paying customers? Can you cite an example where we have failed to make good on an IOU to the Chinese?

I would say that the 350 billion went to things other than what Congress wanted them to go to so it's being hidden. Of course, this makes no sense as we KNOW how fantastically awesome Congress is in matters of economics. :rolleyes:


Where have we failed to pay the IOU's? You are kidding right? Why are banks failing at the current alarming rate? We have not failed to pay the IOU's because the Goverment keeps infushing liquility into the banks so that the banks can keep the terms of the notes in good standing.

Why not simply print more money? Because the Goverment is basically broke, thus why the 1-Trillion proposal.

As for the $350 Billion that cannot be accounted for, why is it being hidden? I agree with incompetance of the Government to a point, but at $350 Billion gone so quickly, you cannot get rid of that kind of money so quickly even if you burned it.

[scrogdog]

The US economy is definitely failing worldwide and the main reason is because of our loan/debt ratio and our production/consumption ratio.


Well, I respectfully disagree and we're are just going to have to agree to disagree.

We are in a world economy now. The whole thing is falling down, not just us, and for exactly same reasons across the board.

As a matter of fact, we're seeing some infighting among the EU over bank subsidies... one member declaring they will the day after another member said they won't... so much for the "union" part.

This is a world problem.

[scrogdog]

Where have we failed to pay the IOU's? You are kidding right? Why are banks failing at the current alarming rate? We have not failed to pay the IOU's because the Goverment keeps infushing liquility into the banks so that the banks can keep the terms of the notes in good standing.

Why not simply print more money? Because the Goverment is basically broke, thus why the 1-Trillion proposal.

As for the $350 Billion that cannot be accounted for, why is it being hidden? I agree with incompetance of the Government to a point, but at $350 Billion gone so quickly, you cannot get rid of that kind of money so quickly even if you burned it.

No one said the $350 billion was "gone".

Joe, private banks, you know... the ones we bailed out and are talking about?... have nothing at all to do with China IOUs. That's the Federal Reserve, bud.

Joe? Whether or not you think the American government is "broke" has nothing at all to do with the decision to print more money.

[joe123]

Home loans were bundled and then re-sold as huge notes on the open market.

Many banks bought these huge notes and others leveraged off them to make things worse. These same banks now have toxic notes because people are defaulting on their loans and the homes backing the notes are not worth the price printed on the note.

Because the Feds back banks, they are forced to inject liquility to keep the notes (not the banks in some cases) in good standing and the money people have deposited in the banks.

US owes China about 2.5 Trillon and that's just china. Japan owns most of Hawaii and many other assets in the US (they were a little smarted than the Chinesse :D )

I really think that things are much worse then we realize.

[scrogdog]

Home loans were bundled and then re-sold as huge notes on the open market.

Many banks bought these huge notes and others leveraged off them to make things worse. These same banks now have toxic notes because people are defaulting on their loans and the homes backing the notes are not worth the price printed on the note.

Because the Feds back banks, they are forced to inject liquility to keep the notes (not the banks in some cases) in good standing and the money people have deposited in the banks.

US owes China about 2.5 Trillon and that's just china. Japan owns most of Hawaii and many other assets in the US (they were a little smarted than the Chinesse :D )

I really think that things are much worse then we realize.

I know that, but the government was selling debt to China WELL before the current crisis. The feds backing banks is a recent phenomena which, like you, I don't like.

However, it is not the CAUSE of the problem at hand. It WILL be the cause of future problems. Which our situation with China has nothing to do with. We will continue to sell them debt... and they will buy it. Trust me. :)

Now, if this so-called mess of a bill passes, the real concern is the addition to the overall debt picture, not the fact that we peddle that debt.

[Gib's Son]

China no longer needs us no more than OPEC needs us. Are we good to have as a customer? Sure, but they don't need us to survive anymore. That is the reality of the new global market. Our share (contribution) has diminished while other nations (India) has increased. There is more to the picture, than meets the eye (hey hey my my). IMHO it goes much deeper and we must look back to what the Chinese and the Soviets were saying how they were going to "Defeat" the U.S.

The Chinese said the way to defeat the U.S. is via economic greed. (I am paraphrasing.) The Soviets said they would infiltrate our educational system and change the minds of the youth. Every other nation except ours thinks in centuries, not eight year terms. A flaw that the founding fathers seemed to overlook.

Come on, China is not our friend any more than the Soviet Union of Mexico. China and Russia WANT to be the new Supper Powers. They have a long term plan which extends 100's of years. So what is our plan, how far are we looking ahead? Our politicians look know further than the next election and most Americans cant see any further than the last TV commercial.

[joe123]

In short, all you out there better start to learn how to speak Chinese.

Begin with: Yes sir, may I have another?

[jmac00]

read post 2 through 17..............

what is the bottom line? the bottom line here is a MAJOR DEPRESSION, that world has not seen since 1929.

Gib is right, the stimulus package will pass, but only because EVERYONE is hurting and congress is in Major Nanny mode.

it will never work, the last one didn't work? why should this one?

please return your trays to there original up-right position and fasten your seat belt, we are in for a very bumpy ride. :rolleyes::(

[scrogdog]

China no longer needs us no more than OPEC needs us.

Lol - all right, I give up. Whatever. :rolleyes:

[The Doctor]

According to Larry Summers, the porkulus, er, the stimulus bill (http://www.bloomberg.com/apps/news?pid=20601068&sid=aLqmR5ZB_RYI&refer=home)is needed to prevent a sustained deflation in consumer prices. See that link or see this thread (http://hvac-talk.com/vbb/showthread.php?t=215452).


By that logic, he and the Obama Administration are going to spend YOUR money to keep prices from deflating. They don't want prices to go down, so they're going to spend your money to prevent it from happening. :confused:

How is that anything other than de facto price supports?

Harry Reid seems to think that spending $780billion is going to put money back into your pocket. Here is his quote --“We are passing a bold and responsible plan that will help our economy get back on its feet, put people to work and put more money in their pockets,” he said. That is from this Bloomberg article (http://www.bloomberg.com/apps/news?pid=20601087&sid=aGxw_gworouY&refer=home)

[jmac00]

According to Larry Summers, the porkulus, er, the stimulus bill (http://www.bloomberg.com/apps/news?pid=20601068&sid=aLqmR5ZB_RYI&refer=home)is needed to prevent a sustained deflation in consumer prices. See that link or see this thread (http://hvac-talk.com/vbb/showthread.php?t=215452).


By that logic, he and the Obama Administration are going to spend YOUR money to keep prices from deflating. They don't want prices to go down, so they're going to spend your money to prevent it from happening. :confused:

How is that anything other than de facto price supports?

Harry Reid seems to think that spending $780billion is going to put money back into your pocket. Here is his quote --“We are passing a bold and responsible plan that will help our economy get back on its feet, put people to work and put more money in their pockets,” he said. That is from this Bloomberg article (http://www.bloomberg.com/apps/news?pid=20601087&sid=aGxw_gworouY&refer=home)

thats great FOR THIS WEEK!!!, what are they going to do for the rest of the year ????? what a freaking waste of time and OUR MONEY

[harry baldini]

Well, I respectfully disagree and we're are just going to have to agree to disagree.

We are in a world economy now. The whole thing is falling down, not just us, and for exactly same reasons across the board.

As a matter of fact, we're seeing some infighting among the EU over bank subsidies... one member declaring they will the day after another member said they won't... so much for the "union" part.

This is a world problem.
While we are a part of a global economy, we still must fund our own programs and pay our own debts because the world will not continue to do those tasks for us.
We are fast approaching 10% debt to the Chinese while we are losing jobs at a rate that can only lead to depressed markets in every job sector.
In fact, there are only two(2!) job sectors in this country that have maintained a steady rate. Every other job category is losing jobs by the millions.
Debtor nations do not have a good record throughout history and the fact that we are producing at record lows and consuming at record highs is why our top economists are all saying the same things.

I guess we will have to agree to disagree because I cannot see any way of rationalizing the problem as a global one when Americans will ultimately be responsible for the economic failures our leaders have created.

[joe123]

Trust me, Depression COMING! :eek:

[harry baldini]

Trust me, Depression COMING! :eek:

I like your posts, Joe. It's apparent you have a good understanding of the situation we are facing.

And I do agree that a depression is more than just a remote possibility at this point.

[scrogdog]

While we are a part of a global economy, we still must fund our own programs and pay our own debts because the world will not continue to do those tasks for us.
We are fast approaching 10% debt to the Chinese while we are losing jobs at a rate that can only lead to depressed markets in every job sector.
In fact, there are only two(2!) job sectors in this country that have maintained a steady rate. Every other job category is losing jobs by the millions.
Debtor nations do not have a good record throughout history and the fact that we are producing at record lows and consuming at record highs is why our top economists are all saying the same things.

I guess we will have to agree to disagree because I cannot see any way of rationalizing the problem as a global one when Americans will ultimately be responsible for the economic failures our leaders have created.

Well I'm not sure what economists those might be. Most seem to be talking a lot like MSN's John Markman.

http://articles.moneycentral.msn.com/Investing/SuperModels/too-late-to-avoid-a-depression.aspx?page=1

Note the decided lack of ANY discussion of Chinese IOUs and what OPEC is doing as causal factors. The reason is really simple; those things will have nothing to do with it.

Note, however, that he does bring up the rapid decline in foreign markets.

Tell you what, if depression comes we'll return to the issue and discuss exactly what Chinese IOUs and actions of OPEC bought us down. Ok?

Until then, I'll get my news from the newspaper. Not sure where you're getting it, frankly.

Kinda funny in light of the president being charged with fear mongering.

[scrogdog]

In short, all you out there better start to learn how to speak Chinese.

Begin with: Yes sir, may I have another?

Somewhat similar to;

"Japan's going to own us within a decade!"

"They couldn't defeat us by force so now they are doing it peacefully!"

Lol - anyone but me remember that claptrap?

Anyone but me remember what actually happened? :rolleyes:

[jmac00]

Somewhat similar to;

"Japan's going to own us within a decade!"

"They couldn't defeat us by force so now they are doing it peacefully!"

Lol - anyone but me remember that claptrap?

Anyone but me remember what actually happened? :rolleyes:

ya, the difference is Japan was going to take us over by simply out producing us. They were going to make a smaller, better quality product. And bury us in quality products. Which they pretty much have done.

The Chinese on the other hand have purchased 800 BILLION DOLLARS worth of GOVERNMENT BONDS...........which at some point in time WE WILL HAVE TO PAY BACK, either with dollars or product or REAL ESTATE.

The Chinese own us:mad:

[scrogdog]

ya, the difference is Japan was going to take us over by simply out producing us. They were going to make a smaller, better quality product. And bury us in quality products. Which they pretty much have done.

The Chinese on the other hand have purchased 800 BILLION DOLLARS worth of GOVERNMENT BONDS...........which at some point in time WE WILL HAVE TO PAY BACK, either with dollars or product or REAL ESTATE.

The Chinese own us:mad:

Way off.

What the doomsday brigade kept claiming is that the cash-heavy Japanese were going to buy up failed US business. And own us.

Did they? Thought not.

Actually, if you'll look back at Japan in the 90s you'll clearly see the true danger of what we face today.

Debt itself is the issue. Not where it sits.

So, you think we'll just hand over New York City and the Grand Canyon and call it a day? :)

[jmac00]

Way off.

What the doomsday brigade kept claiming is that the cash-heavy Japanese were going to buy up failed US business. And own us.

Did they? Thought not.

Actually, if you'll look back at Japan in the 90s you'll clearly see the true danger of what we face today.

Debt itself is the issue. Not where it sits.

So, you think we'll just hand over New York City and the Grand Canyon and call it a day? :)

try to forget Japan for a second and concentrate on the 800 BILLION DOLLAR BONDS China holds. Exactly how do you propose to pay that off? The interest alone will be our Great Grandchildren debt to pay off. Actually I'm curious how Bush thought that was going to get paid off?

[scrogdog]

try to forget Japan for a second and concentrate on the 800 BILLION DOLLAR BONDS China holds. Exactly how do you propose to pay that off? The interest alone will be our Great Grandchildren debt to pay off. Actually I'm curious how Bush thought that was going to get paid off?

Well, I suppose the same way that we always do.

You know, these IOUs have terms just like anything else. It's not as if China can just go "well pay us now". There are agreements in place.

What happens is that the money to pay off come to term debt comes from our yearly budget.

So, what's going to be bad is if the bailout flops and then we still have to pay the bill. Which, again, is pretty much what happened to Japan in the 90s.

Make no mistake about it. We WILL pay it. However, when you assume more debt in a good economy, it's acceptable as long as the economy grows. That's why debt is expressed relationally to GDP to describe how bad it actually is. If the economy doesn't rebound and we still have to pay, well then.... there you have it. Probably a depression.

The fact that China holds the notes is, once again, meaningless.

[Gib's Son]

In 2007 Japan was the biggest foreign holder of US Treasury bonds, with almost $623 billion U.S. government debt. China was the second biggest investor, with about $397 billion, and oil exporters, which include Iran and Saudi Arabia, had $110 billion. And that was in 2007!

So if any of them choose to reduce their holdings significantly, it would trigger sharp falls in US government bond prices, driving up their yield, which would raise borrowing costs sharply for American consumers and companies.

You could argue that countries such as China are unlikely to reduce their US bond holdings or call in their dept because they would also suffer a fall in the value of their own investments but it remains true that they are holding onto a powerful financial weapon; a weapon that can keep us down for years as they continue to shift their investments in other emerging nations such as India and Africa. Lest we forget, the Chinese and the middle east folk think in terms of hundreds and thousands of years in the future, we don’t. If the U.S. credit rating is dropped from A1 then everyone will pay higher interest rates and it will take longer for us to pay back all these loans. China and others can ride it out in the short term but the pain will be felt here for much longer.

[scrogdog]

In 2007 Japan was the biggest foreign holder of US Treasury bonds, with almost $623 billion U.S. government debt. China was the second biggest investor, with about $397 billion, and oil exporters, which include Iran and Saudi Arabia, had $110 billion. And that was in 2007!

So if any of them choose to reduce their holdings significantly, it would trigger sharp falls in US government bond prices, driving up their yield, which would raise borrowing costs sharply for American consumers and companies.

You could argue that countries such as China are unlikely to reduce their US bond holdings or call in their dept because they would also suffer a fall in the value of their own investments but it remains true that they are holding onto a powerful financial weapon; a weapon that can keep us down for years as they continue to shift their investments in other emerging nations such as India and Africa. Lest we forget, the Chinese and the middle east folk think in terms of hundreds and thousands of years in the future, we don’t. If the U.S. credit rating is dropped from A1 then everyone will pay higher interest rates and it will take longer for us to pay back all these loans. China and others can ride it out in the short term but the pain will be felt here for much longer.

I posted a chart a couple of weeks ago which showed that the US has never appreciably reduced its debt since WWII.

That DOES NOT MEAN that we don't pay our bills. Quite the opposite in fact, we DO pay our bills. But we also incur more debt.

Again, the reason that debt is bad is because it exists in the first place. We don't want to be in a situation where we are paying it back in a non-growth scenario.

Why wouldn't I argue that China and Japan and others will continue to fund debt? It's about the easiest money in the world. Not to mention dependable. But it doesn't matter what they are willing to do if this bill flops we're screwed.

[whec720]

I posted a chart a couple of weeks ago which showed that the US has never appreciably reduced its debt since WWII.

That DOES NOT MEAN that we don't pay our bills. Quite the opposite in fact, we DO pay our bills. But we also incur more debt.

Again, the reason that debt is bad is because it exists in the first place. We don't want to be in a situation where we are paying it back in a non-growth scenario.

Why wouldn't I argue that China and Japan and others will continue to fund debt? It's about the easiest money in the world. Not to mention dependable. But it doesn't matter what they are willing to do if this bill flops we're screwed.

So you support the stimulus? What's with the Common Wealth that you live in?

[RoBoTeq]

I like your posts, Joe. It's apparent you have a good understanding of the situation we are facing.

And I do agree that a depression is more than just a remote possibility at this point.
The upcoming depression doesn't bother me as much as the imminent revolution. This is not like the last depression when Americans still all felt like a united nation. We are more divided now then we were just prior to the war between the states. The difference now is that those of us who oppose the others are spread out all over.

If the revolution comes, many who voted for the current Socialist regime will be picking rose colored glass from their eyes as they move to the side of rebellion against the government. The deciding factor will be which way the military goes. I hope and pray that we as collective Americans can see this before it actually goes into action and oust those in our government who are not working for the good of all Americans and a truly United States of America.

[scrogdog]

So you support the stimulus? What's with the Common Wealth that you live in?

Where did I say that? Did you even read the freakin' topic? Or just felt like popping in randomly with a wisecrack? :rolleyes:

What I said was if we DO descend in to depression, then the fact that China holds US IOUs will have *nothing* to do with it.

[RoBoTeq]

Somewhat similar to;

"Japan's going to own us within a decade!"

"They couldn't defeat us by force so now they are doing it peacefully!"

Lol - anyone but me remember that claptrap?

Anyone but me remember what actually happened? :rolleyes:
This time around it would be more likely that global financial powers will be uniting the major countries of the world under a Socialist Unified Continental kakistocracy Society, aka; S.U.C.K.S

[whec720]

Where did I say that? Did you even read the freakin' topic? Or just felt like popping in randomly with a wisecrack? :rolleyes:

What I said was if we DO descend in to depression, then the fact that China holds US IOUs will have *nothing* to do with it.

Would I wise crack?:D

Okay, thanks for the clarification. So you don't support the stimulus, just say so.....sheech...:rolleyes:

[harry baldini]

Well I'm not sure what economists those might be. Most seem to be talking a lot like MSN's John Markman.

http://articles.moneycentral.msn.com/Investing/SuperModels/too-late-to-avoid-a-depression.aspx?page=1

Note the decided lack of ANY discussion of Chinese IOUs and what OPEC is doing as causal factors. The reason is really simple; those things will have nothing to do with it.

Note, however, that he does bring up the rapid decline in foreign markets.

Tell you what, if depression comes we'll return to the issue and discuss exactly what Chinese IOUs and actions of OPEC bought us down. Ok?

Until then, I'll get my news from the newspaper. Not sure where you're getting it, frankly.

Kinda funny in light of the president being charged with fear mongering.
My news is coming from the people who are considered the best and brightest economists in the world.
They are all saying the same thing that I've illustrated twice.
America cannot readily pay it's debts because of a noted lack of production and an out of proportion increase in consumption.

Read Simon Johnson (IMF) and other experts who acknowledge that while we have a global problem, we taxpayers are still charged with providing the solutions.
"The U.S. cannot pull itself out of the throes of this economic downturn unless it produces something of substance and that will be accomplished through manufacturing. We are in an economic crisis"

Widely publicized common knowledge that I read and observe every day, albeit not from my local newspaper alone.


The rest of the globe has been unwilling to step up and that's a fact.
You say these debts will be paid and that the economy is sound?? Details please.

The experts are all sounding the alarms. Are you hearing them? Many American don't hear them because they are unwilling to observe the ripple effect caused by the dissolution of our manufacturing base.
Sorry Scrog but there is a crisis here.
Hopefully, it's always darkest before the dawn, byt there are no guarantees.

Oh and one more thing...Budget concerns and the buildup of foreign debt do indeed prolong the recovery effort in the event we enter a depression.
You can't ignore a trillion dollars of debt to one nation(not counting other debts we owe to to other countries) and suggest that it has no effect on our economic woes.
Are you kidding?

[whec720]

My news is coming from the people who are considered the best and brightest economists in the world.
They are all saying the same thing that I've illustrated twice.
America cannot readily pay it's debts because of a noted lack of production and an out of proportion increase in consumption.

Read Simon Johnson (IMF) and other experts who acknowledge that while we have a global problem, we taxpayers are still charged with providing the solutions.
"The U.S. cannot pull itself out of the throes of this economic downturn unless it produces something of substance and that will be accomplished through manufacturing. We are in an economic crisis"

Widely publicized common knowledge that I read and observe every day, albeit not from my local newspaper alone.


The rest of the globe has been unwilling to step up and that's a fact.
You say these debts will be paid and that the economy is sound?? Details please.

The experts are all sounding the alarms. Are you hearing them? Many American don't hear them because they are unwilling to observe the ripple effect caused by the dissolution of our manufacturing base.
Sorry Scrog but there is a crisis here.
Hopefully, it's always darkest before the dawn, byt there are no guarantees.

Oh and one more thing...Budget concerns and the buildup of foreign debt do indeed prolong the recovery effort in the event we enter a depression.
You can't ignore a trillion dollars of debt to one nation(not counting other debts we owe to to other countries) and suggest that it has no effect on our economic woes.
Are you kidding?

This has been the case for the last thirty years. With each Administration, be it D or R, it just gets worse. Like Robo said, we are being sold down the drain.

[scrogdog]

My news is coming from the people who are considered the best and brightest economists in the world.
They are all saying the same thing that I've illustrated twice.
America cannot readily pay it's debts because of a noted lack of production and an out of proportion increase in consumption.

Read Simon Johnson (IMF) and other experts who acknowledge that while we have a global problem, we taxpayers are still charged with providing the solutions.
"The U.S. cannot pull itself out of the throes of this economic downturn unless it produces something of substance and that will be accomplished through manufacturing. We are in an economic crisis"

Widely publicized common knowledge that I read and observe every day, albeit not from my local newspaper alone.


The rest of the globe has been unwilling to step up and that's a fact.
You say these debts will be paid and that the economy is sound?? Details please.

The experts are all sounding the alarms. Are you hearing them? Many American don't hear them because they are unwilling to observe the ripple effect caused by the dissolution of our manufacturing base.
Sorry Scrog but there is a crisis here.
Hopefully, it's always darkest before the dawn, byt there are no guarantees.


Well i never said that the economy is sound or that all this debt is no worry. What I said was the fact that China carries it is IRRELEVENT to whether or not we see a depression.

Yes, we will pay the debt just like Japan paid the debt for thier stimulus package that didn't work. THAT is what caused their depression, the need to pay the bills during negative growth. Took them damn near a decade to get out if it.

Who held Japan's debt was IRRELEVENT to the situation.


Oh and one more thing...Budget concerns and the buildup of foreign debt do indeed prolong the recovery effort in the event we enter a depression.

You've got things slightly backwards. The failure of the stimulus to cause a rebound will be the cause of the depression if we get it. If it works, then we'll be able to pay and grow at the same time. Just like previous downturns in the 70s, 80s and 90s. If it doesn't, then we will pay at the expense of other matters during growth decline.

What China does or doesn't do is IRRELEVENT.

[harry baldini]

I'm not sure I understand why or how you think that other nations assuming our debt is not a liability now and in the future.
Japan is a bad example. We devastated and rebuilt Japan and put them in the economic position they eventually enjoyed.
No such scenario exists with China. The only reason China is not more rigid in assuming our debt and allowing it to expand is because they are continuing to benefit from us in other economic sectors. Their boom will eventually level out and could even dip.

Let me ask you this in a simple fashion.
If your business had limited assets and a boatload of liabilties, do you think your creditors would forgive all the debts that you owed them? Hardly.
And those liabilities would be a detriment to how you did business and how other creditors were willing to do business with you. It could have terrible effects on your long term growth and short term goals.

I just cannot understand your rationale in making a statement that our massive debt with China and other lenders is inconsequential.

[jmac00]

I'm not sure I understand why or how you think that other nations assuming our debt is not a liability now and in the future.
Japan is a bad example. We devastated and rebuilt Japan and put them in the economic position they eventually enjoyed.
No such scenario exists with China. The only reason China is not more rigid in assuming our debt and allowing it to expand is because they are continuing to benefit from us in other economic sectors. Their boom will eventually level out and could even dip.

Let me ask you this in a simple fashion.
If your business had limited assets and a boatload of liabilties, do you think your creditors would forgive all the debts that you owed them? Hardly.
And those liabilities would be a detriment to how you did business and how other creditors were willing to do business with you. It could have terrible effects on your long term growth and short term goals.

I just cannot understand your rationale in making a statement that our massive debt with China and other lenders is inconsequential.

forget it harry, I tried telling him that on page one. But Doggy lives in the land of Kennedy where money and debt are irrelevant:rolleyes:

The only way he will see whats going on, is in time, when the depression actually hits, THEN he may figure out what we are trying to tell him.

But, hey! the dude is obviously way smarter than all the economic forcasters:rolleyes:

[jmac00]

here, maybe doggy can figure it out on his own:

At the World Economic Forum in Davos, Switzerland, almost all countries blame the U.S. for the global recession. China's Premier Wen Jiabao even set out a possible U.S. vs China divorce. He laid the global crisis squarely on Washington's doorstep: The financial crisis, he said, is "attributable to inappropriate macroeconomic policies and their unsustainable model of development characterized by prolonged low savings and high consumption; excessive expansion of financial institutions in blind pursuit of profit." China is not happy with the U.S. -- the implication: a major, across-the-board reassessment in China's investments in the U.S. Last year, China ended all new investments in a number of U.S. companies. - last year, China dumped $26.1 billion in Fannie Mae and Freddie Mac bonds — just in the five months ending last November.

so China is holding our debt, and you think it's irrelevant :rolleyes: Good luck with that thinking

************************************************** ****
More evidence we maybe in deep poo

The Stimulus Package, is a Welfare Package – In LBN’s view, this is not a stimulus package at all, it is 600 pages of social engineering and a Trojan horse. We are getting ―change‖ but not what most voters expected. Obama is still using the ―we need to act quickly’ mantra to try and ram this package through before it gets cut any more. From a manufacturing industry point of view, the shine has already gone from the ―messiah.‖ This stimulus package is going to create market turmoil and the fact that Obama is letting it happen so early in his presidency is very worrisome, especially to CEOs because it is now obvious this package means there is no help for the manufacturing or software sectors. The president may find himself in deep trouble with voters if he fails to make things better. Obama is already trying to lowering expectations by saying things will not get better until 2010 or 2011.

One analyst even calls this package an atrocity. It shows absolutely no regard for voters. If that isn't enough to get you in a gloomy mood not only did the Democrats stuff the stimulus package with pork they are bent on forcing socialism. The package is still only 5% real economic stimulus – and only a small amount of that will kick in immediately. The package does not contain any input from Republicans – The ―Collins 3‖ simply forced a $950B package back to $827B. This package is a slap in the face of voters and Republicans. It will simply cause more partisan bickering. Based on our observations, the key problem is that the package does not contain anything to help the housing crisis which is where this whole economic problem started. We find this to be incredible. The president may seem to be trying to work inclusively, but if he lets Congress bulldoze this version of a stimulus program through the Senate, voters will be rightfully outraged. By the end of 2009 if they find we are still in a recession. If that happens, let’s hope congressional heads roll in 2010.
###

[scrogdog]

I just cannot understand your rationale in making a statement that our massive debt with China and other lenders is inconsequential.

I never said it was inconsequential. I suggest a reading comprehension course. Really, this is getting a bit silly.

Well, I guess I'm done here.

The charge against scaremongering Obama was that he never answered the charges of his critics with regards to the bill. Instead he simply continued his fear campaign as if they had never even spoken.

Here is what I actually said, for the last time. Unless you wish to answer what I actually said, I'm not going to continue to argue with a couple of scaremongering nuts who can't read.

Ready?


Well i never said that the economy is sound or that all this debt is no worry. What I said was the fact that China carries it is IRRELEVENT to whether or not we see a depression.

What part of that sentence do you fail to understand? Key words here; "CARRIES IT".

I guess you are too far wrapped up in falling over yourselves to spread fear about a problem THAT DOESN'T EXIST.

How pathetic.

The failure of the bill may cause depression BECAUSE WE ARE IN DEBT!!!!!!!!

IT DOESN'T MATTER WHO CARRIES THE BLEEPING DEBT!!!!!!!!!!!!

The very idea that China will somehow "foreclose" on America and "own us" is uninformed claptrap and utter BS. Sorry, but it is. Incidentally, NONE of your links have suggested this either!!!

Now China may very well stop US investment. That will not mean that we hand them an aircraft carrier. :rolleyes:

I even gave historical example with Japan.


the dude is obviously way smarter than all the economic forcasters

Actually I'm smart enough to read ALL of the economists. That's how I know that YOU don't; because they don't know anymore than we do what will work. They are all over the place with this bill. Why? Because any stimulus attempts to forecast a human response. Good luck with that.

[harry baldini]

OK
You never said inconsequential...just "irrelevant as to whether we see a depression".
Every single economic expert I have heard and read does not omit our massive debts with other countries when referring to the crisis we face. In fact, they all know that it is PART OF THE PROBLEM.
And yeah, you're correct...it does not matter who holds the debt at all...but the fact that the debt is there cannot be overlooked when we seek ways to reconcile the problems we face.

Regardless of how you "worded" it, you are seeking to minimize the current economic situation and the debt involved as non-existant, and that's a far cry from what the experts are noting.

Now, I tried to be civil in my responses, but now I see you getting all personal and in attack mode so...
Tell you what wise guy...you take a remedial course in basic economics and I'll do the same when trying to understand your "wordsmithing".

[scrogdog]

OK
You never said inconsequential...just "irrelevant as to whether we see a depression".
Every single economic expert I have heard and read does not omit our massive debts with other countries when referring to the crisis we face. In fact, they all know that it is PART OF THE PROBLEM.
And yeah, you're correct...it does not matter who holds the debt at all...but the fact that the debt is there cannot be overlooked when we seek ways to reconcile the problems we face.

Regardless of how you "worded" it, you are seeking to minimize the current economic situation and the debt involved as non-existant, and that's a far cry from what the experts are noting.

Now, I tried to be civil in my responses, but now I see you getting all personal and in attack mode so...
Tell you what wise guy...you take a remedial course in basic economics and I'll do the same when trying to understand your "wordsmithing".

I said, flat out, that there would likely be a depression if the bill fails. That's because we'd have to pay debt during negative growth. See? I said exactly that more than once. In fact, I think it could get pretty ugly.

I am not minimizing ANYTHING except for some fear mongering. Most of the other stuff you said is true.

What is not true is the claptrap about China. What I meant was the fact that China held our debt was irrelevent in the scenario that would CAUSE a depression; that is to say that it doesn't matter whether France holds it or Russia or Tibet. We are still in the same position.

That position is undesirable BECAUSE we have debt. Not because China holds it.

Sorry if I got upset, but even in hindsight I don't see how what I said led you to you thinking that I didn't see debt as a problem. I repeatedly said it WAS a problem, but the fact that China held it was irrelevent.

[000whitefang]

read post 2 through 17..............

what is the bottom line? the bottom line here is a MAJOR DEPRESSION, that world has not seen since 1929.

Gib is right, the stimulus package will pass, but only because EVERYONE is hurting and congress is in Major Nanny mode.

it will never work, the last one didn't work? why should this one?

please return your trays to there original up-right position and fasten your seat belt, we are in for a very bumpy ride. :rolleyes::(
lol you and me are on the same page

[joe123]

I said, flat out, that there would likely be a depression if the bill fails. .

I say there will be a depression if the bill passes.

You see, we are prolonging a bad thing and that bad thing is building up. We should have had a healthy correction of housing years ago and one started, but then people panic and it was pushed back.

We will see a temporary up tick in everything once the bill passes, everyone will forget about how bad things are, spend like mad and in 2 years from now, things will be a lot worse because the real problem has not been dealt with.

[The Doctor]

Thank God somebody said it. Well, anyway thank Joe.

It's like they don't learn. Tinker too much and create too much volatility and history may just repeat itself.
Why don't they let the correction take place naturally? Oh yeah, they have to kick back some action to their "voters". I remember hearing that at the meeting just after the election.

So my posse believes in Keynesian economics to a point too... (sigh)

[scrogdog]

I say there will be a depression if the bill passes.

That is also the forecast of the Congressional Budget Office. Sort of, anyway; the exact words were more along the lines of "not good for the long term picture". This is the agency charged with reporting economic data to Congress and giving opinions on budgets and bills.

They were ignored.

Perhaps we could save a few bucks if we just fired them.

[JRINJAX]

I say there will be a depression if the bill passes.

You see, we are prolonging a bad thing and that bad thing is building up. We should have had a healthy correction of housing years ago and one started, but then people panic and it was pushed back.

We will see a temporary up tick in everything once the bill passes, everyone will forget about how bad things are, spend like mad and in 2 years from now, things will be a lot worse because the real problem has not been dealt with.
I agree fully. We are venturing into a long, unmapped journey with plenty of chances for unforseen consequences.

I would rather let the market painfully correct itself without re-engineering the economy and our social structure.