What will the world be like WITHOUT America the economic superpower?

118 posts / 0 new

Comments

Well, when we're not all farming, we can weave our clothing on hand looms to replace what we can no longer afford to import from China. Life would be very busy,,,making essential stuff at home rather than shpping till we drop. Not boring. Just different.

Productive sectors support the service sectors. That should be obvious...and doesn't seem to be. We don't make our roofs out of paper dollar bills. They'd leak.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

Exactly, we're in total agreement there then. A successful service sector exists only because an even more successful productive sector exists.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

My point is that "At some point people should understand that the productive sectors of the economy support the service sectors"

is false, everyone supports everyone else, at a value given by the market.

It is of course possible to assign a group of goods necessary for life, and say that without these, we would be dead. But the value of these things is given by exchange in the market, not because they are neccessary for life. That is why water is so cheap and diamonds so expensive.

Dr. Econ's picture
Dr. Econ
Joined:
Jul. 31, 2007 4:01 pm

But one of them has to exist first. If you and I woke up stranded on an island, and I had a basket full of diamonds (or gold) - what good are they to you? What can you do with these diamonds that benefits your lot in life right now? Why would you want them?

Value is relative.

Or how about if I told you that our recently created island economy (which primrily consists of me and you making sure we don't starve and have a safe place to sleep) would benefit if I decided to start singing, instead of looking for food & shelter.

Well, if you don't like my singing - guess what, I'm going hungry. And you have one less person to help you find what you need to live.

Now maybe if you decide that my voice is so beautiful that you'd be willing to trade your food & shelter for vocal performances - that's fine. But I have to convince you that my vocals are more valuable to you than the energy you put into searching for food & shelter for two people. Without your labor and production, we both die now. The only reason my services can exist is because you produced beforehand.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

Hi, Cheesebone,

What I don't understand is why a dual approach isn't used. An approach that tries to make it easier to invest and that encourages people to spend. Maybe it's just me....

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

People shouldn't be encouraged to spend - they should be encouraged to SAVE. Savings creates credit. the more savings is accumulated, the more credit is available, and the cost of borrowing comes down (in the form of low interest rates) which inherently encourages investment by itself. High levels of savings mean that people have money to spend on things that they want to later on.

People don't need to be encouraged to buy things they want - they buy things they want because they can afford it and have determined it's a good purchase.

The only time you have to encourage people to spend, is when you're trying to get people to buy things that they normally wouldn't want to spend money on at that time. We encouraged buying real-estate - look what happened. We gave tax credits to buy big hungry SUV's - look what happened. We created "Cash for clunkers" - look what happened. When you encourage spending in a market that needs to be saving, you dig a hole that empties savings and ultimately gets filled with personal debt. When people go into debt, they HAVE TO reduce future consumption to free up the money necessary to pay for the debt they've accumulated. Encouraging everyone to spend at one time is guaranteeing a future contraction in spending when people start paying back what they owe. There is no way around that at all, and it's something that many mainstream economists still can't seem to fathom.

Just "spend spend spend" and the economy will grow? Nonsense. People can spend BECAUSE the economy grows.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

Well, I view an economy as something that constantly needs to be moving and distributing. Instead of thinking in terms of "supply side" or "demand side," why not focus attention on keeping money flowing through continually and through all sectors, period. I would like for this to be done with no redundant regulations with out weakening the accountability for pollution, criminal finances, etc.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

Which is fine, the point is that an economy naturally does this on it's own. People like variety, and people need to live. People WILL produce things to exchange them for other things that they want or need. But they have to be produced before they can be traded for something.

If we become so efficient at producing something that we result in excess, then that simply means that less time and human labor needs to be spent to produce enough for everyone. This frees up that time to pursue other things, perhaps a service, or a simple vacation. If it used to take 100 people to produce enough food to feed the community, but our technology and machinery have improved to where we're more efficient, well, maybe now we only need 80 people to accomplish the same task.

Yes, 20 people have lost their job now, but these are 20 people who can now direct their efforts towards another area of the economy. Maybe they can start playing music, and trade that service for food. Who knows? There are thousands of options, and demand will always be there as long as people don't have to work all day to produce just enough to get by.

Maybe you can have everyone keep their jobs, and just cut the daily work schedule by 20% - same wages, same amount of employees, same production, less time invested. Again, this benefits everyone by giving them more free time to pursue other interests or simply relax.

It sounds almost counter-intuitive, but the goal of a succsesful economy is to REDUCE jobs, when you think about it. Make it so efficient that a minimal amount of time is required to producing the things people need and want, and allow more time for leisure.

Instead of one person working 6 days a week, maybe 6 people can have the same position and work 5 days a month!

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

Well, there are people who , if, they lose their job, will have mouths to feed. However, I fully acknowledge that it would not be your fault or my fault if that happens.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

Cheesebone says:

"People shouldn't be encouraged to spend - they should be encouraged to SAVE. Savings creates credit. "

They shouldn't be encouraged to save in a recession. That only reduces demand, which reduces investment. An increase in savings may reduce the interest rate a bit, but investment is dependent on expected demand. No one is going to invest in the middle of a recession simply because the interest rate falls a bit.

Furthermore, it is not the supply and demand for savings that makes the interest rate move as much as the desire of investors to hold different types of assets. If people are scared and hold more money and less other types of assets, that has nothing to do with people's desires to save or the amount in savings accounts.

But if you don't believe that private economies create recessions, what about when the government creates a recession? Wouldn't you then recomend spending? Typically, in a recession, buinesses

Dr. Econ's picture
Dr. Econ
Joined:
Jul. 31, 2007 4:01 pm

Dr. Econ, your message messed up, please send again.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

Econ, I think the 2nd half of your message got clipped there..

But - you want people to SPEND during a recession. Question - how many recessions have we had where people still had tons of liquid money to extract for discretionary spending?

You're encouraging something that really can't be done. Recessions exist because most people don't have the money to spend in the first place - it all got squandered and lost elsewhere. It's like telling someone who's starving "well, just eat some more" when the fact is that they obviously would if they had the food to eat. It's not like people don't enjoy spending, especially on things that they work hard for and not necessarily on things that they NEED like housing, food, energy, etc.. people get excited about spending $50 on a video game. Nobody gets excited about dumping $50 into their gas tank. But, when you're broke, filling your tank becomes a priority over the next "Call of Duty" sequel.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

Cheesebone, I don't know if you know it, but I see it. That is the issue of priorities. Let's just say that a community of government and businesses just won its own lottery. What is it going to spend its money on! Even if the government (not speaking insultingly) could print up money with little to no inflation, what should the money be spent on? The wrong spending would hurt just as much as no spending at all. The fed should act like the government's "piggy bank" for a rainy day, but it is acting like its copymachine for printing out more money! What should the money be spent on with out making the problem worse?

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

Well, other countries have a "rainy day fund" and they don't necessarily have to use their central banks to finance them. Look at Japan - they just had an enormous disaster. How are they going to pay for all of this necessary rebuilding?

Well, they currently own close to $1 Trillion in US debt. That's money that came out of the Japanese economy, and was lent to us. They can cash that in! We OWE them the money. That's a pretty huge "rainy day" fund, and from the looks of it, it's raining like crazy in Japan. They don't need to print up extra money, all they have to do is cash in the bonds they own and they can start rebuilding without costing their country a dime.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

You are right in that it is raining like mad in Japan. What puzzles me is that they bought our debt, instead of more of our gold, silver, platinum and stuff like that. Wouldn't buying mercantiles have been safer or had a higher return than our debt? I mean, haven't we been keeping the rates on our bonds low?

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

Well yes, but a lot of misconstrued information still reigns supreme in the general view of economics right now. A lot of people, PROFESSIONAL economic professors, mainstream economists, so on... they still believe (incorrectly) that a strong US dollar is the key to a successful global economy. As a result, Japan has made the mistake of supporting US dollar strength by buying up our debt and simultaneously weakening their own currency in relation. Buying gold will benefit them, but they view it as a risk as it ultimately reduces the value of their current US debt holdings by letting the dollar lose strength, and therefore makes it more expensive for us to import their goods. The US is a large consumer of Japanese exports, and they fear if it becomes more expensive for us to buy their goods, we will buy less of them and they will ultimately lose their biggest customer.

The US has put it's creditors in a funny position, because we've convinced them that they need to lend us money if they want their economies to stay successful (which is total BS), and now we have them up against the ropes with the threat that the money we DO owe them, may not be worth much when they get it back, and they need to support US dollar strength to ensure that their debts get properly repaid (which is ALSO total BS).

I fear it's only a matter of time before the jig is up and these countries just decide to cut their losses and stop lending altogether. What's the point of taking out government bonds if the interest rate is less than the actual rate of inflation?

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

You have a point. Did you know that the treasury is selling bonds and savings bonds that are referenced to the rate of inflation? The higher inflation is, the higher the interest rate. If inflation skyrockets, you could become a millionaire probably, but what would a million dollars be worth?

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

Yeah, they're called TIPS (Treasury Inflation-Protected Securities). This is basically hiring the pedophile to oversee the playground though, lol... remember that these bonds are being referenced to the inflation rates based on what the government says inflation is actually increasing at. But the truth is that these numbers are completely bogus. When you look at all of the number manipulation that goes into what the government does to calculate inflation, you'll laugh. It's an absolute joke.

As a late-edit here, if we calculated inflation the way we USED to calculate inflation back when Jimmy Carter was president, (which was far more accurate than today's methods), inflation would be measured at close to 10%.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

To quote an article about how inflation is currently calculated...

"Using a piece of chicanery called “hedonics” the government says there is no inflation if steak prices soar because they figure you are buying hamburger instead.

Got that? If you are used to a great T-bone and baked potato dinner, the fact that you can only afford hamburger helper means there is no inflation.

Here is another example:

...consider the case of Apple computers. We all know Macs are expensive. And we know Apple doesn’t discount. The cheapest Mac laptop today costs $999. A few years ago, it also cost $999. So the price is the same, right?

Ha. Not according Uncle Sam. Using a piece of chicanery called “hedonics,” Uncle Sam calls this a price cut. His reasoning? You’re getting more for the money. Today’s $999 Mac is lighter, fancier and faster than last year’s $999 Mac. So the government calculates that the “real” price has actually fallen."

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

I like delving into different perspectives because I like people who are willing to tell me the truth as they see it. Its like looking into an uncompromising mirror. It shows the good haircut and the bulging stomach simultaneously!

What I mean when I say that, is that what you say is true, but I don't want it to be true, because if it's true then both you, me, and the country are in for a ride! What's worse is that both Republicans and Democrats are doing stuff like this. I think the best option though is to not panic, and try to make the best choices.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

You're absolutely right, this is not a left VS right thing, because they've both horrendously screwed things up for everyone. And neither side wants to take the blame for it, so obviously most people here on this board will try to point the finger at the Right and most Republicans will try to prove that it's all the fault of the Left. Politics.

I wish I didn't believe it either, but I'm pretty sure what I'm saying IS the truth, and we are absolutely in for a pretty uncomfortable shift in living standards. The best thing to do is prepare for it, and hope the people who are in government when this goes down actually understand WHY we're in the mess and don't make more of the same mistakes that everyone else already has.

That's why I want Ron Paul in office, because I feel that by the end of the next presidential term, we'll be living in much, much different conditions. And as long as he's president WHEN this all hits the fan, at least he won't try to play the hero and "save the economy" with some cockamamie plan, because he understands how an economy grows and why it collapses, and what's necessary to restructure.

There's a book, that's VERY easy to read, called "How an Economy Grows, & Why it Crashes" written by Peter Schiff.. if you haven't read that book, I'd suggest heading out and picking it up today. It's probably the most important book I've ever read and it really puts a lot of things that sound complicated, into terms that are easy to digest. If you agree with anything I've said before then you'll probably love that book. I've bought 4 copies myself just to give them to friends & family and even people who disagree with me completely on my political outlooks, can't deny anything written within that book.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

I do not feel that investing in debt is automatically and necessarily "bad." However, this nation has overmax'ed its credit cards and its time to get a debit card or a convenience charge card.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

I don't disagree that debt can be beneficial if used responsibly. But "responsibly" went out the window a LONG time ago with regards to the way our government has been behaving.

It's kind of like alcohol, lol.. used responsibly, it can certainly make occasional nights a little better. Getting drunk every night will kill you though.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

I agree with you. For example, I think that mortgages are "good" debt, on the condition that you don't get a mortgage that goes up and down. That kind of debt helped bring on our recession! Huge loans plus variable interest rates can spell disaster!

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

Cheesebone exasperates:

"Question - how many recessions have we had where people still had tons of liquid money to extract for discretionary spending?"

Most of the time, it is a gradual process - people save relative to investment. Investment may not keep up with savings, the interest rate does not clear the market for savings and investment, thus income falls a bit and savings disapears - and all you get is a lower level of income.

But, when there is signifcant crash to the system, then savings rates rise significantly, and firms are obvioulsy flush with cash. And that is where we are today. The savings rate skyrocked to 3.5%, people began hoarding cash. The only thing to do is encourage spending.

Dr. Econ's picture
Dr. Econ
Joined:
Jul. 31, 2007 4:01 pm

Cheesebone says:

"Got that? If you are used to a great T-bone and baked potato dinner, the fact that you can only afford hamburger helper means there is no inflation."

The economy sucks, no question about that. But it began falling apart when we cut taxes and went to free trade.
You can't blame the Fed on this one, since the GDP implicit price deflator - which is the index of all goods in the economy, is also flat.

What you can do is look at other indexes - real wages, medical costs, core inflation.

Real wages (under a variety of indexes) have been growing hardly at all since the 1980's, where they use to grow quite rapidly.

Dr. Econ's picture
Dr. Econ
Joined:
Jul. 31, 2007 4:01 pm

Scholar Cheesebone says:

"There's a book, that's VERY easy to read, called "How an Economy Grows, & Why it Crashes" written by Peter Schiff.. i"

I'll bet. I imagine it is nothing but nonsense. It's VERY easy to read because it is a CARTOON!

Dr. Econ's picture
Dr. Econ
Joined:
Jul. 31, 2007 4:01 pm

"The savings rate skyrocketed to 3.5%"... like we're supposed to rejoice or something?? That's hardly an accomplishment. You might as well be saying "My kid is getting better at driving because he only got into 5 car accidents this year - last year he got into 9." The fact is that it's still a disaster.

I don't disagree that real wages aren't keeping up with inflation, but that's got a lot to do with the fact that the stated rate of inflation is being heavily manipulated by government math.

Medical costs are only exploding because our government won't get out of the market there anyway, and CORE CPI is a f**king joke. Food and Energy are the most responsive areas to inflation, of course it looks good to "leave them out" when you're trying to calculate inflation. It's going to be HILARIOUS to watch Bernanke tell the country that "inflation isn't a problem" when the middle class is spending almost everything they earn on basic living needs like food, energy, and housing.

And yes, the book I referenced is indeed a cartoon book. That doesn't change the fact that it's contents are virtually unarguable. Read through it and find something that doesn't make sense, please.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

Cheesebone, this is micahjr34!

I think that the reason why people get on you is not necessarily because what you say is wrong or unintelligent (of course, not). I think that what is happening is that you are pointing to the big river that all of us need to cross in one way or another, but with out a solid idea as to how to do it. Maybe both you and me need to propose solutions to these problems, instead of just talking about the problems. For eample:

Proposed Solution Number #1: VOTE the people out that borrow huge amounts of money with interest payments that will be uncomfortable to try to pay off. I have learned the hard way that not voting will only bother your conscience.

Proposed Solution Number #2: Put our MONEY where our values are. Shop only at those businesses that share our values. Buy products made in the USA whenever that option presents itself!

Proposed Solution Number #3: Invest our money into businesses, credit unions, and the like that share our values. 'Nough said!

Proposed Solution Number #.......: I think we both can cover the rest! We also need to encourage others to seek solutions, too, instead of just talking about what problems are out there!

micahjr34
Joined:
Feb. 7, 2011 4:57 pm
Quote Dr. Econ:

My point is that "At some point people should understand that the productive sectors of the economy support the service sectors"

is false, everyone supports everyone else, at a value given by the market.

It is of course possible to assign a group of goods necessary for life, and say that without these, we would be dead. But the value of these things is given by exchange in the market, not because they are neccessary for life. That is why water is so cheap and diamonds so expensive.

poly replies: If you go back into economic history, what you'll find is, a medicine man or teacher didn't exist until the productive sectors of the economy could generate a surplus to support them. They'd have spent their time growing something to eat and weaving their own clothing. rather than concocting healing-herb remedies or giving instruction..

. Unless the productive sector generates a surplus of goods/food to support a service sector, there is no service sector. That hasn't changed, It is just more complex.

An economist without an understanding of economic history is half-blind. That's why one of my favorites is Michael Hudson. His grasp on economics extends all the way back to ancient Sumeria.

Retired Monk -"Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

Every now and then Polycarp and I see eye-to-eye, that last post took the words right out of my mouth.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

Same thing to you, Cheesebone! The problem is that when I do agree with you, it is usually the case that I don't want it to be true! While I am (figuratively) going to buy my grocceries and be prepared to run to the hills, I am still going to keep money in the bank, proverbially speaking!

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

Cheesebone wrote:: It sounds almost counter-intuitive, but the goal of a succsesful economy is to REDUCE jobs, when you think about it. Make it so efficient that a minimal amount of time is required to producing the things people need and want, and allow more time for leisure

poly replies: Actually,that's a side benefit of technological advancement. The goal of a successful economy is to produce and distribute required goods.. The U.S. solved the production problem years ago, and has never solved the distribution problem..

We don't have people in this country going without meals because we can't grow enough food to feed them. It's a distribution problem...

In a monastery, if something is required we use the economic fundamentals of capitalism to produce it...and distribute it. Your quirky utilization of capitalism gets in the way of distribution.

Retired Monk - "Ideology is a disease

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

But that would mean that the chief end and duty of humans would not be work. Calvin thought it was to love and enjoy God forever. Dour old guy. Good thing the Calvinists invented the work ethic. We might see him as a fun guy.

DRC's picture
DRC
Joined:
Jul. 31, 2007 4:01 pm

DRC, you have a point. I feel that modern culture in the USA villifies work and only celebrates play. I think that they are both good.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

Well, there's an old saying...

If you do the things you need to do, when you need to do them - then someday you can do the things you want to do, when you want to do them.

Fact is, we shouldn't be vilifying hard work. But we shouldn't vilify leisure either. We just need to make sure people understand that leisure is generally only achievable AFTER there has been enough production to "finance" the relaxation.

For America - there is enough GLOBAL production to finance our leisure. But it's certainly not fair to ask the rest of the planet to produce so we don't have to.The fact that some countries are working hard to make us goods, and then lend us the money to buy them, is a hilarious concept when you realize how incredibly asinine it really is. But, that's what's happening.

Schiff said it best - "it's a lot like that passage in Tom Sawyer, where he convinced everyone not only to whitewash his fence for him, but to pay him for the privilege to do so. Little did Mark Twain know that someday, that passage would become the basis for the entire global economy."

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

Hi, Cheesebone,

I didn't think of it in terms of "financing" our leisure, but in a way that is very true, especially if the person on vacation or whatever is using a credit card. However, under some circumstances I don't think it is smart to eat a meal that takes a year to pay off, lol!

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

Well, the whole idea behind credit is that it gives you immediate gratification, at the expense of future underconsumption or non-savings. You can have what you want RIGHT NOW, but it requires that you direct xx amount of money for for the next xx amount of months towards paying off the debt, whereas previously that money was something you were able to do "whatever you wanted" with.

The problem many people get into is when they decide to use the credit AND maintain previous levels of spending.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am
Quote Cheesebone:

Well, other countries have a "rainy day fund" and they don't necessarily have to use their central banks to finance them. Look at Japan - they just had an enormous disaster. How are they going to pay for all of this necessary rebuilding?

Well, they currently own close to $1 Trillion in US debt. That's money that came out of the Japanese economy, and was lent to us. They can cash that in! We OWE them the money. That's a pretty huge "rainy day" fund, and from the looks of it, it's raining like crazy in Japan. They don't need to print up extra money, all they have to do is cash in the bonds they own and they can start rebuilding without costing their country a dime.

poly replies: Wouldn't that sort of be like a run on a bank? The Fed? We'd have to borrow the money...somewhere...to honor the trillion we owe the Japanese. Ooops. I forgot. We have printing presses.

The Japanese can flood China with dollars to buy what they can't produce quickly enough for themselves. The Chinese can use them to snap up U.S. agricultural lands and natural resources...and outbid us on international oil It seems the Chinese don't want to loan us anymore money.

I agree, Cheesebone. Inflation rates are skewed. The figures don't reflect true inflation. anymore than unemployment rates reflect true unemployment.

My mom bought a watermelon yesterday. Six dollars.. Nearly an hours min. wage income.. When min. wage was $1, they sold for 25 cents. Four watermelons for an hours work rather than one. Inflation..

When I worked for min. wage years ago, I bought a house...and a new sportscar in the same year.. A min. wage worker today is lucky to find a cheap apartment in a slum and get a bus pass. Inflation. Earning double the min. wage meant living on "Easy Street"..Of course, we lived under the New Deal at the time. We hadn't chosen to junk it yet, and the military/industrial complex hadn't completed its stranglehold on the country.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

Cheesebone makes an incredible point. He said that the credit card and credit services sector is about 'immediate gratification." Now I would not take the option of having a credit card away from people because I don't like making people choose only from the options that I give them. However, I refuse personally to have a credit card, only a debit card. I know myself. I can be slightly obsessive/compulsive with my spending money, and if I have a credit card I know I can severely hurt myself by going massively into debt by that card. That is why I insist on having a debit card. To me, the thought of having a credit card or going to small loan business is dangerous because I know myself...if I personally open the door of easy credit in the form of a credit card, it is a door I will never be able to shut. However, this is just me personally, but I know that there are others in the same boat.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

The problem of credit card debt has more to do with the War on the Middle Class and the usury of the credit industry than to immediate gratification, etc. Those who have a shopping jones need to get help for it, but the rest of us found ourselves trying to pay the bills and deal with the crises that come along, and there were times when only our credit limit would avoid worse problems.

Flat wages and rising cost of living, with national Republican financial profligacy run amok has left us with the hyped up financial crisis. The problem is inadequate revenues and a wealth bloat/poverty imbalance. We need to stop waste and invest at the same time, so just stopping spending misses the mark badly. We need the money the rich have gained by less than honorable means, even if they just went along for the ride.

DRC's picture
DRC
Joined:
Jul. 31, 2007 4:01 pm

I am in the same boat as you, Micah. No credit cards for me, just debit.

ALSO, as far as helath insurance goes, I am uninsured, for the record.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

Cheesebone - Whether you are insured or not, I respect your privacy enough to let you seek your own options in getting covered or not covered. However, it must be scary hearing of people getting sick or getting into accidents. I am a "starving student" so to speak and I am incredibly lucky to have parents that allow me to be on their plan. I like to do chores for them and other nice things, because I realize how unlucky others can be in that they have problems that make getting insurance hard. I have an "understanding" with my parents that since they help me now, after college I will help them by helping support them as they get older.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

I heard something about China switching from U.S. treasuries. 20% of their outlay, but I don't know what that figure represents. Did anyone catch that story? Did Thom cover it? Put that together with what's happening to the Euro and I have to wonder if we're in for the next "dip" by the end of the year.

nimblecivet's picture
nimblecivet
Joined:
Jul. 31, 2007 4:01 pm

Maybe this is what he was talking about:

http://www.reuters.com/article/2011/05/13/china-eu-bonds-idUSL3E7GD0B320110513

"May 13 (Reuters) - The European Union's foreign policy chief thanked China for shoring up investor confidence in the bloc by continuing to buy European sovereign bonds...

After investing billions of euros in Portuguese and Greek bonds to diversity its "huge" foreign exchange reserves away from the dollar, China has said it is considering buying more, in a move to help stabilise the bloc's fragile finances and protect its business interests. "

China to the rescue! I also saw something about China buying Japanese bonds.

nimblecivet's picture
nimblecivet
Joined:
Jul. 31, 2007 4:01 pm
Quote nimblecivet:

... 20% of their outlay...

Make that 2/3rds according to "Green with Harrison" (a feature of Green 960 here in 'Frisco).

nimblecivet's picture
nimblecivet
Joined:
Jul. 31, 2007 4:01 pm

I am not going to sit, worry, and pout about this all day, but we are pratically one of China's best customers and they are reducing the amount of money they invest in our bonds. China could be doing that for a multiplicity of reasons, but since buying bonds is based on long term self interest, it will ultimately involve other countries bonds being less of a risk and/or having a higher rate of return. It would be premature to grab the groceries and run for the hills, but if I wonder if the Chinese see a long term future of deep recession within the USA economy.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

Does anyone know of simple ways to prepare for a recession or a depression (besides saving up cash), that doesn't involve having a fear of the future? For example, what could college students in the middle of being in school do to prepare for not being able to find work for an extended period of time after graduation? I for one am going to take up meditative calligraphy, it costs very little and I find it very relaxing.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

OK, I admit that one sounded cheesy, but the intent was genuine. I just read a post that suggested buying all of your necessities before inflation hits, so that way when the money loses value, it won't hurt you so much. I believe that this is correct. It would be a good idea to watch the business/economy section of the newspaper and make important expenditures before major inflation sets in.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

For those of us who don't have much savings or money to invest and protect elsewhere, buying necessities while you can is an absolutely good idea. Things like toothpaste, toilet paper, anything of legitimate value (even liquor.. just because you don't drink, doesn't mean you can't trade it for something with someone who DOES drink)... although it may get to the point where we can just use dollar bills for toilet paper anyway, haha.

Cheesebone's picture
Cheesebone
Joined:
Sep. 1, 2010 9:18 am

Currently Chatting

Get. Money. Out.

Last week, the United States Senate actually considered a constitutional amendment on campaign finance. Last Monday, the Senate advanced Tom Udall's proposed amendment, which would allow Congress to regulate money in politics. Seventy-nine senators voted to allow debate on the measure.

Powered by Pressflow, an open source content management system