It's all about the economy...

[Neognosis]

Moderators Note: This thread was split out from the "If Economy Goes Belly up" thread, that can be found here

INdicators say that obama is not screwing things up though.

Also, I don't think you know much about the economy. I base this on two observations in the beginning of your post. First, economists say that it is good to pump cash into the economy during a recession. I'm not an economist, and I don't understand why. I just know that people who study this for their life's work probably know more than you.

Second, anytime I hear this precious metal stuff, it's always coming from a paranoid whack job. Don't know if what they say is true or not, but I don't see sensible people buying precious metals, and they advertise for gold on shows like Savage and Art Bell. That alone tells me something, for what it's worth.

Law and order also did not break down during the Great Depression. But people LOVE to get all excited and scared...

Ok, carry on.

Edited September 22, 2009 by Tiggs

[ctn]

INdicators say that obama is not screwing things up though.

Uh-huh... Tell me another one. You need to learn a bit more about the way things work. Jobless ratings don't seem to agree with you, and you also seem to have a poor understanding of the way cycles work. You don't jump from one month of doom and gloom, to the next month saying "things are looking great!" Do you realize that it's going to take some time for the inflation to truly hit?

You're looking at a house of cards built to give the illusion of a recovering economy. Inflation will hit, and if you don't believe it, then you truly are a lost cause when it comes to understanding the impact of an artificially driven economy.

Tell you what, if yo were dead broke, went to the bank, and borrowed $100,000 at high interest, could you suddenly go on a spending spree? TO the outside world, it'd appear that you were rolling in the money right? But what happens when the cash dries up? What happens when you're hit with compound interest?

The indicators you're viewing right now, were driven by Cash For Clunkers, and other such nonsense, which was in essence, US borrowing from US... The sudden cash flow might look nice, but just wait until the loan defaults begin hitting, and wait until the second round of mortgage defaults hit... (Have you wondered why real estate is still waaaay down? Don't kid yourself)

Ask yourself - Do you TRULY believe a country can print 1 trillion dollars in cash, backed by NOTHING and not pay the price? Where is this phantom money coming from? Or I'll put it to you in another way:

NAME 1 INSTANCE IN HISTORY WHERE HUGE SUMS OF MONEY WERE PRINTED (Without proper backing in solid assets) , AND MAJOR INFLATION DID NOT HAPPEN?

Can you? Japan did it... Know what happened? Nearly sank their own economy and took more than a decade to dig themselves out. I can keep going, more than 17 other examples on this list here. EVERY single time my friend, every time - It has happened. So you, the man who can't even explain the investor you were quoting, are going to claim that you're right, and history is wrong?

"Also, I don't think you know much about the economy. I base this on two observations in the beginning of your post. First, economists say that it is good to pump cash into the economy during a recession. I'm not an economist, and I don't understand why. I just know that people who study this for their life's work probably know more than you"

Uh, you might want to refrain from making sweeping assumptions when you don't even understand the subject matter yourself - as you admitted. I think I do quite nicely in the "economics" department my friend - My collection speaks for itself.

Now what you FAIL to take into account when you claim "pumping cash" is a good thing in a recession is that one already has assets. With assets in the heavy 6 figure range, that cash will lose value as the dollar drops. We're not talking about money changing hands here, we're talking about the method of cash storage.

Money can be paper, metal, or take some other form of value. When the U.S. dollar continues to devalue, why on EARTH would someone sit around with that money letting it shrink? Please do some research on the topic, and I think you'll find that pretty much any investor you will find will agree with what I'm saying.

It's pretty easy to find out there. I'll put it to you this way, I belong to 3 speerate investment clubs on a local and national level - In the past 6 months, we've had no less than 5 "special guests" show up to talk silver and gold in preparation of rampant inflation. That tell you something? It's unanimous that your money needs to be stored in something OTHER than the dollar.

If nothing happens and the economy is fine, then no biggie - You're still fine as silver is a great buy and hold - But if things take a turn for the worse, most experts estimate the value of Silver and the correction in the market to drive values up to 200 - $300 spot. Not bad. But this isn't something you buy to get rich, you buy it to store money in a form that is universally accepted.

"Second, anytime I hear this precious metal stuff, it's always coming from a paranoid whack job. Don't know if what they say is true or not, but I don't see sensible people buying precious metals, and they advertise for gold on shows like Savage and Art Bell. That alone tells me something, for what it's worth."

Huh - So you're calling Warren Buffet a paranoid whack job? (You know, the BILLIONAIRE who also happened to purchase over 4,500 tons of silver?) How about every other major investing institution? I guess you find MSNBC, CNN, and all other Mainstream media paranoid whack jobs as well? Each of those programs have also recently been talking about the value of precious metals! Good lord did you miss the mark on that one! Buying silver and gold is typically lumped in with another term you might hear it referred to as: "commodities." Ever heard that term used before? Then I guess you now know how far off the mark you were with your claims that only "whack jobs" buy precious metals. Pretty common thing to do Bucko...

Not to mention, the true wealthy generally maintain about 15 - 20% of their wealth in precious metal form, or in certificates to precious metals as well - You should really get your facts straight.

"Law and order also did not break down during the Great Depression. But people LOVE to get all excited and scared..."

Huh - Who is talking about getting scared? Did I mention anything about getting scared? Oh I didn't that's just you pulling comments out of thin air. Sorry, no time to talk, as you've proven that you understand way too little about this subject matter. Next!

Ok, carry on.

[Lt_Ripley]

INdicators say that obama is not screwing things up though.

Also, I don't think you know much about the economy. I base this on two observations in the beginning of your post. First, economists say that it is good to pump cash into the economy during a recession. I'm not an economist, and I don't understand why. I just know that people who study this for their life's work probably know more than you.

Second, anytime I hear this precious metal stuff, it's always coming from a paranoid whack job. Don't know if what they say is true or not, but I don't see sensible people buying precious metals, and they advertise for gold on shows like Savage and Art Bell. That alone tells me something, for what it's worth.

Law and order also did not break down during the Great Depression. But people LOVE to get all excited and scared...

Ok, carry on.

he forgets Bush took us into this mess . did he think things would magically disappear with Bush ?

[ctn]

Please don't attempt to derail this thread Ripley. This is not the topic at hand - So either speak on topic, or go start your own thread.

he forgets Bush took us into this mess . did he think things would magically disappear with Bush ?

[preacherman76]

INdicators say that obama is not screwing things up though.

What "indicators" are those? The rising unemployment??

[Caesar]

I think the big problem we have now is the trillions Obama just made out of thin air. if they do not cover those notes you will see masive inflation. your starting to see this in gold prices. as soon as the economy gets better your going to see so many dollars chassing to few goods.

I believe what your seeing alot are companies downsizing and making better profits and making the stock market higher. since the markets are going up, large institutional investors are putting even more money in the market. if you don't see the unemployment and bankruptcies follow the stock market, it will lead us back into a recession.

If you see both the unemployment and bankruptcies numbers improve your going to see rates go up alot to try and cover those trillions in notes.

[questionmark]

I think the big problem we have now is the trillions Obama just made out of thin air. if they do not cover those notes you will see masive inflation. your starting to see this in gold prices. as soon as the economy gets better your going to see so many dollars chassing to few goods.

The pre-Obama trillions were made of nothing else either... nothing changes, economically we are just living an illusion and not since 2009 but since 1980.

[Caesar]

The pre-Obama trillions were made of nothing else either... nothing changes, economically we are just living an illusion and not since 2009 but since 1980.

I suggest you get some education on the matter.

Show me were one system of the government has made trillions in notes and then sells them to another system of the government?

[questionmark]

I suggest you get some education on the matter.

Show me were one system of the government has made trillions in notes and then sells them to another system of the government?

The trillion of today is the 200 billion of 1980. You pretend that your dollar has the same value as it had 30 years ago, which it does not. $5 of 1980 is about $1 of today. Simple.

And as for pushing papers without real value around, it was done then just as it is done now. And especially from one branch of the government to another.

[Caesar]

The trillion of today is the 200 billion of 1980. You pretend that your dollar has the same value as it had 30 years ago, which it does not. $5 of 1980 is about $1 of today. Simple.

And as for pushing papers without real value around, it was done then just as it is done now. And especially from one branch of the government to another.

No kidding that was when we stopped using the gold standard. many of the top us companies make 60% of thier sales from other nations so why would we use a gold standard if all the major currencies are intertwined with each other?

Show me were one system of the government has made trillions in notes and then sells them to another system of the government?

This seems like Obama is monetizing our debt?

[questionmark]

No kidding that was when we stopped using the gold standard. many of the top us companies make 60% of thier sales from other nations so why would we use a gold standard if all the major currencies are intertwined with each other?

Show me were one system of the government has made trillions in notes and then sells them to another system of the government?

This seems like Obama is monetizing our debt?

You may be blaming this on Obama knowing it is only half the truth. If the actual administration would not keep on the same track as created by Reaganomics (and only briefly interrupted by Slick Willie) you could stuff the US in a trash bag and put it on the dump of history. There would not even enough money to pay for the Armed Force's fuel...never mind bailing out anybody.

The question here is not: How many billions are we down the tubies? but: How the F are we going to get out of it?

The first would be, at the first possible exit leave Reaganomics, or expand it by that part that part of the Keynes' Theory that is always ignored by the politicians: Debts are an exception, not a rule. And: Capitalism only works as long as it benefits the majority.

That means, as soon as there is real growth (not the type created by the government, corporations and individuals incurring further debt) the taxes have to be increased to pay for that part of the government's bill underpaid by the tax payer for the last 30 years. No use doing it now as it would just accelerate the downwards spiral of them last 30 years.

But, I am afraid, that will never happen....

And, for your trillion paper, that is monopoly money. It does not matter what that paper says... they could have added another ten zeros, would not matter either.

Edited September 21, 2009 by questionmark

[Neognosis]

eh, maybe you are right. I don't know economics. I do know that many lifelong economists believe in keynesian economics. So who am I to argue? Granted, I'm not a member of an investment club, as impressive as that is, but I hear economists talking that keynesian economic theory can possibly pull us out of this, and NOT trying anything guarantees that we don't pull out of it.. so I'll listen to the guys who aren't playing the market to make money, (I'm pretty sure they don't give a S about anything BUT making money, and are partly responsible for this mess anyway) instead I'll listen to the guys who study this for their life's work, an they seem to want to give Keynesian theory a try.

[Caesar]

The first would be, at the first possible exit leave Reaganomics, or expand it by that part that part of the Keynes' Theory that is always ignored by the politicians: Debts are an exception, not a rule. And: Capitalism only works as long as it benefits the majority.

That means, as soon as there is real growth (not the type created by the government, corporations and individuals incurring further debt) the taxes have to be increased to pay for that part of the government's bill underpaid by the tax payer for the last 30 years. No use doing it now as it would just accelerate the downwards spiral of them last 30 years.

We haven't seen Reaganomics since he was president, I think maybe a bit more under Clinton then Bush. why would want to apply even more keynesian economics it hasn't done anything! I think Bush and Obama love to use both tax cuts and lots of spending.

Good GDP growth fed by low taxes and cuts in government spending will pay off the debt

And, for your trillion paper, that is monopoly money. It does not matter what that paper says... they could have added another ten zeros, would not matter either.

It seems like alot of nation love to peg thier currency to monopoly money .

[Caesar]

eh, maybe you are right. I don't know economics. I do know that many lifelong economists believe in keynesian economics. So who am I to argue? Granted, I'm not a member of an investment club, as impressive as that is, but I hear economists talking that keynesian economic theory can possibly pull us out of this, and NOT trying anything guarantees that we don't pull out of it.. so I'll listen to the guys who aren't playing the market to make money, (I'm pretty sure they don't give a S about anything BUT making money, and are partly responsible for this mess anyway) instead I'll listen to the guys who study this for their life's work, an they seem to want to give Keynesian theory a try.

keynesian economics is when the government plays a big role in the econonmy or helps with government projects like Obamas stimulis bill to fill in when we are in a recession to fill in in a bad economic cycle. Prime Minister Gordon Brown is also follows keynesian ideas.

[Neognosis]

I mean, keynesian economics pulled us out of the depression. However, we did have WWII to help a bit too. This would be the first time the US has tested keynesian economics without a major war. LIke I said, I don't know economics, but I know how to listen to those who do.

[Caesar]

I mean, keynesian economics pulled us out of the depression. However, we did have WWII to help a bit too. This would be the first time the US has tested keynesian economics without a major war. LIke I said, I don't know economics, but I know how to listen to those who do.

Well they also try it in other nations like England and other nations in Europe.

[ninjadude]

What "indicators" are those? The rising unemployment??

LEADING indicators. unemployment is a LAGGING indicator.

[ninjadude]

Show me were one system of the government has made trillions in notes and then sells them to another system of the government?

The George W. Bush administration.

[Caesar]

The George W. Bush administration.

I've asked for a source or an example and thats the best you can do?

Show me when one system of the government has made trillions in notes and then sells them to another system of the government?

[ninjadude]

I did.

[ctn]

You make it sound as if it were so black or white. You do know what false flags are don't you? Or do you have excuses for all the false alarms of recovery that have been announced so far this year, only to have things come crashing down again days later?

It's far too early to tell, and anyone who ignores the run of inflation that follows these cycles is kidding themselves.

It's sad that so many people are against making a simple move to protext themselves. I guess that helps explain why this country is always caught with thei pants down in these busts. Plenty of ways to store wealth while minimizing risk, even if you don't care much for metals.

LEADING indicators. unemployment is a LAGGING indicator.

[ctn]

I wouldn't exactly go around using the GD as a sterling example of Keynesian economics in action. lol

I mean, keynesian economics pulled us out of the depression. However, we did have WWII to help a bit too. This would be the first time the US has tested keynesian economics without a major war. LIke I said, I don't know economics, but I know how to listen to those who do.

[ctn]

"The question here is not: How many billions are we down the tubies? but: How the F are we going to get out of it?"

That's a statement I can agree with.

[Lt_Ripley]

No you did not because you cant!

and yet ........

Bush's Borrowing `Comes Home to Roost' as Rates Rise (Update1)

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By Alison Fitzgerald and Kevin Carmichael

Feb. 6 (Bloomberg) -- President George W. Bush has increased the national debt 45 percent while cutting the share of the budget spent on interest by almost a third. That's about to change as borrowing costs go up.

Bush benefited from the combination of economic expansion, low interest rates and strong foreign demand for Treasury securities as the national debt ballooned to more than $8 trillion from $5.6 trillion at his inauguration in January 2001. Declining rates allowed interest expense to drop to 14.2 percent of the budget in fiscal 2005 from 20.2 percent in fiscal 2000.

``Up until now, rising debt has been offset by a falling interest rate,'' says Brad Setser, an economist at Roubini Global Economics in New York. ``Now, debt is still rising and the interest rate is no longer falling. The consequence of rising debt will no longer be masked.''

The Treasury's interest costs are poised to jump after the Federal Reserve's 14 consecutive rate increases, a record supply of U.S. debt and signs that international investors are losing their appetite for U.S. government securities, say strategists such as Chris Rupkey of Bank of Tokyo-Mitsubishi and Lou Crandall of Wrightson ICAP LLS, both of them based in New York.

``Federal interest costs are rising very rapidly,'' Crandall says. ``Much of the debt that the government issues is short-term debt, and that's all being repriced at progressively higher interest rates.''

About 23 percent of the Treasury's $4.1 trillion in marketable securities matures in less than a year, and almost half matures in three years or less. Only 12 percent are 30-year bonds, the smallest percentage since at least 1980, according to Treasury figures. This week the Treasury is selling $14 billion in 30-year bonds, the first to be offered by the U.S. government since August 2001.

Bush's Budget

Bush today sent Congress a $2.77 trillion budget request for fiscal 2007 that calls for a deficit of $354 billion, compared with a record $423 billion this year. The Bush administration says it still expects to shave the deficit to about 2.25 percent of gross domestic product by 2009, from 3.2 percent this year.

The Treasury Department estimates that it will borrow $427 billion in fiscal 2006 and $373 billion in fiscal 2007 to fund government operations, the budget showed. The government borrowed $297 billion in 2005, according to the documents.

cont ..

http://www.bloomberg.com/apps/news?pid=10000103&sid=aU9hKP2Yw80E&refer=news_index

China Is Now A Net Seller Of U.S. Treasury Notes And Bonds!

By: Money and Markets Sunday, September 06, 2009 11:40 AM

We told you this was coming. Heck: A blind man could have seen it a mile away.

For many months now, we've predicted that Washington's wild spending and borrowing spree would make the global investors who buy our longer-term Treasuries — notes and bonds — as nervous as long-tailed cats in a room full of rocking chairs.

We've cautioned you that our sky-high deficits, record shattering borrowing by the U.S. Treasury and runaway money printing by the Federal Reserve would cause them to lose sleep, worrying about the real return on their money — not to mention, the return OF their money.

We forecast that as these concerns deepened, they would reduce the amount of money they were willing to loan Washington … or stop loaning us money altogether … or even begin selling the longer-term Treasuries they already own.

Now, those forecasts have begun to come true — in spades!

Just a few days ago, the U.S. Treasury Department revealed that China actually REDUCED its note and bond holdings by $25 billion in June. Although China did NOT sell shorter-term Treasury bills — and isn't expected to — it's still the largest amount of Treasuries China has ever sold in a single month.

This is a huge development:

* In 2006, China and Hong Kong accounted for more than 50 percent of the increase in the amount of Treasury debt sold to the public …

* In 2008, their share had fallen to 22 percent as the U.S. government increased its public debt by a record $1.2 trillion …

* In the first half of THIS year, China and Hong Kong acquired only 9 percent of the more than $800 billion worth of Treasury bonds that were sold — and now …

* In June, China became a net SELLER of U.S. Treasury notes and bonds!

So what's next? Will China dump the rest of its estimated $876 billion hoard of U.S. Treasuries and crash the Treasury market — and by doing so, kill the U.S. dollar, drive interest rates sky high and leave the U.S. economy a smoking ruin?

Absolutely not. Beijing's leaders are far too smart for that. They're well aware that doing that would crush the value of the Treasuries they own and cost them a king's ransom.

http://www.istockanalyst.com/article/viewarticle/articleid/3461458

[AROCES]

Economy will get better from where it is now, the foundation of the economy is still good and not all sectors of the industries really are in trouble.

the thing is the growth will be small and unemployment I say will not get better than 7%. Obama has poured mostly of the stimulus to renewable energy that has very little market, just watch and see.