28 replies to this topic

[me-wonders]

Hi, I am looking for information about how to do survey to measure our present situation and the direction we are going.  I came across an explanation of different types of recessions, and this explanation of the liquidty trap we are in.  I have heard the feds have printed money to dump on the market.  As far as I know this has not done yet, because it causes inflation.  A lot of unemployed people and inflation is not a good mix.  I kept wondering why when our economy is shrinking, prices on such vital things as food and electricity, goes up.  Like this is not supply and demand economics.  Any way, I think it behooves us to have a better understanding of our economic situation.

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Liquidity trap

A liquidity trap is a Keynesian theory that a situation can develop in which interest rates reach near zero (ZIRP) yet do not effectively stimulate the economy. In theory, near-zero interest rates should encourage firms and consumers to borrow and spend. However, if too many individuals or corporations focus on saving or paying down debt rather than spending, lower interest rates have less effect on investment and consumption behavior; the lower interest rates are like "pushing on a string." Economist Paul Krugman described the U.S. 2009 recession and Japan's lost decade as liquidity traps. One remedy to a liquidity trap is expanding the money supply via quantitative easing or other techniques in which money is effectively printed to purchase assets, thereby creating inflationary expectations that cause savers to begin spending again. Government stimulus spending and mercantilist policies to stimulate exports and reduce imports are other techniques to stimulate demand.^[20] He estimated in March 2010 that developed countries representing 70% of the world's GDP were caught in a liquidity trap.^[21]

[Coffey]

Want to know how the economy works?


These guys we call bankers (or that other word that sounds similar with a W) loan our Governments money with interest. By the time our government runs the money through our system it comes back and they can't pay the interest... So they get another loan.... This is called the never ending circle of debt. (well it what I call it lol) Now the general public who don't actually have much knowledge on how the national banking system works blames the government for over spending and all sorts of mistakes they make with the money. But the truth is, it doesn't matter how they use the money it will never cover the debt. Because that is how the system works. That is why 1 family in the world owns half the worlds wealth and controls the other half.
ironically all these patriotic Americans don't realise that the civil war they had with the British was because they didn't want a National Banking system. (which the British had) It was acutally part of the constitution to now have a national banking system. Now the US has one after the Rothchilds and their fellow bankers tricked the US into getting one. (to long to explain this part google it to find info on it)

Oh Libya didn't have a National banking system either, until Gaddafi was killed. Now ther eis one there and it's flying Al Qaeda flags above it. (yes we helped Al Qaeda take Libya... Now start questioning 9/11)

The sooner everyone realises this fact the better.

Edited by Coffey, 31 December 2012 - 06:52 PM.

[Hilander]

So the banksters are running the world on a pyramid scheme.

[Coffey]

Hilander, on 31 December 2012 - 07:27 PM, said:

So the banksters are running the world on a pyramid scheme.

Yeah pretty much.

[acidhead]

There are many reasons why nations go into recessions.  The USA is the global economic leader and when America gets financially into trouble it affects the whole world because the US$ is the world's reserve currency.  The housing bubble exposed the derivative market scam and the scam continues.  The stimulus plans and the quantitive easing techniques employed by the Federal Reserve are nothing but short term reliefs to a problem that needs fixing or it's going to self implode on itself.  America over leveraged itself the last couple decades or so while at the same time businesses shipped employment abroad to cheaper labor markets.  These jobs aren't coming back either.  The Unions and lobbyists chased them off while lining their pockets at the same time.  THe stimulus went to big business and it's big business who can afford to use low interest rates to further their own private business at the expense of the individual taxpayer.  This is what marxism looks like, or fascism, or communism soon thereafter.

[AsteroidX]

If the rest of the World depends on the US economy then I feel sorry for them. Im an American and I dont even rely on it for day to day living.

[acidhead]

AsteroidX, on 01 January 2013 - 05:27 AM, said:

If the rest of the World depends on the US economy then I feel sorry for them. Im an American and I dont even rely on it for day to day living.

The rest of the world depend on the US$ more than it depends on it's economy.  But this is going to change I suspect.  Not entirely but to some extent. More nations or zones are going to get a stake in the new deal. And I believe Obama is there to sell it to the American people.

[Jinxdom]

Think globally not locally for economics then you can get a better understanding of what is happening. The whole system is pretty much a really crappy game of hot potato.

[me-wonders]

I am glad there is some interest in this subject.  Perhaps we should have started with what gives the dollar value in the first place.  Since the time of Rome what gave money value was the metal it was made of.  Gold, silver, nickle and copper gave our money value.  This is no longer true.  

The paper dollar was backed by gold held in a vault.  Then it was backed by both and silver.  This is very problematic, because there isn't enough gold and silver in the world, to back all the money in the world.  This is what made discovery of gold in the new world, so important to the world!  European economies were held back by the lack of gold, and starting with Britain, we went off the gold standard.   Since then the value of money is backed by our Gross National Product.   Gross National Product, used to mean something that was actually produced, a car, a widget, a house.  Then that shifted more and more to just the movement of money.   Gross National Product becomes a count of every time a dollar changes hands.  Bartering takes the transaction out of the Gross National Product, unless it is reported to the government and given monetary value.  Women who stay home to care for the family, are worthless, because they are not contributing to the flow of money, regardless of how fast they spend their husband's pay check.  Women must be tied into the work force, the production of the Gross National Product, to have value, so maybe we can stop blaming gays, or atheist for destroying the family, because it is not them driving the problem.

For sure, the government does not want a decrease in employment!  However, a free market, and shipping jobs over seas makes citizens of other countries part of what backs our dollar.   That is all these workers become part of our Gross National Product, if they are producing for a US own company.   Did I get that right, or am I making a mistake here?  I am reminded of the Simi City, where the economy grows and grows, once you get past the difficult stage of the game.  The problem is, Simi City is complete fantasy.  In the real world you can not build industries without the resources and markets essential the the give and take of economics.  Playing into this problem is robotics.  Robots don't pay taxes, and we have not figured out how to make a machine do the work of 50 women, so those women can stay home and care for their children, and get those machines to pay taxes.  Am I figuring this right?  The IRS was created at the same time as the Federal Reserve, because the two go together.  You are worth what  you contribute to the Gross National Product, and your property has value.  (just not as much as it did before the bubble burst).

This link might explain things better

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http://www.nolanchar...-us-dollar.html

When a person, business or a country's debt goes beyond its ability to pay, it will sooner or later face bankruptcy. We are already seeing a huge rise in home foreclosures across the country caused by run-away inflation by new dollar creation by the FRB. The bankers are collecting on the debt by taking the very homes of our fellow Americans (as predicted by Jefferson those many years ago). This will be one of the greatest transfers of wealth from the middle class to the central bankers and government central planners in history.

Edited by me-wonders, 01 January 2013 - 03:27 PM.

[DieChecker]

From what I remember the US has been "printing" lot of money and has called it Quantitative Easing. It is called Expansionary monetary policy. They keep inflation where they want it by controlling banking interest rates.

[DieChecker]

me-wonders, on 01 January 2013 - 03:21 PM, said:

Gross National Product, used to mean something that was actually produced, a car, a widget, a house.  Then that shifted more and more to just the movement of money.   Gross National Product becomes a count of every time a dollar changes hands.  

I always find it amusing that everyone on Social Security, Welfare, Unemployment, SS Disability, and various other programs all count into the GNP. If we simply taxed them at 50% and then gave them twice as much... we'd probably improve our GNP, while spending the same amount of Fed dollars.

[questionmark]

DieChecker, on 01 January 2013 - 08:25 PM, said:

I always find it amusing that everyone on Social Security, Welfare, Unemployment, SS Disability, and various other programs all count into the GNP. If we simply taxed them at 50% and then gave them twice as much... we'd probably improve our GNP, while spending the same amount of Fed dollars.

its gets worse, you pay somebody to sit on a chair 8 hours a day and you just have increased the GNP by the value of the salary and(sometimes) of the chair.

[DieChecker]

Reminds me of when I was talking to my wife about the stupid "Record Breaking" movie weekends. Yeah... If they are going to charge $14 a seat, up from $11, up from $10, up from $8, up from $7, it is not hard to fathom why ticket sales continue to break records. Soon, they'll charge $18 for a 3D movie and $13 for a regular movie. Because they know that people will pay $13 because they are already paying $14 for 3D. Then we'll see stupid stories of even higher ticket sales, beating records set a year or two before.

The GNP does not always go up because there is growth going on.

Edited by DieChecker, 01 January 2013 - 08:38 PM.

[questionmark]

DieChecker, on 01 January 2013 - 08:36 PM, said:

Reminds me of when I was talking to my wife about the stupid "Record Breaking" movie weekends. Yeah... If they are going to charge $14 a seat, it is not hard to fathom why ticket sales continue to break records. Soon, they'll charge $18 for a 3D movie and $13 for a regular movie. Because they know that people will pay $13 because they are already paying $14 for 3D. Then we'll see stupid stories of even higher ticket sales, beating records set a year or two before.

The GNP does not always go up because there is growth going on.

in fact many years of the last decades the GNP grew less than the total debt... they still call it growth...

[Yamato]

Credit exploded from 1 trillion dollars in 1980 to 50 trillion dollars today.   Talk about growth!   This economically sick age of "credit as money" is due to no lack of regulations, it's directly due to the bloody regulations.   Guaranteeing stupid lenders their stupid lending and dumping the consequences on the innocent is unethical and unforgivable.   This gimme-gimme generation still spending the youths' money on whatever junk result they scheme up next needs to come to an end sooner than later, but with the government punting its ponzi scheme for maximum life cycle, we're not done doing damage to the country yet.  And when this fake economy implodes they're all going to BS that "we couldn't have seen it coming".   Good topic, me-wonders.