Trickle down economics is a lie, the proof !

[Yamato]

Yamato, tell me what solution would you have suggested - other than Kenysian intervention - which would have prevented a total world economic melt down in 2008 ?

Well if that's what I'm doing, just accepting your economic speculations of cause and effect, I would just change the rhetoric because that's all that is. The owners and their elected shills in this country don't want to be replaced in a downturn, that's what the problem is. We often get the best results from scratch. Maybe mixing up our talent better in the marketplace and getting the army-sized companies into smaller more agile groups would generate some economic growth for a reason, not just a digital balance sheet. But everyone's a chickenhawk with the economy now too. Bleedover from the military industrial complex it looks like to me.

[Guest]

Well if that's what I'm doing, just accepting your economic speculations of cause and effect, I would just change the rhetoric because that's all that is. The owners and their elected shills in this country don't want to be replaced in a downturn, that's what the problem is. We often get the best results from scratch. Maybe mixing up our talent better in the marketplace and getting the army-sized companies into smaller more agile groups would generate some economic growth for a reason, not just a digital balance sheet. But everyone's a chickenhawk with the economy now too. Bleedover from the military industrial complex it looks like to me.

A very rosy picture of what would have been the second great depression - write large.

Hold onto those dream - they will help you sleep at night

Br Cornelius

[Jeremiah65]

Br...I fear we are heading full steam toward another global conflict....call it WW3 if you wish, but it is coming.

Why? Resources...the mad scramble to control them.

I was not pleased with the bailouts and the handouts in 08 and 09...I was not pleased with "too big to fail"...this should never have been allowed to happen in the first place.

I was not pleased with the dissolution of Glass-Steagle...that was a HUGE mistake.

I am not please with the hundreds of trillions and possibly into the quadrillions of "loser" derivatives...sooner or later...someone is going to have to pay the fiddler and it is going to be the most ugly financial collapse in the history of civilization. But humanity WILL survive. Will we be space age or stone age...that is the real question.

All of this economic theory sounds wonderful on paper but there is always an aberration...something people forgot to consider or just the random freak that pops up.

They will float this ship as long as they can with unlimited lending and printing...but sooner or later...the fiddler is going to come a callin'

My opinion...which is not new and one I have stated a hundred times at least...let people be free to do whatever it is they do best...I do NOT care what that is. We all have a skill, a talent that will allow us to feed and shelter ourselves...let people do that.

No, it's not paradise...not Shangri-la...but it is a thing that allows people to live and perhaps...one day...we can learn to do better. getting through the rough spot is all that matters right now...and...remembering what put us here.

I know I become a grain of sand in the belly of the oyster when I say this but...so be it....we are here because of greed, gluttony, envy, lust, anger, sloth and vainpride...WE did this to ourselves and only "we" can pull out of it...greedy, self serving politicians and their quest for wealth and power over the masses is not and never will provide a real solution to our problems...abstaining from the 7 deadly sins is the best road to solution...

my soapbox moment concludes...

[Guest]

I tend to agree with everything you say Jeremiah. A profound lack of vision and wisdom, and backing the wrong horse, has brought us to the brink.

Throughout human history we have been winging it and letting chance see where it takes us. That has worked because there was always another frontier to expand into and another vast expanse to dump our waste into. But those easy days are over - gone - never to return.

The only way to get through this seismic shift in terrain is to start to actively manage ourselves into the future - predict the inevitable pinch points and at least try to avoid them before they cause to much damage.

I suspect we are in the last great hurrah for the irresponsible ways of the past, the just lets see what happens if we just try this. It will likely be a bloody reckoning and we will either learn the hard lessons and grow or become a rather sorry footnote in history.

Br Cornelius

[Yamato]

A very rosy picture of what would have been the second great depression - write large.

Hold onto those dream - they will help you sleep at night

Br Cornelius

"The second great depression", oh joy. And Saddam Hussein was Hitler. You just buy their empty rhetoric, I pay their loaded bills. When one is actually responsible for something and not just snipping from the fringes, there's nothing rosy about it. Chickenhawks rule the roost. Now they're scared of lower prices the market would set without them running their interference and so they need their giant banks and sleazy banksters and digital fiat to ensure their wasteful entrenched and entitled positions endure. I lived through a real great depression; my home city was wiped out worse than anything from 1933, caused by supply-demand cycles that were reliant on govt spending and war spending in particular. But instead of bailing that out, we buy all that cheap imported steel instead from our most-favorite human rights violators as if our goods manufacturing in this country wasn't already gutted enough. Somehow lower prices are okay when they serve the right peoples interests, just not the wrong peoples. How quaint.

[Guest]

"The second great depression", oh joy. And Saddam Hussein was Hitler. You just buy their empty rhetoric, I pay their loaded bills. When one is actually responsible for something and not just snipping from the fringes, there's nothing rosy about it. Chickenhawks rule the roost. Now they're scared of lower prices the market would set without them running their interference and so they need their giant banks and sleazy banksters and digital fiat to ensure their wasteful entrenched and entitled positions endure. I lived through a real great depression; my home city was wiped out worse than anything from 1933, caused by supply-demand cycles that were reliant on govt spending and war spending in particular. But instead of bailing that out, we buy all that cheap imported steel instead from our most-favorite human rights violators as if our goods manufacturing in this country wasn't already gutted enough. Somehow lower prices are okay when they serve the right peoples interests, just not the wrong peoples. How quaint.

You may not think it significant that Banks across the world were about to close their ATM networks and stop releasing money - but I personally think it would have had a profound effect on the collective psych and led to a world wide recession the like of which we have never seen.

Like I said - no analysis.

Br Cornelius

[Yamato]

You may not think it significant that Banks across the world were about to close their ATM networks and stop releasing money - but I personally think it would have had a profound effect on the collective psych and led to a world wide recession the like of which we have never seen.

Like I said - no analysis.

Br Cornelius

It would have led to banking reform. But we can't have that now can we.

[Guest]

It would have led to banking reform. But we can't have that now can we.

That's after the chaos had settled, or should I say "if the chaos settled".

We can all agree with banking reform - but total collapse rarely produces the most efficient result.

Unfortunately Yamato this has grown very tedious and rather pointless so I will end it for me at least.

Br Cornelius

Edited May 13, 2014 by Guest

[Yamato]

That's after the chaos had settled, or should I say "if the chaos settled".

We can all agree with banking reform - but total collapse rarely produces the most efficient result.

Unfortunately Yamato this has grown very tedious and rather pointless so I will end it for me at least.

Br Cornelius

"Total collapse" is total speculation. Some collapsing is the medicine we need to get rid of the disease we have. The system works because it's forced to work, with massive amounts of capital coming from places who want to keep the biggest players entrenched in their places while preventing reform or replacement of those entitlement holders with much better companies, much better banking and much better policy and in result a much healthier economy that actually has a real reason to grow that isn't just making money or micromanaging winners and losers in markets unnaturally.

[ian hacktorp]

Change is happening and looks to be gathering speed. USD as "world reserve currency" is soon to be a relic from the past...an idea that was scoffed at here on UM less than 1 year ago...yet here we are:

Russia Holds "De-Dollarization Meeting": China, Iran Willing To Drop USD From Bilateral Trade

...the further the west antagonizes Russia, and the more economic sanctions it lobs at it, the more Russia will be forced away from a USD-denominated trading system and into one which faces China and India. Which is why next week's announcement, as groundbreaking as it most certainly will be, is just the beginning.

http://www.zerohedge...bilateral-trade

.

Edited May 13, 2014 by hacktorp

[+DieChecker]

Reading the Wiki article on the book, I can see from the books argument that all that really needs to be done is to reduce the effectiveness of inherited money. Simply increase the inheritance tax, or put a much larger percentage tax on investment earnings, and things will begin to turn around.

I don't see why there has to be a Revolution and everyone on Capital Hill taken out and shot. (figuratively)

http://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century

The book argues that there was a trend towards higher inequality which was reversed between 1930 and 1975 due to some rather unique circumstances: the two World Wars, the Great Depression and a debt-fueled recession destroyed much wealth, particularly that owned by the elite.[3] These events prompted governments to undertake steps towards redistributing income and the fast economic growth meant that inherited wealth had its importance reduced.[3]

The book argues that the world is returning towards "patrimonial capitalism", in which much of the economy is dominated by inherited wealth and that their power is increasing, creating an oligarchy.[4] In order to illustrate a society that has a rigid class structure based on accumulated capital, Piketty uses examples from the novels of Honoré de Balzac, Jane Austen and Henry James.[3]

Piketty predicts a world of low economic growth, dismissing the idea that bursts of technological advances will bring the growth back to the levels of the 20th century, arguing that we should not base ourselves on the "caprices of technology."[3]

Piketty proposes that an annual global wealth tax of up to 2%, combined with a progressive income tax reaching as high as 80%, would reduce inequality.[3]

[Space Commander Travis]

Change is happening and looks to be gathering speed. USD as "world reserve currency" is soon to be a relic from the past...an idea that was scoffed at here on UM less than 1 year ago...yet here we are:

Russia Holds "De-Dollarization Meeting": China, Iran Willing To Drop USD From Bilateral Trade

http://www.zerohedge...bilateral-trade

.

Well, so I should think.

[Yamato]

Exactly, with two of those three countries being sanctioned by the US and the third one wanting to be the biggest consumer economy of the 21st century, some transactions in their own currencies are bound to start happening.

It's not a Qaddafi or Mosaddeq or a Hugo Chavez taking it in-house when it's a major player like Russia doing it. We could bully, overthrow, try to assassinate or even bomb those other players, but we might not be able to bully Russia if Putin plays his cards right. China is probably Putin's biggest wildcard for what can make these Russian sanctions fail in the end.

[ian hacktorp]

...some transactions in their own currencies are bound to start happening.

It's those transactions involving oil and natural gas that should have people's attention, since energy trade is the dollar monopoly that has propped up the US 'economy' for so long. Loss of that so-called privilege is the trigger event for the coming currency crisis and it will be a doozy.

Well, so I should think.

It's never a bad idea...

.

Edited May 14, 2014 by hacktorp

[Yamato]

It's those transactions involving oil and natural gas that should have people's attention, since energy trade is the dollar monopoly that has propped up the US 'economy' for so long. Loss of that so-called privilege is the trigger event for the coming currency crisis and it will be a doozy.

I'm assuming that foreign countries with currencies correlated with commodities like Australia and New Zealand will have a layer of protection from the blood in the water but they might lose quite a bit of value as well. If you think there's going to be a currency crash, where do you go? Out of US dollar denominated assets in theory but that's hard to do in practice. And still to this day, when the US crashes, China crashes even harder. When we see the first sign of that no longer being the case I think it'll be time to worry. I think a new reserve currency from China will be a result of China being the most powerful economy in the world. At some point after China surpasses us, the world will float their currencies to theirs. It might have to be 10% or 20% or 50% larger than the US before that happens but eventually the sheer convenience of trading with what you trade more of will cause the switch. When big players in Asia are trading with one another more than they're trading with us, what purpose does the dollar serve other than goody gumdrops from the govt. I can see our politicians going on a dollar crusade around the world after they destroy it enough. I wouldn't bet my shirt that it happens in the next few years though. Yes it's really sad and pathetic that it's happening at all, but it's not time to panic yet.

[+DieChecker]

It could very well be China that holds the future currency standard, but I have no fears as the USA still holds a gigantic amount of natural resources. More then a third of the worlds coal is in the continental US, as well as a overwhelming majority of the worlds frac-able oil. So, I have no real fear of the USAs future. If anything the US will export energy at horrendous cost to the rest of the world, and we'll probably all live in a utopian society, with lots of free money. Just look at the Saudis and how they turned a total crap desert nation into a nation swimming in wealth.

[Guest]

It could very well be China that holds the future currency standard, but I have no fears as the USA still holds a gigantic amount of natural resources. More then a third of the worlds coal is in the continental US, as well as a overwhelming majority of the worlds frac-able oil. So, I have no real fear of the USAs future. If anything the US will export energy at horrendous cost to the rest of the world, and we'll probably all live in a utopian society, with lots of free money. Just look at the Saudis and how they turned a total crap desert nation into a nation swimming in wealth.

The Saudi's have some of the easiest extractable oil in the world. Frackable oil costs at least 4 times the amount of conventional oil to extract and the production cycle is measured in years not decades. The future for America if it intends to rely on Fracking to support itself will be extremely bleak. The Fracking Bubble is a very dangerous hyped investment ponzy and not a pathway to a secure future. Don't take my word for it - it has been the talk of the investment banks and oil insiders for about 5 years at this stage.

As to Coal - you really don't believe there is a price to pay for burning the stuff ?

Or where you been ironic ?

Br Cornelius

[+DieChecker]

The Saudi's have some of the easiest extractable oil in the world. Frackable oil costs at least 4 times the amount of conventional oil to extract and the production cycle is measured in years not decades. The future for America if it intends to rely on Fracking to support itself will be extremely bleak. The Fracking Bubble is a very dangerous hyped investment ponzy and not a pathway to a secure future. Don't take my word for it - it has been the talk of the investment banks and oil insiders for about 5 years at this stage.

As to Coal - you really don't believe there is a price to pay for burning the stuff ?

Or where you been ironic ?

Br Cornelius

When Saudi and Venezuelan oil is all gone, what will the world turn to? 10 years ago they laughed at oil shales and said it would cost well over $100 a barrel to get to. Well oil is well over $100 a barrel now. And gas prices are at $4 a gallon now. And gas prices are $10 a gallon in Europe, if I am remembering right. So they are going to be willing to pay for that gas at double or triple the price? Yes they will. The world will buy our coal and oil, and gas, and we'll get fat off those sales. Or, at least someone will get fat off it. My expectation is the government will put a huge tariff on it and fund much of the government entitlements with that.

Actually oil shale don't use fracking, they use a system called in-situ mining, where the thick oil is heated up and then extracted. And this technology is just getting better and better.

Edited May 15, 2014 by DieChecker

[Guest]

When Saudi and Venezuelan oil is all gone, what will the world turn to? 10 years ago they laughed at oil shales and said it would cost well over $100 a barrel to get to. Well oil is well over $100 a barrel now. And gas prices are at $4 a gallon now. And gas prices are $10 a gallon in Europe, if I am remembering right. So they are going to be willing to pay for that gas at double or triple the price? Yes they will. The world will buy our coal and oil, and gas, and we'll get fat off those sales. Or, at least someone will get fat off it. My expectation is the government will put a huge tariff on it and fund much of the government entitlements with that.

Actually oil shale don't use fracking, they use a system called in-situ mining, where the thick oil is heated up and then extracted. And this technology is just getting better and better.

The world recession was triggered by the $100.00 oil prices - and the lack of a serious recovery are a consequence of it remaining high. The future will be very bleak for anyone who continues to depend on oil to fuel their economic engine. Many economic activities simply cease to be viable at $100.00 a barrel. Thats assuming that it will remain at $100.00 per barrel - which it wont when all the sweet easy crude is gone. This is a recipe for a total collapse of the current economic model. Fracking cannot save the economic model based upon cheap oil and we are in the first early stages of the slow decline into an expensive oil economy, it will go in steps but each decade will be worse than the last if we continue to rely on fossil fuels.

Shale-oil has all the same issues but an even worse pollution footprint, its energy return (energy in vs energy out) is so pathetic that only desperation would make people think it offered anything but environmental disaster.

None of these alternatives will be able to compete with the remaining conventional oil and people will continue to buy it whilstever there is a ready supply. The free market in oil will collapse in the face of national expediency and those producers will hord it and out compete the countries who have to buy from the dirty American producers. The sensible money and countries are already ahead of the curve and divesting of their reliance on fossil fuels - and they will be the real winners when the cheap sweet crude runs out.

Br Cornelius

Edited May 15, 2014 by Guest

[Space Commander Travis]

they'll come up with something, they always have done before. People are always so eager to see the collapse of civilisation, it rarely happens.

[Frank Merton]

Yea what is it with people; they would rather hear the world ends tomorrow than the day after all will be paradise.

The business web pages invariably have at least one story telling us a depression or some collapse is coming, even when everything else on the page is positive. I think they deliberately plan at least one such story just to attract those eyeballs who want it.

[Frank Merton]

I think solar power and electric cars are just about here. A little nudge here and there in the form of subsidies and some stiff rules on coal and other pollutants will do the trick.

[Guest]

Oil will collapse, but those with vision will not go down with it.

I suspect that America will collapse because of its excessive dependance on oil and the failure of the oil-dollar mechanism which has been their primary method of economic control.

Br Cornelius

Edited May 15, 2014 by Guest

[Frank Merton]

Oil will collapse, but those with vision will not go down with it.

Br Cornelius

The price of oil may well collapse, but that is contradictory to your thesis that we are running out of it. England was dependent on wood, then coal, then oil and now more and more natural gas. Next will come other sources. If not our civilization will have difficulties and suffering. You seem to be eagerly waiting for that.

[Guest]

The price of oil may well collapse, but that is contradictory to your thesis that we are running out of it. England was dependent on wood, then coal, then oil and now more and more natural gas. Next will come other sources. If not our civilization will have difficulties and suffering. You seem to be eagerly waiting for that.

Oil supplies will collapse causing prices to sky rocket.

Br Cornelius