Mainstream media is starting to report on an upcoming economic crash.

Well I guess they can't ignore it anymore. The mainstream media is finally reporting on the economic troubles coming up for the United States. While other blogs (like mogambo guru), banking institutions, sites (like financialsense.com) and forums (like ATS) have been reporting about it for at least a year now. A year ago it would've been a pipe dream to see the mainstream media give any attention to this, but I guess it's starting to get hot in the kitchen right now.

Ignoring the lessons of 1929

The economic and financial landscape of 2007 bears striking similarities to 1929. Back then, there were large, unregulated pool operators and other insiders constantly muscling the tape in whatever direction they chose. The public, too, was involved, thinking the country was experiencing a new era. Meanwhile, business began deteriorating in the spring of 1929, though the partying in stocks lasted until the fall.

[edit on 21-5-2007 by TheBandit795]

Funny that no one really wants to do anything about these things until there is a real problem. If my car was a quart low on oil, I would fill it up, but using that as an analogy, it seems as if people would rather not be bothered and just drive it until the engine seizes up.

We recently had an representative from Morgan Stanley give us a chat on our 401K accounts (sort of a yearly pep talk to encourage new accounts), and the sales pitch was unbelievably full of lies. It was brought up that the markets are better than ever but what would happen if there was another market crash like before. It was like it could never ever happen again was the assurances. They said that the markets are programmed (electronic) to close if it swings wildy downward as a control measure, yet it wasn't explained that if the value continues to be worthless, how will they ever get the markets back up. We would still lose a ton of money whether the markets are protected momentarily or not. Yes, they are still trying to hype everything up until the last minutes.

We are going to go through a crash that will make the great depression seem like a slight dip in the road. We went from a surplus to a deficit almost overnight, that according to the GAO is solely the result of the bush tax cuts (they have gone on to say that even with the war, we would still have a surplus if not for those tax cuts) and have been burning the candle at both ends for way too long. Add into that the mass of those debts are owned by China and Japan and the refusal of both the president and congress to do anything meaningful about social security and medicare (the plan to privatize it doesn't count since it was nothing more than a ruse to milk more federal monies into bush backers hands) so when all those bills come home to roost, our economy will not be able to substain it. After all we may be the strongest militarily, but are no longer the economic powerhouse we once were.

What is going to happen is going to happen and is nothing that we can do to stop it right now, is too late.

Sometimes I wonder if the desire is for the economy to colapse so the elite can profit from the sell out that is to follow it.

Personally I don't take pleasure in this, as I'd really not have such a thing happen.

However, it is good that something is being said, perhaps than we can change things
to stop it from happening.


Honestly though, I'll be the first to laugh if we start a mild decline than go into an
unprecedented economic boom.

Originally posted by grover
We went from a surplus to a deficit almost overnight, that according to the GAO is solely the result of the bush tax cuts ...

hmmm .... it couldn't possibly be any fault of Clinton's because he spent money on the wrong things and lived off the fat that 12 years of Reagan/Bush gave him, could it??

Clinton - who used up the weapons we had built up and stored during the Reagan/Bush 41 years. He looooooved to shoot off those cruise missiles (after each Monica event) but he never replaced them.

Clinton - who emptied our strategic oil reserves and didn't replace them.

etc etc He lived high off the goods left behind by 12 years of Republican administration. Now we are having to replace those at greater expense.

Sure he balanced the budget ... because he starved the military and defense sectors .. and our INTELLIGENCE sectors .. to death.

However, I agree that we shouldn't be having tax cuts while we are in a war. We need to fund the war and cutting taxes doesn't do it. In times of peace, it would be great. But, radical Islam is going to be at war forever and I don't see how we can afford tax cuts while having to deal with them.

Originally posted by marg6043
What is going to happen is going to happen ...

Yep. I agree with ya. Higher powers than us - powers that we elected AND the real powers that run in the shadows - are moving economies and there isn't a darn thing we can do about it.



[edit on 5/22/2007 by FlyersFan]

Originally posted by FlyersFan

Originally posted by grover
We went from a surplus to a deficit almost overnight, that according to the GAO is solely the result of the bush tax cuts ...

hmmm .... it couldn't possibly be any fault of Clinton's because he spent money on the wrong things and lived off the fat that 12 years of Reagan/Bush gave him, could it??

Clinton - who used up the weapons we had built up and stored during the Reagan/Bush 41 years. He looooooved to shoot off those cruise missiles (after each Monica event) but he never replaced them.

Clinton - who emptied our strategic oil reserves and didn't replace them.

etc etc He lived high off the goods left behind by 12 years of Republican administration. Now we are having to replace those at greater expense.

Sure he balanced the budget ... because he starved the military and defense sectors .. and our INTELLIGENCE sectors .. to death.

However, I agree that we shouldn't be having tax cuts while we are in a war. We need to fund the war and cutting taxes doesn't do it. In times of peace, it would be great. But, radical Islam is going to be at war forever and I don't see how we can afford tax cuts while having to deal with them.

Originally posted by marg6043
What is going to happen is going to happen ...

Yep. I agree with ya. Higher powers than us - powers that we elected AND the real powers that run in the shadows - are moving economies and there isn't a darn thing we can do about it.



[edit on 5/22/2007 by FlyersFan]

First off flyer... the Reagan/Bush years left us with massive deficits not surpluses... that is a matter of record and easily verifiable.

Second of all... the so-called starving of the military...i.e. its downsizing after the cold war was a Republican idea, and started during the first Bush administration. The massive base closings began at this time as well, and continued well into the Clinton administration, but he didn't start either. Remember we won the cold war and began dropping assets like the Mujahadin in Afghanistan because we didn't need them anymore. Remember we were all supposed to get a tax kick back called the peace dividend. Again easily verifiable.

Third: The oil reserve has never been emptied. It has been used yes, but never emptied because the program is automatic... out of X number of barrels bought or produced X number is earmarked for the reserve. Congress set the amount we should have on stock (and has increased the amount a couple times) and so it is maintained at those levels.

Fourth: It would take more than a few BJ's from Monica for him to empty our stockpile of missiles.

Again, yes the military was smaller after Clinton's term but the process was begun under Bush senior, but besides that fact we are talking about relative terms, even at its smallest, we spend more on our military than any of our closest competitors combined.

I, too, believe the DJIA and market prices in general are heavily inflated. There are some superificial methods the heavily regulated markets try to control huge sell-offs. The one known about to most individuals is that the NYSE will halt trading if it drops 10%. In a really bad sell-off, that would only delay the invetiable, imo.

There are a few things that worry me:

1. Baby Boomers are retiring. When people retire, they slowly pull money from their investments for cash. Pensions work along the same method - the money coming from your 401k or pension is money that was once invested in stocks or bonds.

2. The population in the United States follows an upside down pyramid model in terms of age. There are much more older Americans than younger Americans. Thus, a lot more pulling out their investments than putting in.

3. Younger americans are less likely to invest than their older counter-parts. Wherein the most investments that younger americans tend to do is the money market of the checking or savings account (where they earn minimum interest for exchange of high liquidity).

It does not make any sense to me that we are seeing the record gains that we currently do. Prices seem very inflated, and the ever increasing nature of the market is something of suspect.

Yeah, it doesn't look good, does it?

Savings At Lowest Rate Since Depression

Americans Spent Everything They Made Last Year — And Then Some

Americans once again spent everything they made and then some last year, pushing the personal savings rate to the lowest level since the Great Depression more than seven decades ago.

The Commerce Department reported Thursday that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned but they also dipped into savings or increased borrowing to finance purchases. The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Great Depression.

More...

Originally posted by radardog


There are a few things that worry me:

1. Baby Boomers are retiring. When people retire, they slowly pull money from their investments for cash. Pensions work along the same method - the money coming from your 401k or pension is money that was once invested in stocks or bonds.

2. The population in the United States follows an upside down pyramid model in terms of age. There are much more older Americans than younger Americans. Thus, a lot more pulling out their investments than putting in.

3. Younger americans are less likely to invest than their older counter-parts. Wherein the most investments that younger americans tend to do is the money market of the checking or savings account (where they earn minimum interest for exchange of high liquidity).

To the guy up there that had a pep talk about his 401K...........think Morgan Scamley.
I think we are getting ready to experience a lot of changes in lifestyle, but the most drastic will be for the Gen-Xers and younger who don't seem to have a clue. This is our legacy to them, I'm glad I never had kids. If anyone has noticed, the age group who has amassed the greatest fortunes through greed are in the 40-70 yr age range. The American dream will be gone because if you aren't born into wealth, you can forget it...the divide between rich/poor keeps growing. The following is but one of the problems you will be facing.

The retired portion of the population will grow dramatically as the baby boomers slip into retirement over the next two decades. The Social Security Administration's Office of the Chief Actuary projects that the number of Social Security Old-Age and Survivors Insurance beneficiaries per 100 workers will increase from 25 beneficiaries in 2000 to 26 in 2010, 32 in 2020, and 39 in 2030 (Social Security Administration 2005, p. 55). While most attention has been focused on the projected increase in the number of retirees, the demographic composition of the population at ages 62 and over—the age at which people first become eligible to receive Social Security retirement benefits—will also be changing significantly. These demographic changes have implications for the well-being of future retirees.

Newly eligible retirees are increasingly better educated, but that will level off after 2012. Among those who reached age 62 in 1993–97, 27 percent were high school dropouts, 56 percent were high school graduates, and 17 percent were college graduates. In contrast, for the early baby boomer birth cohorts, who will be 62 in 2008–2012, 30 percent are college graduates and only 12 percent high school dropouts. These percentages will remain roughly constant for future birth cohorts through those that turn 62 in 2028–2032. Non-Hispanic whites are declining as a share of the 62 and over population and will continue to decline for the next few decades. Non-Hispanic whites were 82 percent of 62-year-olds in 1993–97, but are 79 percent of 62-year-olds in 2003–07 and will be only 64 percent of 62-year-olds in 2028–2032. The share of African Americans in this population will rise moderately from 9 percent in 2003–07 to 12 percent in 2028–32, but over the same period the share of Hispanics will jump from 8 to 15 percent and the share of other groups (including Asian Americans) will increase from 5 to 9 percent.

The portion of married or widowed among those eligible for retirement is dropping and will continue to drop. Between 1993–97 and 2003–07, the share of married 62-year-olds declined from 76 to 72 percent; in 2028–32, it will continue to decline to 66 percent. Shares of 62-year-olds who were never married will increase sharply from 5 percent in 2003–07 to 11 percent in 2028–2032. The share of divorced 62-year-olds has gone up from 10 percent in 1993–97 to 15 percent in 2003–07, but is expected to stabilize after the first baby boomer cohorts reach retirement age in 2008–12.



[edit on 22-5-2007 by Jillian_Bacardi]

Damn I am glad I am getting my social security disability now.

Makes me want to get fired and have 4 kids and live off of welfare. At least I would see some money that I've been putting in.

Of course I wouldn't do that, but just makes me wonder if I'll ever see any of this money I'm throwing at my IRA and 401k or see any SS benefits. I know I should have been thinking about these things 10 years ago. I'm 30 now and just starting to think about what I want to do when I retire. I know that's a little early to think about such things, but when you see only two-thirds of your paycheck and try to take out as much money as possible before the government takes theirs, you start to watch those account carefully. "Should I shift my percentage into foreign funds, should I leave them in high-risk/high-yeild?" Answer is: It probably doesn't matter. At the rate things are going, I probably won't see any of it anyway.

In these kinds of cases you have to follow the money. Try to find out who will be able to profit from the situation of a huge market crash. If that happens, stocks will be dirt cheap and will be bought up by someone. Follow the money and you will find out a lot about conspiracies.

Originally posted by TheBandit795
In these kinds of cases you have to follow the money. Try to find out who will be able to profit from the situation of a huge market crash. If that happens, stocks will be dirt cheap and will be bought up by someone. Follow the money and you will find out a lot about conspiracies.

There are more ways than that people can make money off of a crash.

Aside from the buying of puts (which was brought to the public spotlight in 9/11 conspiracy videos) you can...

Sell uncovered ("naked") calls. Basically you would be selling a contract to comeone to buy stock from you at a certain price. The contract is worth more to the seller if the stock price falls, and more to the buyer if the stock price increases.

Short Sell. You borrow shares from another individual's margin account, sell them, then buy-back the shares at a later price (hopefully a much lower price). Think of it like taking gold from your neighbor, selling it for $100, then a few days later buy the same amount of gold for $50, then give it back to your neighbor.


But as a disclaimer, even if you think the market will crash, both are very risky investment decisions.