U.S. Economy : Financial System Bankrupt --What's next?

Good post. I would add only one thing. We are the consumers so when we go so does China and many others. They are only fooling themselves if they think that they will not fall with us. No customers = no factories = no jobs. You cant eat mass produced toys and electronics when you are starving. I guess a guy could try to eat their car seat but without some good steak sauce it would be pretty bland.

Originally posted by RFBurns
Well renaming Great Depression to Great Decline doesnt make it any different, its all the same thing.

Window dressing the truth only makes the situation that much more difficult in the long run. Call it for what it is and not shower it with false impressions and misleading descriptions.



Cheers!!!!

[edit on 17-12-2008 by RFBurns]

No, it is not the same thing. A depression is something that can be addressed with policy and investment over time. A decline such as the one I predict is not so easy and goes on for generations. And this very scenario will have huge consequences on world stability that may spark a world war. A depression does not have to spark a war, but a long term and painful inflationary depression, like the one we're about to face, cannot be cornered as easily. Our policy makers are a bunch of crooks who will prosper in the coming decline while the rest of the country goes through generation after generation of economic and socio-political instability, with massive decline in the modus vivendis of the population as a whole. Again over many generations. Though 3rd world status will hit us immediately after the bubble pops, I suspect that from that point forward we will continue to see the quality of life decline substantially for many decades to come..
And the reason for that is a lack of internal competition between numerous producers of consumer goods in the US. We have nothing to start with and until we get our heads out of the sand and realize that the lack of domestic industrial competition is what is killing us, we won't prosper.

What we need to do NOW is impose EXTREMELY high tariffs on ALL foreign goods that are saturating the market today and creating an artificial-demand bubble that is crippling wages, and will eventually force the bankruptcy of the US. And when the bubble pops(And it hasn't yet) it will be disastrous for many years to come.

Once we impose these tariffs on foreign goods then we can lower the income tax to a manageable rate, foster competitive production in the US, which will raise our wages, and as long as production and wages keep up with demand and vice versa, we should continue to experience growth at a reasonable rate. Tax it to the point it becomes cheaper to produce it here again and you will spur massive industry booms that will be SUSTAINABLE and less wasteful of resources.

The problem with American economics is that they confuse profits with stability and free trade with free market. Free trade is what caused our current trade deficit, that along with massive foreign money creates a debt-liable economy fully exposed to any market disparity, and such creates its own as well.

Profits and share values does not translate into economic stability. Often these two are created in bubbles and over time, as the speculative bubble become greater and artificial demand is made more pervasive, the economy then exposes itself to devaluations of currency and massive joblessness. We need to set aside the bubble economy and see it for what it is, Anti-free-market.

A sustainable economy depends on internal production with massive competition fostering demand, as long as wages keep up with production, there will always be demand. And a government that enforces it's regional, and national monopoly laws(anti-trust laws) will be fostering a competitive environment needed to perpetuate prosperity in a free market system. In these conditions foreign capital investments are good because they finance internal competitive production and the investors see consistent returns.

When the market shoots up %900 in just a matter of months you can bet that it is sustained by a speculative bubble and it won't last. The larger the bubble the more pain is caused when it pops. This is not sound economics, and yet since the 1970s this is the path we have pursued to our detriment.

The bubble inflating right now is on the verge of popping, and it is the MOTHER of all Bubbles and will cause the downfall of this nation as a national player on the economic stage. We will see far more oppressive government in the near future and this will continue for a very long time to come. Such is the difference between a 1930s depression and the Great Decline we will see permeate in our lifetime, but not the end.




[edit on 19-12-2008 by projectvxn]

reply to post by Blaine91555


while i read this type of response all of the time, it makes me question a couple things. Mind you these are just questions, i am not necessarily disagreeing with you;

What do we offer china other than consuming there goods?
They have huge reserves of money, remember they are a creditor and we are the debtor. And we are using the money they borrow us to buy their goods, putting us in debt to them. Without us all they need are other consumers, there is a whole world out there that is not as evolved as our country. All they need to do is turn their interest away from us and look towards continents and countries that need to be advances do to speak. Not every country out there have every family with multiple tv sets and computers and iphones and all the other that has become the norm here in america.

[edit on 12-22-2008 by William One Sac]

one must always remember that we are the worlds largest producers of food. by us having the land and the know how this puts us at a great advantage. we supply the world with most of the food it buys. this is one of the reasons i think we have the upper hand. it is also time to start changing our inforstructer in the U.S. and start to go back to being inovators instead of being immitators. we use to be first at the best technology now i don't even think we rank.

Originally posted by helltick
So what are we supposed to do? I live in western canada but know we are just as f**ked. I'm a 35 year old father of two, own my house (with mortgage), still have a full time job (45k per year), wife works full time (30k per year).

I'm well aware my lifestyle could be in for a serious rude awakening in the new year and we live pretty humble...no cc debt, still driving late 90's vehicles, house was bought 10 yrs ago in a buyers market (cant rent cheaper than our mortgage around here).

Since june i've invested around $4500 in emergency supplies, 150 Watt solar array, 3000 Watt generator, Fuel, First aid, Good non perishable food for damn close to a year, defense, propane burners, heaters, lanterns, etc..

Its posts like this that I'm so glad I found this site and have prepared for atleast a little for whats about to come.
I think every family should prepare for atleast 1 year of self sufficiency.

You're smart and doing everything you can do and I hope you and your family will be ok. There's nothing wrong with preparing.

I'm beginning to agree with the guy I buy my ammo from. That we're going to be facing a 'Mad Max' type of scenario in the near future and those who will be best off are those that form small villages or communes where a small community pools their resources and talents together to work and live together and defend each other.