Originally posted by Rockpuck
Am I dreaming?

Yes.

Now what?

If the article is correct, then yea THE FED (not government) should be increasing money supply. If there is a low money supply it leads to recession. Basic economy fact. Government really should not be doing the fed's job though because the fed most likely knows more of what is going on.

This is interesting and confirms my suspicions.

1. It has become apparent to me that the contraction in our credit aggregates cannot be slowed or reversed by ANY amount of printing. Which means deflationary pressures are coming(I'm actually happy about this because I have a lot of cash, no debt, and a store of silver).

2. My fear of out of control inflation, however, stems from the fact that once the EU collapses along side the US, our creditors are going to want their money, and we may wind up getting flooded in a sea of our own cash should the rest of the world start calling in our debts.

Or we will just default and possibly go to war.

[edit on 27-5-2010 by projectvxn]

Personally I would like to have seen at least one Gov along the way go down the Wealth creation route.. but how do you convince your creditors that it's cool to compete against them and from their perspective steal some of their wealth..

We seem to be circling the drain on that one issue.

It seems to my untrained and simplistic eyes that without wealth creation we are stuffed and with wealth creation we are stuffed, while the establishment is between a rock and hard place with only a few options available to handle the mess we are in.

Until I see some new tech that brings enough change to create enough revenue streams to make a dent in this debt I can only conclude that conflict is the only outcome.

Either via internal protests at the Tax hikes, service cuts as part of any repayment plan, or some external conflict involving a handy scapegoat, that allows the establishment all the emergency legislative tools that come with large conflicts.

Personally I can not see the establishement allowing the internal machinations of their gov to be undermined and indeed given the threats in response to the bailouts, their heads literal appear to be on the line, so I can only conclude an external scapegoat will be found (there appear to be a few already set up for any fall)

If you look behind the Falklands issue (threats of war) etc, your see the Establishment propping up the Argentine economy, even while the threats of conflict flew around a British bank was appointed to manage the soverign debt issues in Argentina..

They really do not need another Greece running rampant in South America.

That approach clearly demonstrates (to me atleast) the desperation that is running behind the scenes at the moment and I have to wonder how many more bailouts, and how many more last throws of the dice those in power have left before the true extent of the issues become visible for all to see.

Originally posted by Peruvianmonk
It is absolutley vital that a fresh stimulus package is passed through Congress. Without one the U.S. and world economy will plunge in to a deeper recession.

The problem with that is that those who caused economic problems in the first place will retain their position.

A fresh stimulus is just a bailout. Sure its just printed money and more money can be printed until infinity.

The real problem is that trust an faith are very important in this economy. There will be a point when people lose total faith in the government, who keeps maintaining economic corruption via bailouts.

Look who gets the bailouts, it is either the failures or the guys who had a big hand in this economic mess. Look at the Wall Streeters, Fannie and Freddie, GM, Greece, these people should BE CLEANED OUT OF THE SYSTEM and they SHOULD ROT AWAY instead of being preserved. They are FAILURES who happen to have the ear of the government.

But these bailouts are protecting the biggest failure of them all, the true rot in our system. The bailouts are protecting the Fed. Our banking system is unsustainable.

The moment there is deflation, and allowed to take its course, many institutions that have been driving Americans into the pits of debt and economic malaise will be destroyed. The Fed, the top of that pyramid is going to have to fall and people will hate debt based fiat currency for generations.

Sure it is a big change and there will be societal pain, but it is going to happen anyways only a lot more painful if time goes on. The point of recessions and depressions is to clean out the excess and rot from the economy. The point of bailouts is to preserve that excess and rot. Why is it that unions , Wall Street execs, and government workers get the big bucks and benefits while the average American gets hosed with taxes or wallows in unemployment?

The choice is simple. Bailout the rot, or purge the system.

Duplicate post, created when editing?



[edit on 27-5-2010 by sligtlyskeptical]

The real problem is the fact that we don't simply print the money. We have to lend it into circulation. The only way out of this is a huge public works program paid for by dollars that are printed by the treasury leaving the Federal Reserve out of it. Let's put everyone that needs work, to work, and at the same time solve the M3 problem.

Inflation? We have a long ways to go before this would result in any inflation. If we do enough of it we just may prevent major deflation. I think we could do it indefinitely without inflation as long as the work being done was actually productive and leverage in the financial system was kept to a minimum.

If the big money conservatives don't want it to happen then you better start coming up with many millions of decent paying jobs before saying squat.



[edit on 27-5-2010 by sligtlyskeptical]