the coming economic doom

reply to post by Karlhungis

Thanks for the headsup, Karl....From what you say, Q4 might now be so bad, but the forecasts for Q1 might be the thing that tips the whole thing over...

Nevermind, man...What happens, happens...We deal with it as it does...I don't think there is a whole lot you can do to prepare for a serious recession, if that is indeed what will happen...It might not be as bad as the one we had in the 80's (let's hope)...

I think yr right about #3, sadly One can only hope, eh ?

Peace out and don't sweat it too much mate

reply to post by DigitalGrl




while you've got time, go ahead an audit or elect courses that will have value in a military environment...
because as the economic conditions become worse, enemployment becomes the norm, a lot of service jobs will be non existant
But, hordes of americans will try to join the military, or security enterprizes
that will be needed to protect the remaining businesses & industry in the USA.

the future looks like "The Grapes of Wrath", (read the book, see the classic movie)
and 'enforcers' in the private sector and the military in the gov't sector will
be the two main employers, for the fortunate...
all the rest of us 'useless eaters' will be herded into those FEMA gulags.

Originally posted by Rilence
reply to post by Quazga

 

Wrong...

Consumers are responsible for their own actions, including obtaining and using credit...

Any suggestion otherwise smells a lot like deserting ones own obligations to one's self...

That is, you decided what you do and when you do it...

To blame banks for the spiral in consumer credit is absurd....

Individuals are responsible for their own situations with regard to credit (any many things in life), period...

Peace

EDIT -- to add

BTW, Dawn...I agree with you 100%...nice post

[edit on 22-1-2008 by Rilence]

Actually your thesis is incorrect. How do you mate animals? Do you wait for them to choose a mate? No, you put them in a cage with the opposite sex, and they do their stuff. Environment is *the biggest* factor in determining human behavior. Humans will always take wahtever currency is given them. What you call free will is simply automated responses based on efficiency and efficacy in the short term.

Not to wax philosophical, but this was the reason behind the warning by the Teacher known as Jesus to not sign anything. Because that's not the way animals survive.

Also keep in mind that it was because of this that Jubillee was created in past civilizations, otherwise the debt would become so suppressive that the entire civilization would collapse under it.

You can spout your "Individual is reponsible" theories all day long, but do some experiments, and you will find that the elements of a system are subject to the rules of that system and the environment is the key factor.

Let me give you an example. For years there were people who were told "NO" we are not giving you credit. So what happened in the minds of the people who applied? They came to the conclusion "I am not worthy of that money because I am not allowed to have it"

Then all a sudden the banks got real loose with it. They gave credit to people who had no business getting it, so now the people say "I must be worthy of the money because now I am allowed to have it"

have you ever Given childred free reign over their day? left them in charge of themselves? Watch what happens, they forget everything that si required to be done to ensure a good life, because "Responsibility" is not an inherent ascpect of humans, it is an adapted mechanism to survive in societies.


Yes I agree that any individual has the ability to rise above their environmental factors, but it takes much more will power than most people have. So you can sit there and say the whole world is stupid and irresponsible, or you can look at it like an economist, and understand that greed is the only factor that drives markets.

Originally posted by Quazga

Originally posted by ChrisJr03
Credit abuse is a major reason we are in this situation. The banks are not all to blame....

Excuse me... *Who* exactly financed the credit? Who encouraged us to take more, much more than we could ever safely have access to. Do you know that some animals will eat themselves to death on certain foods? Farmers have to be aware of this if they want to keep horses around. Banks also have to be aware of this if they would like to keep a "healthy" credit business going.

Instead they decided to go the shooting star route, which has brought this all down on their heads. So, I say, just desserts.

Yes, the banks may not be to "blame", but they are what caused it, end of story.

While there may be free and easy credit out there, at least there was, it is the consumer who decides whether or not to take on the card. If the consumer does, it is their responsibility to use the card correctly. Still, people are responsible when they charge up their cards and can't pay. The bank didn't say to them, "Hey, go charge up your card, you only have to pay the minimum, and then we'll charge you 20%". Thats another problem in this country, people pointing the blame at someone else other then themselves, it's never so and so's problem. Ya the banks are part of the problem, but people have to be accountable and responsible for their actions.

Still, people are responsible when they charge up their cards and can't pay.
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for the most part I agree, but even the law is open to the idea that more than one person or group can be responsible for something...thus the idea of co-defendents. I suggest here, there are many, many, "codefendents" sharing the blame, the creditor being one.

I would like to suggest another one, OUR GOVERNMENT, and in particular, our Social Service system! There is a small segment of our population who's income exceeds the guideline for eligibility for these programs, and yet, you can add the numbers us any which way you want, you will not find the money there to pay for there rent, the electricity and other utilities, heat for their home, healthcare for themselves and their families, clothing for the family (even if that clothing is coming from the goodwill), transportation to work, and all the other essential stuff. If the person facing forclosure bought that house initially because the payment was cheaper than the hud subsidized housing apt he was originally renting and could no longer afford, well....THEN OUR GOVERNMENT is partially responsible. IF the person ran up credit card debt buying medicine for his chronically sick child or himself, then the government is partially responsible. If he used it to buy clothes for himself to replace the holey clothing he's been wearing, then the government is partially responsible. If he used it to buy food, then the government is partially responsible. heat? same thing....and on and on. the urge to survive will always outweigh any urge to be "financially responsible"!
Fix that one injustice that is so commonly accepted in this country, and alot of the problems would be prevented.

[edit on 24-1-2008 by dawnstar]

Originally posted by ChrisJr03

Originally posted by Quazga

Originally posted by ChrisJr03
Credit abuse is a major reason we are in this situation. The banks are not all to blame....

Excuse me... *Who* exactly financed the credit? Who encouraged us to take more, much more than we could ever safely have access to. Do you know that some animals will eat themselves to death on certain foods? Farmers have to be aware of this if they want to keep horses around. Banks also have to be aware of this if they would like to keep a "healthy" credit business going.

Instead they decided to go the shooting star route, which has brought this all down on their heads. So, I say, just desserts.

Yes, the banks may not be to "blame", but they are what caused it, end of story.

While there may be free and easy credit out there, at least there was, it is the consumer who decides whether or not to take on the card. If the consumer does, it is their responsibility to use the card correctly. Still, people are responsible when they charge up their cards and can't pay. The bank didn't say to them, "Hey, go charge up your card, you only have to pay the minimum, and then we'll charge you 20%". Thats another problem in this country, people pointing the blame at someone else other then themselves, it's never so and so's problem. Ya the banks are part of the problem, but people have to be accountable and responsible for their actions.

When will you people realize that it's exactly that thinking which caused this mess!

For years people applied for credit they couldn't deal with because they were prompted by the TV "Buy this if you want to be worthy".

Look at the Inuit in Alaska. When westerners first went there, the people worked for their food and kept their traditions. As soon as TV was introduced, the younger generation changed overnight, they all wanted nike's and to look like barbie and had no desire to keep their traditions. The result? A wasteland of meaninglessness hangs over those people as they struggle to grab at the false promises of the Ad Industry.

Now back to the borrowers of today, wheras for years folks attempted to get loans, and credit cards but were denied, these applications eventually got approved by the banking establishment. People who don't have money also don't think long term and are not responsible enough to do so. The bankers knew this beyond the shadow of a doubt when they gave gave the loans, yet they didn't care.

Many studies have shown that people are *not* cost/benefit analysis engines. They respond to irrational drives, which do not make sense but happens anyway. This is why we have laws to begin with! Because people will respond irrationally.

This is one of those situations.

Think back to the Company Stores of yore. By your logic those miners should never have borrowed any food they required for their families from the company store. Yet they did.

Does anyone here every study sociology? Evidently not. Go on about your daydream world.

[edit on 28-1-2008 by Quazga]

…Go on about your daydream world.

I agree.

To whole heartedly believe that the consumer is to blame for doing what they do best (i.e. consume), you close yourself off to the grander scope of the situation.

In our current framework of society it would be nearly impossible for a person to scrape their way from nothing to having something of their own without at first, borrowing. You need to borrow first before you can own.

Unless you live in the wilderness, build your log cabin house with your own bare hands, farm, trap, hunt, barter and trade goods with others you may be able to achieve this goal, but it would be a hard fought and grizzled path.

If anyone wishes to live a little more comfortably, however, as we have all become accustomed to in this day and age, the concept of borrowing becomes a staple facet of survival in the modern society.

It is this concept that is inherent to the basic understanding of modern economics 101.

As anything is borrowed from someone else, it puts the lender at a dis-advantage because they are unable to now use the tool they loan, whatever that tool may be (hammer, car, boat, house, capitol, etc.). Since the lender would be doing a great favor to the debtor to borrow without compensation for loss of access to the tool for that period of time.

As an eventuality, even if the lender is extending the loan as a favor (i.e. with no compensation in mind) the lender will in fact incur a loss in this situation, where it be the time value, construction value, or investment value of whatever they have loaned to the debtor.

Therefore the concept of the "natural interest rate" comes into being. A rate which can be derived from any free market (free as in: "without regulation"; the U.S. economy would NOT be an example of a free market) that appropriately compensates the lender for the use value lost when an asset is loaned to a debtor.
=========

Economics 101 aside, in a society of comfort, such as ours when people tune in to television, walk down the street, listen to the radio, talk to their friends or family, they may become compelled to want or need something.

The situation to borrow arises when this person does not have the required capitol to purchase this thing outright. Therefore they seek out a lender, make an agreement with the lender to borrow x~ amount of capitol, and agree to pay back the lender in regular installments the total amount borrowed PLUS a standard rate to compensate the lender for the loss of access to the capitol during that time. Once both parties agree on an arrangement, a contract is struck, the lender is being compensated by interest, and the debtor has the thing for which he/she desires.

This would all be fine if the debtor finds that their income levels and their spending levels leave enough room for the newly acquired cost of financing their purchase. Even the most un-encumbered or un-educated consumers have little problem understanding this concept, and seem to deal with it with relative ease.

A hidden problem arises however when the costs this person is expending on daily living expenses begin to rise when at the same time compensation remains stagnant, or rises at a level slower than the increase in their cost of living.

Even the savviest consumers do not account for this hidden force when they borrow, and as we are now seeing it's starting to put pressure on consumers where they have never felt it before.

So what do the consumers do to temporarily to try to alleviate this problem? They ask for a raise, or apply for a higher paying job.

And so the business cycle begins. Wages increase, but companies are slowly forced to raise costs; eventually trickling back to increases in the cost of living for all.

But why in an economy would the cost to produce a loaf of bread one year be different than the previous?

Supply and demand influxes aside, The banks and the Government are solely to blame as this driving force is called:

INFLATION.

Originally posted by DigitalGrl

im not grasping how this is actually going to effect me. can someone please explain how all of this is going to effect the average citizen like ME? what will be visible changes that i will see? what aspects of my life will actually change?

not really sure ifyou an access this WSJ article, from this link:
online.wsj.com...
(well it works for me... but i've got an account...)


the economic mess will affect you because,
the Bank you have an account with will likely 'go-under'
your savings & checking monies will be replaced by the FDIC in a few months --- in themeanwhile ou won't have a bank debit card, or a place from where your MC or Visa or DinersClub card can get paid from---

so they too will close (at least temporarily) your credit card purchasing ability.

anytime from this summer of '08 to the winter of '09 the Treasury
is expecting more than 100 banks to go bankrupt.
with that the whole economic world system of credit/trade (as we know it right now) will change dramatically.


the dollar decline will result in much hgher commodity prices-
especially food & fuel... the well heeled will be the only ones to continue their education as all types of grants & student loans go the way of the DinosauR....

i don't think need to go on.... your a 22 yo coed

This is scary stuff.

The FDIC will in no way be able to handle the bank runs people will be making.

According to the guys who have been reassembling the M3 data after the FED stopped producing it in 2006, M3 is currently at just over $13 trillion:

www.nowandfutures.com

This means there is essentially $13 trillion in "cash" in the market right now, and the number keeps going up. The higher this chart goes the more worthless your dollar essentially gets.

Better start bank running now. Buy gold/silver coins, and ask your employer to start sending you checks in the mail instead of direct deposit. Or just make a withdraw every time you get a paycheck.

The scam of Fraction Reserve Banking in this country dictates that banks only keep on demand 10% of deposits, and because of the scam known as FDIC Deposit Insurance, they actually only have to keep on demand 10% of that. This ultimately boils down to 1% of deposits on demand, effectively.

See this short article by Murray N. Rothbard of the Von Mises institute for more detail on the implications of these practices:

www.lewrockwell.com

This is where ALL of the problems stem from. Fractional Reserve Banking is a scam no matter how you slice it.

And what we are currently getting in the market is was happens when fractional reserve banking fulfills it's self imploding model.

The Government and the rich (and we can't forget about China, India, and the Middle East, etc..) get to buy up properties and businesses for pennies on the dollar.

The people currently in power appear to be driving us into this as fast and as forcefully as they possibly can. The Fed is not cutting rates because they think it will help, they're cutting rates because it will only make more severe the recession to come.

This new recession appears to be headed for a full blown depression, and the coupling of the housing market, currency market, and the looming peak oil crisis will coincide together to create a world depression the likes of which the planet has NEVER seen.

If you think I'm wacky for crying the "Sky is falling" all I have to say in return is: you better put on a rain jacket and get an umbrella. I hope I'm wrong too...

reply to post by Hamking


You've got a good handle of the 'bad-to-worst case scenarios'

but like yourself (i hope), i'm trying to envision the future real-time
scenario in todays language...

for example, there won't be a total economic collapse of the fiat money system - at the onset -
and there won't be a reversion to total money exchange in only gold-&-silver coin - at the onset -
the black market and barter economy won't take over the American way of life - at the onset -

all these end results will occur.... After, the Federal Reserve loses all the trappings of authority/leadership/credibility...as they cause hyper-inflation
because of their need to 'rescue' the elite bankers at the expense of the masses & specifically the ~middle-class~