[quote]Big Banana wrote:
I understand your view but disagree. It aint owed until its owed.[/quote]
I agree. Your kids are not born with college debt just because at some point they’ll go to college and be in debt because of it, or because at some point they’ll have a mortgage.
Social security could go away tomorrow: you never know.
[quote]Gettnitdone wrote:
John could you summarise (or expand if you would be so kind) the points raised in that video of Mr. Maloney for those of us who aren’t well versed in this stuff.
Very interesting.[/quote]
The treasury issues bonds, the Federal reserve prints money to buy the bonds, the money then goes to the government, paid to the workers of the government, Goes into the bank. THe banks have a certian amount of the money they have to have on hold, then through fractional reserve, which in the simplest terms mean if they have 100 dollars in the bank they can with a 10% reserve ratio “take” $90 and use it for a loan. Now the original guy still has $100 in the bank, so on the banks balance sheet it looks like there is $190. Now lets say that with that $90 dollars and since it was a loan buys something else. Now we have $270 on the books, but still only $100 in the original deposit. So you see with a 10% rserve ration.
This is how credit cards work, the reason you get raped if you are just one day over is you can see just how fragle this system is.
Now when people stop taking out loans because they are broke/banks just went through bancruptcy so wont make loans it causes people to start paying back their debt. Now when the debt gets paid back the M3 money supply shrinks. Now with supply/demand we can see less dollars in the system means they buy more. Which means things “cost” less. But the debt you have incured doesn’t go down, so infact you are paying a whole lot more then you originaly where planning.
This video he did was before QE2, Now Maloney and I disagree on the next step. He thinks it doesn’t matter how much Base money(actual money think the $100, M3 is the %270) you put in deflation is going to happen, then through the fractional reserve lending we will go through hyperinflation.
850 billion through fractional reserve lending turned into over 13 trillion, think about how much 3 trillion base money will turn into.
[quote]Spartiates wrote:
[quote]Big Banana wrote:
I understand your view but disagree. It aint owed until its owed.[/quote]
I agree. Your kids are not born with college debt just because at some point they’ll go to college and be in debt because of it, or because at some point they’ll have a mortgage.
Social security could go away tomorrow: you never know.[/quote]
True, and Jesus could come back tomorrow, I have more faith in Jesus coming back tomorrow then I do of Social Security going away.
My dad told me when I was 9 that I was already in debt because of college. Then again we may have just descovered my love of economics.
[quote]John S. wrote:
[quote]Spartiates wrote:
[quote]Big Banana wrote:
I understand your view but disagree. It aint owed until its owed.[/quote]
I agree. Your kids are not born with college debt just because at some point they’ll go to college and be in debt because of it, or because at some point they’ll have a mortgage.
Social security could go away tomorrow: you never know.[/quote]
True, and Jesus could come back tomorrow, I have more faith in Jesus coming back tomorrow then I do of Social Security going away.
My dad told me when I was 9 that I was already in debt because of college. Then again we may have just descovered my love of economics.[/quote]
I have no doubt Social security will go away. The day that I retire.
Yea once your in debt its takes a hell of time getting out, some people like it that way whoever controls the money controls everything else. This is nothing new though the US has been going farther and farther into debt.
Would anyone be terribly surprised if we see the end of the U.S. democratic republic in our lifetime?
PE ratios and dividend yields are screaming ‘Sell’. I had a thread on this a few months ago and the market has gone up, making those things even worse.
Think about it: the yield now is around 2% and the PE is at least 15 or 16. The only way the market goes up a lot is if yield falls below 2% and PE goes above 20. The probability of this is quite small – those values are more suitable to years 1966 or 2000.
[quote]RyuuKyuzo wrote:
Would anyone be terribly surprised if we see the end of the U.S. democratic republic in our lifetime?[/quote]
Liberals created a system premised on paying for programs out of an ever-increasing pie. Obamacare is premised on us being able to pay for it from a vibrant and growing economy. They supposed America would be the dominant world economy and we’d be loaded with cash forever.
Nope.
[quote]Headhunter wrote:
PE ratios and dividend yields are screaming ‘Sell’. I had a thread on this a few months ago and the market has gone up, making those things even worse.
Think about it: the yield now is around 2% and the PE is at least 15 or 16. The only way the market goes up a lot is if yield falls below 2% and PE goes above 20. The probability of this is quite small – those values are more suitable to years 1966 or 2000.[/quote]
I agree I think we will see a correction this year for sure. When the state bond bubble pops the comercial real estate bubble should go with it.