T Nation

In Denial About the Economy?


#1

I've noticed very few threads about the economy here lately. Gums Magoo tried to fire one up but there was little interest. Are we in denial?

Anyway, if we go by the numbers, we are entering a Great Depression at least as bad as the 1930's. The only difference is that the government is throwing paper money around at a rate that makes GW Bush look like an amateur. This seems to be easing the process, like entering a very hot bath very slowly. But of course we ARE still taking a bath.

"Job losses result in foreclosure 15% of the time and if the monthly average of 570,000 in the first quarter falls to 325,000, almost 3 million jobs will be lost by yearend and another 450,000 foreclosures and an unemployment rate of 11%. Experts say another 7.8 million jobs will be lost by the end of 2009, and industrial production will fall another 17%. This would cause the loss of 5.1 million more jobs as opposed to 2 million.

Industrial production was off 12.8% yoy, as capacity utilization fell to 69.3%, the lowest since records began in 1967. At the same time the amount of excess capacity utilization is unprecedented. Never mind lost jobs, the economy has to create 125,000 jobs a month just to absorb new entrants into the labor market. It will be at least six years before employment will grow again under the best of circumstances. We are already in a depression as bad as in the 1930s.

The elitists continue to throw money at the problem and after 75 years of going to the well, the debt structure is unsustainable. That is with many years of inflation. We all know as professionals what has to happen as a result of these policies. Then to add to the madness some economists have suggested negative interest rates. The act of the Fed lending money and paying you to borrow the funds. This supposedly would increase economic activity. The theory is for the Fed to increase inflation, which would make cash trash and force people to spend. There is a problem with that theory other than it wonâ??t work and that is people can buy gold and silver with their depreciating dollars. Even if they do not go up theyâ??ll hold their value, something the dollar wonâ??t do under those circumstances. All current problems can be traced to low interest rates and unsustainable levels of borrowing and spending. This theory in the long run increases the problem and causes further monetization. Such ideas as usual emanate from Harvard, that seat of illuminist intellectual power, the August hub of learning, which bestowed a masterâ??s degree on that idiot George W. Bush. Am I happy I chose Northeastern instead."

http://www.marketoracle.co.uk/Article10554.html

Discuss?


#2


Short-term recovery on the way? The BDI is considered an excellent gauge.


#3

I feel your pain HH, nobody wants to play with me either and I cried myself to sleep last night... I guess everyone is too busy watching American Idol.


#4

the problem is there is nothing to discuss. There is no escaping some sort of collapse.


#5

I don't disagree that the economy is in the toilet. I think people make the mistake of thinking very locally or nationally about the economy, of course this has all shifted to a globalized system. Actually this idea that this is a globalized system has made this current economic downturn quite different from the past.

Think about how banks from Iceland effect local municiple bond issues by backing the bonds and then failing. The international banking system is so interconnected that when one explosion goes off it injures everyone else. For example, people were complaining about the amount of money pumped into AIG.

Truth is AIG through its CDS contracts is a mechanism for distributing cash into the banking system throughout Asia, the US and Europe. The US taxpayers finacial stake in AIG is worthless...AIG will be dismantled when this is all done.

Back to my point about this being a global problem. As bad as you think it is in the US and how inflation or some other economic boogey man will destroy us, remember for as bad as it is here it is much worse in the rest of the world. The US will pull out of this first and that will be the critical time to really analyze goverment policies, as for as much as we are spending now we will need to save/cut cost as we come out of the woods.


#6

Rest assured comrades. Our Dear Leader will save us.


#7

That's probably true. Having an economy based on ever-increasing debt levels HAD to end someday. The question then becomes: what can be done? Will the USA itself have to declare bankruptcy and cancel/renegotiate all debts, similar to the Chrysler and GM bankruptcies? What happens to all those who depend on government (like old people)? How will we police our cities and states as they go bankrupt?

Wow, this IS a depressing thread. Let's all go over to SAMA! :wink:


#8

This is the lie that Obama and Bernake want you to believe. Many countries like Australia, New Zealand and Canada are poised to benefit greatly from a coming commodities boom. China will continue to grow as they move away from U.S. treasuries and the new found wealth of their citizens is turned inward to stimulate their own economy.

Inflation is real and it is definitely coming down the track towards the U.S. Obama is socializing American industry, increasing debt by the trillions and the Fed is debasing the dollar at an alarming rate by cranking up the printing presses... a massive correction (depression) is the only way out.


#9

What you fail to understand is that Obama is the first black president. We will brave the waters, embrace the burdens of our past without becoming victims of our past, and reject the politics that divide in order to create a more perfect union.


#10

I hope he can also multiply fish and wine because that could come in handy.


#11

The way I see it we could get da gubbamint out of the economy and have a short term recession or just keep going the way we are and have a total collapse.


#12


Obama is black? I wasn't sure, all those politicians look the same to me.


#13

Is it just me or is that one creepy picture. Got a chill in the spine from looking at it. Weird.

V


#14

can someone photoshop that pic with a Blagojevich hairdo?


#15

And now you know why nobody wants to talk about it. :slightly_smiling:


#16

I agree its a pretty sad state of affairs. The days of peak oil are about over, despite what any government will try to say about their reserves. The population is increasing, far beyond the point of sustainability.

I'm pretty things will fall apart slowly but surely, maybe over the course of the next 100 to 150 years. The cost in human tragedy will be enormous, and sooner or later we will living in little tribes, isolated communities, and city states. Not right away, but a gradual decline as we run out of money, fuel, then food, and clean water.

What we are witnessing may very well be the start, and the next 10 years or so will dictate if we are going to recover or continue down the long process of decline. My money is on the decline, as much as I would like to believe otherwise and get back to the normality of my somewhat profane existence. If we do manage to recover, it won't be for long unless drastic changes are made to the way people live their lives.

Its sad, but true. The past 30-40 years have been quick fixes and instant solutions, that really just fuck us over for the long term. I'm convinced near to 70% of the population is unaware, either intentionally or unintentionally, and most of those that do know, have very little idea of what to do about it.

Another sad fact is people are looking to Obama and the government for help, when they should be making changes to their lifestyles, beliefs about the nature of the world/economy/current culture, and preparing for the inevitable.

This includes brining energy consumption down to a sustainable per capita level, mainly through going without as no renewable/sustainable energy source exists at this time and Moore's law won't save us either. It applies to transistors on a microchip, not the production of energy sources. Plant a garden and learn some skills, preferably ones that can be exchanged for goods and services, as money will be worthless soon enough. Study some traditional forms of medicine, learn the medical functions of herbs and whatnot, as medical care will likely be gone as well.

I don't really like going down this road, but it looks like there is no other way around it and things will probably be fine for the rest of my lifetime, but my children, grandchildren, and great great children will probably see the worst of it.


#17

Solid post. You pretty much summed it up the way I see it, buddy.


#18

Maybe a more suitable analogy would be to say it's like trying to cure a bad hangover with a generous serving of "the hair of the dog that bit you".


#19

Oh no, the economy is fucked. Fucked in the ass via a piledriver.