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Posted By: Larry
Date: 2008-10-17 14:03:58

I call it Communism:

[link edited for length]

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Posted By: Master C
Date: 2008-10-17 14:15:32

Dear Gary,

You're Henny Penny ~ "The sky is falling!  The sky is falling!"

We've heard all this many times before; the end of Capitalism, blah, blah, blah.  It used to be Khruschev who was pounding the table with his shoe announcing the near end of capitalism.

This is a BIG, HUGE SYSTEM of government that can do whatever it takes to ensure its survival.  If you want to run and hide in the woods, go ahead.  But, there are wolves and bears out there.  Sometimes they're more dangerous than a lot of DEBT!

Master C

 

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Posted By: daddysteve
Date: 2008-10-17 15:25:24

You mean "mortgage backed securities" shouln't be consi dered assets?  Debt isn't the same as savings? Promises to pay aren't real wealth? Printing money won't make us richer? This will never fly with the sheeple.

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Posted By: Dirty
Date: 2008-10-18 00:35:37

What we've had for a long time is socialism for the benefit of big corrupt corporations.  That's not capitalism by any twisting of definitions.  Lots of times I hear the talking heads on TV, radio, and print say "capital" when they mean "funds."  I've heard this so much that I don't blame people for not knowing the difference.  It's almost like they do this on purpose as some sort of disinformation propaganda.  If real capitalism were being practiced in the US, these big corrupt corporations would die hard to the better producers of wealth within 15 years.

Capital is physical stuff that can make other stuff.  Capital is not "assets."  Capital is not "money."  Capital cannot be "injected."  Capital is not anything but physical stuff that can make other stuff.

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Posted By: Republicae
Date: 2008-10-18 15:07:00

Gosh Master C….

Since you appear to ignore the facts, this government has been, according to its own GAO reports, technically bankrupt for the last few years and now, according to the latest GAO report it is moving into an effective bankruptcy. The GAO states that there is absolutely no possible way for this government to continue at the same levels as it has for the last two decades. In fact, if you read the former reports from the former Comptroller General of the Government Accounting Office you will find that he stated categorically that it would take a 75% reduction in government services coupled with a tax on all income of over 100% just to ensure there would not be a total collapse of the system.

So, instead of taking definitive steps in reducing its expenditures and increasing its debt; this government is pushing ahead full force into a very uncertain future. In fact, it has not altered its direction or the speed at which it heads in that direction. Amazing ignorance!

So, the FED is doing exactly what they FED does: recklessly flooding the markets with “liquidity”, the very thing that helped create this problem in the first place. I have to wonder if they have ever really realized that eventually DEBT DEMANDS SERVICE. Anytime a society allows debt to create its money, there is a very interesting mechanism involved, especially since debt usually represents future payment and therefore future potential earnings.

So, debt, once it is created or used, has a very definite CLAIM on future earnings from future payments. Now, since the very instrument that is used to repay debt is, in itself a debt instrument that was created solely through the creation of debt all future earnings are also debt instruments unless they can be settled through the use of real capital. Strangely, over the decades the definition of DEBT has been transformed from a liability into an asset, but it is an illusionary definition for all debt is an obligation, a liability that can never truly be transformed into an asset. Since our money is created by and made of DEBT, it will always place a demand upon future earnings when it comes to repayment.

Our entire economy is based upon debt money creation and a particular type of liquidity that must flow down and through the banking system to be effective as an economic stimulant as debt is created. What is happening now with the FED/Treasury injections of liquidity in order to form a type of “mezzanine carry” for illiquid or defaulting debt cannot have an actual stimulating effect on the overall problems facing this system. Since the total debt creation is not restrained by any significant savings within this country, the debt is free-flowing without actual asset capital to back it up.  

With each bout of excessive debt creation, whether it be a monetary or credit expansion, there will continue to be a drawn out systemic failure within financial institutions, banks, commercial paper, so called-asset-backed securities, credit default swaps and let’s not forget derivatives. The entire money model is based upon debt and the expansion of debt to increase economic growth, that can only continue as long as the debt is trumped by growth, which it hasn’t been for almost two decades.

So, keep clinging blindly to a dying system Master C, it will become very evident to you in time, in a short time in fact. 

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Posted By: Republicae
Date: 2008-10-18 15:53:32

Gary Lee....

At this point, many things can happen but it appears that there will be a continuation of mounting problems with some extreme issues appearing globally by mid-2009. By that time we should see a massive, truly massive drain on capital from our country and the enormous debt will require servicing; the question will be if this country will be able to service that debt? Now, it is easy to see that the sharp decline in the U.S. Stock Markets have had a relatively temporary effect on the U.S. Dollar on exchange, but not enough to cause investors to take a serious look at buying Dollars; for the time being it appears that the Euro will have a better chance at drawing the attention of countries as a potentially safer haven than the Dollar.

Now, the U.S. Debt is multiplying exponentially and it is becoming obvious that the debt is beginning to siphon off viability from the economy, giving this country few alternatives economically. Additionally, since the FED/Treasury have decided to take some very extraordinary steps, it appears that it is simply blindly following the only path that it understands, and is injecting unbelievable amounts of money into circulation there will be a very definite inflationary effect from these actions, the question will be if it is just high double-digit or will it be hyperinflationary in nature.

The government’s “solution” may be the straw that broke the camel’s fiat back and it will prove extremely temporary because it never addressed the fundamental problem only the symptoms. I give the temporary status to the “fix” a few months before it is fully evident that it not only didn’t help, but increased the velocity of the downward spiral. Let’s face it, in the last month domestic banking institutions have done something they didn’t even do during the Great Depression, they have “borrowed” nearly a half a Trillion Dollars. Couple that with the fact that since January of this year, the “non-borrowed reserves” of U.S. Banks has not only hit zero, but has dropped below a negative 100%, a first in the U.S.

Now, as the global “recession” begins to have a chain effect throughout the global economy, the U.S. will suffer even greater dislocation. As there is a global effort to divert this “disaster”, the fact is that they will simply speed up the process as governments, like our own, inject mind-numbing amounts of debt-money into the system, further stressing an already overburdened system of debt. There will be a increased marginalization within the system and with that will come a greater instability within it and at that point all the so-called “recapitalization” in the world will not be able to reverse the spiral.

 

 

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Posted By: Republicae
Date: 2008-10-18 17:13:22

Here are some very interesting quotes from history:

 

"We will not have any more crashes in our time."

- John Maynard Keynes in 1927

 

"I cannot help but raise a dissenting voice to statements that we are living in a fool's paradise, and that prosperity in this country must necessarily diminish and recede in the near future."

- E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928

 

"There will be no interruption of our permanent prosperity."

- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

 

"No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment...and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding."

- Calvin Coolidge December 4, 1928

 

"There may be a recession in stock prices, but not anything in the nature of a crash."

- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929

 

"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months."

- Irving Fisher, Ph.D. in economics, Oct. 17, 1929

 

"This crash is not going to have much effect on business."

- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

 

"There will be no repetition of the break of yesterday... I have no fear of another comparable decline."

- Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929

 

"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices."

- Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929

 

"This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."

- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

 

"Buying of sound, seasoned issues now will not be regretted"

- E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929

 

"Some pretty intelligent people are now buying stocks... Unless we are to have a panic -- which no one seriously believes, stocks have hit bottom."

- R. W. McNeal, financial analyst in October 1929

 

"The decline is in paper values, not in tangible goods and services...America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin."

- Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929

 

"Hysteria has now disappeared from Wall Street."

- The Times of London, November 2, 1929

 

"The Wall Street crash doesn't mean that there will be any general or serious business depression... For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game... Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before."

- Business Week, November 2, 1929

 

"...despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation..."

- Harvard Economic Society (HES), November 2, 1929

 

"... a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall."

- HES, November 10, 1929

 

"The end of the decline of the Stock Market will probably not be long, only a few more days at most."

- Irving Fisher, Professor of Economics at Yale University, November 14, 1929

 

"In most of the cities and towns of this country, this Wall Street panic will have no effect."

- Paul Block (President of the Block newspaper chain), editorial, November 15, 1929

 

"Financial storm definitely passed."

- Bernard Baruch, cablegram to Winston Churchill, November 15, 1929

 

"I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress."

- Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929

 

"I am convinced that through these measures we have reestablished confidence."

- Herbert Hoover, December 1929

 

"[1930 will be] a splendid employment year."

- U.S. Dept. of Labor, New Year's Forecast, December 1929

 

"For the immediate future, at least, the outlook (stocks) is bright."

- Irving Fisher, Ph.D. in Economics, in early 1930

 

"...there are indications that the severest phase of the recession is over..."

- Harvard Economic Society (HES) Jan 18, 1930

 

"There is nothing in the situation to be disturbed about."

- Secretary of the Treasury Andrew Mellon, Feb 1930

 

"The spring of 1930 marks the end of a period of grave concern...American business is steadily coming back to a normal level of prosperity."

- Julius Barnes, head of Hoover's National Business Survey Conference, Mar 16, 1930

 

"... the outlook continues favorable..."

- HES Mar 29, 1930

 

"... the outlook is favorable..."

- HES Apr 19, 1930

 

"While the crash only took place six months ago, I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us."

- Herbert Hoover, President of the United States, May 1, 1930

 

"...by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent..."

- HES May 17, 1930

 

"Gentleman, you have come sixty days too late. The depression is over."

- Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930

 

"... irregular and conflicting movements of business should soon give way to a sustained recovery..."

- HES June 28, 1930

 

"... the present depression has about spent its force..."

- HES, Aug 30, 1930

 

"We are now near the end of the declining phase of the depression."

- HES Nov 15, 1930

 

"Stabilization at [present] levels is clearly possible."

- HES Oct 31, 1931

 

"All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S."

- President F.D. Roosevelt, 1933

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Posted By: Gary Whitaker
Date: 2008-10-20 17:19:08

Bottom line is Socialism has never worked and debtitalism combined with government regulations is proving to be a disaster.  Capitalism and the free market have nothing to do with this and can not be blamed without bring in these causes.

 

-- Bo Diddley Blues musician

 

Corporatism as it is a merge of state and corporate power."
-- Benito Mussolini (1883-1945), Italian dictator during WW2

“Government price-fixing once started, has alike no justice and no end.
It is an economic folly from which this country has every right to be spared.”
-- Calvin Coolidge (1873-1933), 30th US President
Source: when vetoing two bills to establish federal controls over agricultural commodities

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Posted By: Gary Lee Whitaker
Date: 2008-10-20 17:21:33

Some great comments: 

Bottom line is Socialism has never worked and debtitalism combined with government regulations is proving to be a disaster.  Capitalism and the free market have nothing to do with this and can not be blamed without bring in these causes.

 

 

"Fascism should rightly be called Corporatism as it is a merge of state and corporate power."
-- Benito Mussolini (1883-1945), Italian dictator during WW2

“Government price-fixing once started, has alike no justice and no end.
It is an economic folly from which this country has every right to be spared.”
-- Calvin Coolidge
(1873-1933), 30th US President
Source: when vetoing two bills to establish federal controls over agricultural commodities

"Don't let your mouth write no check that your tail can't cash."
-- Bo Diddley Blues musician

"A government which robs Peter to pay Paul can always depend on the support of Paul."
-- George Bernard Shaw
(1856-1950) Irish comic dramatist

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