I personally find rising short-term rates a positive factor as I'm staying liquid, but considering they've created interest inversion that's a very negative economic indicator. That's it for the positive stuff.

 

If you believe this (which I think many of us do) then you also have to believe that 1) GWB is not running anything, and is being run by those truely running the country 2) The war is not about oil, but rather about continuing to fill the pockets of US corporate giants, and the absolute wealthiest Americans (deff not you or me lol) 3) All the actions allowing the trade deficit to reach its current levels (again lining the pockets of corp giants etc) endorsed or enacted by both parties, and the continued overspending in supporting their supporters etc is what lead the US to war, and not WMD's or oil 4) there isnt any solution that doesnt lead to fullfilling the teaching of one or more prophets.

I dont totally agree or disagree with the original post as there are some obvious points you can not deny, and others you almost can not accept. Some due to being a stretch, and others just due to their seriousness.

I have blamed both parties all along, and have also stated that I believe the issues of WMD's or Oil were not factors in any of this, and like so many others merely a smoke screen.

What exactly is the potential outcome of getting out of petro dollars, US dollars, and switching to the Euro is to be seen, but I also can fully appreciate the authors expectations as they seem to be inline etc. What I do not know for sure is exactly what I would think of using an act of war to prevent the situation (200 mil starving in the streets?) described by the author.

Then when you condense things to a smaller level and consider just how devestating it may be to a family who has a $300,000 note on a $50,000 home that is being forclosed on it does make sense on the smallest levels. Thing is most would have little compassion for someone running up that large a debt in the first place, and if they were using the $$$ only to entertain their wealthy friends etc compassion would be nonexistant.

I then linked this thinking to the main point of the thread, and then realized if any of the scenerios presented by that author were to become reality our civil liberties would be more important than ever!!

 

Interesting observation.

I still cant agree with the thinking that it is ok for our govt to violate our civil liberties no matter the reason, and once we openly allow it to start there will not be any end to it. Maybe if we all consider all these rights, and checks and balances were put in place for a good reason and purpose we will be better able to realize the important role each and everyone of us plays in the big picture.

Would anyone openly accept the breaking of other laws like molestation, or murder if they were said to increase national security? Of course not, and as whacky as those examples may sound I bet our current examples would seem just as unusual to those who wrote the constitution.

 

It's more of a dammed if we do and dammed if we don't situation. Our manufacturing industry is, for all practical purposes other than military hardware production (no longer applicable to civilian application) outdated and uncompetitive. There's no new wealth entering the country, attested to by our imbalance of payments, to provide true growth. As an economy we're currently living on debt generated by our aggression to retain USD as Petrodollars while rapidly grinding down the general standard of living through inflation combined with stagnant wages. To again become a dominate economic power will require a severe downward adjustment of our standard of living to compete in the global society. How that's achieved is the issue. War against Iraq (and don't kid yourselves, destroying a second Islamic nation will bring terrorism to the US in rowboats and economic problems most Americans are unable to comprehend) or a gradual decline, much as England accomplished after emerging broke from WW2. And it isn't just the US, a majority of mature European nations are facing the same dilemma. The difference being they aren't spending their treasure and using credit for out-of-proportion military expenses while the general public (there's that term again) pays the price.

 

The interesting thing about a list like posted by Hondabuster is that change a couple words in each and it fits the Democrats as well.......................I suspect that politicians that thrive on the spin and loose interpretation are much like a teflon cat...............always land on their feet and nothing sticks to them. I have read about and watched numerous politicians in action, always watching for one that demonstrates even the sightest hint of governing ability. I am too critical I guess, no matter which party they support they are only politicians and spin doctors. I suspect we will give control of our ports at some time to a "friendly foreign power" and it will be the other guys fault, we are only a few years from having access to public property denied to us and it will be "our fault" for not banding together. This forum is land,trail, and environmental issues. Even if some of the posts might appear to be off topic the reality is that the parties, the politicians, the policies and the activities of all that folks have referenced have as an ulltimate goal to take what we have, restrict what we can do, and say its our fault....................In WWII my uncle was in a unit in Europe, it was the custom then to embroider an emblem on a scarf and send it to a service man. The emblem on my uncles scarf is a coiled snake with the motto "DON'T TREAD ON ME". As a young boy when my Uncle gave it to me the motto and emblem made perfect sense..........As an adult it now has an even greater meaning to me. The motto is the same.........................Only the enemy is different.......................Tass

 

Looking at big picture stuff, I don't like at all how the current republican administration and congress are growing government. I don't like at all the increase in spending. This makes the stimulous like tax cuts harder to keep in place when a new administration comes into power. I am not afraid of deficits. They are actually a positive if they help motivate the govt not to spend money.............unfortunately of late, that motivation hasen't been there.

That is about it for the negatives.

Our economic growth is roaring, I believe home ownership passed the 50% mark. Interest rates are still very good and inflation numbers are much lower than the dooms-dayers were predicting a year ago. I have never before seen priming of the pump like they have been doing the last 5 years.............yet growth is happening rapidly, inflation is held at bay and interest rates are good. Economics are very different from 20 years ago.

Most of the people who were crying back in 2003 about the impending economic crash thought it would happen in 2004. The ones in 2004 knew it would happen in 2005. Now we still are growing and building wealth and we are approaching the end of the 1st quarter of 2006. When did you say things were going to get really bad, really quickly?

 

Although I would like to think I have a better than average understanding of economics I am also smart enough to know that I still dont know all that much about it, but I have seen all kinds of indicators that I do understand that all point to problems, and I am taking since the mid 90's or earlier. Things may not have been that great thru the 80's either but there was enough domestic production around to keep most busy, and in hindsight this is very likely the time that the effects were first being felt.

Even though I know there is certainly more than a few up to date or even model manufacturing plants in the US the problem is that except for the oddball these are owned by offshore companies. I remember more than one foreign company purchasing an aging known name US manufacturer only to have to update the entire plant.

Still even if the signs I have been seeing may be different than what others see there has been an obvious large reduction in US mfg (more in the older NE and MW industrial areas) and the imports that replaced it do not produce the same tax income (sort of the dbl edged sword since the wealth is being redistributed further up the food chain, while the tax burden for these same concerns and people have been reduced, what a concept) at the same time the average "joe" is finding less $$$ to spend (less taxed again) and the budgets of most every govt concern have grown so I am assumeing that the whole petro dollar issue was someones brilliant idea (totally sarcastic) to allow both parties to continue to try and keep all ends happy (while creating a uncountable deficit)but I have to think that anyone who was would have had allowed this situation (if the earlier view is completely accurate) to happen is more than a problem gambler shooting the moon, but totally irresponsible, and totally wrong.

Where does it all really end?

 

I'm afraid I don't understand your definitions of growth and building wealth.

Let's look at growth as commonly measured by US GDP, GDP being the sum of all private and government transactions:

2005 US GDP was $13.4-trillion, a stated 3.5% increase over 2004. That's all the general population is ever going to read, hear or see about GDP, a positive number commonly described as growth. That percentage is what drives or curtails consumer spending confidence, be it on a monthly, quarterly or annual basis.

2005 budget deficit - $319-billion (does not include Katrina allocated $62-billion as that wasn't spent until 2006)
2005 supplementary funds (non-budgeted deficit) for Afghanistan/Iraq - $120-billion
2005 SS trust contributions diverted to the general fund - $69-billion
Total - $564-billion

$564-billion is 4.2% of $13.4-trillion, resulting in actual negative GDP growth of .7% as it was supplied by debt, not product growth. Out of kindness I didn't include annual debt service on US debt to that negative number.

If you have even a basic grasp of accounting disclosure principles, you understand anyone in the private sector would be in the slammer for operating a company on those numbers and telling its stock holders it was profitable.


Building wealth. There's only one way a country builds new wealth and that's positive trade with other countries, selling (exports) more than it buys (imports). That means a country with a positive trade balance has taken wealth from other countries. The US had a 2005 negative trade balance of $725-billion, meaning in 2005 other countries took $725-billion of US wealth on a trade basis. The 2006 trade imbalance is already exceeding 2005. We went from being the world's largest creditor nation to the world's largest debtor nation in a relatively short period of time.

Imagine trying to maintain your household finances or a business under those circumstances. Perhaps we attended different schools, but I certainly can't define the US as growing and accumulating wealth. Unless, of course, one considers printing more money to cover shortfalls a viable economic solution to abnormal debt and trade imbalance. Sooner or later others will disregard that money in favor of another currency not encumbered by debt because each year its worth less and less (devalued).

 

I will speak to that later. For now, tell me when the crash is going to happen in your opinion. When will these indicators reduce us to poverty? Just saying things are going badly isn't good enough. I want to know how nuch time I have to get my affairs in order for the depression?

Ron

 

I am posting a link to a website where people can verify your information georged. After researching this a bit you are comparing apples and oranges. The cost of Katrina and the war are cashflow issues. We have way more assets than liabilities. This nations networth is way in the black and we can afford short term cashflow deficits. As long as the GDP keeps growing, we can afford long term deficits. The only time we need to be very concerned is if inflation gets out of control............which it is not. If you have $100k in assets and $50k in liabilities, you have the resources to withstand a negative cashflow of $10 per month for a long time.

Cashflow isn't the only way to determine economic health. Just like when the car breaks down or the roof leaks, we will pay out of savings or borrow money to deal with it right now, but we will still go to work and keep earning money, paying our house down and advancing our career.

Here is the link, you should be able to find everything you need here to verify or see through all the claims of impending depression.



Economy