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OfflineSyle
Kenai Sigh
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Registered: 10/16/05
Posts: 6,678
Loc: WA
Last seen: 10 months, 26 days
Re: Is the U.S. headed into a recession? [Re: zorbman]
    #7879120 - 01/14/08 04:38 PM (16 years, 18 days ago)

Quote:

zorbman said:
Very astute.

The U.S. economy is fueled by debt. The credit cycle is ending along with the economic good times it created.

Traders, investors, and owners of dollars realize that they are holding onto a depreciating asset. Common sense says this situation cannot last.

The Federal Reserve is in between a rock and a hard place. It can respond by raising interest rates to support the dollar but that will tank the economy. Interest rates are at historic lows. They can instead lower them further to provide debt for illusory economic growth but there is only so far they can go in that direction. This move will tank the dollar which will crash the global monetary system.

They have painted themselves into a corner.

I have read some of Fed Chairman Bernanke's past statements and I believe he will choose the path of printing more money and allow the dollar to free fall. This path ends in a hyperinflationary depression which will make the Great Depression look like a picnic.




So what do we do now? Your post scared me in a way  :frown:


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https://kenaisigh.bandcamp.com/ <- Just completed the 2021 RPM challenge for February - An EP in one month (5 songs or 20 minutes). Check it out!


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OfflineThe_Red_Crayon
Exposer of Truth
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Registered: 08/13/03
Posts: 13,673
Loc: Smokey Mtns. TN Flag
Last seen: 6 years, 8 months
Re: Is the U.S. headed into a recession? [Re: zorbman]
    #7879202 - 01/14/08 04:52 PM (16 years, 18 days ago)

The question is, is if the dollar tanks then arent investors going to purchase the currency, everytime the dollar dips it seems like investors buy up the cheap currency in hopes it will go up.

Second thing is, If the dollar does drop, the price of foreign goods will inextricably go up, therefore if one couldnt afford foreign goods then a manufacturing base would have to pop up to meet more localized demands.This localized manufacturing in turn generates a job base.

The problem with this economic slide we are in is because people are widely living beyond their means, and greed by lots of people got us into this mess, and those same people want uncle sam to buy us out of this mess. Wait till the credit markets start taking hits.


Edited by The_Red_Crayon (01/14/08 04:53 PM)


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Invisiblezorbman
blarrr
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Registered: 06/04/04
Posts: 5,952
Re: Is the U.S. headed into a recession? [Re: Syle]
    #7879337 - 01/14/08 05:16 PM (16 years, 18 days ago)

So what do we do now?

Unfortunately, as a country there are not many options available at this point. The best we can hope for is a VERY bumpy landing instead of a crash. You can think of a recession as a the economy "catching a cold". In a cold your body sometimes raises your internal temperature to kill the bugs. After a period of unpleasantness things slowly return to normal.

But if you prevent the fever you only prolong your cold and make it more severe.

As strange as it may sound, we need to go ahead and let this thing happen. Easy credit has created a series of bubbles in the economy. First it was tech stocks (remember the dot.com boom?) in the late 90s. Today it is real estate. POP!

All that easy money was looking for a home. The Fed can create money, they cannot always control where it goes. What we get are bubbles.

So all the misallocations of capital and bad loans need to come off the books so we can work from a sound basis again. The bugs need to die. If we pump more money into the system we will only make the inevitable recession that much worse.

Unfortunately, the fed has taken the course of pumping even more money in which is why the dollar is tanking. In spite of what you may sometimes hear to the contrary- that ain't a good thing.

On a personal basis you have more options available: invest in silver and gold (in that order), get or stay out of debt and work towards self-sufficiency. And always remember your best assets are internal. Keep your head about you because every nutjob imaginable will be coming out of the woodwork.


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“The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.”  -- Rudiger Dornbusch


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Offlinezappaisgod
horrid asshole


Registered: 02/11/04
Posts: 81,741
Loc: Fractallife's gym
Last seen: 7 years, 7 months
Re: Is the U.S. headed into a recession? [Re: Icelander]
    #7879372 - 01/14/08 05:24 PM (16 years, 18 days ago)

Quote:

Icelander said:
it's been a long time since I went down the rabbit hole.

I think it would do you a lot of good.:mushroom2::mushroom2::mushroom2::mushroom2::mushroom2::mushroom2:grams




Soon.


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Invisiblezorbman
blarrr
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Registered: 06/04/04
Posts: 5,952
Re: Is the U.S. headed into a recession? [Re: The_Red_Crayon]
    #7879445 - 01/14/08 05:41 PM (16 years, 18 days ago)

Quote:

The question is, is if the dollar tanks then arent investors going to purchase the currency, everytime the dollar dips it seems like investors buy up the cheap currency in hopes it will go up.




Oh yes. There are buyers and our government has partners who help in that regard. Its not in any government's interests to see the dollar tank and they will prop it up as long as possible. At some point they will be like the little Dutch boy with fingers in the dam to plug the holes that keep popping up. Sooner or later you run out of digits.

Quote:

Second thing is, If the dollar does drop, the price of foreign goods will inextricably go up, therefore if one couldnt afford foreign goods then a manufacturing base would have to pop up to meet more localized demands.This localized manufacturing in turn generates a job base.




A couple of points:

Its been 30 years since the U.S. last had a trade surplus. A low dollar is not going to bring it back anytime soon. Last year the trade deficit went up bigtime in the face of a falling dollar, exactly the opposite of what some would have predicted. People recite the low dollar = good mantra to make themselves feel better. Ignorance is bliss.

Secondly, we also import a lot of stuff to manufacture our exports, so that cost will have to be added in.

Wait till the credit markets start taking hits

Yeah, the bond market will be the last bubble to pop. If you hear about the bond market sliding..start making your way for the exits before the herd begins galloping..


--------------------
“The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.”  -- Rudiger Dornbusch


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Invisiblezorbman
blarrr
Male


Registered: 06/04/04
Posts: 5,952
Re: Is the U.S. headed into a recession? [Re: zorbman]
    #7892618 - 01/17/08 11:34 AM (16 years, 15 days ago)

Home construction drops 25 percent

The prolonged slump in housing pushed construction of new homes in 2007 down by the largest amount in 27 years with the expectation that the downturn has further to go.

http://news.yahoo.com/s/ap/20080117/ap_on_bi_go_ec_fi/economy_156


--------------------
“The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.”  -- Rudiger Dornbusch


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Offlinelonestar2004
Live to party,work to affordit.
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Registered: 10/03/04
Posts: 8,978
Loc: South Texas
Last seen: 12 years, 9 months
Re: Is the U.S. headed into a recession? [Re: zorbman]
    #7892755 - 01/17/08 12:10 PM (16 years, 15 days ago)

when does this "recession" start? when and if it starts will i be able to find parking spaces at the mall? and will there be no more long lines at the cash register!!!

THAT WOULD BE GREAT!


i bet i will not even FEEL this so called recession...


wait i feel PAIN!!! and its in my wallet....Raise taxes to Stop the so called Recession....


--------------------
America's debt problem is a "sign of leadership failure"

We have "reckless fiscal policies"

America has a debt problem and a failure of leadership.

Americans deserve better

Barack Obama


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OfflineCubie
Moderator
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Folding@home Statistics
Registered: 01/11/08
Posts: 8,840
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Re: Is the U.S. headed into a recession? [Re: lonestar2004]
    #7892790 - 01/17/08 12:18 PM (16 years, 15 days ago)

well when you go to the mall and it costs a grand for a stick of gum have fun :tongue:

im broke enough. no more taxes please


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Invisiblecarbonhoots
old hand

Registered: 09/11/01
Posts: 1,351
Loc: BC Canada
Re: Is the U.S. headed into a recession? [Re: Cubie]
    #7894825 - 01/17/08 08:30 PM (16 years, 15 days ago)

how bout taxes on people and corporations and banks who are far from broke and have more money than they can ever spend?


--------------------
  -I'd rather have a frontal lobotomy than a bottle in front of me

CANADIAN CENTER FOR POLICY ALTERNATIVES


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Offlinezappaisgod
horrid asshole


Registered: 02/11/04
Posts: 81,741
Loc: Fractallife's gym
Last seen: 7 years, 7 months
Re: Is the U.S. headed into a recession? [Re: carbonhoots]
    #7898470 - 01/18/08 05:54 PM (16 years, 14 days ago)

Banks are corporations and the corporate tax rate in the US is actually higher than that in most other developed countries. So let's just get it right out in the open that you want the government to forcibly take money from successful, hard working people and give it whatever losers you choose. No thanks.


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Invisiblezorbman
blarrr
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Registered: 06/04/04
Posts: 5,952
Re: Is the U.S. headed into a recession? [Re: zappaisgod]
    #7898495 - 01/18/08 06:02 PM (16 years, 14 days ago)

Quote:

the corporate tax rate in the US is actually higher than that in most other developed countries.




Second highest among industrialized countries. (Japan being the highest).


http://www.taxanalysts.com/www/features.nsf/Articles/FE9DCA58402875D7852573680064DA50?OpenDocument


--------------------
“The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.”  -- Rudiger Dornbusch


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Offlinezappaisgod
horrid asshole


Registered: 02/11/04
Posts: 81,741
Loc: Fractallife's gym
Last seen: 7 years, 7 months
Re: Is the U.S. headed into a recession? [Re: zorbman]
    #7898502 - 01/18/08 06:03 PM (16 years, 14 days ago)

Thank you. I was lazy.


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Invisiblezorbman
blarrr
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Re: Is the U.S. headed into a recession? [Re: zorbman]
    #7909808 - 01/21/08 02:11 PM (16 years, 11 days ago)



--------------------
“The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.”  -- Rudiger Dornbusch


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InvisibleSoY
I am the LizardKing
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Registered: 06/01/06
Posts: 774
Loc: Everywhere
Re: Is the U.S. headed into a recession? [Re: zorbman]
    #7910065 - 01/21/08 03:21 PM (16 years, 11 days ago)

I think "David the Patriot" needs to retake high school English...


--------------------

"The choiceless truth of who you are is revealed to be permanently here permeating everything. Not a thing and not separate from anything."--Gaganji
"Yesterday is but today's memory and tomorrow is today's dream."
"My karma ran over my dogma!"


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Invisiblezorbman
blarrr
Male


Registered: 06/04/04
Posts: 5,952
Re: Is the U.S. headed into a recession? [Re: zorbman]
    #7914348 - 01/22/08 11:44 AM (16 years, 10 days ago)

As predicted:

Fed slashes rates in emergency meeting

NEW YORK (CNNMoney.com) -- The Federal Reserve slashed two key interest rates by three-quarters of a percentage point Tuesday following an unscheduled meeting, citing continued concerns about a weakening economy and turmoil in the financial markets.

The Fed lowered its federal funds rate, which impacts how much consumers pay on credit card debt, home equity lines of credit and auto loans, to 3.5 percent from 4.25 percent.

The rate cut came more than a week before the Fed's next regularly scheduled meeting, a two day session that concludes on Jan. 30. Some market observers think the Fed will cut rates again at this meeting.

http://money.cnn.com/2008/01/22/news/economy/fed_rates/index.htm?cnn=yes

Chasing bad money with more bad money.

They just don't get it.

This is like paying the interest on your credit cards by borrowing from other credit cards. Keep digging that hole deeper..


--------------------
“The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.”  -- Rudiger Dornbusch


Edited by zorbman (01/22/08 11:50 AM)


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Offlinegluke bastid
Stinky Bum
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Registered: 12/20/00
Posts: 3,322
Loc: Charm City
Last seen: 5 years, 3 months
Re: Is the U.S. headed into a recession? [Re: lonestar2004]
    #7914359 - 01/22/08 11:47 AM (16 years, 10 days ago)

Quote:

lonestar2004 said:
when does this "recession" start?




Today, apparently.


--------------------
:hst:
Society in every form is a blessing,
but government at its best is but a necessary evil
 
- Thomas Paine


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Offlinelonestar2004
Live to party,work to affordit.
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Registered: 10/03/04
Posts: 8,978
Loc: South Texas
Last seen: 12 years, 9 months
Re: Is the U.S. headed into a recession? [Re: gluke bastid]
    #7914542 - 01/22/08 12:45 PM (16 years, 10 days ago)

still long lines at the mall.....


--------------------
America's debt problem is a "sign of leadership failure"

We have "reckless fiscal policies"

America has a debt problem and a failure of leadership.

Americans deserve better

Barack Obama


Edited by lonestar2004 (01/22/08 12:46 PM)


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Invisiblezorbman
blarrr
Male


Registered: 06/04/04
Posts: 5,952
Re: Is the U.S. headed into a recession? [Re: lonestar2004]
    #7914560 - 01/22/08 12:49 PM (16 years, 10 days ago)

Sales Tumble, Fanning US Recession Fears
Tuesday January 15, 2008

Frugal shoppers cut back on their spending at the nation's retailers by 0.4 percent in December, wrapping up the weakest sales year since 2002, in a gloomy report that fanned fears of a recession.

http://biz.yahoo.com/ap/080115/retail_sales.html


--------------------
“The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.”  -- Rudiger Dornbusch


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InvisibleDieCommie


Registered: 12/11/03
Posts: 29,258
Re: Is the U.S. headed into a recession? [Re: zorbman]
    #7914566 - 01/22/08 12:51 PM (16 years, 10 days ago)

Wow, 0.4% is a tumble? That seems off by an order of magnitude or so...


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Invisiblezorbman
blarrr
Male


Registered: 06/04/04
Posts: 5,952
Re: Is the U.S. headed into a recession? [Re: DieCommie]
    #7914577 - 01/22/08 12:53 PM (16 years, 10 days ago)

It doesn't take much. Sales had been forecast to dip by only 0.1 percent.

The key phrase in the article is "weakest sales year since 2002".
(The date of the last recession).

Another key point: "wholesale prices..were up 6.3 percent for all of 2007, the biggest annual gain in 26 years"

The trend should be clear by now. This is a weak economy and it's only getting weaker.


--------------------
“The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.”  -- Rudiger Dornbusch


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