Dow 2,000
20% unemployment
50% decline nationwide home prices
$1 gallon gas
Seems crazy, eh?
Well, if less than a year ago I would have told you $5.00 gas would now be $2.00, 14,000 Dow would be 7,500, 5% home price decline would be 20%, and 4% unemployment would be 6.5%, and over 8% in California, you would have thought I was nuts. But here we are.
And at current trends folks, we could easily see the sickening numbers posted above. Trillions and trillions and trillions and trillions have already been lost. 2008 is on track to be the worst year in the entire history of the stock market. Foreclosures litter the land. Confidence is shot. And our incompetent leaders run around like the clueless and corrupted idiots that they are. They have no idea what to do, and the things that they do do just make matters worse.
I see one way and only one way out. Most will disagree with me. And it sickens me that it's come to this point, since we tried to warn the world years ago what was happening and what was to come, and nobody listened, when it could have made a difference.
The way out?
Money bomb.
I repeat, money bomb.
Like I said, most will disagree. Many will be mad. But I am telling you now, it's the only way out, like it or not. Unlike many countries, the US still has a massive line of credit, it has the world's reserve currency, and it has an electronic printing press and a Fed chairman willing to use it. And it needs to use all of these while it still can.
Obama needs to drop a money bomb on the US economy so big that it shocks the world. A money bomb that re-starts the heartbeat of the nation's economy, on a flat-lining patient that is looking D.O.A. right now.
Yes, the money bomb will take down the US dollar, it will send gold skyrocketing, and it will saddle future generations with sickening debt, and you know my take on that.
But, if he doesn't drop the money bomb, the United States economy fails. And in that case, the burden on current and future generations will be even worse.
This, folks, is called check. The bankers and politicians and realtors put us here. And checkmate is right around the bend. It might be just weeks away.
Money bomb.
$10 trillion.
Money bomb.
$10 trillion.
Money bomb.
Soot & Ashes Favourite Blogs
PerpWalkWatch - # of Hours New AG Eric Holder Has Let Angelo Mozilo Run Free
Eric Holder and Barack Obama
Failure to
Arrest
Angelo Mozilo
2862 Hours
(countdown suspended 6/21/2009)
ERIC HOLDER - YOU ARE A COWARD
DO YOUR JOB
(UPDATE 6.4.09 - SEC CHARGES MOZILO WITH INSIDER TRADING. YET ERIC HOLDER STILL SITS ON HIS ASS AND DOES NOTHING)
Posts
Comments
121 comments:
Ok, stupid question, but how does the money bomb destroy the dollar, and what does a destoyed dollar do? I don't get it.
Said in another post,like an apple will cost $50? WHAT?
Sort of radical to buy gold so will somebody PLEASE explain to me what happens when the dollar is destroyed?????????
Yes, anon, an apple costs $50 dollars when the dollar is destroyed.
There are only so many apples in the world. If the federal reserve makes borrowing free or the federal government gives everyone a million dollars then a bidding war starts and apples become worth 50 dollars.
To make matters worse, you still can't turn a profit on farming apples because gas, fertilizer and equipment costs have risen too. So a lot of apples farmers go bankrupt and you have even less apples to go around.
This would be an inflationary depression.
Thing is, I've become so jaded that I no longer care what foolish people do, who foolish people elect and what foolish policies and programs are begun. At this point, all I seem to care about is profiting from this disaster.
Did you catch Obama's new new deal announcement? Best bets now are gold and companies that make items for use in renewable energy. Some construction companies too.
Exactly how will a money bomb help? One the money runs out, we're right back to where we started, except the debt is doubled and we'll be paying a higher interest rate.
I'll take a depression with 20% unemployment any day rather than an idiotic idea like this.
Hmmmm hate to admit it but it does make sense...In all honesty we will default on all the debt, there is no way we can pay back all we've borrowed or have squandered.
I've come to see all the defecits as "Funny Money" with numbers so huge they boggle the mind.
Our only hope is to shock the system and in the middle of the madness rebuild our innfrastructure.
We all are so screwed...No matter what the time to have turned the ship is past at this time we are living on borrowed time...Unlike the Mexicans, Argentines or Russians who had huge economic collapses, we Americans cannot handle being poor or being told we can't have this or that well.
Pray for the best but load up on silver, food and guns :P
http://news.yahoo.com/s/nm/20081122/bs_nm/us_financial_5
Cnina going to give us big ass credit card. Everything will be ok.
Slightly off-topic:
Bernanke, Every Mistake You Make"
.
This is a pretty silly idea man. Conjuring up 10 trillion dollars from thin air isn't going to restart our economy. The only thing that would help us is investing in the manufacturing base and getting our trade deficit eliminated.
Yup--Cause a money bomb worked out really well for the Weimer Republic & Zimbabwe.
Money is not wealth. If you want to see what would happen if you tried a $10 trillion money bomb, read a history book about Weimar Germany or book a flight to Harare.
I agree. At least do something...even if it's wrong.
As GM goes...so goes America.
I picked a bad time to quit smoking.
Google "Weimar Republic" and "hyperinflation" and "Zimbabwe". And if you have the stomach, "Weimar" and "hyperinflation" and "middle class" and "prostitution" and "starvation". Then you'll understand.
Money Bomb now – better than riots in the streets as posted earlier on another thread.
Money Bomb makes the dollar worth fewer yen and euros etc, takes more dollars to buy a pair of shoes eventually. That is destruction of the dollar.
still pessimistic on the US
from before:
HP had and angry tone, watch SA have to cope with a sad America. Keith opened HP before it was known and closed it before it was done, but we can still have some comments and watch housing. Although Keith has posted that there will be a turn, alas, it can be long in coming. SA is opened before the general public thinks the house has burned down, I will be the Pessimist here, SA will have to run as long as HP did for Keith’s prophecy in naming his blog to unfold, the SA part. The Re-inventing America After the Crash (RAAC) part of the name will likely have to become the name of the blog before that process takes place.
They let the cost of a house become too many big macs. They must reduce the cost of the house as calculated by big macs. They cannot let the price of the house fall in dollars while the price of big macs in dollars remains the same because the payment system implodes, the division of labor collapses and there are riots in the streets. So the price of big macs must rise no matter what. If they must push money into the economy by printing it, “Quantitative Easing” that is what they will do. If they slightly deflate the housing components of the inflations index they can inflate the other components and not show high inflation stats. But if they must allow higher ‘inflation’ they will, inflation will make people work so they do not have much time to riot.
The international situation complicates the above simple closed domestic system. It will likely complicate it by making the inflation and the fall in the standard of living of the average person in the US greater. That is pessimistic for the US person, but the average standard of living for the non-US person may improve.
There will come a time when there is new green growth showing above the Soot and Ashes.
Currently PessimUS
But I don't think it will help because the economy is sick and needs to be *restructured*. To get people out of all of the pointless non value creating jobs (and bad contracts). It's a Darwinian process that needs to take place. By flooding the economy as it is with money you are just trying to prevent it from happening.
No pain, no gain eh ?
It appears that Obama understands the need for the money bomb and is ready to activate one come January 21.
When the "elite" take and take and take and take and take until there's nothing left, this is what happens.
Is there any other solution to the liquidity problem? The money that's being oozed slowly from the treasury is being burried under mattresses and hidden for safekeeping. Or in the case of AIG, being blown at the Pointe Hilton Tapatio Cliffs on hookers and booze.
Uh Oh, CNBC says that the government isn't going to take over Citigroup, or force a merger.
http://www.cnbc.com/id/27859019
So...that's interesting... if it's true. (Probably because the govt. is broke and there really is no such thing as "too big to fail".)
But assuming the govt. will print their way out of this, it probably means they are conserving and/or protecting their powder for a big play...like a money bomb. Unfortunately, it will take too long to process the injection of cash and our economy will end up like so many other good companies, bankrupt.
The crisis has moved too fast, and has caught everyone in charge off guard. They really don't know what to do, which means more instability.
At this rate, all stocks will be trading at the $2.00 range pretty soon.
A few indications of this is everywhere: Investors are now advising, "there is no place to hide." The President has said, "this sucker is going down." Paulson has done a 180 on buying up toxic securities, which throws all the leveraged institutions under a bus. They've bailed on the auto bailout and now the CitiGroup takeover. We're right back into the credit crisis we were in a month ago. Commerical Bonds are tanking. Credit card companies are next. Our fed rate is zero bound. Deflation has set in. Retail is cratering. Uemployment is about to skyrocket. There is no gauge to put value on anything anymore. And the rest of the world is in worse shape than we are.
My god. If this crisis is like cancer, then I have to say it is malignant and has already matasisized. Even the cure creates its own set of unintended consequences...which all-in-all is really bad. One of my favorite expressions is, "we've painted ourselves into a corner with non-drying paint."
Perhaps all those 5 million people decending on DC for the inaugeration will have quite a different plan by then. Could get ugly, quick. Hell, the security budget alone is breaking D.C.'s budget.
Throw on top of it all the inevitable devaluation of the dollar down the road and we're looking at some serious doo doo.
I say drop the money bomb, bail out the auto industry, give the banks more money, DO WHATEVER! Cause the consequences of not doing enough are indeed catastrophic, and furthermore we have probably already gone beyond the point of no return. Obviously millions of people are already aware of this, which means they will revolt and it will be lawless.
All I can think of is litterally freezing all global debt. Perhaps setting up a giant account for everything that isn't paid for in order to push it to the side for a while until we can establish a baseline upon which the world can start paying it off. Otherwise, it all goes away. Everything. Laws, contracts, security. It all becomes moot if you can't eat.
This is crazy.
You mean a money bomb like this?
Inflation_in_the_Weimar_Republic
"the government found reparations a convenient scapegoat. Other scapegoats included bankers and speculators...
The inflation reached its peak by November 1923, but ended when a new currency (the Rentenmark) was introduced. The government stated that this new currency had a fixed value, secured by real estate, and this was accepted.
hyperinflation is widely believed to have contributed to the Nazi takeover of Germany. Adolf Hitler himself in his book, Mein Kampf, makes many references to the German debt and the negative consequences that brought about the "necessity" of National Socialism."
When the dollar is destroyed, a new currency begins, "New US Dollar" or whatever, and they start again. It happens all the time actually. It punishes the people who have savings or pensions and forgives the debt of the reckless assholes.
Sounds bad but eventually it happens to most currencies (one could argue it happens to all, but that statement can never be proven since there are arguably some that exist today that will go on forever, but that seems like a bit of a stretch.)
Clinton's money bomb worked for a few years and then gave us a hangover. Obama will give us a money bomb and we'll feel sick again.
When the dollar is destroyed, our imported oil skyrockets in price, and EVERYTHING costs more. You take a massive pay cut in what your time on the job will purchase. Creating money out of thin air never does good in the long run. Please, do not purchase any gold. I am not done buying mine, and don't want the competition.
B/S alert! I have a hard time believing what's written in this post.
I never expected to read in this blog that the cancerous growth of the past 20 years should be preserved through printing money and indebting the future generations.
Anything that grows will die. Growth can't be forever. Balance and stability have to be established; the alternative is death.
OK, Keith, granted, let the government drop a $10T money bomb. Where is the money coming from? How is the money going to be allocated? Will it be mismanaged and covered in secrecy like the first $700B from the first bailout?
A money-bomb would only start hyperinflation, driving the costs of imported goods sky-high.
----
Obama is not going to save anything, not going to do anything useful, don't get too attached to his cult of personality. And that's not to say that McCain would be any better. But Obama's going to be at the helm when the worst of it hits, 2-3+ years out.
BOTH of these guys are firmly establishment bureaucrats. Their loyalty lies no farther than the shadow of the biggest pile of money. Go look at the biggest contributions that other politicians took in past elections... and then look at the biggest donations that Obama got. Why did all these companies pay so much to get this guy elected?
....The only thing funny about the coming economic crash is that Dubya was probably hoping and praying so bad his hands hurt that he could stall it off until his exit, and part of it fell at his feet and is now forever attached to his legacy.
----
I didn't vote this time around, neither of them is worthy. Normally I would have voted republican and much of that just for gun rights, but there was no republican on the ballot this time around.
----
Plan on inflation. Lots of inflation. (the govt can twist the big prices whichever way they want, things like oil/gold/CPI, but how much have grocery store prices gone up in the last 12 months? 10%? 15%? 20%?....)
Lenny
~
that is exactly what will happen...and it won't work. This disinflation period is temporary. Firms around the world are still divesting themselves of stocks and commodities. But inflation is coming and the dollar will get destroyed. The world will eventually decide not to continue throwing good money after bad and will drop the US Dollar as the world's reserve currency. After that any money bombs just make it worse. Creating 2.5 million "new" government jobs by January 2011 is also a money bomb. It will just make matters worse. Behold, the wisdom of Ron Paul.
It's only radical to buy gold because you are conditioned to think that way. In actuality it's radical to hold paper that is backed by nothing. By you holding paper, the powers can manipulate you and steal value from you quite easily. This money bomb crap would devalue your paper instantly, but not gold becaues it's something that can't be printed up out of thin air and is recognized as money for over 5000 years.
And...
If the money bomb doesn't work, there's always war. I fear this more than anything.
What the heck is going on in Somolia...I mean, how the hell do you capture an oil tanker??? The news is very short on details. Do the pirates just cruise up in boat with a few automatic weapons and climb up and just take it over? How the hell do you get on board an oil tanker at sea????
So, everyone's entering the scene, US, Russia, Saudi Arabia, Britian, India....that's some mix.
If anyone's looking for an excuse to start a war, note that the players are taking the field.
Back to the money bomb. $10 Trillion is $33,333 per American (assuming pop. 300,000,000). When you put it that way, it's not enough. It'll help, but only if there's some price fixing to go along with it.
this is an awful mess these people have put us in. they were greedy careless and self serving, wanting to be high rollers, driving expensive cars and live in multi million dollar homes, speed date and get the best looking women, kids in private schools wives who on wear jimmi choo shoes and designer dresses. drinking an overpriced cup of coffee every day. we should have known something was up when everyone went wild over those diabetes creating krispy kreme donuts. when the doctor wanted to ban oreo cookies we should have listened. this is one hell of a mess and I just can't see how we are going to get out of it. the asians want to keep the free trade agreements going so that they will be able to keep living off american labor. if they stop the agreements they will have nothing because American's will produce their own junk and keep the money here. There are alot of people to be employeed all over the world why should it be American's responsiblity to keep them working when we need to consider ourselves first. They do. Didn't they not want American Beef in some Asian country because they said it had mad cow they were rioting in the streets. They wanted to only eat their own beef and not import. We need to have the same attitude. We wouldn't need to buy anything from China. Talk about riots then. There is no gold to back up all this money it's just worthless pieces of paper. Easily adjusted and manipulated to the will of the government. This is a mess, mess, mess. Now Obama has to keep free trade because who will allow us to borrow money and be protectionist. I also read that China is poised to buy General Motors, what a f'n mess. Keep an eye out for the demise of AIG and Wells Fargo. All because people thought they could get a house no money down and the banks thought the government would send money to every house to make sure they could make those payments. What a f'n mess.
Credit is our addiction. Now you want to cure too much credit with more credit? Unlikely that the patient will survive. It's about the dumbest plan I've heard of so far.
Experts said the government may have to act on multiple fronts, perhaps including an outright nationalization of major banks and much more aggressive efforts to stimulate the economy.
“This may well involve nationalizing some of the largest banks, starting with Citigroup,” said Kenneth S. Rogoff, a professor of economics at Harvard. “It will mean spending trillions of dollars.”
Like always, 'let's throw moneyz at the problem, our kids will pay the bill'
Think of how much that kind of thinking drove us where we are now.
It's sad, but I say the pain has to be felt if we want to start again on the right track. And the sooner the better.
Since we just had a spell of massive inflation that wasn't matched by rising wages, it seems to me that a spell of deflation to return things to a more agreeable ratio would be just fine. The economy has been overinflated by unsustainable levels of debt and needs to cool down - more debt might give us a quick fix, but will make the come down that much worse when it hits.
Keith,
What do you think the Euro will do? I have a French bank account and am wondering if I should transfer some money into it.
What if it doesn't work? What if it makes things worse?
Keith said - "And our incompetent leaders run around like the clueless and corrupted idiots that they are."
Remember - Obama is INCLUDED in the above group.
BTW - The Obama administration is shaping up to be the Clinton administration redux.
"There are only so many apples in the world. <...> To make matters worse, you still can't turn a profit on farming apples because gas, fertilizer and equipment costs have risen too. So a lot of apples farmers go bankrupt and you have even less apples to go around."
Let me tell you a little secret: Farmers are paid to destroy tons of perfectly fine edible crops. This is to keep their price very high, not just *profitable*.
Not only that, but tons of food goes to rot and ruin at stores, in transport, cargo, and so on. Barring a agricultural disaster, such as a DISEASE, we should not run out of apples. =)
The problems with transportation and storage might worsen though.
I've thought about it, and I don't think we are going to have a prolonged famine issue after all- depression or not. Food might become much more expensive though.
I guarantee you that if these activities were to continue in a food crisis there would be civil unrest and it would stop. This is the age of information, the 'news' would spread like wildfire.
"What the heck is going on in Somolia...I mean, how the hell do you capture an oil tanker??? The news is very short on details. Do the pirates just cruise up in boat with a few automatic weapons and climb up and just take it over? How the hell do you get on board an oil tanker at sea????"
Piracy has always existed, and essentially that is exactly what they do. I know... I couldn't believe it either. The History Channel had a documentary on modern day piracy, could probably find it if you looked.
The Fed will never do that, Keith. As a quasi-private banking institution, they have no incentive to devalue the currency. I think this talk is goofy. They will simply follow Japan's lead, a decade of deflation, with intermittent mild inflation.
We had hyperinflation over the last 30 years. Our dollar collapsed over the last decade. Massive amounts of debt were created to subsidize corporate America so that they could keep wages suppressed. Now prices on commodities, housing and consumer goods are coming back into line with wages.
Outsourcing only worked because the COL was much lower in the foreign countries where labor was sent. Insourcing only worked because immigrants were willing to accept a much lower standard of living. I used to think that foreigners might someday demand a higher standard of living and higher wages, which would bring jobs back. Now I think it's likely that instead, Americans will be accepting the lower wages and lower standard of living.
Bush doubled the debt from 5 trillion to 10 trillion giving the proceeds to his fascist cronies.
Who cares if Obama doubles down again mailing checks to every tax payer and public works spending projects, at least everyone would share in the dollar debasement.
Just let the thing collapse.
Americans can then rebuild, after purging all the crap.
Sure that means a depression that makes the great depression look like good times. But, Americans will just need to learn how to get by in hard times.
There'll be some positives - obesity won't be a problem anymore as families can't afford to eat so much.
That illegal immigrant problem people complain about so much will go away - Mexico might have an illegal immigant problem as Americans sneak across to get jobs cleaning toilets in Mexico in order to send money back to the US to feed their family.
Even better declare bankruptcy, and start over. The US loses it's international trade and reservce currency status as the dollar is replaced, and everyone with US dollars loses it all.
Then America has a do over.
If they're really smart they'll do away with income tax at the same time. In fact do away with taxes. Have the government print the money it needs - the people should be educated enough in practical terms about the inflationay effects and hence prefer a smaller less printing government... They print it anyway, why have two different forms of taking money from the people?
You are either insane or brain dead or maybe both.
"
What the heck is going on in Somolia...I mean, how the hell do you capture an oil tanker??? The news is very short on details. Do the pirates just cruise up in boat with a few automatic weapons and climb up and just take it over? How the hell do you get on board an oil tanker at sea????"
Pretty much.
You're a sailor, and a couple of boats with guys with automatic weapons and RPGs pull up and start boarding, what are you gonna do? Fend em off with a boat hook and a firehose?
Actually, I think they use firehoses to fend off a lot of em.
Sorry, my bad, $10 trillion doesn't look like it'll be quite enough
Taking over Ford, GM and Chrysler - $100 billion
Taking over Citi, Wells, BofA, JPMorgan, Goldman, Morgan Stanley and State Street - $2 trillion
More for AIG: $100 billion
Bailing out the states and cities - $2 trillion
Bailing out the insurers - $1 trillion
Bailing out Fannie and Freddie - $2 trillion
Bailing out the homedebtors - $2 trillion
I could keep going. Where would you like to stop?
Yes, this is before we get to building infrastructure, going green energy, doing a tax cut, or sending out more stimulus checks
Trillions
Trillions and trillions and trillions and trillions
Keith, I can't tell if you are being sarcastic with this post or not.
The only saving grace in Obama's plan is that he is building useful infrastructure, not just handing out money like Bushco. Obama's plan could rightfully be considered an investment that will make the US more competitive and reduce our dependence on foreign oil. So if we live through the depression and manage to avoid a currency crisis, we might just come out ok in thirty years, assuming we are really lucky on the way.
Personally, I'd rather go with a tried and true solution - depression and deflation. We've done it before, we know what to expect, it's 100% guaranteed to work, bureacrats and politicians can't screw it up, and it's a no-overhead, self-regulating process. Sit back and watch the free market work its magic. And it's likely to be faster and less painful than any other solution, including money bombs.
Seriously, let's take the easy way out. Of all possible scenarios going forward, depression is by far the most attractive. That really sucks, but it's true. Let's get on with it.
I'm being serious.
The destruction of the American (and world) economy is now at hand. We are entering a depression. The banks will fail. Industries will fail. Cities and states will fail. Millions will lose their jobs. Retirement accounts will be destroyed. Game over. Checkmate.
But...
There is a way out. And Bernanke told us about it in his 2002 helicopter speech
The printing press.
The "money bomb" isn't something I'm in favor of. I'm just being a realist. It sickens me. But it's a choice. Either we unleash a money bomb, or we go into a depression.
You choose.
And if they unleash the money bomb, by choice or not, then watch out for your dollar holdings.
And if they unleash a money bomb that's in the billions, it won't matter. The only amount that'll matter now is in the trillions.
We need to live within our means.
Keith:
Except will the money bomb actually stop a depression? I doubt it. It may hide it for a while.
Uhhh - how do you spell Zimbabwe?
Keith,
I understand where you're coming from, but IMO the money bomb will only have the effect of pissing off people with savings and enabling a more dramatic deflation as the money will be very quickly absorbed into the system and we will be left with a devalued currency and a deflationary spiral.
I think the current notion of redirecting federal gov resources to infrastructure projects ala the new deal while propping up the failed banking system is the only practical way to survive this. The deflation NEEDS to run its course, that is just a product of fiat and fractional reserve.
Keith, yor prescience with blog titles HP and now S&A is amazing. I'm afraid of what S&A will look like, but I'm optimistic that we will have a workable system once the S&A settle.
Cheers to "Cash becomes King."
My father died in August. My mother has $180,000 sitting in a checking account.And this particular bank just got $611 million grom TARP, so is safe for now I hope.
I don't want to see her lose everything. She might need it for assisted living and I am hoping I can keep just a little as a downpayment on a little house some day.
At any rate, she would probably totally freak if I told her I had bought $150,000 worth of gold.
But I know my father would want me to do the right thing.
I just don't see how you actually buy anything with gold. After all is said and done, even if it has been a recognized form of currency for 5000 years, whats to keep it from being just another 'pretty, shiny thing' that isn't worth much anymore. Is there only so much of it?
I mean, diamonds are really as plentiful as apples, except
DeBeers owns all of the diamond mines and only sell a small amount at one time, thus keeping the value artificially inflated.
This is such a terrifying time to be responsible for money.
I usually don't have to worry because I have lived on very little all my life, but I am so scared now.
Apparently if the dollar is totally deflated, it makes no sense to take the money out and put it 'under a mattress'.
Am trying to convince myself to buy gold, but it just doesn't feel right.
Neither one of us has any credit card debt.
It's a good time to have extra money. It's like a first for my mother and myself,even tho I guess it doesn't seem like much to some people in here.
I just want to be smart with it and not f*ck up.
My instincts just tell me to leave it alone and quit worrying about it.
Would so appreciate any advice.
The system is going to reboot money bomb or not. A great leveling is happening in the economic world as it is happening in "the real" world. It will be ugly as people's expectations are adjusted and what they really own dwindles to what they can carry and defend. Suprisingly, it won't look a lot different than it does now though and it will be a lot more honest.
@Keith
"There is a way out. And Bernanke told us about it in his 2002 helicopter speech
The printing press.
The "money bomb" isn't something I'm in favor of. I'm just being a realist. It sickens me. But it's a choice. Either we unleash a money bomb, or we go into a depression."
It has been tried before, always with the same result. Look at Weimar Germany or Zimbabwe and you get a pretty good idea of where such a folly will end. It was actually worse than the great depression. If we destroy the dollar there won't be very much imports entering the country, think oil. So what are we are going to do if we're cut off from 70% of our oil supply? Print the remaining barrels? Turn off the lights? Ride a bike? Use our non-exsitant public transportation system? What Keith?
Destroying the dollar would be the final act. After that we would very quickly enter a phase where the Soviet Union was in the 90s. Maybe anarchy, black market, civial war, crime syndicats, etc.. I will make the great depression look like a picnic, it would be more along the lines of The Road Warrior but with hybrids.
Printing money and spending it like a drunk sailor is not the answer. Obama and the retarded Democrats might try just that but I hope more rational minds will prevail. Not that I put much more hope into the Republicans, after all they got us where we are today.
I recommend:
1. Let banks & insurance companies fail, we have way too many of them anyway.
2. Kick all the deadbeats out of their houses, they can rent or live under a bridge.
3. Let Detroit fail, then spend some money to salvage what is salvagable.
1-3 Don't bailout bad behavior, a very important lesson that needs to be learned by all involved.
4. Cut spending on military, wars, bailouts, social programs, subsidies and anything that is not absolutely essential to running the country.
5. Spend the savings on alternative energy, infrastructure (think electric trains & energy infrastructure), bring home essential manufacturing, health, research and education.
While very hard times are straight ahead, with what I outlined above there might be a chance that we will recover 10 years down the road. Most other approaches are doomed to failure....just my $0.02
dumb idea. Weimar and Zimbabwe are two excelent reasons to avoid money bomb at all costs.
What came after weimar? Political destuction and rise of Hitler.
Throw the fucking banks and financials under the bus, protect the people from starvation. Protect society with shelter.
Deflation has a bright side. Lower prices.
Get that: LOWER FUCKING PRICES. That is a good thing
How do you buy groceries and pay bills with gold?
But a money bomb is only a temporary fix, isn't it? It's like being broke, so you max out your credit cards and have a big party, but then the bills come in and they want a payment. Uh-oh. Where will the payment come from? Another money bomb? So we continue to borrow and pile credit on top of credit, until...? What? Aren't we just postponing the inevitable?
I choose dropping a really big money bomb.
In fact, I think every printing press in every country around the world should print enough to pay off the $75 Trillion of leveraged debt respectively. If every country in the world participated, the world's economy would reset without inflation because the amount of money in circulation would still be finite and the additional cash would go straight to deleveraging the debt thereby stabilizing the value of stuff.
The only other solution I see at this point is to have all the rich people give back the money. And I don't see that happening.
......the next decade will be the best for those smart enough to see the potential the next 10 years will bring.a lot of wealth was created during the great depression,I don't see how it can not be done this time around.
=====================================
That happened to my family's "great generation" during the Great Depression. Not through financial wisdom, just plain dumb luck, and some previously burned fingers from a crash in the 1890's. Our family had cash, and was buying, for pennies on the dollar, while everybody else around them was going belly-up. The same thing will happen this time.
I almost equate money like energy, neither created or destroyed, just transferred( O.K. not really, but close.) For every person losing $100 in wealth, there is the potential for another person to gain $100 of wealth, or at least buy that $100 of wealth for 12 cents, whatever!
I recently had a distant great uncle pass away, 98 years old. He lived simply, drove a 70's Ford POS pickup, had since new, lived in the same house he and my great aunt (deceased) bought in the 30's. Apparently he bought a lot of utility stocks for cheap after the crash of 29. The grandchildren were floored to find that his estate is worth between 80-90 million. (Simple will, no estate planning, the taxing ba$tard$ and the probate slimeballs will have a field day with this one, I don't envy the grand kids)
So, there is money to be made, a lot of money, even during severe economic downturns.
I'm for the creation of a jobs money bomb . The government get 25% of the money back in taxes for starters .
One job creates more and the buying stimulates the economy .
In addition if the government can somehow stimulate the emergence of
manufacturing coming back to American ,it would be nice .Corporations should be penalized for outsourcing .
Countries that depended on America for sales need to start taking care of their own . It's absurd that so many slave labor countries were feasting off American buying power while they ignored their own
people . Who got all the money ,the Corporations did .
Time for balance in the distribution of incomes verses the Corporations getting fat off the workers . The opposite is the case regarding the Auto Companies . The Unions need to get real and come in sink with the market .
No longer can Countries have fixed
retirement contracts and they have to be set up to take into considering changing economic cycles . Too bad if you want to retire at 55 and have all your health care benefits paid for you .
With health care costs going up ,the contracts should of been a percent of the going rate and the early retired person should of paid for the difference . Retirement accounts need to be based on different amounts put in yearly based on how well the business does . After 7 to 30 years working for a company the amount would reflect the total of the business cycle up or down .
In addition the government should not be allowed to let Corporations get away with underfunding retirement accounts ,again a product of Corporations having their way with Government .
New workers should be given decent wages and retirement and health plans . No reason to penalize the younger worker who needs to have a life .
Who benefited by the 8 year boom that is crashing . The Corporations got a windfall with all this spending that left the American people in debt . Wall Street and investors around the world got the windfall (if they got out early enough ). New regulations are needed for the Wall Street gambling Casino (or I should say old regulations need to come back ). And finally the crimes of the boom need some Justice . There are always great crimes that are behind great wealth that is created ,so go after it ,at least from the stand point of liability . Go after the Mozillo's for marketing a Ponzi-scheme and refusing to underwrite loans to pump up the stocks and run .I'm sure that Mozillos claims that everyone was doing it or that his Company only gave people what they wanted will not hold water in the final analysis . Get rid of the Politicians that are so corrupted by the long term system that they can't see anything but
protection for their Gods . Don't accept Paulsons notion that prosecution come later ,after bail outs because its just a excuse to
cover-up the crimes and liabilities ,of which Paulson himself might be on the list for his acts during the boom .
Keith,
Have you completely lost it?!!!!
Or has someone else taken over your alias?
A money bomb would take the US to the status of a third world country. One of the major characterisitics of third world is the amount of corruption in the government. A money bomb would be rewarding those that created the mess - an ultimate act of corruption. It would show everyone that there is no point to work hard and save, since the values of those savings will be taken away at a moments notice. Have 500,000 in the bank after a lifetime of working? Well, yesterday you thought you could retire on it but today you can buy 12 eggs. Now back to work in order to buy some more eggs tomorrow.
The US is not supposed to be a feudal country with everyone as serfs working for the banking class.
A money bomb would make it that.
Glad to see you're finally starting to get it.
It really is Econ 101.
But don't worry too much about the "massive debt". The value of that debt is greatly diminished due to the inflationary errosion, so when it gets paid back, it will take less labor per dollar.
You get a smily face sticker today. Not quite a gold star yet.
Class dismissed.
Anon said:
"Exactly how will a money bomb help? One the money runs out, we're right back to where we started, except the debt is doubled and we'll be paying a higher interest rate."
-------------
That's a great question Anon, the way it will help is if it's done in stealth fashion. E.g. look how China is spending $600B on infrastructure. They're in collusion w/the US. They get to liquidate treasuries, US gets to print billions to pay it off. Dollar liquidity splooged all over the world, China buys Caterpillars and US Steel. Everybody's happy.
Smiley face sticker for you today.
Just print some m0re money and send us some more stimulous checks, problem solved my friends.
"Rogers admits that silver has been particularly battered down, 35% this year, and perhaps that is why he thinks this precious metal will outperform gold as investors turn to the metal as a hedge against inflation.
‘Silver will do better than gold,’ Rogers recently said. ‘It’s been beaten down horribly. If you put a gun to my head and said you have to buy one, I would buy silver rather than gold.’
Gold may drop as central banks and the International Monetary Fund (IMF) sell the metal to raise cash, said Rogers, who correctly predicted in April 2006 that gold would reach US$1,000 an ounce. The IMF in May ratified a plan that included proposals to sell 403.3 metric tons of gold to reduce a budget deficit."
HUH?
Well, my father did leave me huge bag of silver dollars!
There are lots of gold bullion bars, coins, etc. on ebay if you want some.
This all seems so weird.
The best a money bomb would do is delay the inevitable, maybe for a few years, maybe for a generation. You must not have kids, Keith.
The likely outcome would be to cause a hyperinflationary depression, rather than a deflationary or slightly inflationary depression which we are currently facing.
With that said, hyperinflation is obviously the goal, since it is the only sure way to squeeze every last dime, or thousand dollars, from the people who sat out the bubbles. If they act prudently and avoid this last potential disaster, hyperinflation, a middle class could rise from the ashes. In other words, anything less than hyperinflation would be a disaster.
Every time this has been tried it has ended in complete, utter disaster. This is like committing suicide when you find out you have skin cancer. If you want mass starvation, revolution and death unparalleled since the Civil War, yes, then let's try this out.
Let me tell you a little secret: Farmers are paid to destroy tons of perfectly fine edible crops. This is to keep their price very high, not just *profitable*.
Hey smart guy, corn at 2.80 fuel at 4.00 there isn't a farmer in the country that isn't starving and bankrupt. City slickers kill me, or should I say themselves.
Obama's Senior Economic Advisor on Face the Nation said it's gonna be 'woo, big, long numbers'(made about three foot long 'air numbers' with his hands)stimulus package'.
So, yeah, trillions.
Nancy Pelosi saying billions with tax cuts.
Oh, whatever.
This is why I hate money. Always have to worry about it.
Guess I will just go down with everyone else.
Keith -
There is nothing unrealistic about your predictions - it is coming true as we post to this blog.
GREED is what lead us here, from all parties in the housing chain.
The fix as I see it is even more drastic (but required) then what you suggest. I suggest that a massive salary cut - across all local, state, county and federal positions be put in place immediately. No salary increases, bonuses, severance packages, etc... for anyone at this time.
Sound too drastic?
Just watch what happens when taxation of all kinds begins to skyrockett when these measures are not put in place.
There's still plenty of popcorn at your local grocery store, so stock up, because this show is going to be running into overtime.
100% correct!
Whether money is thrown at this problem or not, we enter the worst recession we've ever seen - possibly depression (some people are already in a depression anyway).
Anonymous Said ...
Keith, I can't tell if you are being sarcastic with this post or not.
The only saving grace in Obama's plan is that he is building useful infrastructure, not just handing out money like Bushco. Obama's plan could rightfully be considered an investment that will make the US more competitive and reduce our dependence on foreign oil. So if we live through the depression and manage to avoid a currency crisis, we might just come out ok in thirty years, assuming we are really lucky on the way.
Personally, I'd rather go with a tried and true solution - depression and deflation. We've done it before, we know what to expect, it's 100% guaranteed to work, bureacrats and politicians can't screw it up, and it's a no-overhead, self-regulating process. Sit back and watch the free market work its magic. And it's likely to be faster and less painful than any other solution, including money bombs.
Seriously, let's take the easy way out. Of all possible scenarios going forward, depression is by far the most attractive. That really sucks, but it's true. Let's get on with it.
Well said ... our public officials have been painting the nation into a corner for far too long now with non-drying paint (via the printing press) - it's now coming to an end.
No, this is not crazy, it's entirely logical when a handfull of people take advantage of the system and expect other people to pay for their lifestyles - it finally goes under.
Something needs to be done, but if it comes in the form of a "money bomb", the problems we are seeing today will be mild in comparison - and what a bomb it will be.
Awhile back ago, so many here were labeled the "tin-foil hat" group, kind of ironic.
If any of us can where any sort of hat after this catastrophy, we should count ourselves fortunate.
Anonymous said...
Uh Oh, CNBC says that the government isn't going to take over Citigroup, or force a merger.
http://www.cnbc.com/id/27859019
So...that's interesting... if it's true. (Probably because the govt. is broke and there really is no such thing as "too big to fail".)
But assuming the govt. will print their way out of this, it probably means they are conserving and/or protecting their powder for a big play...like a money bomb. Unfortunately, it will take too long to process the injection of cash and our economy will end up like so many other good companies, bankrupt.
The crisis has moved too fast, and has caught everyone in charge off guard. They really don't know what to do, which means more instability.
At this rate, all stocks will be trading at the $2.00 range pretty soon.
A few indications of this is everywhere: Investors are now advising, "there is no place to hide." The President has said, "this sucker is going down." Paulson has done a 180 on buying up toxic securities, which throws all the leveraged institutions under a bus. They've bailed on the auto bailout and now the CitiGroup takeover. We're right back into the credit crisis we were in a month ago. Commerical Bonds are tanking. Credit card companies are next. Our fed rate is zero bound. Deflation has set in. Retail is cratering. Uemployment is about to skyrocket. There is no gauge to put value on anything anymore. And the rest of the world is in worse shape than we are.
My god. If this crisis is like cancer, then I have to say it is malignant and has already matasisized. Even the cure creates its own set of unintended consequences...which all-in-all is really bad. One of my favorite expressions is, "we've painted ourselves into a corner with non-drying paint."
Perhaps all those 5 million people decending on DC for the inaugeration will have quite a different plan by then. Could get ugly, quick. Hell, the security budget alone is breaking D.C.'s budget.
Throw on top of it all the inevitable devaluation of the dollar down the road and we're looking at some serious doo doo.
I say drop the money bomb, bail out the auto industry, give the banks more money, DO WHATEVER! Cause the consequences of not doing enough are indeed catastrophic, and furthermore we have probably already gone beyond the point of no return. Obviously millions of people are already aware of this, which means they will revolt and it will be lawless.
All I can think of is litterally freezing all global debt. Perhaps setting up a giant account for everything that isn't paid for in order to push it to the side for a while until we can establish a baseline upon which the world can start paying it off. Otherwise, it all goes away. Everything. Laws, contracts, security. It all becomes moot if you can't eat.
This is crazy.
RE: "brought about the 'necessity' of National Socialism."
Mein Kampf is a very interesting book and it's too bad that folks continue to blame the historical events of WWII on a single madman since, as far as I can tell, military economies bring on socialism since the military economy distorts the civilian economy so much.
Most major businesses certainly receive cash to support ongoing military operations: AT&T taps our phones; the airlines ship military cargo.
So bailouts (government subsidies) are truly needed to level the playing field a bit.
Oh yes, come up with all sorts of ideas that are actually worse in the long run than TAKE YOUR MEDICINE NOW!!!
The only real "cure" is for a grinding depression and all that entails.
Everything else is just a band-aid....or worse....like a "money bomb".
Keith,
Your "solution" does not address the root cause of the problem.
Let's try this solution:
1. Stop all these bailout programs.
2. Cut government spending.
3. Leave taxes alone.
4. Move to the gold standard
5. Outlaw fractional reserve banking
6. Abolish the Federal Reserve--which is the organization that created this problem.
This solution will no doubt cause a lot of disruption in the economy, and so we should have generous and length unemployment compensation during this period.
However, this is the only plan likely to work this time and actually prevent the problem from happening again.
o.jeff
Money Bomb on the way:
"I don't know what the number is going to be, but it's going to be a big number," Obama economic adviser Austan Goolsbee said. "It has to be. The point is to, kind of, get people back on track and startle the thing into submission."
Also, Bernanke and Paulson can do whatever they want. They bailed out AIG, Fannie, Freddie, etc, they can bail out Citi, BofA, Ford, GM, anyone they want. There are no checks and balances anymore.
And re-read that Bernanke helicopter speech again. The government will issue trillions in new debt, and the Fed will buy it up.
Then you'll know.
It hath been foretold.
Anyone buying gold this week?
http://cgi.ebay.com/1-PAMP-SUISSE-100-GRAM-3-2-oz-PURE-GOLD-BAR-NO-RESERVE_W0QQitemZ350127402251QQihZ022QQcategoryZ39484QQcmdZViewItem
I just found another bad guy:
The Office of Thrift Supervision (OTS), an agency of the United States Department of the Treasury, is the primary regulator of federal savings associations (sometimes referred to as federal thrifts). Federal savings associations include both federal savings banks and federal savings and loans. The OTS is also responsible for supervising savings and loan holding companies (SLHCs) and some state-chartered institutions.
The OTS was established by Congress as a bureau of the Department of the Treasury on August 9, 1989 as part of the Financial Institutions Reform, Recovery and Enforcement Act of 1989. OTS does not receive appropriations from the U.S. Congress to fund its operations; instead, the entire budget of the agency is paid by assessments on the institutions it regulates.
Here's the short list of who they were supposed to regulate:
Indy Mac
Washington Mutual
Countrywide
Citicorp
American Express
Can you believe that the regulators are paid by the institutions they are supposed to regulate? Just like the ratings agencies. Jeez.
SEE:
http://www.msnbc.msn.com/id/27865780/
I rent, will continue to buy the stocks that I 'hope' will survive...and continue to keep 50% cash.
Wish me luck, as I am wishing you, and our nation, luck.
And as I've been saying to Keith and the others, life was pretty damn good in the 60s...1 car per family, kids playing outside, smaller houses, people caring for their neighbors, growing their own gardens where possible...etc.
keyser soze
Talking Heads
Burning Down the House
http://www.youtube.com/watch?v=st1lH8zcIuQ
or
Jesus Christ Superstar
The Temple
http://www.youtube.com/watch?v=IFNJ-YdBH4c
Lamaria - don't forgt the billions that farmers are paid for 'Idle Acres', not to be confused with Green Acres and Zeb.
Which brings me to my favorite topic...the bubble in midwest farmland and worthless 'hunting ground'. Productive farmland is now selling for $7-9k per acre and the euphemistically named 'hunting ground' is now known to fetch $5,000 an acre. That...and US Treasuries, are the NEW BUBBLE.jmho
keyser soze
Afterthought said...
We need to live within our means.
Thank you for cutting through the crap.
Occams Razor:
All other things being equal, the simplest solution is the best.
Got desperation?
anon,
These two things are incompatible, you can not do both at the same time:
2. Cut government spending.
This solution will no doubt cause a lot of disruption in the economy, and so we should have generous and length unemployment compensation during this period.
Keith said: Anyone buying gold this week?
--------------------------------
Gold has been tested and re-tested at the $740.00 level and appears to have established a floor. Gold is in backwardation as of late last week which is a very bullish sign. Gold investors will tell you there are 2 reasons for backwardation: 1) The market fears a collapse in the currency, and/or 2) The market is worried about counterparties making good on their promise to deliver gold.
It may get very interesting at Comex next month Re: rumors of a run on Comex as investors take delivery. If it happens, gold goes into the stratosphere.
I'm buying - only physical gold - avoiding the paper market, I don't trust it.
Why don't we eliminate money and just say everything is free from now on? What a great idea, huh? It's at least as good an idea as this 'money bomb'.
Get ready for rioting and civil war - coming to a city near you!
Create a new WPA and CCC for rebuilding America's infrastructure, create more light rail, and convert parks and public buildings so they are more energy efficient.
Quit sending foreigh aid outside the country. (This means no money to all those Africans who think they are in the money now that Obama is in the White House).
Raise the retirement age for Social Security immediately to 70 years old, except for those who must retire due to health reasons.
I tend to agree. The only way to handle this level of debt is sovereign default and starting with a new currency. The implementation needs to be done in a face saving way and for this reason...
The only problem is that this amount of cash bomb is not suitable for a helicopter - probably need to start a few B-52s.
here's what I read from this post: "a bailout is bad when Bush does it but it's a good thing when Obama does it."
pull your head out of the Obama cult, man.
Bring on the Money Bomb!! I'd like to pay of my mortgage with a million dollar bank note and say to my banker keep the change! Unfortunately my bank not accepting Zimbabwe at par - yet.
Zimbabwe U.S.A. Ya, that'll be fun.
You're full of shit, Keith. We need to suffer tremendously and ride this out like we've always done. No money bomb. No roads and bridges to nowhere just for the sake of generating jobs. No more fucking bailouts.
Just what in the hell do you think is going to happen when the dollar is destroyed? What happens with regards to inflation? You've got to start thinking. When you talk nonsense like this, it scares me quite frankly.
Much deleveraging needs to transpire, and I hate to say it, but many lives must be lost in the process. 1-2 billion people must disappear-period. Brangelina and Gossip Girl won't seem nearly as interesting when you're dumpster diving for a mouldy loaf of bread. This country must pay the price for its profligacy and stupidity and it must not come at the expense of my two month old daugther. Sacrifice your children if you'd like, but mine won't pay for your goddamn putrid mess.
Lots of old men and women (whose greed created this mess - greatest generation my fucking ass) need to be thrown in ditches and buried. Lots of 30-somethings must be reduced to pauperdom and get knifed in the streets over an apple core.
I REPEAT: The people of America must be made to suffer horrifically. We made this mess and nothing is going to get us out other than longsuffering. You want to talk about rebirth. America, after a decade of hell, will emerge like the Phoenix rising from the ashes.
Im deep in gold bombs away
"Why don't they make it a $20 trillion money bomb? it's not like it's going to do any good."
Wrong !!!
Let me be the first to call for a 75 Trillion money bomb that will fix all of our problems.
Right Keith
Yea thats the ticket.
75 Trillion
No wait ...
make it 80 Trillion
No wait... I know 100 Trillion
Yea thats the ticket.
Thank God all we have to do is print money.
GM can be used to build printing Presses. The hell with cars.
They could print their own bailout money.
Right Keith
And you thought the fix was going to require pain ... No way.
Money bomb is OK,...
but re-price gold to $50,000 per ounce at the same time.
"Anyone buying gold?"
I bought some GDX on friday morning. The etf rose 20% that day alone. No, I didn't get all of that rise, but I got some of it.
I actually bought it for the long term. All the necessary parties are in alignment on this one - they are attempting to inflate their way out.
Obama readies with massive US rescue package
Anne Davies, Washington
November 24, 2008 - 7:49AM
President-elect Barack Obama is considering a possible $1.1 trillion economic stimulus package in a bid to create or save 2.5 million jobs as soon as he takes office on January 20.
Senior Democrats today revealed they were pushing Mr Obama to massively up the ante on the $US61 billion rescue plan already rejected by the Senate and President George Bush.
The emergency package is being worked on by Mr Obama’s economic team and senior members of Congress, as economists warn that America now risks the far more serious prospect of a very deep recession and falling prices, similar to the Great Depression.
A formal lannouncement on the package is expected today on Monday US time.
Keith,
A money bomb of the size you are talking would cause massive inflation and bring us to ruination as it has done to so many countries before.
It would be much easier and less costly to simply let deflation take hold and have this thing wind down.
Doing New Deal programs like infrastructure programs will do NOTHING for us since people can't buy a bridge or a sidewalk with the wages they will get from building them. These programs did very little to get us out of the Depression (it was WWII).
Forget alternative energy too. There is not enough of it to even make a difference to us over the next fifty years. This is a pipe dream and rantings of deluded socialists led by al gore.
We need to let this thing unwind and get housing prices back to where they should be. Because there will be so many unoccupied houses, we will need to bulldoze many of them at some point to establish a true equilibrium between supply and demand. Invest in Caterpillar!
I'm actually shocked that you are now advocating a money bomb after taking to task bernanke for so long on HP for doing the same. You have thrown me for a loop on this one!!
It seems to me you invested so much into pushing Obama that you are now climbing on board the very train you let pass by many times this year. You should stick with your guns...you were right...and give the big O the heave ho. He is going to do everything opposite that you said on HP. We warned you this would happen. It is time for you to dump the Dems and simply become an American, as folks like myself have done.
My own position is that we need some liquidity injections into the system...Kindleberger writes about this in MPC. But a money bomb will send us into hyperinflation and bomb us back to the stone age.
Here's something that occured to me based on the recent unemployment numbers: what happens to the country's unity if states begin to go bankrupt at different times? California has 9% unemployment and is $300 billion in the red. New York is $47 billion in the red and is loosing many many investor jobs. Florida the same and not just labor jobs. Ohio, Detroit - Need I say more? Hell, Las Vegas is toast, which all means a serious decrease in Federal (and state) revenue.
Seriously. If California or New York go bankrupt and DC/VA/MD have money, aern't they going to be pissed? We need an orderly process to handle the fundamental elements of this crisis. If states are left to themselves...they might damn well recede.
The President has to unite the country behind one hell of a bold plan, or the country will splinter into seperate economic factions.
One idea worth suggestion is to litterally announce that the U.S.A. is declaring Chapter 11 bankruptsy and using the world court to process the structure of it.
What the hell? We'll be the first in the world to do it - thus setting the legal precident for all the others.
If an organized bankruptsy is good for GM, why not America? If the problem really is analagous to overextending one's self similar to any family's predicament in general, then the answer might also be as simple. Declare bankrupsty and reorganize in a world bankrupsty court.
Given the hurtling speed of this disaster, being proactive, upfront and honest might actually work. Just come clean and use the laws we have to guide the process.
The alternatives are downright ugly.
And again, I'm seriously worried about what 5 million or more people are going to want to say by Jan. 20th when they descend on DC for the Inaugeration. What if it's 20 million unemployed people by then?
Our leaders need to stop bullshiting the public and come clean about the extent to which we are screwed and use the opportunity to present a bold, provocative way of getting out of this mess. As long as people see their favorite television show and the commercials that support them, or thousands of people at a game or the mall, they will never believe there's a problem. And there in lies one of my greatest fears. You will turn on the TV and every channel will have a "Test Screen" and as you flip through them you come across one channel that is describing which zip code they are distributing food in today, if we're that lucky.
If CitiGroup goes to zero, so will the rest of the banks...and companies too for that matter. Just like if GM goes down it'll take another one or two with it. Once that happens, it really is game over. And frankly, as far as I'm concerned, the snowball has already been pushed down the hill.
Structured, International, Chpater 11 Bankrupsty is my new suggestion.
With the collapse of CitiGroup, there is going to be a run on the banks, FDIC or not. Bank of America will be right behind it. People will wise up real quick when they go to the bank and the doors are locked during normal business hours.
Boy, they sure screwed this up.
Borrow, Spend, Print to the End.
cool, 10 trillion.
that would be 30k for every man, woman and child.
CTC baby, CTC! (Cut The Check)
This is a pretty silly idea man. Conjuring up 10 trillion dollars from thin air isn't going to restart our economy.
-------------------------
well, we are kind of almost half way there.
Fed has "loaned" 2 Trillion to "banks". they won't say who nor what was put up for collateral because that information could cause people to lose faith in the financial system (reassuring, huh?).
700 Billion for Paulson and Co.
~300 Billion for the first stimulus.
Now BO is talking about a 1 Trillion stimulus package.
that is 4 Trillion right there.
wow, just think of it, 30k per man woman,and child.
everyone would be lifted out of poverty, albeit for just a short period of time.
for that instance, BO can lay claim to eliminating poverty! just think of the possibilities!
just think about it! every family could then afford a decent new car! send their kids to college! take a vacation! buy a small business! buy a boat! pimp their rides! never have to pay for gas again!
all of that and everyone would be able to do that stuff the day after distributing the checks!
people will be working over time to meet the demand for all that stuff! Or else prices will have to increase to compensate for limited supply.
uh oh. Perhaps BO can freeze prices across the board the day before the checks are distributed.... yea, thats the ticket.
Then you'll know.
It hath been foretold.
Anyone buying gold this week?
----------------------------
HUI is showing some life again. might be time to get back in.
some annonopussy said "Lots of old men and women (whose greed created this mess - greatest generation my fucking ass) need to be thrown in ditches and buried. Lots of 30-somethings must be reduced to pauperdom and get knifed in the streets over an apple core.
I REPEAT: The people of America must be made to suffer horrifically. We made this mess and nothing is going to get us out other than longsuffering. You want to talk about rebirth. America, after a decade of hell, will emerge like the Phoenix rising from the ashes."
Sorry asshole, but the lefties already tried this experiment. The country was Cambodia, and Pol Pot's Utopian dream never arrived even though he and his cronies followed your recipe to the letter.
Depression and pain got my vote. Period. Anything else is just another dumb trick to keep running this rigged system. ok ?
how come you've done such a great job with HP and such a lousy job with SA ??
Many of you are still confused.
I'm telling you, the ONLY WAY the US avoids a Great Depression 2 is with a $10 trillion money bomb.
So, you choose.
$10 trillion.
Or Great Depression 2.
Steely Sham - are you retarded? No, seriously? How for the love of god did you take that message and equate it with Cambodia? Are you some bitter Cambodian with an agenda who goes about spewing vapid idiocy at any site that will post it?
The point is, the American people need to suffer the slings and arrows of their profligacy. Now pay attention here dipshit: that means a lower standard of living and some serious pain. And if that means hunger and a little insecurity in their otherwise sheltered lives, then I for one am all for it.
I don't know why I bother responding to mental pygmies. It usually doesn't make much of a dent in instances of monolithic stupidity.
Sheeesh - moron.
Oh and I assume your name is Steely Damn.....otherwise you're just another anonymous pussy, right? Idiot.
FLASH - looks like a $320 billion money bomb just went off to bail out ONE COMPANY - Citigroup
Get that printing press going!
And I encourage all of you AGAIN to read Bernanke's helicopter speech. It's now more important than Manias, Panics and Crashes. And his endgame is now here.
Over the next 4 years, $10 trillion will need to be spent. And we still might have a great depression 2.
Good luck taking delivery of those silver bars . . .
Keith:
Looks like the Obama plan is only going to be 700 billion (politically correct to match the Wall St bailout I'm sure). Is that enough in your mind to save us?
Me thinks not.
2000 Dow?
Dow was up 7% on Friday. It will be up 4% at least today.
As for the dollar have you actually checked f/x rates recently?
Euro was 1.60 in July. It's 1.25 today.
Get a grip man.
"...trillions have already been lost." Really? Where did it go?
I read in another article "every last penny of profit an investor earned...".
The "money" we're talking about was never really there. Nothing was built or created. This paper wealth is nothing more than 1's & 0's on some banks computers until it is withdrawn and used to purchase something. Right now that money has simply transferred from one account to another.
There was a time when the thought of creating wealth out of nothing was ludicrous and we may be heading back in that direction now.
Last anon - thank you for proving that idiots still roam the streets of America
Re-read the post.
IF the US DIDN'T drop a money bomb, that's where we were headed.
And guess what. This weekend, they dropped a $1.4 TRILLION money bomb. Just for starters. $300 billion for Citibank and the Dems are talking a $1.1 trillion stimulus.
And that's just for starters.
I think it's MUCH more likely that we'll see Dow 20,000 before we see Dow 2,000. The Obama administration and the Dems are letting us know what choice they've made - between a Money Bomb and a Great Depression 2.
Invest accordingly.
FYI...
Fed Pledges Top $7.4 Trillion to Ease Frozen Credit
By Mark Pittman and Bob Ivry
Nov. 24 (Bloomberg) -- The U.S. government is prepared to lend more than $7.4 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.
"And guess what. This weekend, they dropped a $1.4 TRILLION money bomb. Just for starters. $300 billion for Citibank and the Dems are talking a $1.1 trillion stimulus."
Back up a bit. The Dems are TALKING about $1.1 trillion. Hasn't happened yet. The "money bomb" was $300 billion.
Don't count your chickens before they hatch.
RobertM: "...trillions have already been lost." Really? Where did it go?"
keith: "Last anon - thank you for proving that idiots still roam the streets of America
Re-read the post.
IF the US DIDN'T drop a money bomb, that's where we were headed."
Keith, here's your original post:
"And at current trends folks, we could easily see the sickening numbers posted above. Trillions and trillions and trillions and trillions have already been lost."
So which is it? Has it already been lost, or will it be lost? Or do you just make it up as you go along. Don't bother answering, anybody paying attention already knows the answer.
Keith, explain to us how the money bomb prevents a depression. Once people have money in their pockets, they will bid up real estate, buy $4 coffees, marble countertops, and flat screen tvs, and they'll be filling the hummers with cheap gas. Businesses will likewise produce crappy cars and import cheap crap from China.
And when the money bomb runs out in two years, we're right back to where we started.
Seriously, how will the money bomb change anything? Will Americans wake up and change their behavior? What will they do differently.
I know the money bomb is coming; I'm just trying to figure out why people think it will do any good.
The definition of inflation is "an increase in the money supply". The dollar will fall like a stone in the lake. How do they stop it from turning into hyperinflation like Wiemar's Germany ? They can't. The remedy (raising interest rates to 20%) destroys the markets they are trying to reflate. Allowing vulnerable organizations to go bankrupt and get acquired by stronger ones is the best solution. It is the solution neither party is suggesting. They have indeed chosen the money bomb, but it is not a solution. It is a band-aid for cancer. Buy gold and gold stocks. It is the bargain of a lifetime. There is no timing this accurately. Buy in and hold on.
Keith,
Ron Paul Money Bomb - you used to say that - what happened to that???
Same will happen here.
This post is funny,
Things will work the way they work... you can't turn back the clock.
Oh... and cold fusion... you want to change the game - cold fusion.
Other than that - you're pissing in a CAT 5 hurricane.
Enjoy.
I feel stupid asking this, but...
What exactly is a money bomb?
Is it printing a massive amount of money without reserve backup?
The money bomb....well, at this speed of giving the stuff away, it makes sense...no one appears to be too concerned about the deficit....we're talking about a BIG STIMULUS (that's what Obama said yesterday)
Post a Comment