November 18, 2008
Get ready folks. Here comes the greatest global economic Hail Mary money bomb that the world has ever seen
A stimulative money bomb is about to go off, in America and all over the world.
The governments of the world, with a coordinated effort, will now use shock therapy to try to resuscitate the patient.
It's not a question of "if". It's a question of "when", and "how much".
Get ready.
It's coming.
And the shock waves will be felt for generations.
Tax cuts. 0% interest rates. Checks in the mail. Jobs programs. Infrastructure investment. Bailouts. And the most aggressive inflationary stimulative monetary and fiscal policy that the world has ever seen.
Get on record here with what this Hail Mary will look like. Or as I call it, a "Money Bomb".
And will it work?
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36 comments:
It works if the aristocrats still have their heads 10 years from now, which is the real purpose of the plan.
This plan would be perfect if it had some care about the environment; we should be pushing ourselves as a matter of normal policy; space, AI, robotics, stem cells, genetic engineering, faster computers, better internet, the list goes on and on.
But we need to have a sustainable environment to live in.
World GDP is 66 trillion. I'm hearing the IMF recommended a stimulus of 2% of GDP, or 1.3 trillion.
Not even close. After all is said and done I predict 10% of GDP if not more.
Hmmmm... I'm wondering what the best way is to position my nets so I maximize my own cash catch.
I want to hear more on the green industry potential, to start a new "industrial revolution" for America.
Now that we have no need to build new homes, we can retrofit old homes with all the latest greatest, insulation, LED lighting, Solar hot water, where applicable, solar PV, wind, etc etc.
create consumer demand for products, technologies, skilled installation labor, and sales all based in USA. No more consuming worthless or non essential chinese crap.
Just my quick 2cents.
won't work. the die-off in the urban holding pins will be catastrophic (for them). Jefferson's dream of a nation of yeoman farmers beholden to only themselves is at hand!
got pain :)
I'm a lifelong Hurricane - 24 years later and the pain of that one play still haunts me.
Dual meaning in that clip - not just the bomb but the pain that continues to endure
You want pain? Michigan grad here. Kordell Stewart, Colorado.
Pain.
Back to the subject at hand, predict the size of Obama's stimulus package, and also whether he'll raise taxes on $250k+ like he promised.
I predict $1.2 trillion stimulus, and no tax increases.
We're gonna blow a hole in this deficit. It's gonna be sick.
Just gimme a $5000 stimulus check so I can pay off the last of my bills and have a little party and then I will go into hibernation until better days arrive.
When you say 'stimulus' are you just talking about the checks sent out to us by the government? Or is there some other stimulus coming?
Frankly, I don't care if it works or not.
I have my shadow companies set up and my zombie employees and this is one bubble I am not going to miss.
If they are stupid enough t offer it up, this time I AM TAKING IT, ALL OF IT.
F*ck America. It's DEAD anyway.
Only 137 newspaper pages of residential foreclosres in Wayne County, MI today.
Bernanke must be correct again. The credit markets are beginning to work again (wave of laughter).
PUNISH THE GUILTY AND START AT THE TOP.
Huh? It's already started homeboy.
The money bomb I really despise is the one that GM or Ford might get. The only way for them to get rid of their obscene labor contracts and idiotic management is to go bankrupt. When the Prius was introduced several years ago the vice chairman of GM dismissed it as a marketing stunt and GM then went and built a new SUV/truck factory. Their workers get paid more then college graduates, they get lifetime medical insurance and they get nearly full pay if they get laid off. Even if we bail them out they still can't even compete with cars made in southern states with cheaper labor.
Headline: "Paulson Warns Against Using Bailout Plan as `Panacea' for Economy's Ills"
Just wait a minute. I thought that's what these bailouts were all about.
Some random thoughts on the ‘Money Bomb’ topic:
So we are seeing deflation in housing, stock, and used SUV/truck prices. Billions of dollars, no – make that trillions of dollars – have evaporated. That would drive the money supply down, wouldn’t it?
Now, enter the Fed and its printing presses, along with the $700B Bailout. This is pumping newly-created money into the ‘system,’ isn’t it?
So, will these two balance one another out, preventing both extreme deflation and hyperinflation?
As an observer, it seems to me the end result will be a net loss on the part of individual homeowners and those who own stock and other depreciated assets, and a huge gain to the banks and other ‘top 5%’ers;’ i.e. CEO.s.
In other words, what is happening before our eyes, is a massive transfer of wealth from ordinary Americans into the pockets of the corporate elite. Isn’t this what appears to be going on? And what are we going to do about this?
-Mammoth
HELLO AGAIN TOOLS,
SAVIOR OSAMA WILL RAISE TAXES AND WHEN RE-ELECTED IN 2012, HE WILL (HOPEFULLY) REMOVE THE LOWER CAPITAL GAINS RATES AND STICK IT TO THE MAN WITH ALL INCOME TREATED AS ORDINARY WITH RATES OF AT LEAST 50% FOR THE UPPPER INCOME FOLK!!!!
THE RICH SCREWED ALL OF YOU BEGINNING WITH RONNY IN 1982!!!!
TOOLS, IT IS TIME FOR EQUALITY!!!!
THE GAP OF HAVE'S AND HAVE NOT'S HAS GROWN OUT OF PROPORTION!!!!
GO AHEAD AND CALL ME A COMMIE, BUT DEEP DOWN YOU KNOW I AM RIGHT!!!!
NONE OF YOU, ABSOLUTELY NONE OF YOU ARE PART OF THE ELITES!!!!
IF YOU BELIEVE THAT YOU ARE A SPECIAL RICH MAN/WOMAN THEN YOU ARE TRULY A TOOL!!!!
DO YOUR RESEARCH, YOU KNOW IT BE TRUE (SORRY FOR THE VADER REFERENCE)!!!!
WHY HAVE A CAPITAL GAIN RATE OF 15%?!?!?!?! MOST OF YOU TOOLS THAT OWN STOCK/CAPITAL ASSETS HAVE THEM IN A TAX DEFERRED ACCOUNT!!!!
GUESS WHAT, WHEN YOU TAKE THE MONEY OUT, IF THERE IS ANY LEFT, YOU PAY - DRUMROLL - ORDINARY RATES!!!!
AND DON'T GIVE ME THIS "WE RECEIVED AN ORDINARY DEDUCTION FOR THE DEFERRAL" CRAP EITHER!!!!
YOU KNOW WHAT, I DON'T CARE!!!!
STICK IT TO THOSE WHO MADE OUT WITH THE RAPE AND PILLAGE OF THIS ONCE PROSPEROUS NATION!!!!
LOOK IT UP TOOLS, TAX INCREASES STIMULATED THE ECONOMY!!!!
THAT IS TRICKLE DOWN ECONOMICS, EITHER PAY EMPLOYEES OR PAY UNCLE SAM!!!!
YOU DON'T LIKE IT, TOUGH SH1T, SOMEBODY ELSE WILL TAKE YOUR PLACE!!!!
TARDS!!!!
TWITS!!!!
DIMWITS!!
NITWITS!!
TOOLS!!!!
DOLTS!!!!
DOPES!!!!
The governments of the world and the Central Banks of the world will do WHATEVER IT TAKES to fend off the coming Depression/Deflation. The big question is if this "money bomb" or "hail mary" works. If it works, then instead of seeing 20% to 30% unemployment, you will see 10% to 15% unemployment, etc.. and then the economy will be revived.
But if it doesn't work, (and so far all that the governments of the world have tried hasn't worked) then WATCH OUT. Here comes a massive, huge, gargantuan deflation likes that we haven't seen.
I am hoping for a hyper-inflationary environment. I hope and pray we don't see a huge deflation. As many of you know, in a deflation; cash will gain value because real estate, stocks, etc.... go down in value greatly and also those that are in debt see the actual value of debt go high in relation to current asset values. This will be very interesting to see in the next six to nine months. If it doesn't work, then it's time to worry.
Keith, if you thought that was painful wait till Michigan checks into the house of agonizing pain and torture Saturday at noon. Its gonna be a bloodbath. Kind of like the aftermath of the money bomb. How do we let such incompetent monkeys run things?
It will work temporarily. ANd might distract people from the greater problem it creates.
Crap, forgot to add:
Remember how people thought the economy did OK in the 2nd quarter, until someone pointed out the amount of growth was equal to the amount given out in those stupid checks?
Where are we going to borrow this money? Or are we going to print it?
how can you not have hyper inflation with such massive money printing?
remember though German middle class was radicalized by the Weimar hyperinflation...what will the wetsern middles classes do when their savings are wiped out and they are new (old) proletariat sharing penury with the new Detroit and Appalachia relatives?"
I can't believe any sane person would think the money bomb would work. Our problem is that we've been living off of borrowed money, we don't produce the right goods, we don't produce enough of our own goods, the production we do have is inefficient, consumers, businesses, and governments waste money on stuff they don't need, and nearly every asset class is overvalued, especially real estate.
We need a real economy where money is wisely spent on things we need that we mostly manufacture ourselves.
The money bomb, no matter how big, will just prolong the wrong behavior a while longer. Then the money runs out and we're back to where we started, only we'll be deeper in debt and the Treasury will be paying higher rates, thus diverting tax dollars toward interest when it will be sorely needed elsewhere.
This mess was caused by too much cheap money flooding the economy and it cannot be fixed by more, even cheaper money.
We lived through a depression before and we can do it again. The government should focus on making sure no one starves, and let the rest work itself out.
This should be called a "Money MOAB".
Will it work? I don't think so, but it appears the world is ready to drop the bomb and see what happens. Just can't see how those several million jobs being lost in the US by summer of 2009 will be coming back anytime soon.
This recession is going to last years.
It won't work because they've failed to address the core issue - needed salary increases and long-term job stability in the private sector - especially for middle-class tax-payers.
We're just throwing more money after bad money.
What a waste and heavy tax-burden on our future generations who did nothing to cause this problem, but will be held responsible to pay it back for the rest of their lives.
Meanwhile Paulson/Bernanke sit in their cushy positions, spending our money anyway they see fit.
Hey Keith, Paulson and Bercracky are getting yelled at by Congress. What do you think?
I wouldn't sell America short and I wouldn't fight the Fed (which is now the basically every central bank in the world).
The global boom has started from the "Soot and Ashes"....
NOBODY IS LOOKING UP....
Barney Frank and Shelia Bair want to use TARP to help struggling "homedebtors." They said it's all in the TARP legislation. No it's not you two corrupt dopes.
I am going long on guns and ammo and canned chili as a backup. I will be somewhere out in the Dakotas, where I was born and raised. God help anyone who comes out there and attempts any chit. I will travel to make money as long as it is there but never to far from the bunker or the fort.
10% of GDP Keith?
I'm betting more like 100%
Think about the stimulus package that China spent on infrastructure.
Wasn't it between $500B and $600B?
Being that their workers get $1 per day, what do you think we would have to spend to match the amount China spent considering that we have to pay our workers $200 per day?
And what about musicians? There has not been a worthwhile album out in years. And screenwriters? Is Hollywood still the leader in filmaking? Probably not. Every movie the last 10 years has been some regurgitated crap from other movies.
More and more covers and remakes. Meanwhile more and more would-be porn stars are emerging on the internet.
I had to walk out on my ARM just to afford my 60" flatscreen HDTV and can't even watch anything respectable while waiting for my government check. What's up with that? Guess its back to WWF and reality TV.
Not going to work unless we have some new form of energy bubble. Something new... To fuel the world.. Then we will come out of it.,
Is the Libertarian New World Order dieing? Or just being born?
A Hail Mary should at least be 80 to 90 yards, is it that bad yet.
http://www.latimes.com/news/
la-fi-homes19-2008nov19,0,
6262498.story
Price of Southern California homes falls 41% from peak
http://seekingalpha.com/article/
106698-median-housing-prices-
poised-to-fall-back-below-200k
Real estate is "local" so I find national statistics to be somewhat meaningless (average wage in New York City is a bit different than Kansas City, Missouri) but we've now dropped from $230K as the median price in July 2006 to just touching $200K as of this past quarter.
This is a 13% national drop which is good news for affordability purposes, but we're still quite a ways way from my target of mid $160Ks, which would put us back to around 3.2x income.
But we're getting there fast despite the government interference.... free markets do work.
Hmmmmm
For 2009, I say $2 trillion in assorted bailouts. We now have to rescue commercial property loans, prime mortgages and numerous "too big" to fail corporations.
That major money bomb is just that, a bomb.
Better yet, call it a neutron money bomb. Destroying lives and leaving McMansions behind.
How cowardly are we.
WE are so unable to take any economic discomfort we are willing to enslave our children and grandchildren under massive debt and high taxes.
Reagan let the economy take it in the shorts (with punitively high interest rates) for two years in order to usher in a new era of prosperity.
Why don't any politicians offer this harsh medicine to cure our ills.
You can't solve a debt problem with more debt.
Jymkata
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