Empire

lol! Good one

 

I'm not saying there aren't some problems with our economic structure rat, but I don't think we're on the verge of economic collapse.

 

I think you read me wrong, but that coulda been my fault. I was trying to say between you and me we are discussing things that we are already well aware of. None of this is even remotely new or original to me. Again I get the impression you are grouping me with the rest of the sheep that see the world through the eyes of the media. Put simply, anything from me about this topic is purposely dipped in sarcasm, rolled in parody, and injected with uncanny references.

 

I think calling others sheep is an excuse for not wanting to elaborate on the discussion.

 

The GDP cannot be overstated when the dollar keeps dropping, coupled with inflation and the current deficit.

I think you guys need to become a little more updated on what's going on.

Do you guys even know where the dollar stands next to the Euro, compared to where it stood five years ago?

 

http://www.fromthewilderness.com/free/ww3/112304_economic_armageddon.shtml

Economic "Armageddon" Predicted

By Brett Arends/ On State Street
Tuesday, November 23, 2004

Stephen Roach, the chief economist at investment banking giant Morgan Stanley, has a public reputation for being bearish.

But you should hear what he's saying in private.

Roach met select groups of fund managers downtown last week, including a group at Fidelity.

His prediction: America has no better than a 10 percent chance of avoiding economic "Armageddon."

Press were not allowed into the meetings. But the Herald has obtained a copy of Roach's presentation. A stunned source who was at one meeting said, "it struck me how extreme he was - much more, it seemed to me, than in public."

Roach sees a 30 percent chance of a slump soon and a 60 percent chance that "we'll muddle through for a while and delay the eventual Armageddon."

The chance we'll get through OK: one in 10. Maybe.

In a nutshell, Roach's argument is that America's record trade deficit means the dollar will keep falling. To keep foreigners buying T-bills and prevent a resulting rise in inflation, Federal Reserve Chairman Alan Greenspan will be forced to raise interest rates further and faster than he wants.

The result: U.S. consumers, who are in debt up to their eyeballs, will get pounded.

Less a case of "Armageddon," maybe, than of a "Perfect Storm."

Roach marshaled alarming facts to support his argument.

To finance its current account deficit with the rest of the world, he said, America has to import $2.6 billion in cash. Every working day.

That is an amazing 80 percent of the entire world's net savings.

Sustainable? Hardly.

Meanwhile, he notes that household debt is at record levels.

Twenty years ago the total debt of U.S. households was equal to half the size of the economy.

Today the figure is 85 percent.

Nearly half of new mortgage borrowing is at flexible interest rates, leaving borrowers much more vulnerable to rate hikes.

Americans are already spending a record share of disposable income paying their interest bills. And interest rates haven't even risen much yet.

You don't have to ask a Wall Street economist to know this, of course. Watch people wielding their credit cards this Christmas.

Roach's analysis isn't entirely new. But recent events give it extra force.

The dollar is hitting fresh lows against currencies from the yen to the euro.

Its parachute failed to open over the weekend, when a meeting of the world's top finance ministers produced no promise of concerted intervention.

It has farther to fall, especially against Asian currencies, analysts agree.

The Fed chairman was drawn to warn on the dollar, and interest rates, on Friday.

Roach could not be reached for comment yesterday. A source who heard the presentation concluded that a "spectacular wave of bankruptcies" is possible.

Smart people downtown agree with much of the analysis. It is undeniable that America is living in a "debt bubble" of record proportions.

But they argue there may be an alternative scenario to Roach's. Greenspan might instead deliberately allow the dollar to slump and inflation to rise, whittling away at the value of today's consumer debts in real terms.

Inflation of 7 percent a year halves "real" values in a decade.

It may be the only way out of the trap.

Higher interest rates, or higher inflation: Either way, the biggest losers will be long-term lenders at fixed interest rates.

You wouldn't want to hold 30-year Treasuries, which today yield just 4.83 percent.

 

on your vehicle = Sheep.


Elaborate enough for you?

 

Sinking Dollar Dominates Davos Debate

By Mark Landler
January 27, 2005
New York Times

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

DAVOS, Switzerland, Jan. 26 - Two things were as clear as the Alpine air on the opening day of the World Economic Forum on Wednesday: The relentlessly sinking dollar is Topic A, and anyone hoping for an answer to when it will stop dropping is likely to come away disappointed.

Economists, politicians and business executives voiced deep unease about the imbalances in the global financial system, which are reflected in the dollar's steep fall against the euro and other currencies.

But most expressed skepticism that the Bush administration would reduce the trade and budget deficits, which have fed those imbalances. The White House has said that it does not view these issues as a major problem because foreigners still view the American economy as an attractive investment.

Some at the forum said they doubted that China, which is financing much of the American debt, would bow to pressure to allow its currency to rise against the dollar this year.

"The U.S. current-account deficit is a problem for the whole world," said Jacob A. Frenkel, a former governor of the Bank of Israel. But, he said, "I don't see the budget deficit being taken seriously."

The Bush administration, which dispatched Vice President Dick Cheney and Secretary of State Colin L. Powell to past Davos meetings to defend the Iraq war and other foreign policy actions, has not sent a similarly prominent economic policy maker to this gathering. That absence has lent the proceedings an imbalanced tone.

"In fairness, it's a transition period in Washington," said Representative Barney Frank, Democrat of Massachusetts, who supplied the American voice on a panel about American leadership. He added, however, "The administration doesn't really have anyone they trust enough to send here."

Mr. Frank, the ranking Democrat on the House Financial Services Committee, said that he worried that the United States was not paying enough attention to the risks of its growing indebtedness. The repercussions of a weak dollar, he said, had barely registered with the White House.

Other critics were blunter.

"There's nobody home on economic policy in America right now," said Stephen S. Roach, the chief economist at Morgan Stanley. The twin burdens of household and public debt in the United States, he said, are unsustainable. Describing American consumers as "an accident waiting to happen," he asked, "When does the music stop?"

With the dollar already trading at $1.30 to the euro - near the level of economic unacceptability for Europe - Mr. Roach said the United States could not rely on currency markets to right the imbalance between it and the Asian countries that finance American deficits by buying Treasury bills.

The answer, he said, lies with the Federal Reserve, which he said would have to raise rates aggressively to curb the spending binge. Whether it could do that without triggering a recession is an open question.

Few here held out hope for international coordination of the kind that stabilized the dollar in the 1980's.

"The Bush administration doesn't listen to people," said Laura D. Tyson, who served as an economic adviser to President Bill Clinton. "There's no hope of changing U.S. fiscal policy."

Professor Tyson, who is dean of the London Business School, said European leaders needed to stop worrying about the actions of other countries and set about streamlining their own economies. She pointed to recent wage negotiations in Germany, in which the unions agreed to longer hours and more flexible work rules, as a hopeful sign of change.

Certainly, Europe cannot rely on Asia to take the pressure off the euro. While people here said they were guardedly optimistic that China would eventually allow its currency, the yuan, to rise against the dollar, few were willing to hazard a guess as to when - or to what extent.

"That will need a political commitment and a political will, and I don't see that happening this year," said Takatoshi Ito, a specialist in international economics at the University of Tokyo.

Some economists warned that the expanding trade deficit and weak dollar could cast a shadow over negotiations to liberalize world trade, which have been dragging for various reasons in the last year.

China's record trade surplus with the United States could fuel protectionist forces in the United States, said C. Fred Bergsten, the director of the Institute for International Economics in Washington. He said he could foresee moves to impose import barriers on Chinese wood and shrimp. "This is a poisonous environment for trade policy and for domestic politics in the United States."

In the last couple of years, with the White House's march to war in Iraq, Davos itself has been a rather poisonous environment for Americans. Those tensions have ebbed this year.

 

I think this pretty much sums up the situation:

http://www.goldline.com/featured-article/2004/heading-for-financial-disaster2.html

 

Its just as easy to get herded around by the anti-establishment crowd, says I.

 

It's pretty ironic now that I backed my words up with proof, everybody suddenly becomes silent.

 

I'm too drunk to come up with a coherent response, I'll address this later.

your sources seemed a little sketchy...

 

Sketchy? Yeah, I pulled them out of my ass.

 

Granted, that the economy crumbles like it did in the 1930s, wouldn't the world's economy go down too? And I think the rest of the world has fewer measures against total collapse than the United States.

what about the military might of the United states? it is still strong, and perhaps will always be.

My point: Even if the economy does fail... the American Empire will survive and will perhaps, rebound.

 

I wouldn't call fromthewilderness.com balanced journalism...

 

neither would I...

any website that advertises "Crossing the Rubicon" on its front page should be suspected. they are often set-up to pander to conspiracy theorists.

 

some americans do see this and shiver a bit...

 

Did it ever occur to you that perhaps america will give the rest of the world the finger, and just straight up call off it's own debt? As I understand, they've done it before, or something similar...

 

exactly, in the world in where might make right, America will always prevail.

 

If many of nations are dropping the dollar in favor of the Euro - when a collapse occurs what makes you think they (I'm assuming you are referring to the current ruling elites of america) will be calling the shots in some sort of New World Order? Would those nations that still have power ($$$) trust in a leadership that bancrupted the largest economy in the world?