OT: Financial doomsday?

[slidey]

Taking off on a tangent from the thread about gas rationing in NJ, I thought I'd start this thread to give the people interested in discussing/understanding the financial doomsday scenarios. Here's a couple of videos which might serve as food for thought:

http://youtu.be/gWtrbGWixRQ

and

http://youtu.be/2LZozsLYHD4

And, since these are BBC documentaries you know they're entirely non-partisan.

[verticaldoug]

Forecasters are always wrong. or a broken clock is right twice a day.

Don't worry about it. Roll with it.

[Fixed]

The sun will rise tomorrow ...if it does not it will not matter

Think positive thoughts there is too much negativity around these days
Cheers imho :bike::)

[AngryScientist]

The sun will rise tomorrow ...if it does not it will not matter

Think positive thoughts there is too much negativity around these days
Cheers imho :bike::)

Fixed gets it imo

[1centaur]

"And, since these are BBC documentaries you know they're entirely non-partisan."

Very funny.

I got through the first one but won't take on the second.

In many ways, a good summary of the obvious, IMO, though interspersed with sad lefty propaganda from time to time that serves to undermine the whole. In particular, the left likes to define free markets as regulation free, while free marketeers do not. And income inequality reflects a transition to a knowledge economy (and apparently what the true value of premier league players is) rather than some sinister scheme to plunder the average Joe. Finally, the role of banks is dubiously cast; they joined the crowd in overlevering and were also hurt by it - they are just one symptom of the bigger problem, not a driver of that problem, per se.

That bigger problem is the generational change that follows a manufacturing growth spurt. We (the west and especially the US) got used to a certain level of growth and then believed it must continue rather than accepting that it was a temporary fluke. The American Dream was an example of that mistake; the welfare state promises of all western governments were also based on that false predicate. GM worker salaries were another; the rise of union wages was another. Importantly, China is now going through that same upswing. They have not found a better way, they are following the same path but many decades later. They save because they don't have a welfare system. Hmm, should we kill our welfare system so we save more? Growth is VERY important to politicians; that rising tide floats a lot of votes because it pays for stuff. As the West goes into austerity mode, the Chinese manufacturing engine will slow and its consumption engine will have to pick up to keep their growth going so the people don't get restless and take it out on the politicians. They're not going to magically manage the transition with a better system, though they will probably try with a less free system. The credit that politicians get for a semi-managed economy will break down when the management does not work, and it won't work forever because people want more than they have. Human nature is a political problem.

Ideally, in the Monday morning quarterbacking sense, many years ago foresightful politicians would have told us our economic growth rate would slow and we should expect less for ourselves and from them. I'm sure that would have gone over well. Instead we borrowed to keep the game going and persuaded ourselves it was fine. Now we know it is not and we'll get our slow growth forced on us. Whether it would have been better for brilliant politicians to force that on us sooner or somewhat unfettered markets to force it on us later, we're here now.

As a country, we need more jobs for people who don't have great skills, because that's better for us than welfare for those people. As the documentary said, welfare payments in England are more lucrative than wages in China. Not said: it's better to be paid to do something than to do nothing. I would like politicians to work on industrial policy that encourages made in the USA and all the inefficiencies that implies, but I also want a fairly unfettered market to keep people creative to drive job growth from unexpected places. I wish, but don't expect, that our politicians will agree with me, and I greatly wonder if culturally we can shift to low expectations without hating the relative few who will prosper greatly despite mediocre growth.

[fogrider]

sure china is willing to build everything from light fixtures to iphones for us, but the tide is turning. it's tough to keep the level of quality up, look at the latest batches of iphones...lots of quality issues. and there are lots of Chinese willing to work for very little pay, but once they get some experience, they're looking for a better paying job.

focus on what you can do to (in no particular order): vote, make sure you have a bike to ride and raise your family right.

[BdaGhisallo]

And, since these are BBC documentaries you know they're entirely non-partisan.

Slidey,

Thanks very much for the chuckle! That is funny!

[rnhood]

"And, since these are BBC documentaries you know they're entirely non-partisan."

Very funny.

I got through the first one but won't take on the second.

In many ways, a good summary of the obvious, IMO, though interspersed with sad lefty propaganda from time to time that serves to undermine the whole. In particular, the left likes to define free markets as regulation free, while free marketeers do not. And income inequality reflects a transition to a knowledge economy (and apparently what the true value of premier league players is) rather than some sinister scheme to plunder the average Joe. Finally, the role of banks is dubiously cast; they joined the crowd in overlevering and were also hurt by it - they are just one symptom of the bigger problem, not a driver of that problem, per se.

That bigger problem is the generational change that follows a manufacturing growth spurt. We (the west and especially the US) got used to a certain level of growth and then believed it must continue rather than accepting that it was a temporary fluke. The American Dream was an example of that mistake; the welfare state promises of all western governments were also based on that false predicate. GM worker salaries were another; the rise of union wages was another. Importantly, China is now going through that same upswing. They have not found a better way, they are following the same path but many decades later. They save because they don't have a welfare system. Hmm, should we kill our welfare system so we save more? Growth is VERY important to politicians; that rising tide floats a lot of votes because it pays for stuff. As the West goes into austerity mode, the Chinese manufacturing engine will slow and its consumption engine will have to pick up to keep their growth going so the people don't get restless and take it out on the politicians. They're not going to magically manage the transition with a better system, though they will probably try with a less free system. The credit that politicians get for a semi-managed economy will break down when the management does not work, and it won't work forever because people want more than they have. Human nature is a political problem.

Ideally, in the Monday morning quarterbacking sense, many years ago foresightful politicians would have told us our economic growth rate would slow and we should expect less for ourselves and from them. I'm sure that would have gone over well. Instead we borrowed to keep the game going and persuaded ourselves it was fine. Now we know it is not and we'll get our slow growth forced on us. Whether it would have been better for brilliant politicians to force that on us sooner or somewhat unfettered markets to force it on us later, we're here now.

As a country, we need more jobs for people who don't have great skills, because that's better for us than welfare for those people. As the documentary said, welfare payments in England are more lucrative than wages in China. Not said: it's better to be paid to do something than to do nothing. I would like politicians to work on industrial policy that encourages made in the USA and all the inefficiencies that implies, but I also want a fairly unfettered market to keep people creative to drive job growth from unexpected places. I wish, but don't expect, that our politicians will agree with me, and I greatly wonder if culturally we can shift to low expectations without hating the relative few who will prosper greatly despite mediocre growth.

Good post. You said it better than I could have.

[charliedid]

maybe

[zap]

And, since these are BBC documentaries you know they're entirely non-partisan.

For some.

[54ny77]

that's a bit sensationalist report, pandering to an agenda perhaps.

i'm more concerned about the u.s.'s slow & steady decline into a socialist welfare state than a doomsday.

death by a thousand cuts.

[slidey]

Ok, ok...here's a clarification, which should've been evident anyways.

The '?' in the title is quite important...in that, this is just a food for thought, and provides reasons as to how the west's financial policies contributed to it going turtle. The key-point to note for me was the laxity with which the free-market policy was let to spread, of course, put forth by Thatcher/Reagan.

As for non-partisan, I still stand by it unless I have proof otherwise...or you point me to better sources. For me, the only other source that is on par with BBC's journalistic excellence has been Al Jazeera. haven't given NPR a try yet, mainly since I don't have an everyday news fixation, and don't feel the need to fill a gap per se.

[Vientomas]

that's a bit sensationalist report, pandering to an agenda perhaps.

i'm more concerned about the u.s.'s slow & steady decline into a socialist welfare state than a doomsday.

death by a thousand cuts.

I'm more concerned with the disappearance of the middle class. Death by a thousand losses.

[BumbleBeeDave]

. . . concerning system that has built up over many years under both parties and a number of leaders.

Please, this is definitely an interesting discussion, but let's be very careful to keep the partisanship out of it.

Thanks . . .

BBD

[MadRocketSci]

overview of the first movie: china saves, we borrow, we owe, they took our jobs...

we listened to economic academic types without applying a critical thinking filter. How did so many people not see this coming? As an engineer, I believe the field of economics needs a foundational principle akin to the Second Law of Thermodynamics, which for us constrains the fantasy of perpetual motion machines and other flights of wishful get something for nothing thinking and grounds us back in this universe. Without something like that analysis and theories of d-bags like greenspan are crap.

[norcalbiker]

Greed and human nature.

I can't be too concern or nothing will happen on my daily life.

I still want to ride whenever I can.

Now go for a ride if you can and it will relax your mind.

[54ny77]

exactly.

I'm more concerned with the disappearance of the middle class. Death by a thousand losses.

[Chance]

We need a cultural change in the US that will accept, maybe even embrace, that not all people are created with equal talent. Or equal intelligence. Or equal drive. And so on. The entire premise that we can all grow up to be President, corporate CEO, business owner, or college graduate if we just “try” enough is killing our society. It’s incredibly harmful to us all to set policy to support this flawed and unattainable ideal.

Fortunately we may eventually get back to basics because humans too often think they are well above average. They may support change that they think will give them an advantage. :rolleyes:

[54ny77]

http://www.youtube.com/watch?v=eiRGRvE_Wqg

http://www.carlspackler.com/archive/cs_089.jpg

We need a cultural change in the US that will accept, maybe even embrace, that not all people are created with equal talent. Or equal intelligence. Or equal drive. And so on. The entire premise that we can all grow up to be President, corporate CEO, business owner, or college graduate if we just “try” enough is killing our society. It’s incredibly harmful to us all to set policy to support this flawed and unattainable ideal.

Fortunately we may eventually get back to basics because humans too often think they are well above average. They may support change that they think will give them an advantage. :rolleyes:

[Rada]

that's a bit sensationalist report, pandering to an agenda perhaps.

i'm more concerned about the u.s.'s slow & steady decline into a socialist welfare state than a doomsday.

death by a thousand cuts.

Smoke screen. Follow the money.

[Chance]

http://www.youtube.com/watch?v=eiRGRvE_Wqg

http://www.carlspackler.com/archive/cs_089.jpg

Yeah, can relate. Fortunately it can be a temporary setback. Or better, a temporary opportunity to get ahead. It doesn't have to be a permanent condition for most people who have the talent to do better than dig ditches.

Growing up did jobs a lot harder than digging ditches. Did that kind of manual work too. In the end got through school without loans. And therefore no loans to repay. In a way making school harder would be great because it would separate those who really want it bad enough. And would test the students’ resolve to get ahead.

And some people just don't want the education route. That's fine too. They often do much better working for themselves instead of getting a college degree and working for others.

[Ahneida Ride]

. . . concerning system that has built up over many years under both parties and a number of leaders.

BBD

99 years ... (started Dec. 23 1913)

and tons of complicity

[BdaGhisallo]

As for non-partisan, I still stand by it unless I have proof otherwise...or you point me to better sources. For me, the only other source that is on par with BBC's journalistic excellence has been Al Jazeera. haven't given NPR a try yet, mainly since I don't have an everyday news fixation, and don't feel the need to fill a gap per se.

I think we all need to realize that ALL news outlets have a bias. Some are more overt than others and some do their best to hide it. It's unavoidable when you're dealing with people. In some instances, bias doesn't creep into how they report news, but instead in which news they decide to cover or ignore, for instance.

I think the bad thing is when news organizations attempt to deny the obvious and run from their bias. It's fine to be biased, it just needs to be acknowledged. Folks will always seek their information from sources that align with their view on things.

[froze]

I wouldn't put much stock on forecasters either because usually they want to sell you something.

But having said that there is a concern that our debt ratio is too high to sustain, and our currency was switched from the gold standard to the fiat currency back in 1971, and historically since the Roman days no Fiat currency lasted more than 40 years and we're just on the outside of that. Since 71 our dollar has lost at least 175% of it's value. Average cost of a car in 71 was $3,000 now it's $30,000; average price of a house was $25,000 now it's $256,000; avg price of a refrigerator hasn't gone up much only about double, but the life expectancy has been shortened by about 15 years!

Problem is most of our debt is owned by foreign countries with the largest share held by China which means if China should ever want a "favor" they will have the muscle to get it.

The biggest problem is that the entire world's economy is going down the tubes and usually when that happens a major war develops, and that's where we're headed.

[bshell]

Most of our debt is actually held by the US government (which seems kinda weird that you can owe yourself $). China holds about 1.3 trillion out of 16.2 trillion. Only 7-8%.

[froze]

Most of our debt is actually held by the US government (which seems kinda weird that you can owe yourself $). China holds about 1.3 trillion out of 16.2 trillion. Only 7-8%.

What's weird about all of this, is everyone borrows money from everyone else. For example, China actually borrowed money from the USA BEFORE the communist revolution in 1949 to the tune of 783 billion dollars if I remember correctly. China never paid back a dime of it in either principal or interest! Kind of makes one wonder what kind of games the world governments are playing with each other...or perhaps the governments are playing the game with us, the American public, and we don't know it!

[slidey]

What...really?? How does that work?? Does it have any relation to using the World Bank as a personal kitty, while forcing Africa to pay up debts? I recall hearing at one point that US had run up pretty large debts with the World Bank, but tried looking at the website just now, and couldn't find any figures for USA/UK and a few other countries. Does anyone have any explanation for this?

Most of our debt is actually held by the US government (which seems kinda weird that you can owe yourself $). China holds about 1.3 trillion out of 16.2 trillion. Only 7-8%.

[slidey]

Hmm...you do have a point. I believe the losers in a major war get their debts all wiped out, well mainly 'cause they lost the war and are deemed to be sulking away, etc. However, if you're on the so-called winning side then you're basically stuffed with debts...I believe, the UK only recently finished paying off its financial debt to the US for money borrowed during the WW2. On the other hand, it does seem for all manners and purposes that Germany is on a much stabler footing than the rest of Eurozone. That's not saying much given the tied financial fortune the Eurozone shares, but still.

What's weird about all of this, is everyone borrows money from everyone else. For example, China actually borrowed money from the USA BEFORE the communist revolution in 1949 to the tune of 783 billion dollars if I remember correctly. China never paid back a dime of it in either principal or interest! Kind of makes one wonder what kind of games the world governments are playing with each other...or perhaps the governments are playing the game with us, the American public, and we don't know it!

[Ahneida Ride]

Most of our debt is actually held by the US government (which seems kinda weird that you can owe yourself $). China holds about 1.3 trillion out of 16.2 trillion. Only 7-8%.

Actually, It is held by the fed reserve ... a private corporation.
The fed holds the treasury bonds .

It purchased those bonds by typing numbers into a spreadsheet, creating
it's non-nonredeemable notes out thin air.
and hence collects interest on nothing.

We, as a sovereign nation, have granted a private corporation to counterfeit
our currency and then charge us interest on our own money ! :help:

[Chance]

Can anyone explain what is driving the market today? Without getting into any politics that is. Doesn't make sense before much data is in.

[54ny77]

Turn those machines back on!

http://www.dvdbeaver.com/film2/DVDReviews33/a%20trading%20places%20blu-ray/08_TradingPlaces_BD.jpg

Can anyone explain what is driving the market today? Without getting into any politics that is. Doesn't make sense before much data is in.

[1centaur]

Can anyone explain what is driving the market today? Without getting into any politics that is. Doesn't make sense before much data is in.

I was asked this today by one of our traders (neither of us being equity guys). While I think he was hoping that it was some informed opinion on a Romney win, my only guess was an anticipation that greater certainty would lead to resolution of issues and the market will trade that outcome up. If so, the recounts and lawsuits we might be facing by tomorrow morning will put a damper on things.

But hey, as a non-equity guy, my guesses mean little.

[froze]

What...really?? How does that work?? Does it have any relation to using the World Bank as a personal kitty, while forcing Africa to pay up debts? I recall hearing at one point that US had run up pretty large debts with the World Bank, but tried looking at the website just now, and couldn't find any figures for USA/UK and a few other countries. Does anyone have any explanation for this?


Because the government controls what and how much they want us to see. This is why you can no longer find the sat pics taken by CIA and commercial sats showing semi trucks going to, getting supplies, and leaving known Iraq chemical facilities before the second Iraq war, and then showing those trucks going into surrounding countries to get rid of their loads. This sort of stuff happens all the time.

[froze]

I was asked this today by one of our traders (neither of us being equity guys). While I think he was hoping that it was some informed opinion on a Romney win, my only guess was an anticipation that greater certainty would lead to resolution of issues and the market will trade that outcome up. If so, the recounts and lawsuits we might be facing by tomorrow morning will put a damper on things.

But hey, as a non-equity guy, my guesses mean little.

It won't matter who wins, it's just a matter of time before the bailout bubble bursts and the schit hits the ceiling. This is an accumulation of many events that started in 1971 when Nixon took us off the gold and silver standard and put our currency on a fiat system...no fiat system has ever survived, the average has been just 27 years and we've gone 42 years by the sheer power of the American economy, but that power has ran it's course, we're on the short end of the stick. There have been 16 fiat currencies worldwide that have failed since 1975 alone and a lot more before that, we're next in line. What's weird is all fiat currency countries that have failed also did a major bailout program like America did before they collapsed, and everything appeared rosy, but then sudden and total collapse happened within a short period of time.

Question is, how long can the USA hold off the inevitable?

[jr59]

It won't matter who wins, it's just a matter of time before the bailout bubble bursts and the schit hits the ceiling. This is an accumulation of many events that started in 1971 when Nixon took us off the gold and silver standard and put our currency on a fiat system...no fiat system has ever survived, the average has been just 27 years and we've gone 42 years by the sheer power of the American economy, but that power has ran it's course, we're on the short end of the stick. There have been 16 fiat currencies worldwide that have failed since 1975 alone and a lot more before that, we're next in line. What's weird is all fiat currency countries that have failed also did a major bailout program like America did before they collapsed, and everything appeared rosy, but then sudden and total collapse happened within a short period of time.

Question is, how long can the USA hold off the inevitable?

Maybe you could enlighten us on what country is on the gold standard?

Here I'll help you....NONE!

So much for that reasoning, but I bet it does make for great ratings in the media!

Just to be a bit clearer! Fiat system;
http://www.investopedia.com/terms/f/fiatmoney.asp#axzz2BUzxtQ4N

[froze]

Maybe you could enlighten us on what country is on the gold standard?

Here I'll help you....NONE!

So much for that reasoning, but I bet it does make for great ratings in the media!

Just to be a bit clearer! Fiat system;
http://www.investopedia.com/terms/f/fiatmoney.asp#axzz2BUzxtQ4N

This is why the whole world is in a mess! And what happens when the economy of the world tanks generally results in a huge war.

[jr59]

This is why the whole world is in a mess! And what happens when the economy of the world tanks generally results in a huge war.


As I said, I am sure that gets huge ratings in the Media.

Doesn't have to be fact driven, just radical!

But you are free to believe what you wish.

[froze]

As I said, I am sure that gets huge ratings in the Media.

Doesn't have to be fact driven, just radical!

But you are free to believe what you wish.

I'm not in the media world so there is no need for ratings on my end, nor any needs for ratings here because I don't give a schit about my ratings here...that's why I would make a piss poor media person! Besides, sometimes I say schit just to read the responses because some of you guys are extremely funny! But some of you actually spend time thinking of intelligent comments which stimulate others to think. So there is a reason behind my comments.

But the IMF did warn of such a situation where economic stress could lead to a war, here is http://www.dailymail.co.uk/news/article-1164273/Finance-crisis-lead-war-IMF-warns.html Just interesting reading, not to be taken as a predictive fact of course, but it could happen that way.

Seriously; no one, and I mean no one can accurately predict the outcome of the economy or the aftermath of success for failure of such an outcome, just as no investment advisor or guru can accurately predict which type of investments will do better than the rest.

[MattTuck]

GDP ≠ Stock market ≠ Main Street ≠ Real Economy ≠ Wealth

Long live F.A. Hayek!! :banana:

[Chance]

Are we doomed? Let’s hope the first hour of the market (Dow down about 250 points) is not an indication of how disturbed investors are about the election’s outcome, although in a way it is easy to see how some people (not me) may be scared $hitless at the direction our society is going in general. It’s just not about the politics anymore, although that is affected indirectly. It’s more about what we are becoming. Too many want it all but are willing to sacrifice nothing.

Last night while watching TV they interviewed a couple of young 18-year-old girls who appeared to be completely clueless about the real world around us. Their vocabulary seemed mostly limited to “oh my god” and not much more. They could not discuss a single election issue. When asked what they thought about anything important or why they voted the way they did the only reply was because their friends suggested it on Twitter or Facebook. That seemed to be the full extent of their knowledge. Yeah, they could work a smartphone. Beyond that who knows.

Would bet they had done “ZERO” research or had any real opinions of their own (other than to follow their friends). Even if wrong it’d have been better than being blind sheep. Yeah, we probably are financially doomed. But not because of policies. Our real problems seem a lot bigger than that.

[ORMojo]

Last night while watching TV they interviewed a couple of young 18-year-old girls who appeared to be completely clueless about the real world around us.

I'd be happy to put my 3-year-old daughter up against them! She watches the nightly news and PBS with us (about the only TV we watch). Since the whole family has been home sick with horrible stomach flus the past 3 days, we've had extra election exposure.

About 30 minutes ago we were all catching up on election returns on the TV, and when the announcer said " . . . Obama . . . re-elected as President . . . " my daughter said "well, yeah" with an all-too-knowing tone. :p

[froze]

A
Last night while watching TV they interviewed a couple of young 18-year-old girls who appeared to be completely clueless about the real world around us. Their vocabulary seemed mostly limited to “oh my god” and not much more. They could not discuss a single election issue. When asked what they thought about anything important or why they voted the way they did the only reply was because their friends suggested it on Twitter or Facebook. That seemed to be the full extent of their knowledge. Yeah, they could work a smartphone. Beyond that who knows.

Would bet they had done “ZERO” research or had any real opinions of their own (other than to follow their friends). Even if wrong it’d have been better than being blind sheep. Yeah, we probably are financially doomed. But not because of policies. Our real problems seem a lot bigger than that.

I can guarantee you the huge majority of teens and early 20's people did little if any research into who and why they voted. Their heavily influenced by their teachers and professors.

I have a controversial opinion about voters that will surely arouse hatred here towards me. But I feel people shouldn't be allowed to vote unless they own property and or own a business! Why? Because renters and non business owners for the most part do not have a clue about the effects of taxes!

[jr59]

I can guarantee you the huge majority of teens and early 20's people did little if any research into who and why they voted. Their heavily influenced by their teachers and professors.

I have a controversial opinion about voters that will surely arouse hatred here towards me. But I feel people shouldn't be allowed to vote unless they own property and or own a business! Why? Because renters and non business owners for the most part do not have a clue about the effects of taxes!


wow...just plain wow!

In before the lock!

[FlashUNC]

I can guarantee you the huge majority of teens and early 20's people did little if any research into who and why they voted. Their heavily influenced by their teachers and professors.

I have a controversial opinion about voters that will surely arouse hatred here towards me. But I feel people shouldn't be allowed to vote unless they own property and or own a business! Why? Because renters and non business owners for the most part do not have a clue about the effects of taxes!

:eek:

I got nothing.

[froze]

wow...just plain wow!

In before the lock!

Wow you say? Of course it's wow! But think about it. I give you an example. In Fort Wayne Indiana where I live, about 2 years ago a bond was proposed for education and put on the ballet, the bond was a 30 year bond for $1 BILLION dollars! Who was going to be responsible for the pay back of that bond? Homeowners. The bond would have resulted in a homeowners tax INCREASE of an average of $1,500 per household! Guess who voted for the approval of the bond when a survey was taken? Teenagers and college students and renters! People who do not directly pay for such taxes. Fortunately there were enough homeowners who came out and voted to defeat the bill. But had that bill been proposed in a city with more teens and students and renters they could have tilted the vote enough for a passage. Teens, students, and non property and or business owners for the most part don't have clue about the effects of taxes and elections concerning people who bring about those taxes.

But you can say wow all you want, but obviously such an idea would never ever see the light of day, but youthful ignorance can and does sway votes.

[AngryScientist]

yea, this one is off the tracks.

feel free to start a new thread if someone pleases, and let's keep politics and who should be able to vote out of it, thanks,

http://thebiglifeproject.com/wp-content/uploads/2012/02/derailed-train-by-aussiegall-cropped.jpg