We are really screwed now!!

Well, as far as GDP, but GDP is a misleading figure. America's economy is 70% service sector. We push a lot of money around, but we don't actually produce much. This is why we depend so much on China.

Click to expand...

I can't state it better than this.

People often wince at the notion of America becoming largely a service economy -- envisioning a nation of low-paid fast food merchants, manicurists and landscapers. But the shift from manufacturing is really a shift toward higher-paying, higher-skilled and knowledge-based jobs: architects, doctors, lawyers, design engineers, etc. As the United States tries to find its place in the globalizing economy, nothing illustrates just how crucial a role services play than this little known truth: While the nation has run huge trade deficits for three decades, we run a trade surplus in services. It topped $70 billion in 2006.

Click to expand...

http://www.kiplinger.com/businessresource/recommend/archive/2007/Service_Sector_Fisher.html

That is what has given America its economic power over the last couple decades, the Bretton Woods Sytem. Should The reserve currency ever be changed to, say, the Euro, we would be screwed.

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We would just not have as much power is all, we really do control the world economy right now. But if it gets changed we would just switch our dollars for euros. The value would not change, because it is just a piece of paper. It is our wealth that affects the price it is worth on the open market.

China is paying attention to what we are doing, and they have even warned us to practice fiscal responisbility. 24 trillion dollars is an extremely large amount of money, and we are basically robbing China of the value of the bonds they hold(as well as every american who own a dollar). I do not believe they will continue to throw good money after bad forever. The stimulus package hasn't done anything to fix our economy, and really it is just going to inflate the bubble that is our entire economy. This can't last forever, and I think we are nearing the end of sustaining our huge phony economy.

Click to expand...

(2007) $3.42 trillion (ranked 3rd) (200 $4.33 trillion (official data) How do we owe them 24trillion when it is about 4 times what their GDP is?

And if you have not opened up a financial pages or looked at the economy latley you may have missed it, but the worm has turned. Stocks are flying up, the slowdown in unemployment is almost out of steam ready to start to retreat (unemployment is always the last to pull out of a recession/depression), housing prices are starting to creep back to a more natural price, on and on.

And it is directly linked to the fact we did not have a meltdown, so I say that the stimulus packages did work and very well. Even if it does not get reported.

Like TBT pointed out, we have 60 TRILLION in unfunded liabilities, 11 TRILLION in public debt, and growing trade and budget defecits adding to these figures all the time. I think we are on the way out, as far as economic power. China will be the new Economic powerhouse.

Click to expand...

Unfunded liabilities is like saying I have $300,000 in bills over the next 30 years that I have not made money yet to pay for them. It doesn't consider future earnings. We are carrying too much debt right now and most of it on the peoples side is for stupid things that are a drag on the economy. But if the money is being used well it is an investment, again like taking a loan out to get a (useful) college degree. It will pay for itself very fast.

And I think that China may eventually overtake the US, but it is a looong way out, because they are just going to try to work their way to the top. Eventually the brute force approach will top out because there won't be enough demand for their products so they will stop growing and have to turn to reeducating their public so it will be several steps back before they get back to it.

I think India has a better chance at overtaking us since they are very invested in education.

It is my understanding that we are in danger of losing our AAA credit rating in short order.

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http://www.reuters.com/article/InvestmentOutlook09/idUSTRE55E6BM20090615

I wanted to get into the Standard & Poor's site, but I don't have an account with them. This fear came from a downturn in the stock market (it was at 6400) and if it went further south it would have forced a lowering of the rating.

But since the stimulus package, loan to the auto companies, bank bailout, small business $90b loans, and now cash for clunkers it is above 9400, meaning we are well out of the danger area we were in back in may-april.

Our economy has pretty much stabilized again and now we need to just tighten up. We need to start to pay off the debts we have and buy stuff with the money that we do have. But we still need to continue to invest in ways to grow the economy and not just stick our heads in the sand and wait for a crash.

Hanimal, when you are UNABLE to find buyers for your treasuries means that OTHER COUNTRIES ARE NOT BUYING THEM. Thats the whole point of the post, If other countries do not buy ours, then we cannot export our inflation and must monetize the debt by having the Fed buy the treasuries. It has nothing to do with FOMC, and all to do with the fed creating more money and dumping it into the economy. It WILL create inflation. My post was not a question that I was wondering about, i already know WHY they do it, but was wondering how many folks besides TBT (WHO Knwos a good deal about econ BTW) would know what it means when you can only sell short term(1 year) debt and not the more important 5 and 7 year debt which only the fed bought.

Click to expand...

With the stock market rallying why would anyone look for a 2% return? It makes no sense.

What you are talking about is the conspirist theory of why it is happening. The inflation that you say we are monetizing is a figment of imagination. We have a deflationary trend happening right now. Once unemployment drops back down to around 6% then you will see them selling more bonds to pull the excess out of the market to help curb it as well as bring up interest rates. Which at that point will be able to be sold since the stock market won't be as much on fire.

This is just an open market operation, and it has been happening for the better part of the last century.

Hemlock said:

Well put TBT...
fuckin dollar gonna tank and we'll be back at 18% interest.....No matter what Obama Says...It can't do anything else economics 101..We went thru this during the 80's crash...you couldn't get money and if you did they stabbed ya at 18% ( construction money) residental mrtgs were starting at 11% it was awful and imo this is worse a lot worse...For the first time in my life I fear for our country...

Click to expand...

Actually we should be at a high interest rate. The United States needs to amortize (pay off) the debts that we are carrying, and thus secure a solid foundation for additional growth.

As long as the United States continues to accrue more debt we will never be able to truly escape from the stagnation that is being hidden by inflationary policies. I am not going to comment on what I believe is the cause of the stagnation, because that goes beyond the scope of this discussion, but I am going to say that we might be looking at insane inflation levels, especially if China or the Middle East (or even Venezuela) stops accepting dollars for goods and services. The former (China) of course is manufactured goods, and the latter two are oil.

We've seen how dependent we are upon oil and how quickly high prices in oil can bring our economy to its knees. Drill here, drill now, was more than a catchy slogan being pushed by the Republicans, it was the statement of the need to decrease our dependence on foreign oil even as we make the transition to greener technologies.

Of course the solution to the oil crisis has been staring us in the face for the last half a century. Nuclear Energy, which if the US was to allow for breeder reactors (Reactors that take high level Uranium/Plutonium/Fission Byproducts) and refine them into additional usable fuel) we would see minimal waste (over 95% of a uranium rod consists of Uranium at the end of its life and another chunk is plutonium which can also be used to produce energy) and high efficiency. Europe has been using breeder reactors for a while now.

Of course, another technology that we should have been pursuing with more funding is Fusion Reactors, because they would produce immense amounts of power, and would do so cheaply. Instead we are subsidizing the pursuit of inefficient power sources (wind and solar) that cost 500% - 600% more than Nuclear, Coal and Oil sources and are unstable.

Everyone talks about climate change, and yet their solutions ignore climate change. If the climate is changing then can we guarantee that those mountain valleys in the Sierre Nevadas where we have stationed wind-farms are not going to become rain-forests? (Rain Forests do not have to be tropical, as the existence of the only Rain Forest in the United States in Washington State can attest.)

Other solutions that are being ignored include Solar Power Satellites which would be reliable (due to not being reliant upon the weather, because of their stationing in space where it is not a factor.)

Solutions are manifold, but due to their political contributions (or lack thereof) some solutions are being pushed while others are being ignored.

Actually we should be at a high interest rate. The United States needs to amortize (pay off) the debts that we are carrying, and thus secure a solid foundation for additional growth.

Click to expand...

In a deflationary situation, that would be stupid since you would be paying more money out than it is worth.

Eventually when the trend turns you will see the rates rise, but not while deflation is happening.


EDIT:

Plus if we pay off the debts we are carrying quickly you would have a huge outflux of money and that would create an insane inflationary trend since there is a ton of more money in the system. It has to be done slowly.

Everything else you said I am on board with, we need to get off the oil/coal and nuclear power is very important and useful. But I do disagree with your stance on solar power.

Of course, another technology that we should have been pursuing with more funding is Fusion Reactors, because they would produce immense amounts of power, and would do so cheaply. Instead we are subsidizing the pursuit of inefficient power sources (wind and solar) that cost 500% - 600% more than Nuclear, Coal and Oil sources and are unstable.

Click to expand...

Aside from the small neighborhood nuclear plants that they came out with a couple years ago (which noone wants in their area) that are still unproven, you cannot plug in nuclear plants everywhere. Solar panels are able to be on every home in the us spreading out the electricity grid. There is no reason that the power has to be generated in one area and pushed out over a huge grid.

And how is it unsustainable? If the sun goes out then we die. If you mean at night, that is why it is not the only solution.

We should not be so railroaded into any one thing. We should start putting solar panels on homes, wind farms where they are useful, nuclear for the stable nighttime energy, geothermal in the areas that can take advantage of it, oil/coil in the areas that they are best used in.

And further more this technology is still pretty young. The first apple computers are not as advanced as they are today. The technology needs to be used so that it can be improved.

hanimmal said:

Everything else you said I am on board with, we need to get off the oil/coal and nuclear power is very important and useful. But I do disagree with your stance on solar power.



Aside from the small neighborhood nuclear plants that they came out with a couple years ago (which noone wants in their area) that are still unproven, you cannot plug in nuclear plants everywhere. Solar panels are able to be on every home in the us spreading out the electricity grid. There is no reason that the power has to be generated in one area and pushed out over a huge grid.

And how is it unsustainable? If the sun goes out then we die. If you mean at night, that is why it is not the only solution.

We should not be so railroaded into any one thing. We should start putting solar panels on homes, wind farms where they are useful, nuclear for the stable nighttime energy, geothermal in the areas that can take advantage of it, oil/coil in the areas that they are best used in.

And further more this technology is still pretty young. The first apple computers are not as advanced as they are today. The technology needs to be used so that it can be improved.

Click to expand...

Solar and Wind are inefficient, land intensive, and cost ineffective.

People often wince at the notion of America becoming largely a service economy -- envisioning a nation of low-paid fast food merchants, manicurists and landscapers. But the shift from manufacturing is really a shift toward higher-paying, higher-skilled and knowledge-based jobs: architects, doctors, lawyers, design engineers, etc. As the United States tries to find its place in the globalizing economy, nothing illustrates just how crucial a role services play than this little known truth: While the nation has run huge trade deficits for three decades, we run a trade surplus in services. It topped $70 billion in 2006.

Click to expand...

I think that misses the point completely. Much of the service sector depends on foreign imports. Practically nothing is made in America anymore, even the stuff that claims it is, is made of foreign parts, assembled in America. If China stopped taking our worthless IOUs, our entire economy would be crippled. We cannot continue to run a trade defecit forever, and we cannot have a viable economy if we absolutely depend on China and other countries for manufacturing. We may have a trade surplus when it comes to services, but that completely ingores the fact that we still have an enourmous trade defecit(which of course already includes services). The fact is, our economy is dependent on foreign credit...and we cannot maintain an economy based on foreign credit forever.

hanimmal said:

We would just not have as much power is all, we really do control the world economy right now. But if it gets changed we would just switch our dollars for euros. The value would not change, because it is just a piece of paper. It is our wealth that affects the price it is worth on the open market.

Click to expand...

Like I just mentioned, our economy is dependant on foreign credit, and the only reason we have been able to run a trade defecit for DECADES now, is the Bretton Woods system. Bretton Woods has basically made us immune to normal market influences. We can just print as much money as we like, and the rest of the world just eats all our inflation because the dollar is the reserve currency. If the Bretton Woods agreement were to change, this would no longer happen...and all those foreign owned dollars will come home to roost...meaning a huge influx of inflation. And if we were no longer allowed to run a trade defecit, our economy would be crippled.

hanimmal said:

(2007) $3.42 trillion (ranked 3rd) (200 $4.33 trillion (official data) How do we owe them 24trillion when it is about 4 times what their GDP is?

Click to expand...

I was talking about the stimulus packages, not our debt to China.

hanimmal said:

And if you have not opened up a financial pages or looked at the economy latley you may have missed it, but the worm has turned. Stocks are flying up, the slowdown in unemployment is almost out of steam ready to start to retreat (unemployment is always the last to pull out of a recession/depression), housing prices are starting to creep back to a more natural price, on and on.

Click to expand...

We may have reinflated the bubble, but we have done absolutely nothing to fix the root problems. I anticipated you would say this, that is why I posted the article.

hanimmal said:

Unfunded liabilities is like saying I have $300,000 in bills over the next 30 years that I have not made money yet to pay for them. It doesn't consider future earnings. We are carrying too much debt right now and most of it on the peoples side is for stupid things that are a drag on the economy. But if the money is being used well it is an investment, again like taking a loan out to get a (useful) college degree. It will pay for itself very fast.

Click to expand...

I may be wrong, but I was under the impression, that forecasts for unfunded liabilities include expected incoming revenue.

hanimmal said:

And I think that China may eventually overtake the US, but it is a looong way out, because they are just going to try to work their way to the top. Eventually the brute force approach will top out because there won't be enough demand for their products so they will stop growing and have to turn to reeducating their public so it will be several steps back before they get back to it.

Click to expand...

Eventually, China will become a larger consumer of its own products. They will not depend so much on foreign consumption.

Solar and Wind are inefficient, land intensive, and cost ineffective.

Click to expand...

Complete bs. A solar panel takes up zero land space. Zero it goes onto a preexsisting structure. And people get checks back from the electric company due to their panels putting electricity back into the system, so they are very efficient on their scale. You take energy that would have been lost and turn it into something that can be used.

You are pretending like it is killing a deer just for its antlers. You kill the deer for the meat, the antlers are a byproduct. This is energy that has already been produced (Sun) and it is just a way to capture it and use that power.

I think that misses the point completely. Much of the service sector depends on foreign imports. Practically nothing is made in America anymore, even the stuff that claims it is, is made of foreign parts, assembled in America. If China stopped taking our worthless IOUs, our entire economy would be crippled. We cannot continue to run a trade defecit forever, and we cannot have a viable economy if we absolutely depend on China and other countries for manufacturing. We may have a trade surplus when it comes to services, but that completely ingores the fact that we still have an enourmous trade defecit(which of course already includes services). The fact is, our economy is dependent on foreign credit...and we cannot maintain an economy based on foreign credit forever.

Click to expand...

This is wrong because what happens is that we go over there with our companies and produce the product because the labor is so cheap. Then we can turn around and improve our workforce into more educated fields that they just don't have in the same numbers like engineers, archite..... you can read. The better jobs that we have don't need to produce something to be valuable to the world trade. People are too backwards thinking, we will always have service jobs and producers here in the states some for trade, more for our countries needs, but we don't need a childs toy manufacturer here when we can buy it for pennies and it would cost us a dollar to make.

Like I just mentioned, our economy is dependant on foreign credit, and the only reason we have been able to run a trade defecit for DECADES now, is the Bretton Woods system. Bretton Woods has basically made us immune to normal market influences. We can just print as much money as we like, and the rest of the world just eats all our inflation because the dollar is the reserve currency. If the Bretton Woods agreement were to change, this would no longer happen...and all those foreign owned dollars will come home to roost...meaning a huge influx of inflation. And if we were no longer allowed to run a trade defecit, our economy would be crippled.

Click to expand...

It would mess things up shortterm if that happened. But really that would just be stock prices. Longterm it would not matter what currency we use as long as our country is strong and we continue to have a well educated (although this is looking bleak) and specialized workforce. Look at every other country, with regards to our growth they are growing usually faster. How could that be if they don't control the world currency?

I was talking about the stimulus packages, not our debt to China.

Click to expand...

Ah ok, yeah I saw that guys report but havn't had time to read it yet. So I am unsure how he got to those numbers, but I do know some got counted twice. But lets use it because its out there. That is money that we will have to pay off no question, but it doesn't mean that the bill is going to come due today, or even soon. After the mess we have been in it will take a couple decades to pull out of it. But that doesn't mean that the sky is falling.

We may have reinflated the bubble, but we have done absolutely nothing to fix the root problems. I anticipated you would say this, that is why I posted the article.

Click to expand...

How about looking at it as the economy is stablizing like I said not reinflating the bubble. A bubble is just the top end of it. We now know how far our economy can stretch. The goal now needs to be keep it supported and fix the underlying issues until everything can catch up to it with legitimate growth.

We let the banks get away from us and need to pull in the reigns. This is what has to happen so that a new bubble doesn't form (which it will but hopefully not anytime soon). Our capacity has not diminished, but the credit debt of the people was way too high. That needs to get paid down first so that they can buy stuff with actual money.

The banks need to get regulated.

Once all that is stable the government can retract and start to lick its wounds. But we needed it/need it in full force to shield us from this mess that happened.

I may be wrong, but I was under the impression, that forecasts for unfunded liabilities include expected incoming revenue.

Click to expand...

I would have to see where those numbers came from. Since everything is so easily manipulated I am guessing that came from an unreliable source until proven otherwise.

Eventually, China will become a larger consumer of its own products. They will not depend so much on foreign consumption.

Click to expand...

Well until they can make more money at home than they do everywhere else in the world they will sell and just trade for even cheaper stuff from somewhere else or go without. Right now they are stockpiling their wealth which is very smart. A strong China doesn't hurt America. Look at Britain, they were the top, but their citizens are very happy with being down the food chain. We just need to worry about our standard of living and not worry about winning a global race.

TheBrutalTruth said:

Actually we should be at a high interest rate. The United States needs to amortize (pay off) the debts that we are carrying, and thus secure a solid foundation for additional growth.

As long as the United States continues to accrue more debt we will never be able to truly escape from the stagnation that is being hidden by inflationary policies. I am not going to comment on what I believe is the cause of the stagnation, because that goes beyond the scope of this discussion, but I am going to say that we might be looking at insane inflation levels, especially if China or the Middle East (or even Venezuela) stops accepting dollars for goods and services. The former (China) of course is manufactured goods, and the latter two are oil.

We've seen how dependent we are upon oil and how quickly high prices in oil can bring our economy to its knees. Drill here, drill now, was more than a catchy slogan being pushed by the Republicans, it was the statement of the need to decrease our dependence on foreign oil even as we make the transition to greener technologies.

Of course the solution to the oil crisis has been staring us in the face for the last half a century. Nuclear Energy, which if the US was to allow for breeder reactors (Reactors that take high level Uranium/Plutonium/Fission Byproducts) and refine them into additional usable fuel) we would see minimal waste (over 95% of a uranium rod consists of Uranium at the end of its life and another chunk is plutonium which can also be used to produce energy) and high efficiency. Europe has been using breeder reactors for a while now.

Of course, another technology that we should have been pursuing with more funding is Fusion Reactors, because they would produce immense amounts of power, and would do so cheaply. Instead we are subsidizing the pursuit of inefficient power sources (wind and solar) that cost 500% - 600% more than Nuclear, Coal and Oil sources and are unstable.

Everyone talks about climate change, and yet their solutions ignore climate change. If the climate is changing then can we guarantee that those mountain valleys in the Sierre Nevadas where we have stationed wind-farms are not going to become rain-forests? (Rain Forests do not have to be tropical, as the existence of the only Rain Forest in the United States in Washington State can attest.)

Other solutions that are being ignored include Solar Power Satellites which would be reliable (due to not being reliant upon the weather, because of their stationing in space where it is not a factor.)

Solutions are manifold, but due to their political contributions (or lack thereof) some solutions are being pushed while others are being ignored.

Click to expand...

I agree with most of what you say and am interested in nuclear technology, but know too little about it. What I do know is that only small pockets of Europe utilize nuclear technology. Do you know which countries are large producers? In recent elections, three countries that I know of just passed laws to introduce nuclear technology, so it's gaining steam across the pond, but I would like to research those countries that have had it for a while now. How are energy prices, etc...?

I live in Europe for at least a month every year and I can say this - utilities are FRICKIN expensive. So if you're correct in saying that they utilize nuclear power, then why are the prices still so high? Isn't nuclear derived power supposed to be cheap?

24 Trillion...

jrh72582 said:

I agree with most of what you say and am interested in nuclear technology, but know too little about it. What I do know is that only small pockets of Europe utilize nuclear technology. Do you know which countries are large producers? In recent elections, three countries that I know of just passed laws to introduce nuclear technology, so it's gaining steam across the pond, but I would like to research those countries that have had it for a while now. How are energy prices, etc...?

I live in Europe for at least a month every year and I can say this - utilities are FRICKIN expensive. So if you're correct in saying that they utilize nuclear power, then why are the prices still so high? Isn't nuclear derived power supposed to be cheap?

Click to expand...

Taxes.

http://www.iaea.org/NewsCenter/PressReleases/2007/prn200719.html

Of the 30 countries with nuclear power, the percentage of electricity supplied by nuclear ranged widely: from a high of 78 percent in France; to 54 percent in Belgium; 39 percent in Republic of Korea; 37 percent in Switzerland; 30 percent in Japan; 19 percent in the USA; 16 percent in Russia; 4 percent in South Africa; and 2 percent in China.

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So, France, Belgium, Russia, UK also produces a lot.

The US had 103 reactors providing 19 percent of the country´s electricity. For the last few decades the main developments have been improved capacity factors, power increases at existing plants and license renewals. Currently 48 reactors have already received 20-year renewals, so their licensed lifetimes are 60 years. Altogether three-quarters of the US reactors either already have license renewals, have applied for them, or have stated their intention to apply. There have been a lot of announced intentions (about 30 new reactors´ worth) and the Nuclear Regulatory Commission is now reviewing four Early Site Permit applications.

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Even the US uses a lot of Nuclear. I see no reason for the United States not to pursue this avenue more vigorously.

Should it be the only avenue of power production pursued? No, but it should be one taken.

what... huh? said:

It is my understanding that we are in danger of losing our AAA credit rating in short order.

Click to expand...

Give moody's enough cash and they'll give ya AAA rating hannamal read this book. Cause you just don't get it.
It will help you understand modern investment instruments..

Amazon.com: A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers (9780307588333): Lawrence G. McDonald, Patrick Robinson: ...
www.amazon.com/...Failure-Common-Sense.../0307588335

Hemlock said:

Give moody's enough cash and they'll give ya AAA rating hannamal read this book. Cause you just don't get it.
It will help you understand modern investment instruments..

Amazon.com: A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers (9780307588333): Lawrence G. McDonald, Patrick Robinson: ...
www.amazon.com/...Failure-Common-Sense.../0307588335

Click to expand...

Sounds like a book I'll need to check out just on general principle, but probably not soon. Going back to the Roman Empire for a while.

Caesar's The Gallic War tonight (should be done with it) and then a few other books, including some classic speeches and writings made in that era.

I might go further back to Attic Greece, and then maybe see what I can dig up on the Parthian and Persian Empires, and perhaps go further East to China and Japan.

No true literature in the New World from that era, unfortunately...

TheBrutalTruth said:

Sounds like a book I'll need to check out just on general principle, but probably not soon. Going back to the Roman Empire for a while.

Caesar's The Gallic War tonight (should be done with it) and then a few other books, including some classic speeches and writings made in that era.

I might go further back to Attic Greece, and then maybe see what I can dig up on the Parthian and Persian Empires, and perhaps go further East to China and Japan.

No true literature in the New World from that era, unfortunately...

Click to expand...

Cicero is a great representative of Roman oratory and philosophy, at its finest, imo.


Men decide far more problems by hate, love, lust, rage, sorrow, joy, hope, fear, illusion, or some other inward emotion, than by reality, authority, any legal standard, judicial precedent, or statute.
Cicero

Looks like the Fed will need to buy 100 billion next week and 500 billion next quarter of treasuries to keep the "Recession is Over" game going. You know Hannimal i sure hope you are right about us going back to normal growth and low unemployment soon. I seriously doubt it considering that the USA has only paid off .2% of its debt load, and thats really what this is all about, the amount of debt. Sometimes I wonder if people know why countries MUST buy US treasuries at some point. Anyone know why?

NoDrama said:

Looks like the Fed will need to buy 100 billion next week and 500 billion next quarter of treasuries to keep the "Recession is Over" game going. You know Hannimal i sure hope you are right about us going back to normal growth and low unemployment soon. I seriously doubt it considering that the USA has only paid off .2% of its debt load, and thats really what this is all about, the amount of debt. Sometimes I wonder if people know why countries MUST buy US treasuries at some point. Anyone know why?

Click to expand...

Because it used to be a safe bet, I'd wager. I'm sure they're holding their breaths now, though.

Quote:
Originally Posted by what... huh?
It is my understanding that we are in danger of losing our AAA credit rating in short order.

Give moody's enough cash and they'll give ya AAA rating hannamal read this book. Cause you just don't get it.
It will help you understand modern investment instruments..

Amazon.com: A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers (9780307588333): Lawrence G. McDonald, Patrick Robinson: ...
www.amazon.com/...Failure-Common-Sense.../0307588335

Click to expand...

Yeah that is something that I have already ordered, it looks like a good read.

And I agree that the AAA rating is bs. But it wasn't me that put much stock into it. I was just saying why we are not in danger of losing it, well aside from just dismissing it since it is just like getting a special sticker for following codes that allows your insurance rates to be brought down.

I could have went even further and said that it was really england that was in danger of losing the rating, and was just speculators in the 'news' that brought up us losing our rating here in America. But I decided to just give the actual history of where we were at that time for a little perspective.

Looks like the Fed will need to buy 100 billion next week and 500 billion next quarter of treasuries to keep the "Recession is Over" game going. You know Hannimal i sure hope you are right about us going back to normal growth and low unemployment soon. I seriously doubt it considering that the USA has only paid off .2% of its debt load, and thats really what this is all about, the amount of debt. Sometimes I wonder if people know why countries MUST buy US treasuries at some point. Anyone know why?

Click to expand...

I have been saying that the end of this year we will be well on the road to recovery, and next year should be a good improvement to almost normal. I hope that I am right too for all our sakes.

That debt needs to get paid off for sure, but it won't be a quick fix. That is one of the problems we have a tendency in this country to think very short term. We forget the past too fast, and look too shallow into the future. This type of debt is decades, not years.

I am not sure what you mean with that last sentence, mind rewording it?

TheBrutalTruth said:

Sounds like a book I'll need to check out just on general principle, but probably not soon. Going back to the Roman Empire for a while.

Caesar's The Gallic War tonight (should be done with it) and then a few other books, including some classic speeches and writings made in that era.

I might go further back to Attic Greece, and then maybe see what I can dig up on the Parthian and Persian Empires, and perhaps go further East to China and Japan.

No true literature in the New World from that era, unfortunately...

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It's too bad you can't read these texts in their original languages , because I'd argue that ancient Greek and Roman literature (poetry), history, philosophy, and drama are easily the most foundational and important of all major genres.

Read Homer, Aeschylus, Sophocles, Euripides, Aristophanes, Plato, Aristotle, Herodotus, Xenophon, Epictetus, Marcus Aurelius and then read Virgil, Ovid, Catullus, Cicero, Caesar, Livy, and Pliny and only then can you even begin to call yourself a learned man. I'm team teaching a Western Civilization course this coming semester and boy am I excited!!!

hanimmal said:

That debt needs to get paid off for sure, but it won't be a quick fix. That is one of the problems we have a tendency in this country to think very short term. We forget the past too fast, and look too shallow into the future. This type of debt is decades, not years.

I am not sure what you mean with that last sentence, mind rewording it?

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I totally agree with attention deficit Americans. It could be paid off in a scant 2 years if the government would let the failures fail. Regardless what has been done is done, so it will take decades of recession to pay it off. At least Americans as a whole are saving again, unfortunately most are saving dollars.

I CAN reword that. Why must foreign countries have reserves of US Currency?

Read Homer, Aeschylus, Sophocles, Euripides, Aristophanes, Plato, Aristotle, Herodotus, Xenophon, Epictetus, Marcus Aurelius and then read Virgil, Ovid, Catullus, Cicero, Caesar, Livy, and Pliny and only then can you even begin to call yourself a learned man. I'm team teaching a Western Civilization course this coming semester and boy am I excited!!!

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This sucks, I guess I am not going to be learned for a long time.

But congrats on the class!

I CAN reword that. Why must foreign countries have reserves of US Currency?

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Ah ok. They don't have to (I am not sure if your asking why they are forced, or why do they, or even why we let them), but since most of the world does most their business with us it makes sense for them to keep money invested here. That money is basically their savings accounts.

It helps to keep it here because we can act as a quick 'bank teller' for the world (I can already hear the wheels of conspiracy turning). If say a company in England is going to buy $3 million worth of toys from China, because we are the holding company it is as simple as moving this pile of money from this area of a building that belongs to England (Through electronic books of course) to this area that belongs to China (after converting it to the correct currency of course). So that the company that is making the toys can be paid through a electronic transfer.

With a centralized system it allows for fast and safe exchanges. Commercial paper can be lend overnight across companies, investors in England, or Taiwan can simply press a button and the rest of the work is done by us.

This allows the world to work efficiently. It is an amazing thing. But they don't HAVE to they WANT to. There are other exchanges set up everywhere in the world. But we do it better than anyone else and have been doing it for a much longer time. And since we are the richest nation by far, if we are left with the bill due to a mistake we are the only ones that can afford it.

That way it is very streamlined for the world. And they do trust us because we have not screwed it up yet.