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We have Worldwide Economic Stimulation!

Discussion in 'Political Discussion' started by PatriotsReign, Nov 24, 2008.

  1. PatriotsReign

    PatriotsReign On the Roster

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    Despite the fact that economic stimulation is the reason we're in the mess we're in

    We have Worldwide Economic Stimulation!

    Now if this makes sense to some people, I'd love to read your rationale. There are some on this board who continually believe our currency will collapse due to the HUGE deficit we are running up. But I doubt these people have considered that on a comparative level, other major economic powers are spending MORE on stimulus packages than we are.

    Here are just a few examples;

    "Asia-Pacific governments and their counterparts around the world are spending hundreds of billions of dollars and implementing new policies to prevent the financial and economic crisis from worsening.

    China this month announced a $586 billion economic stimulus, while South Korea unveiled a 14 trillion won ($9.3 billion) package of extra spending and corporate tax breaks, adding to almost $20 billion in income-tax reductions announced in September.

    In Australia, the government is guaranteeing all bank deposits held by regulated institutions and investment funds in the nation. Japanese lawmakers last month approved a 1.8 trillion yen ($19 billion) supplementary budget as part of a stimulus package and Prime Minister Taro Aso promised Oct. 30 to pump an additional 5 trillion yen into the economy."


    So our currency should not become devalued considering the entire know economic world is joining us in the Bailout Party. My question is why are gov'ts around the world plugging the holes in the dike with the same dynamite that blew us up in the first place? Why do we panick so much...PERIOD?

    The world is treating the economy like it's the stock market. We all know the market will react immediately to news or action. But the economy will never react to news of stimulation. Why is it that I know that recession is the cure for what ails our economy but the smartest and brightest minds in the world seem to be over looking that fact? I don't get it. Our economy is out of balance and recessions restore balance and confidence.

    Am I missing something here?
    Last edited: Nov 24, 2008
  2. maverick4

    maverick4 Banned

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    That is only a temporary phenomenon; the idea of the US dollar as a haven for countries to park their earnings is gone.

    Other nations have spent billions but we are in the ballpark of over 5 TRILLION to bail out various modern-day corporate princes and monarchs in our socialist-for-the-elite economy.

    We are in jeopardy of losing reserve currency status, and when that day comes in the next 6 months, it is going to get outright ugly in the US.
  3. PatriotsReign

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    I don't agree, but I can't deny there is that possibility. Time will tell mav and time is all we have.
  4. Fogbuster

    Fogbuster Rookie

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    .

    This is an indication that the world still has faith in the American economy. China has just replaced Japan as the largest holder of US bonds, which of course promise a return for cash invested today. The Chinese have enjoyed an unparalleled cash and trading surplus with the US for almost 20 years, so they have the dollars to invest. The down side, of course, is that the US will need to buy back those bonds at some point, when the come to maturity.

    All in all, however, it is a sign of faith in America's economy, derived no doubt from America's tradition of relatively fair play and making good on promises, stability, and integrity. Some thing the rest of the world admires. Even China.


    //
  5. maverick4

    maverick4 Banned

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    The Chinese and Japanese aren't stupid, they know what we are doing. We are devaluing our currency so that their bonds will be worth MUCH LESS when we have to pay back our debts. Short term it seems like a great idea, let's screw our foreign investors so we don't have to pay as much! But long term, that is a horrible idea because once they stop buying our garbage notes, the entire US economy and way of life is screwed.
  6. PatriotsReign

    PatriotsReign On the Roster

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    You really do believe what you're saying will happen, but you also need to understand there's an equal chance it will not happen.

    Stop crusading and just state your opinion Mav.
    Last edited: Nov 24, 2008
  7. maverick4

    maverick4 Banned

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    You're right, I need to stop sugar coating the truth.
  8. PatriotsReign

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    Do you actually believe YOU hold the key to the truth more than anyone else here Mav:rolleyes:

    What are your qualifications? Where have you gotten your experience and expertise on economic theory?

    Sometimes, you seem like one of those nuts who travel the world to protest at the World Economic Summits.
    Last edited: Nov 24, 2008
  9. maverick4

    maverick4 Banned

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    I don't claim to know any more than any of you here, except what I have been posting the past 1.5 years here has come to pass mostly.

    I'm not any more educated probably, but I do read lots, and from what I have been reading (not wacko sites but extremely intelligent analysts or investor blogs) the worst is YET TO COME.

    I do not delight in this, my own portfolio has taken a hit because I can't fully be out of US assets. I also do not like a world where the US falls, but we are seeing it happen in real time.
  10. PatriotsReign

    PatriotsReign On the Roster

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    Well, we probably agree more than we disagree, and I guess that's what this board is all about. I read a lot about economic theory as well, but I would never put any economist on a pedistal because there are none that deserve to be. I try not to see where these guys are always right, but also where and why they may be wrong.

    This crisis was an easy one to predict regardless of the number of idiots who kept their blinders on. Now you can put guys like Schiff on a pedastal, but he is only one of hundreds who predicted this fall.

    3 years ago, I told one of my brothers that a severe recession would occur very soon. i outlined it in an email I sent to him. Now my prediction didn't get publicized nor am I famous, my point is, it was easy to predict.

    Keep in mind the world would have a lot to gain by keeping US currency strong and a lot to loose if it fails. Nothing can replace lost demand...nothing.
  11. maverick4

    maverick4 Banned

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    We are currently sh*tting on our own currency deliberately. The world is clinging to the hopes that the old global system with the US as the top dog and main consumer will continue, but it won't.

    Schiff isn't even one of the main guys I read.

    Do you agree or disagree that the worst has already passed?
  12. wistahpatsfan

    wistahpatsfan Rookie

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    #75 Jersey

    Maveric's probably right. There have been a number of publications locally (Mass) saying the unemployment situation will bottom out in the 3'd quarter of 2010! There are still a lot of houses of cards that will tumble between now and then. Citicorp will not survive, IMO (nor should they be allowed to).

    I remember the RE collapse of the 80's and Bank of New England (remember them?) had to fail because they held 40% of their assets in RE. They got caught in greed mode. It's happening again.

    The irony of all these bailouts which are designed to "save our economy" will more likely than not gauranty the complete collapse of our currency. We're trying to cure a paper mirage with other paper mirages. It won't work. Our society has to stop being the type that can only relate to instant gratification via debt. You can't cure bad debt with more bad debt.
  13. PatriotsReign

    PatriotsReign On the Roster

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    I have stated several times that our recession/depression has just begun. Nothing can turn around until

    1. All toxic debt is eliminated from the financial system
    2. Housing bottoms out
    3. A prolonged period of re-evaluation of our economy has run it's course
    4. Confidence is restored

    If you want me to stick my neck out and forecast how long that will take, I'll say 5 years in total but I'm counting 2008 as the first year of the recession...so around 2013.

    I also believe we will not experience any economic "booms" in our lifetime. I don't see the Dow getting backt to 14,000 for at least 8-10 years.
    Last edited: Nov 24, 2008
  14. maverick4

    maverick4 Banned

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    So I'd say we're pretty much on the same page, except I think the Dow is going to 6k within a few months as well.
  15. PatriotsReign

    PatriotsReign On the Roster

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    Are you saying "in the 6,000's" or all the way TO 6,000? Big difference between the 2.

    I'll also say I have no idea how far down it will go, but your guess is not unreasonable based upon revaluation of companies that will never see consumerism (that drives 70% of GDP) like we have since the 90's.

    Also, keep in mind that the dramatic losses in 401K values will force consumers to save even MORE of their own money in personal investments to off-set retirement savings. That will drive "consumer spending" down even further.
  16. Real World

    Real World Moderator Staff Member

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    So where will China and Japan go sell their goods, when they've destroyed the American economy in 6 months?

    Investing is a legal form of gambling. Therefore, if I were a gambling man, and the world economy was going to sh!t, I'd be betting on that eeeeeeeeeeeeeeeeeeeeeevil US of KK, ahem, of A, to be the most likely to come out on top. ;)
  17. maverick4

    maverick4 Banned

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    No one is destroying the American economy except for America.

    In fact, Japan and China have basically been doing everything they can to help us, by lending us money (burning their money). Those two countries have probably lost half a trillion dollars trying to help us out so far.

    If the American engine blows up, then these countries will need to generate self-consuming economies much faster than anticipated.
  18. PatriotsReign

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    NOt that we're taking sides here RW...but I'm also taking the position that our currency will not collapse nor will we have hyper-inflation. I think that is where Mav & I disagree. But we do agree regarding the length and severity of the recession/depression this is just beginning.

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