Economic Question

[Foxrac]

There are aware about different philosophies (NOTE: I prefer to see in factual, but if you can't so please use your philosophy) and please keep political at minimum. Please cite the source when you want to confirm as fact.

1) Does austerity measure could hurt the economy? Does could return to recession?

2) Do you believe that stimulus package is necessary to help with economy?

3) How did mortgage subprime caused? Is it possible to blame on specific officials, especially bank, government, etc?

4) How did financial crisis caused in 2008? Is it any blame for financial crisis?

5) What happened if we don't use TARP (bailout) to save bank? Will we return to Great Depression?

6) What happened if we don't save AIG from falling?

7) When we will see economy goes back on best track and more stable?

I will ask more questions when I have mind. Thank you for be civil with this discussion.

 

[deafdrummer]

Please keep your questions to a minimum per thread, or at least break out each question to its own thread and post a link to each thread as they are created. There is TOO MUCH INFORMATION to answer all the questions. Remember, I posted that massive missive the other day about Sound Money, or a couple of them. I'll have to see if it's possible to distill the information into a small, simple paragraph. You already saw what happened with the Virginia thread. Read that for starters. All this mess got started because of the banking class' involvement with paper money and the massive wealth creation it gives them at the expense of the rest of the human population.

Simply put for now, all the banks out there need to fail. You see, government interfered in the natural market forces by not allowing the banks to learn from their mistakes and punishing those who do very well with very high taxes on businesses. Moral hazard is the principle of reaping the reward of good decisions and risk taking, and yet not expect to pay for your mistakes in decision making, etc. In other words, "I screwed up, I blew it, come bail me out!"

The financial industry, the banking class who runs it, and government that plays into the banking class' hands are all at fault for the plight that we all find ourselves in. My hope is that we liberate ourselves from these F*s within my lifetime. You can start by having money outside the banking system, whether it be gold, silver, supplies like food water, ammo, extra clothes, extra parts for your vehicles, anything so that you are NOT stuck with paper money in your possession. The sooner everyone does this, the sooner we break the stranglehold these B* have on us, and the sooner things will get better for us.

That doesn't mean it's not going to get rough. It will be rough for a while as we transition back to a gold standard and more natural market forces that determine supply and demand for goods and services. But it HAS to start with recognition of the fact that all parties who made bad decisions have to take their lickings, suffer their bad decisions and losses, learn from that, and make much more prudent decisions as to who they are going to trust their capital with next time. This is a case of being more concerned NOT with the return ON your capital, but the return OF your capital. The loss of your capital is much more DEVASTATING than the loss of the return ON it. You see? As soon as we can purge the losses out of the system and the market can start anew is when things will get better. It IS the only way.

If you want to understand how austerity measures affect countries, look no further than Greece, which is undergoing a massive collapse right now. http://www.keeptalkinggreece.com/ This will give you EVERYTHING in terms of what happens with irresponsible governments and how central banks take advantage of the situation, and let me leave you with this graphic on the magnitude of our situation versus Greece, Italy, Spain, Ireland, or Portugal for that matter. Look at my post over in the stockbroker's thread. http://www.alldeaf.com/personal-finances/96686-any-stockbrokers-here-4.html#post1985042 - look for the one with a bunch of small circles inside a BIG one.

 

[Lukin]

There has been talking of World War C (Currency War) around here about the demise of US economy.

Dunno if you're interested.

 

[deafdrummer]

Actually, we have been INSIDE a currency war for a while now.

 

[Lukin]

Actually, we have been INSIDE a currency war for a while now.

Yeah, this isn't new, like trade and tariff wars of 1930s Depression.

The currency war I refer to is about competitive devaluation as to boost exports by making imports expensive or blocking imports through high tariffs. I thought of recent news about Venezuela in particular, as they already have devalued theirs at 46%.

Japan has already entered the global currency war. There has been a speculation about Europe entering in very near future, potentially making things worse.

So far, US Federal Reserve, People's Bank of China, the Central Bank of Brazil, the Swiss National Bank, and the Bank of Japan are doing such devaluation.

I think this April/May/June will be interesting months to watch out.

 

[VacationGuy234]

1) Does austerity measure could hurt the economy? Does could return to recession?

If you are implementing this, the reason is likely because you are in recession or well past recession and into depression or crisis(as is the case in Greece).

2) Do you believe that stimulus package is necessary to help with economy?

Yes. What makes an economy work is the movement of money so people can buy goods and services. During a recession, the only way to make money move is to add more money. This is normal and needed in any capitalistic economy.

There is no debate over whether money is needed. The debate is over were to spend the money. In the case of bailing out banks, some including myself, don't believe that was the right thing to do. The same goes for the housing market. The problem was bad financial products(mortgage backed securities) coupled with predatory lending and that can only be corrected through the market.

3) How did mortgage subprime caused? Is it possible to blame on specific officials, especially bank, government, etc?

It was caused by the government not enforcing predatory lending and allowing banks to sell loans to people who cannot afford them. And, packaging those loans in the form of bonds to people who expect a set return(even if the house is foreclosed).

Ultimately, the government is to blame. If they enforced the laws, the housing market bubble and collapse would not have happened.

4) How did financial crisis caused in 2008? Is it any blame for financial crisis?

See the above answers.

5) What happened if we don't use TARP (bailout) to save bank? Will we return to Great Depression?

The banks fail and the government takes them over. This is normal and happens all the time, but never at the rate it did in 2008.

Will people lose money? Yes. Anyone who had over 100k would lose money because that was the amount insured at that time(it is now 250k today).

6) What happened if we don't save AIG from falling?

I can't fully answer this question.

7) When we will see economy goes back on best track and more stable?

It's already getting back on track and more stable. However, we will not see a return to pre-2008 level because, basically, those levels were all a scam due to a bubble in this housing market.

You will see a better economy, but you are not going to see that false economy again.

 

[Lukin]

I have been searching for this thread in last fifteen minutes. Now I've found it!

Bundesbank President's Speech: Weidmann warns of currency war

Freiburg - Bundesbank President Jens Weidmann has warned of the consequences of a state-run exchange rate overturning. "Try more and more countries to press their own currency, it can at the end lead to an ambitious devaluation, which is known only losers," the Bundesbank chief warned on Monday during a presence at the University of Freiburg.

......


Spur for the debate about exchange rate dumping last was the radical monetary easing in Japan , which had sent the yen is declining. This export-oriented Japanese companies have a competitive advantage in the world market. The euro has become extended costly against the yen since mid-2012 by nearly a third.

read more at Bundesbank-Präsident Weidmann warnt vor Währungskrieg - SPIEGEL ONLINE

thought I'd post this, since it was on Spiegel some time before I mentioned it on this thread, so...

EDIT: on second thought, I think I will take a cigarette break, lol... you nutty economists!!!

 

[Grummer]

economics to me is ; 2 bananas =1 apple, 10 apples= 1 melon , 10 melons = 1 bottle beer 24 beer = 1 bourbon, 3 bourbons = 1 Scotch whisky