United States Heading towards a Depression?

Don't ask silly questions, ok? Everyone knows what tins of bins are.

 

How's the economy in Eire? I hear inflation and job losses are a problem, but it still sounds better than the American economy when you look at fundamentals like household wealth vs public debt.

 

What's more sad is that political candidates hire the same people that run failed banks to run their campaigns.. Go figure. It's a never ending cycle of retardation!

 

HUD Secretary Alphonso Jackson announced his resignation Monday amid criminal probe

http://news.yahoo.com/s/ap/20080401/ap_on_bi_ge/hud_chief;_ylt=Avr3nhEtTfN.mAvW.bt51ulv24cA

Breaking News: Swiss bank UBS AG says it expects to post first quarter net losses of $12 billion

http://news.yahoo.com/s/ap/20080401/ap_on_bi_ge/switzerland_ubs;_ylt=AirOaJPRvwYX4oDysPjvj..s0NUE

 

Something tells me he would be the perfect choice to head up Obamas financial fiscal responsibility panel cabinet position.

 

Pretty sobering article here,

USA 2008: The Great Depression
http://www.independent.co.uk/news/world/americas/usa-2008-the-great-depression-803095.html

Excerpt

 

As the author of that article might say, Wall Street is not Main Street. There isn't a magic Dow # that will cause us to go into a tailspin. The Plunge Protection Team has breaks put into the market after '87, and they will prop up the markets if they can.

If anything, the markets are misleading. I'm far more interested in the independent M3 numbers Ron Paul is talking about, particularly the 17% growth rate. That's terrifying if the dollar doesn't come out of it's funk (which for all intents and purposes, it is very unlikely to do).

Watch the dollar. It will tell you whether things are getting better or worse..

 

The US Department of Agriculture says the cost of feeding a low-income family of four has risen 6 per cent in 12 months.

That smells like inflation to me.

 

Well, GDP has still risen even in this most recent quarter... What this smells like too me is high energy costs, fuel costs, etc., translate to more expensive agri-production, transporting of food, which equals higher costs at the grocery store.

The root of all evil in todays WORLD WIDE economic crisis is:

Energy Prices
Ignorant Lenders

Prices are not inflated by a devaluing of currency as much as they are inflated by real cost increase related to the actual production of those goods.

 

That's cost push type reasoning.

Prices are going up because costs are going up.

But cost is what a consumer pays, price is what a merchant charges. It's the same number, just viewed from opposite sides of the transaction.

If the money supply is relatively constant in size, a higher cost/price in one good, would necessitate a lower cost/price in another because there are only so many dollars to chase around an economy in the aggregate.

But if the money supply is increasing consistently, aggregate prices can rise, and rise, and rise and rise...

Don't get sucked into cost push, demand pull. I really believe those terms and concepts have been introduced to take the conversation away from inflation, and they can be debunked by anyone with some time to think it through.

 

6 percent is a bold lie, too. Every year, before they calculate the cost of food, they do "substitutions." Since the 1970s, steak has been replaced with greasy ground beef and the individual consumer's theoretical fruit budget has plummeted from ~25 pounds a year to ~4. Then they report prices only went up 4-6%.

Companies make these substitutions as well, finding cheaper sources of sugar, oil, and protein (HFCS, canola aka rapeseed, and gluten / soy protein isolate) - and the problem is we've pretty much already hit the bottom of the barrel. The food doesn't really get any worse from here unless we start eating what the Chinese want to feed our pets.

Its both - prices are going up because costs are going up and demand is going up, but they're also going up more because of monetary inflation. In the last four years, oil has nearly doubled in Europe, but it is up three to four times what it was four years earlier in the U.S. You can apply that to any sector that hasn't had radical efficiency growth and you have to take that monetary factor of ~50-60% out of the increased cost or decreased quality of goods and services. Oil shows the effect most clearly because there is no available substitution... You can't downgrade to offset costs - oil is the downgrade while "green" energy is the premium.

If the money supply was constant in size, the economy would collapse! Any savings would cause immediate liquidity problems and credit would be almost impossible to acquire. The money supply does need to grow, but it should be proportionate to growth in the economy..

 

My bad. I have come to the conclusion that I am not as good at explaining as I am at arguing.

What you wrote is what I sorta meant.

But savings and investment are part of the ebb and flow of the market. Savings wouldn't necessarily cause liquidity problems, it would be deflationary, and prices would adjust downward.

If the belief is that excess money = inflation, then decreasing money must be deflation, no?

And yeah, steep or excessive inflation/deflation is a bad thing, but on a micro level, this is supposed to be happening in the economy constantly. Credit expansions, credit contractions. With every single monetary unit that is exchanged or deposited.

 

Are you watching this shit with Bernanke. Good God. These Congress-tards don't know what the hell they are talking about. Whoever that lady is was asking basic ECON 101 questions. Then she asks about his "bag o' tricks" and "food stuff", yes she said it those exact ways. And then this black dude from MD (ugh..) called Bernanke a "superstar". Wtf. Oh and some guy brought up "tulip mania" lol.

 

Almost everyone in Congress worships the FED Chairman. Without the FED, they can't fulfill their election promises to lobbyists, and buy votes from the constituents.

The country is BROKE. No one wants to tell people to buck up, eat less, walk more, turn off the TV and stop shopping.

 

The U.S. economy has been in a downward spiral for quite some time but I'm not sure if it's heading towards a depression?

 

IMF Says U.S. In Worst Economic Crisis Since Great Depression
http://www.infowars.com/?p=1223

Anyone out there still doubting that there may be a significant economic event happening?

 

Not only is it not headed for a depression, it is NOT in a recession.