United States Heading towards a Depression?

I don't think that is likely. I don't think the currency could be harmonized quickly enough, and the central banks are in a nightmare of bad P&R, as is the USD right now.

If not for the housing crash though, I think it was on track to see some sort of North American or all of the Americas unified currency. The dollar had debased to almost the same level as the next largest economy, but everything was still very bullish.

Of course, now it looks like the Euro may come unravelled, as Germans refuse to hold Spanish or Italian printed Euro notes.

Interesting times we live in. Interesting indeed.

 

I don't think the Canadians would be so happy about some Amero bullshit.

If ECB raises rates it has a good chance of screwing the EU's individual economies, especially the more fragile ones.

Raising rates to combat the price of food and oil is not the best idea, but we'll see how it works out if they go through with it.

This whole mess is going to hit other nations harder than it does us.

The Asian countries, specifically China and Vietnam, are run by idiots who think it is a good idea to buy dollars by printing more money. That is why their inflation is at ridiculous rates.

 

This will make you barf.



I got lots to post tomorrow. Time to rack out.

 

MBIA may be next. MBIA Inc. faces a ``tenuous situation'' as the bond insurer seeks to cover payments and collateral calls on $7.4 billion of securities triggered by Moody's Investors Service cutting its insurance rating five levels to A2 from Aaa last week

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=at9o5_2nw.p0

Billionaire investor Eli Broad says this is worse than any recession we've had since World War II

http://www.bloomberg.com/apps/news?pid=20601087&sid=aAZwgRY7yikM&refer=home

 

This picture shows what I have a hard time explaining to liberals who blame Reagan and the Bushes for all of America's economic problems.

The exponential curve of fiat-debt-death begins long before Ronnie gets into office, and it was a consequence of putting the government on the credit card from the New Deal and WW2 to the "great society" and Vietnam.

Our political leaders are largely doing the best they can to hold things together, but at this point there's only so much they can do to deal with the effects of generational debt while trying to remain competitive and relevant in the modern global economy.

I figure they have to let inflation get as bad as the people can tolerate. They will probably really reign it in a few years from now, but until then they'll let it run at a low double-digits long enough to knock out a few trillion in the debt and allow the banks to make their balance sheets look nice.

 

People already can't tolerate it. Folks on fixed incomes are going to get wiped out.

 

Guerilla I was being facetious. Dollar issues aside, one could argue that the European currency was established with arbitrarily high value from the get go. Every nation involved in the switch to the Euro was not on an even ground with respect to the value of their currency. If anything, the Euro was inflated and overvalued from the very beginning. This too needs to be factored in when looking at the overall exchange rate between dollar/euro. It's one of the key reasons the euro remains higher than the dollar. Not the only one, but a big part of it initially.

My suggestion was that we too, here in the Americas could just make up a new currency out of thin air and put an arbitrary/inflated value on it as well.

I think it is important to not discount the fact that the invention of a new currency that uplifted a lot of lower valued currencies is partly to blame for the decline the dollar's value.

 

I'm not really an expert on the formation of the Euro, but I would assume that they had used existing rates between currencies to meet the standard.

If a currency is inflated that's the opposite of overvalued. I think you mean just overvalued. But the Euro has been trading for a long time now, and has shown itself to be one of the world's strongest and reliable currencies. By that, I mean that the market has had it's opportunity to reject or punish it for being smoke and mirrors, and the market seems to think the Euro is solid.

I don't think it is that simple. Although all currencies have arbitrary values. They are all just paper, and they trade based upon market perception of it's relative value to another. Back in the day, you could actually trade a banknote, FRN etc for an amount of gold or silver. Now, you can't trade it for anything of a fixed value.

Honestly, our fundamentals are in horrible shape, and due to compounding of interest on the debt, those fundamentals are going to get a lot worse, relatively fast. I'm trying to avoid doom and gloom. I've posted information and sources numerous times. Obviously this thread is full of it. It's out there, it is real. Everyone should strive to be debt free, diversified and liquid.

 

The Dow has broke the 11400 resistance and is on it's way down 132 points today. GM's stock price is at 1954 levels. The Financials are in trouble and are going to take more hits in the 3rd quarter.

The Euro strength is based on the financial strength of Germany, France, and Germany. Weak links are the inflation countries of the Med - Spain, Portugal, Italy and Greece. However, Europe doesn't have the culture of debt and without anything better the Euro may become the worlds reserve currency.

 

Fortis Bank predicts US Financial market meltdown within weeks

IndyMac denies that it's close to collapse

Starbucks closing 600 stores in the US


The Coming Depression?
Posted by Bill Anderson at 02:53 PM

Great Depression and government action
Posted by Michael S. Rozeff at 03:09 PM

Expect a 'Deep Slowdown' in the Global Economy
Posted by Lew Rockwell at 01:58 PM

 

I heard about Starbucks closing 600 stores on Bloomberg today. They will be cutting 12,000 workers.

Asian stocks declined today (July 2) for the ninth time in 10 days. Japan's Nikkei 225 sank 1 percent to 13,331.98. South Korea's Kospi index lost 2.2 percent, the region's biggest drop.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ayH6sAooKxsM&refer=home

 

Well obviously people aren't going to buy as many $5 lattes with costs going up and wages staying flat. I think a lot of people have expected Starbucks to be the first one to take a hit if workers had to contract spending at all.

Heh, Walmart has been doing great for the opposite reason: cheap, terrible service.

 

Oil is estimated to hit $200 soon.. that will crush just about anything.

 

Auto sales hit 15-year low. GDP and unemployment will take a hit on that one.

http://news.yahoo.com/s/nm/20080702/bs_nm/usa_autosales_dc;_ylt=Aje9XZAZgxe3XD0Ly6wa10iyBhIF

I bought some bird food at walmart the other day. 2 LB blend for $1.98. In the supermarket it's like $5.99. But I can get a blend in the Pet store that us fresh for $1.39 lb.

I don't really shop in walmart but I don't think the prices are that great. The New York metro is loaded with 99 cent stores, outlets, spanish supermarkets, aftermarket stores. In the rural areas where there is nothing more than main street, walmart has the best prices by far.

The cost of energy still has been fully passed along in prices. It will take a year for the costs to work there way into the economy. Prices are going up but at the same time the economy is flat.

 

Russia's oil output has been in decline since August 2006

http://www.economist.com/business/displaystory.cfm?story_id=11332313

 

P.S. Anyone still interested in buying http://www.usa-economic-recession.com

Its a great opportunity I tell you...