United States Heading towards a Depression?

Oh boy, what did they do this time and how much is it going to cost me? I'll have to go lookin' this up now.

I want the federal reserve gone so we can at least blame the elected officials when they waste obscene amounts of our money.

Well well, looks like they're going to take on credit & car debt now so they get to dictate how those companies do business. I knew they were looking at a way to distribute the full risk of student loans to the public at large, but this is turning into one of the quietest socialist take-overs of a private economy I've ever heard of.

 

You are simply disgusting. There is no other way of defining you.

My forum name is always preceded by impending doom and gloom. It's like being a rock star I tell ya...

Why can't some of you move on with your lives and be happy?

 

You're working from a limited linguistic palette!

Yes! Tight leather pants, motorcycles and big hair!

We will be able to move on when we get our stimulus! $600 doesn't even buy an ounce of gold! In 1971, Gold was $35 an ounce! A dollar is technically 24 grams of fine silver! $600 only buys $36 worth of silver circa 1792!

Imagine how much your booger will be worth in 200 years!?!

Act NOW! The FED is buying crap, and no deal is too crazy for Madman Bernanke!

 

No one is calling a recession. We all know what a recession is.

You do realize that government spending is considered in GDP. Thus when the government spends more via war, stimulus packages, new social programs, GDP grows. Why do you think hundreds of social programs were created soon after the great depression? It was to propel GDP back to the positive and create new jobs for people with freshly created cash.

The fact is Mia, that each recessionary period is ended by inflation. Prior to 1913, panics crashed the market then as the correction ended, the markets rebounded. Economic slowdown throws malinvestment out and deflates prices.

Post 1913 we inflate the second the numbers turn sour. Look at this chart which has been posted in various threads on DP, probably this one as well:

Each recession brings a greater money supply, the money supply should stay stable. Today we're inflating again to keep the numbers up. Bernanke has pushed $384 Billion into the economy through the banks. This is $384 Billion that will go directly to the GDP even though it was created from thin air.

In 1970, the money supply was about $500 Billion. In 2004, it was $4.5 Billion. From 1970 to 2004 the growth in GDP was 1039%. Its easy to see how easily these numbers correlate, larger money supply= larger GDP.

I'd like to see how this is refuted.

 

You mean $4.5 TRILLION in 2004.

 

Ah, actually, a couple people here are.

Actually, some people here do not.

Total Tax Revenues are up and have been ever since the Bush tax cuts. In 2007 alone we collected 7% more than the previous year in total taxable revenue.

To make it easier for some... We have more money coming in, and have year after year due to the Bush tax cuts.

 

How much was the money supply and debt increased during this period?

Feel free to use M2 if you don't want to use M3...

 

I want to use M16.

 

That's fuc*ing sad and insane all at once.

 

So the rise in tax income over the past however many years is due entirely to Bush tax cuts? Give me a fucking break. Tax revenue will rise with the expansion of credit and money supply.

And just so you don't have to do the math for Guerilla's question I'll answer it for you. This way we'll actually get statistics rather than the same old rhetoric, in your world Mia, correlation apparently does imply causation.

In year 2000, TMS was slightly less than $3 Trillion dollars. Today it sits at $5.2 Trillion, not accounting for the recent influx from the FED, just what we can see on the chart above. That represents an increase of 40% in the money supply, correct me if I'm wrong, but the Bush tax cuts do not generate anywhere near 40% in more tax revenue, yet alone more than that (The amount required to show that Bush's tax cuts create more revenue).

In 1987, tax revenue was 18.4% of GDP. 1995, 18.5% and in 2006 the number was again 18.4% of GDP. Judging off your beloved statistic the GDP, the Bush tax cuts actually reduced revenues, even from the high tax Clinton years. I'm failing to see where the tax cuts generated any additional revenue absent growth in an expanding money supply.

In 2000, tax revenue was $2.1 Trillion. In 2005 it was $2.15 Trillion. Hmm, from 2000 to 2005 the money supply rose 25% while tax revenue rose 2.3%. Hmm, tax revenue would have gone up anyway, regardless of tax cuts simply because the growing money supply.

 

Yes but it cost a couple of dollars to fuel your car, a house cost $10,000, etc. I think you will find gold normally tracks inflation remarkably well over the longer term.

Not so silver which has a lot of ups and downs over history thanks to large finds and the fact it is a consumable material - unlike gold which 95% mined still exists. Much of the gold could have been worn by a Pharaoh, etc - Gold has an amazing history really, that wedding ring on your finger may have been on a king or queen before.

 

And it was $641.20 an ounce in 1980. By comparison, that is about $600 MORE an ounce by todays dollars than it is presently.

It's all relative.

 

It just means that gold is undervalued, and being long in gold is not a bad position to hold.

 

Not all recessions have two negative quarters of negative GDP. That is a media myth. The National Bureau of Economic Research offically determines when a recession starts and ends.

From the FAQ of the NBER site

Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBER's recession dating procedure?

A: Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. Our procedure differs from the two-quarter rule in a number of ways. First, we consider the depth as well as the duration of the decline in economic activity. Recall that our definition includes the phrase, "a significant decline in economic activity." Second, we use a broader array of indicators than just real GDP. One reason for this is that the GDP data are subject to considerable revision. Third, we use monthly indicators to arrive at a monthly chronology.

The US is presently in a "minor" recession. Former Federal Reserve Chairman Alan Greenspan said this month that the U.S. economy was in recession

http://news.yahoo.com/s/nm/20080408/bs_nm/usa_economy_greenspan_dc

I believe that the current recession will minimal with unemployment rising to around 6% by the end of the year. However there is substancial risk that the US will have a double dip recession or the Fed's policies of inflating the economy will lead to bank failures and a depression. Although the distinction between a recession and a depression is not clearly defined, it is often said that a decline in GDP of more than 10% constitutes a depression. The douple dip recession of 1980 thru 1982 came close to a depression. Interest rates topped 20% and unemployment was close to 11%

January-July 1980: 6 months chart (worst quarter GDP Growth -7.8% spreadsheet)
July 1981-November 1982: 16 months chart (worst quarter GDP Growth -6.4%)
July 1990-March 1991: 8 months chart (worst quarter GDP Growth -3.0%)
March 2001-November 2001: 8 months chart (worst quarter GDP Growth -1.4%)

Both inflation and substancial subprime losses continue to present high risks to the economy. The US also has had four straight month of cut jobs — bringing total losses to 260,000.

The Fed said Friday it would boost the amount of emergency reserves it supplies to U.S. banks to $150 billion in May, from the $100 billion it supplied in April. The Fed took this action and several other moves to boost credit in coordination with the European Central Bank and the Swiss National Bank.

http://news.yahoo.com/s/ap/20080503/ap_on_bi_ge/wall___main;_ylt=AvEKW_xu3WMcMpLM352YnZqs0NUE

The ECB will lend 50 billion in May and the Swiss National Bank 6 billion every two weeks.

This is crazy. The Fed has already loaned banks 600 billion.

 

Well, that's it. I'm calling for Mia to resign his commission as Chairman of the Sunshine Economics Board.

 

Poole, Bies Say More Fed Rate Cuts Wouldn't Stem Slowdown Much

`We have an adjustment in housing that has to take place,'' Poole, former president of the St. Louis Fed'

http://www.bloomberg.com/apps/news?pid=20601087&sid=aWAYs4brrVwM&refer=patrick.net

Don't fire him yet. It's possible that the US economy will turnaround. If the Fed as Mia has stated lets housing correct, the worst we will have is a 'slight recession' which is part of the normal business cycle.

 

Not all recessions have two negative quarters of negative GDP.

The 2001 recession did not involve two consecutive quarters of decline

http://www.nber.org/cycles/recessions.html

 

Exactly why Mia should resign before our next board meeting, where we will have to vote him out!

 

The job market is weakening.

"Planned job cuts in U.S. companies totaled 90,015 last month, up from 53,579 in March and up 27 percent from a year earlier, employment consulting firm Challenger, Gray & Christmas Inc. reported."

http://news.yahoo.com/s/nm/20080501...bargo5_1_dc;_ylt=Arp_NJANIWTkjD8bMB6.kAXv5rEF