Watch Out, the Financial Crisis may be Upon Us.

I have always (Actually since bush and the Repukes have taken over) felt that our financial policy defies any common sense.

Deficit spending, trade imbalances, a runaway budget, reduced wages, jobs going abroad, health insurance crisis, huge property tax increases, cuts to states and cities, and on and on, can only lead to a financial disaster.

No smoke and mirrors guru, like Alan Greenspan, and certainly no morons like chimp and friends, can convince me otherwise.

Today's 174 point drop in the Dow is the thing to watch.

If tomorrow, the Dow does not rebound, watch out.

You see, all this speculation and double-talk from all these talking heads like Covutto defy what's so obvious.

Our country is linked to crude oil, like it or not. We can not climb out of its grasp in the foreseeable future, so we are prisoners to the market forces.

I believe it is as simple as this. Our huge budget deficit, trade imbalance,and personal debt has caused our dollar to drop like a stone. Oil is priced in dollars, and even if it wasn't, we still have to buy it with dollars. If a barrel of oil costs $50, and the dollar loses 10% of its value, oil must increase to $55.

This increases everything made here, weakens the dollar more, causes a bigger defect, a still weaker dollar, and a poorer economy.

As the debt grows, interest rates must increase to sustain the borrowing, people will no longer be able to refinance their personal debt. Consumer confidence will wane, people will buy less, jobs will be lost, home prices will fall, the real estate bubble will burst, foreign investors will call in there loans and sell American investments.

I hope to God that I'm wrong, but I have had this nightmare while awake every day for over three years.

I hope someone can convince me that everything will be just fine, but please do it with facts and no Greenspan, Bush, and Fox News Bull Shit.

by the financial crisis. Been out of work for over 2 years and have sold just about everything to pay the mortgage and bills. Husband doesn't make enough to pay everything. It's been hell!!!

Same story here, in Arizona.

We saw this coming four years ago and have done everything we can to prevent personal collapse, but the jobs aren't there and it's getting scary.

:hug:

(i.e., fewer dollars, more euros) is cause for real concern.

We live in fear (rightly so) of mass dollar dumping. If this were the beginning of a trend our economy is shot.

wait until the Chinese dump their dollars. Then the Bu$h*t will really hit the fan!!

just like the bank owns my house, but, only for 5 more years ...i hope we can hold out until then :scared:

at this point its going down, and its going to be a hard fall.

I've positioned myself for a huge inflationary cycle.

Homeowner with locked in Mortgage of 6%, work very close to home, no stocks, invested in short term interest bearing bonds, but I cannot live more than 6 months without a job.

If it turns out to be a depression, I'm F**ked

we are in for some hard times.


Didn't the central bank spank us a bit today?

Question of when, not if.

I don't think today's market drop is the real collapse, I think it's just a reaction to the price of crude topping $50/bbl-- which itself was a reaction to the new low temperatures coming this week, which means people like me are going to have to buy another tankful of heating oil. (Supply and demand, y'know.)

Also it's arguable the market was overbought the last couple weeks.

But some time in the next four years, China will realize they don't need to keep lending us money (i.e. buying our T-bills) just to keep us buying their cheap manufactures at Wal-Mart. Then the dollar will drop like the proverbial stone.

It has some of the best-trained economists in the world. But if there's one thing China is good at, it's waiting. It's in no hurry. It plans long, long term. It is choosing a moment.

The question being: what is the best moment for China, and what does that mean for the rest of us?

My guess is that the moment is when primary and heavy secondary industry (that is, mining and things like shipbuilding) drop below a certain relative percent of China's GDP.

if they can develop another market-- say, India, where all those new call center and tech support workers now have money.

An Indian global service ying to the Chinese global manufacturing yang. The world's largest emerging import and export markets locking into a bipolar economic system with the rest us us rendered about as relevant as South America ... unless Europe can shore up the Euro as global reserve, and quick.

The US has money but it is becoming worthless as it is backed only by our word. And bush is proving the value of that. As oil extraction peaks world wide then oil and natural gas will become the priceless commodities they really are. Oil has been cheap only because of the ease of extraction and the lack of ability to manipulate extraction rates by individual producing countries (say greedy politicians).

As demand outstrips supply the bidding will begin. Those with oil will want to exchange their oil for the best currancy that will allow them to purchase that which their people want. That means China and India will likely be trading with the oil rich countries of the ME and to a lesser extent Africa and SA. In reality we(USA)are on the tail end of a dying relationship with the rest of the world.

No one quite knows how to make the divorce as painless as possible so everyone is waiting and watching. But the end will come and those who produce the things that the oil exporters want will bag the oil. The only thing that the US has that it exports now is it's military might. But even that is a fading star. The Russians and now the Chinese have seen the light and are now gearing up for assymetric warfare. And Iraq has proved how to defeat the US grunts on the ground. We screwed ourselfs folks. Bob

cast off our possessions and get back to real family values, like trying to find a way to eat and moving in with relatives.

I would like to invite everyone down to Florida where they can attempt to squat in the million dollar beachfront condos that people bought as investments.

to recover from it.

entire Social Security Trust Fund to finance their wars and when that is all gone ( given their track record they can run through trillions in a couple of years),they will mount more and more bizarre wars against just about everybody. So, to add to your nightmares, watch for them coming to take your children away to fight their wars.

have no children, but I cry for everyone's, everywhere.

I agree with your prediction but I have one question - it seems to me that all this was done on purpose by bush inc. Why?

I don't care what their intentions are.

The results are what count, and Hoover will look good in comparison by the time this Asshole leaves office.

It's all there, especially in the chapter "Sell the lexus and Burn the Olive Tree". It's all about globilization, and bankrupting countries so the multinational corporations can make it big.

Here's another article he wrote about Argentina: Who Shot Argentina? The Finger Prints On the Smoking Gun Read ‘I.M.F.' Inside Corporate America Guardian (London) Sunday, August 12, 2001
by Greg Palast

It's not the peg itself that skewers Argentina - but the peg combined with the Four Horsemen of IMF neoliberal policy: liberalized financial markets, free trade, mass privatization, and government surpluses.

'Liberalizing' financial markets means allowing capital to flow freely across a nation's borders. Indeed, after liberalization five years ago, the capital has flowed freely, with a vengeance. Argentina's panicked rich have dumped their pesos for dollars and sent the hard loot to investment havens abroad. Last month alone, Argentine's withdrew 6% of all bank deposits.

Once upon a time, government-owned national and provincial banks supported the nation's debts. But in the mid 1990s, the government of Carlos Menem sold these off to Citibank of New York, Fleet Bank of Boston and other foreign operators.
snip
There's more cheer for creditors in the Understanding, including 'reform of the revenue sharing system.' This is the kinder, gentler way of stating that the US banks will be paid by siphoning off tax receipts earmarked for education and other provincial services. The Understanding also finds cash in "reforming" the nation's health insurance system (cut cut cut).

But when cut cut cut isn't enough to pay the debt holders, one can always sell 'la joyas de me abuela,' grandma's jewels, as journalist Mario del Carvil describes his nation's privatization scheme. The French picked up a big hunk of the water system and promptly raised charges in some provinces by 400%.
http://www.gregpalast.com/printerfriendly.cfm?artid=96

I will check out that book

I read it the week before the election...and felt it was a safe time to do so, because I thought Kerry was in, and things would be better. :(

But dems aren't the ones who like to bury their heads in the sand. :)

Greed for Money. Greed for Power. Greed, which is based out of insecurity, or fear.

but what good is all that money and power if the country collapses?

Even those with the best of intentions can F**k up, but if it's intentional, it's treason.

writes about this in Wealth & Democracy. Not everyone was jumping out windows on Wall St during the last depression. Insurance companies became fabulously wealthy, for example. I can't remember some of the other examples he gives. However, IIRC, he does note that extremely wealthy families like the DuPonts and Rockefellers set themselves up for having an incredible grip on the development of the US economy after FDR turned it around.

It's possible that Republicans see that inevitable economic development in Africa, Asia and South America is going to create access to incredible wealth and they want to make sure that only a few people in America are ready to tap into that wealth. To do that, they need a power-shifting depression so that the right people are in position to benefit from wealth the 21st century will create.

That's my guess.

All of your points are right on the money. Greenspan is a lying, right wing hack. The "liberal" media adores him. Every utterance from that buffoon is to promote the right wing agenda. And his every move weakens our economic outlook in the long term.

And then we have total imbeciles running the executive branch and the congress.

When the deluge does come, it will be a shattering experience for most Americans. Somehow they'll manage to blame the Democrats.

Free Trade was allowed in the late 1800's and early 1900's, it lead to the Depression. With free trade being used again, we'll enter another Depression but this time, Christians will blame pagans, Buddhists, liberals, gays, etc as god's punishment for their existance and create a theocracy.

Not all Christians but liberal Christians need to get their religion out of the hands of nuts.

The market has a way of sucking in every last bit. Think back to the 90's. Most people thought that it couldn't continue. Then it went higher. Then it went higher. Eventually sucking in those that said well I must be wrong and joined the crowd.

Looking forward consider what the situation will look like once the event occurs. Again one will never know where the bottom is.

Think that the saying goes something like Bears win. Bulls win. Only pigs loose.

economists think we are in ok shape ? Or is the economic community more or less united that we are screwed long term ? Does anyone know ?

We're drowning in extreme deficits under a corrput, corporate-backed government gone mad. We've also got a genuine energy crisis looming, to which there will be no easy answers.

And, of course, there is Global Warming looming over the horizon as well.

I wish I could tell you otherwise, but things are going to become quite nasty before the 2008 election cycle. I can't tell you how it is all going to unfold, but I'm willing to bet that we will all be living our lives quite differently ten years from now. Gas will be something like $45.00 a gallon, but hydrogen will not save our SUV-obsessed society. Kiss suburbia and those H2 Hummers good bye. After peak oil hits and oil becomes increasingly scarce, we will all eventually be living and working much closer to our homes, supporting relocalized economies.

I've been worried about the same thing. So what's the best way to handle our money? How can we protect it? :shrug:

We're in for some serious pain.

this too.
I read this this afternoon:

Shares drop as oil surges and dollar slides ( South Korea diversifying its currency)
http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20050222&ID=4259824

Last week the Chinese said something too about diversifying their currency, confidence in our economy is dropping world wide and we are indebted to the world. The bigger economies could lose if they withdraw too quickly from our markets but what about some little country, say in South America, that has little to lose. This could start the ball rolling.

The market is like walking on eggs, there is nothing under it. All we need is some big hedge fund to blow up, some event to start a real crash that will be more than a correction.

So,...you are starting to get a grip on economic reality?

Oh, AND,...are you also starting to understand the warring-machine which funnels what's left into certain pockets?

Kinda' makes one swoon,...huh.

No one ever imagined that Bush really meant what he said when he spoke of tearing things down in order to "FIX" everything.

want to destroy, then reconstruct society according to their religious beliefs. That is bush's fix.

http://www.businessweek.com/bwdaily/dnflash/oct2004/nf20041025_5442_db084.htm



ECONOMIC FUTURES
By Michael Mandel

China's Coming Financial Crisis
And thanks to its quasi-socialist goverment, the budding superpower is ill-equipped to handle this almost inevitable bust

Economists and economic journalists do a lot of hand-wringing about America's budget and trade deficits. They worry that the dollar will plunge and that foreign investors will flee U.S. financial markets. The country is committing the sin of profligacy, it's said, and will suffer for it. But let me make a fearless prediction: The next big financial crisis won't happen in the U.S. Nor will it occur in Europe.


No, China is in the biggest danger of a meltdown over the next five years. Within this decade, its financial system will hit a big bump, and the response of China's political leaders will determine whether the country recovers quickly or slips into depression. Moreover, if a real financial crisis happens in China, the economic and political implications for the rest of the world will be tremendous.

POOR INVESTMENTS. On the surface, this forecast may seem absolutely ludicrous. After all, China has averaged annual growth of almost 10% for the past 20 years -- a faster pace than almost any other country. It's on the verge of making the big jump to being an industrial superpower. And it has run a $100 billion trade surplus with the U.S. in the first eight months of this year alone.


<snip>

I think that is the plan... that and martial law. This is why all this money is stolen day and night by the Bushites as perhaps as a nest egg for the ruling class... while the rest of us go down toilet. Here is something I have been doing for ages now... I have almost entirely stopped using money. I have cultivated relationship with local markets, local this and that...If they need writing done, I do it. If they need comp work done, my hubby helps them out. In exchange, I get some free produce and other items. This is the oldest way of living: barter. Now if everyone does this, then we will all stay okay and it will be the corporations who will take the hit, not the people.

Professor Krugman is not optimistic.

I hope the American people learn something from all this.

"In the world I see - you are stalking elk through the damp canyon forests around the ruins of Rockefeller Center. You'll wear leather clothes that will last you the rest of your life. You'll climb the wrist-thick kudzu vines that wrap the Sears Tower. And when you look down, you'll see tiny figures pounding corn, laying strips of venison on the empty car pool lane of some abandoned superhighway." (Fight Club, 1999)

Would you be sad to see it happen? Is this postmodern nightmare of concrete and gasoline and zoloft and televangalism and eating disorders truly the best we could do? Are we too shortsighted to envision life without the SUV and the Frigidaire and the cubicle and the telephone?

Maybe so.

Or maybe the world, every living being in the biosphere including homo sapiens sapiens, would breath a collective sigh of relief if humanity shrugged off the chains of its parasitic cancerous civilization and rejoined the process of evolution. It has happened before.

from same author?

Came across this while looking into an entirely different subject. Don't know much about the veracity of the website and author but in some of the links reputable sources were cited. I stocked up on nothing for Y2K and am generally not an Apocalyptic leaning person but an economic collapse is inevitable due to factors you have pointed out.

Global Tipping Point

We have assessed the day's news and come to an interesting conclusion.  Although the web bot project has predicted it a couple of weeks earlier than today's date, we can see several areas now where equilibrium has been broken and the world is starting to tip.  Let's start with the high level view:
<snip>
 First: On the rumors that something was going to happen in Washington DC, it seems as though the reports of a plot to attack the life of the President being uncovered was, at least initially, the source of concern.  Now that suspects are being rounded up, LINK, the worries have not abated.  One reason is the President will be in a part of Germany tomorrow which is not especially friendly toward Washington.  A reader in Germany reports:
<snip>
Second:  Stock, commodity and metals markets all went crazy at the same time today.  We noted that some of it was driven by reports that Asian Banks are dropping away quickly from support of the US dollar, a move that could have calamitous impacts in the US.  Details.  This event caused me to click the speed dial to Robin Landry, a long time contributor to the perspectives we hold on markets and such with the question of the day.  "Is this the start of the BIG ONE Robin?"
<snip>
Third:  Oil is starting to rear its head in a horrific way.  A couple of points could be mentioned, but the fact that the comments of energy banker Matthew Simmons showed up in Al Jazeera today saying that the Saudi oil peak may already be past us is a horrible thought.  but you have to read it and figure out the implications.  DETAILS.  Regardless of your take on Peak Oil (mine is well stated by the unnamed energy from Houston whose comments we shared with your EARLIER.) you need to read Matt Simmons latest World Energy Summary.
To read entire article which has additional links go to:
http://urbansurvival.com/week.htm

And it's amazing to me that your average "fiscal conservative" continues to support this BS.

Excuse me, but I thought true, honest fiscal conservatives were AGAINST running up the national debt as far as the eye can see, and increasing the size of government.

Yet, they are supporting the very man who is doing all of that.

I don't get it.

So, I want to throw out a challenge to any one of the freepers from freerepublic.com, who I'm sure are lurking on this site. If any lurker from freerepublic.com can explain to me why a fiscal convserative whould continue to support this kind of irresponsible budget, enlighten me please.

Problem is, I know you CAN'T elighten me, b/c there is no excuse for a true fiscal conservative to support what Bush is doing to our economy.