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  1. #21  
    Quote Originally Posted by shopharim View Post
    Want to know what to do?

    Encourage yourself and others to turn off the news and go about normal economic life.
    So, if the US had turned off the news, Bush and Cheney's talking down the economy in 2000/2001 would've been less caustic in real terms?
  2. #22  
    Quote Originally Posted by lifes2short View Post
    So, if the US had turned off the news, Bush and Cheney's talking down the economy in 2000/2001 would've been less caustic in real terms?
    Our economy is a faith-based economy. Our monetary instruments are solely backed by the full faith and credit of the Government. As a result the economy generally rises and falls with expectations about the future.

    Unfortunately, the population's expectations about the future are influenced greatly by the topic du jour, rather than by application of sound financial principles. Hence, election year prognosticating about the economy (such as in 2001 and 2007) tend to hold more sway with the public than objective assessment of economic indicators.

    When the opinions align with the indicators, that bodes well. However, it is still problematic in that opinions change with wind, and hence the population's behavior changes just as swiftly and frequently.

    What makes this most unfortunate is there are those who understand this relationship and so manipulate the "news" to suit their personal political and economic fancies. I think the term is self-fulfilling prophecies.

    Tell people that there are going to be more foreclosures, and there will be. Why? is it inevitable? No. But, having heard such news, people who can afford to purchase do not (for fear of foreclosure, or, in hopes of getting bargain basement prices). Consequently, those who made poor desicions (goaded by unscrupulous financiers) and need to sell can not, and so foreclosures occur.

    Couple that with the "flipping" mentality in the mortgage industry (where the loan originator is not concerned about the lendee's ability to pay, becuase it already has a buyer for the loan; and the buyer is all to happy to collect interest over 2, 3, 5, 7 or 10 years knowing that such revenue will offset loss incured when inevitably selling the property for less than the remaining principle after foreclosure) and the potential level of disaster is staggering.

    This is not to say that the "value" of the dollar is not at real risk. It most certainly is. That circumstance, though, is not a mere result of recent executive policies. This country, for some time, has been moving across a continuum from a focus on making a difference to that of making a profit. The uncertainty we're facing in the wake of this voyage should not come as a surprise. The world's #1 best-selling book has long included the observation that "the love of money is the root of all evil."
  3. #23  
    Quote Originally Posted by shopharim View Post
    Unfortunately, the population's expectations about the future are influenced greatly by the topic du jour, rather than by application of sound financial principles.
    Based on that observation, the market should be much more volatile over the long haul than it is. Or, could it be all that high-interest borrowed Chinese money is what gives the false impression of a righted ship?

    Hence, election year prognosticating about the economy (such as in 2001 and 2007) tend to hold more sway with the public than objective assessment of economic indicators.
    In 2007, there has been no indication of election-year prognosticating, of the scale of the Bush/Cheney cabal of 2000/2001. The primary election-speak concerning the economy is in dealing with the facts of the insane national deficit, trade deficit, a $1.5 Trillion war bill (so far) which is being mortgaged by China, etc. To not address them, and promote intelligent plans for progression out of this depression, would be completely irresponsible.

    When the opinions align with the indicators, that bodes well.
    Not where OIL is concerned, except for speculators' "opinions". Or, did you mean the public's opinions? In either case ...

    This is not to say that the "value" of the dollar is not at real risk. It most certainly is. That circumstance, though, is not a mere result of recent executive policies.
    Just when do you believe the war on the dollar actually began?
  4. #24  
    Quote Originally Posted by lifes2short View Post
    ...Just when do you believe the war on the dollar actually began?
    When we stopped backing it with precious metals and started backing it with faith and credit.
  5. #25  
    Quote Originally Posted by lifes2short View Post
    Based on that observation, the market should be much more volatile over the long haul than it is. ...
    Actually, the relative stability and decidely upward of the market over the long haul makes the point. The topic du jour effects short term values.

    That notwithstanding, I agree that a debt based economy represents another risk altogether, especially if the debt is being held by parties not beholden to you.
  6. #26  
    Quote Originally Posted by shopharim View Post
    The uncertainty we're facing in the wake of this voyage should not come as a surprise. The world's #1 best-selling book has long included the observation that "the love of money is the root of all evil."
    Iago

    "Good name in man and woman, dear my lord, Is the immediate jewel of their souls: Who steals my purse steals trash . . . But he that filches from me my good name Robs me of that which not enriches him
    And makes me poor indeed."


    Criminal: A person with predatory instincts who has not sufficient capital to form a corporation.
    - Howard Scott
  7. #27  
    Quote Originally Posted by shopharim View Post
    When we stopped backing it with precious metals and started backing it with faith and credit.
    And when was this tipping-point, by your estimation?
  8. #28  
    Quote Originally Posted by shopharim View Post
    When we stopped backing it with precious metals and started backing it with faith and credit.
    Shop -- the credibility of any currency is based on the credibility and strength of the economy from which it is generated.

    Printing paper when there is little of interest availalable to buy is why currencies collapse -- not because they're not backed by gold or silver.

    Zimbagwe is a classic current example.
    755P Sprint SERO (upgraded from unlocked GSM 650 on T-Mobile)
  9. #29  
    Quote Originally Posted by lifes2short View Post
    Based on that observation, the market should be much more volatile over the long haul than it is. [...]
    I don't think this is entirely accurate. One must also factor in the general population's direct participation in the market. There have been relatively few times in recent history where they have played such an active role.
    ‎"Is that suck and salvage the Kevin Costner method?" - Chris Matthews on Hardball, July 6, 2010. Wonder if he's talking about his oil device or his movie career...
  10. #30  
    Quote Originally Posted by shopharim View Post
    Our economy is a faith-based economy. Our monetary instruments are solely backed by the full faith and credit of the Government. As a result the economy generally rises and falls with expectations about the future.
    Unfortunately, the population's expectations about the future are influenced greatly by the topic du jour, rather than by application of sound financial principles.
    So, which is it? The government's faith or investors' faith which influence the stability of the market?

    Quote Originally Posted by Toby View Post
    I don't think this is entirely accurate. One must also factor in the general population's direct participation in the market. There have been relatively few times in recent history where they have played such an active role.
    So that's why Bush's domestic directive response to 9/11 was "go shopping".
  11. #31  
    Quote Originally Posted by lifes2short View Post
    And when was this tipping-point, by your estimation?
    Some brief anecdotal search results point to 1971 as the finalization of the switch over. Though the decline began before then (one site points to the establishment of the Federal Reserve as the beginning of the end).
  12. #32  
    Quote Originally Posted by BARYE View Post
    Shop -- the credibility of any currency is based on the credibility and strength of the economy from which it is generated.

    Printing paper when there is little of interest availalable to buy is why currencies collapse -- not because they're not backed by gold or silver.

    Zimbagwe is a classic current example.
    I'm not convinced that the strength of the issuing economy is a factor when the note is backed by gold or silver. If the issuer has the credibility (integrity) to honor the stated exchange rate, I can redeem my note regardless of the strength of the issuer's economy, and regardless of the availability of items of interest.

    In fact, what we're seeing in the world today may be the ramification of the US not maintaining its credibility with regard to the gold standard. It is as a casino selling chips valued at $5, $10, and $25, but then only redeeming them at $1, $2 and $5 dollars. Or worse, not redeeming them at all.

    Once that occurs, I must remain in the casino if my chips are to have any value whatsoever. That might be tolerable if the casino was not also simultaneously selling its interest in the various vending operations inside the casino. Because, if the food vendor is not owned by the casino, there is no longer any obligation to honor the chips.

    OK, I've taken the analogy far enough (probably too far).

    But in any case, what makes the barter system work best is when there is an understood, non-negotiable standard. Apart from such, the only true source of valuation is might (real or percieved).
  13. #33  
    Quote Originally Posted by lifes2short View Post
    So, which is it? The government's faith or investors' faith which influence the stability of the market?
    The influence is not singular. It is not either-or, but both-and. That one can accumulate dollars is a function of the investors' faith. That those dollars will have any worth is a function of the Government's faith.
    Quote Originally Posted by lifes2short View Post
    So that's why Bush's domestic directive response to 9/11 was "go shopping".
    Perhaps. But, at the time it seemed to me more a show of unbroken spirit rather than economic strategy.
  14. #34  
    Quote Originally Posted by shopharim View Post
    I'm not convinced that the strength of the issuing economy is a factor when the note is backed by gold or silver. If the issuer has the credibility (integrity) to honor the stated exchange rate, I can redeem my note regardless of the strength of the issuer's economy, and regardless of the availability of items of interest.

    In fact, what we're seeing in the world today may be the ramification of the US not maintaining its credibility with regard to the gold standard. It is as a casino selling chips valued at $5, $10, and $25, but then only redeeming them at $1, $2 and $5 dollars. Or worse, not redeeming them at all.

    Once that occurs, I must remain in the casino if my chips are to have any value whatsoever. That might be tolerable if the casino was not also simultaneously selling its interest in the various vending operations inside the casino. Because, if the food vendor is not owned by the casino, there is no longer any obligation to honor the chips.

    OK, I've taken the analogy far enough (probably too far).

    But in any case, what makes the barter system work best is when there is an understood, non-negotiable standard. Apart from such, the only true source of valuation is might (real or percieved).
    interesting analogy -- and maybe applicable to Zimbawe in some ways, but for the purposes of international trade its not really illustrative.

    Using a commodity (gold, silver, water, oil) as a standard of exchange creates an artificial throatle on enterprise and development -- and destructively distorts and often harms (ironically), those that possess the commodity that is the standard. (i.e. Spain w/gold and the middle east w/oil).

    Economies that trade based on their inventivenes, creativity, and industriousness can grow and benefit because of their success.
    755P Sprint SERO (upgraded from unlocked GSM 650 on T-Mobile)
  15. #35  
    Quote Originally Posted by shopharim View Post
    Some brief anecdotal search results point to 1971 as the finalization of the switch over. Though the decline began before then (one site points to the establishment of the Federal Reserve as the beginning of the end).
    Actually, I was more interested in your thoughts, versus those of Google, given the conviction of your earlier statement.

    And when was this tipping-point, by your estimation?
    Quote Originally Posted by shopharim
    When we stopped backing it with precious metals and started backing it with faith and credit.
  16. #36  
    Quote Originally Posted by shopharim View Post
    Some brief anecdotal search results point to 1971 as the finalization of the switch over. Though the decline began before then (one site points to the establishment of the Federal Reserve as the beginning of the end).
    I'm not sure I'm understanding you here. We have been on a fiat money system since 1933.
    ‎"Is that suck and salvage the Kevin Costner method?" - Chris Matthews on Hardball, July 6, 2010. Wonder if he's talking about his oil device or his movie career...
  17. #37  
    Quote Originally Posted by lifes2short View Post
    So, which is it? The government's faith or investors' faith which influence the stability of the market?
    The latter is the one with the most influence. Not sure if shop misspoke, but the monetary system's stability is based on the faith _in_ a government, not the faith of such (in itself).
    So that's why Bush's domestic directive response to 9/11 was "go shopping".
    Don't know what his motives were. Are we talking about the economy or the stock market?
    ‎"Is that suck and salvage the Kevin Costner method?" - Chris Matthews on Hardball, July 6, 2010. Wonder if he's talking about his oil device or his movie career...
  18. #38  
    Quote Originally Posted by shopharim View Post
    The influence is not singular. It is not either-or, but both-and. That one can accumulate dollars is a function of the investors' faith. That those dollars will have any worth is a function of the Government's faith.
    When you earlier stated "solely" regarding the government's faith, I took that to mean the obvious. Thanks for clarifying, and because this is an elemental premise, I think you'll find complete agreement.

    Perhaps. But, at the time it seemed to me more a show of unbroken spirit rather than economic strategy.
    Never really considered Bush to be one to wax philosophical. And now that hindsight is 20/20?
  19. #39  
    Quote Originally Posted by gojeda View Post
    ...As long as people are spending money, everything will recover sooner or later.
    everything doesn't always recover.

    There are dozens, maybe hundreds of Dot Bomb stocks that sizzled, exploded, and dissapeared.

    E-Trade is maybe about to become one of them.

    The mortgage brokers were hot stocks 6-8 months ago. There had been a surge of desire to purchase them by investment bankers and brokers. Where are they now ??

    Some mistakes don't come back.

    BTW -- perhaps you can help out my former collegue -- he lost his porche, his yacht, and his bone collection when the bubble burst... (you'd like him -- even though he's homeless, he still votes republican)

    755P Sprint SERO (upgraded from unlocked GSM 650 on T-Mobile)
  20. #40  
    Quote Originally Posted by BARYE View Post
    interesting analogy -- and maybe applicable to Zimbawe in some ways, but for the purposes of international trade its not really illustrative.

    Using a commodity (gold, silver, water, oil) as a standard of exchange creates an artificial throatle on enterprise and development -- and destructively distorts and often harms (ironically), those that possess the commodity that is the standard. (i.e. Spain w/gold and the middle east w/oil).

    Economies that trade based on their inventivenes, creativity, and industriousness can grow and benefit because of their success.
    If by inventiveness, creativity and industriousness you mean exchanging worthless paper for real goods, then I would call it ingenious....that is, until your partners come to view your paper as worthless (especially if you've abandoned the production of real goods, and relied on your role as the "banker" as the means of your success).

    If on the other hand, your paper represented something of intrinsic value, you are still a viable participant in the trade game (as long as you possess that something, I suppose)
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