I feel like we're walking a razor's edge.

[mrgorth]

All the shit that Bush is doing (Rice, Gonzolez, CIA purge), talk of invading Iran, dollar is falling and today on NPR I heard about the worsening trade deficit. I feel like we're this close to another depression but this one will come with persecution. It might happen on it's own but another 9/11 or worse will bring it on right away. I don't know how much longer we've got.

[patomime]

1. keep the faith .....

because that's what they want. They (those who oppose progressives/liberalism) want you to be discouraged.

We must stick together and fight for our rights and civil liberties -
it's what our country was founded on and what you are discouraged about now.

Chin up!

"No retreat, baby, no surrender" :hi: :pals:

[nadinbrzezinski]

2. Yesterday we had a long discusion on this

It is commiing faster than people think

Think HOOVER and his policies, because that is exactly what these loons are doing, all the way to the Free Hand of the Market Place.

Trust me this is reaganomics gone on steroids, which is Hooverism...

And you are right we may see represion, you now what comes wiht that don't you?


Well yesterday I think the WaPo wrote that these loons want those who invest in the market and live from interests to do better than those who work forty hours a week

Well quick go get VI Lenin's works, in particular on Revolution, and think how that movie ended... becaues these loons are pushing for something as radical as that.

By the way, GET OUT OF DEBT, as fast as you can, and get rid of most of your credit cards, you'll thank me for this when the depresion comes.

[phantom power]

7. depends on whether we see deflation, or inflation.

If it's inflation, it's preferable to keep the debt, and then pay it off later with worthless currency. Use any available cash to buy durable goods, food, gold, or other inflation-resistant stuff.

But if we're headed for deflation, debt is the last thing you want.

There. Debt is either going to exactly what you want, or exactly what you don't want. How's that for stress...

[bobbyboucher]

3. You might want to position yourself.

Batten down the hatches, just in case. There are many signs that point to just that, but nothing is certain, of course, but I find it hard to think that good days are ahead.

[Pacifist Patriot]

4. Fabulous. And I was just getting used to the idea that an NPR

affiliate is intimidated by the far right.

http://story.news.yahoo.com/news?tmpl=story&u=/oneworld/20041122/wl_oneworld/4536983061101133419

The refusal by a North Carolina affiliate of National Public Radio (NPR) to run an underwriting announcement by a local group that carries out family-planning activities abroad is raising fears that the leadership of federal regulatory agencies may try to enforce a new kind of right-wing political correctness.

Back to economics, I did get a good zing in on a Bush supporter who is headed to Germany this week and complained about the exchange rate with the Euro. It's unnerving all the way around, it really is.

[Fovea]

5. This depression will hit *during* the world war.

Not before.
There will be no lifting out of it with a big bloodletting and war consumption binge.

There will be no oil to do it with, and no exports.

Remember what we did to the Japanese over Nanking? We cut off their oil. Then they attacked us.
This time, we are attacking the middle east, soon the EU and China will have all the cheap oil they can transport, and we will have a regional war, heading global.

[Pillowbiter]

6. I feel a draft too.

Followed by a maelstrom.

Though some advice, sell your bond funds if you have any, pay down your debts, buy stocks though only to funnel any profits into gold purchases, and if you can spare it, buy a gun (to use in a well regulated militia in order to defend your freedoms as stated in the constitution, not to kill criminals without due process and other phantom boogeymen who are out to take your money).

Hope to see you on the other side.

PB

[Pillowbiter]

11. To enforce the validity of my advice.

At least the part about paying down debt and selling bonds.

http://business.bostonherald.com/businessNews/view.bg?articleid=55356

PB

[VolcanoJen]

8. A customer told me yesterday that the struggling dollar is a GOOD thing.

"Helps make America more competitive!" he explained, while I looked at him as though he were f'in nuts.

Is this some kind of talking point being drilled into the heads of Hannity/Limbaugh/O'Reilly listeners?

[AngryAmish]

10. Good for US manufactuers, bad for importers

So if priced in US dollars, fewer Euros (etc) to buy said product. Cheaper to buy means more sold overseas. Thus, good for manufacturers.

However, imported products (Javanese bananas, eastern european porn) become more expensive in US. Say said dirty magazine costs 10 Euros. When there was parity b/w dollar and Euro the mag cost $10. However, since dollar is now about .7 to Euro, the filth costs over $14.

[Shakespeare]

12. Good for the wealthy, for the Carlyle group, etc.....

The lower the dollar goes, the greater the bargain to buy up U.S. debt. I assure you the Bushies are perfectly happy with a weak dollar, because it allows their cronies to buy up our assets like they were at a fire sale.

[VolcanoJen]

13. Talk to me like I'm four... how does this affect prices within the US?

I really don't know squat about economics, and I'm trying to truly understand this issue of the Euro vs. the Dollar.

If the dollar is weak, does that affect the price to import goods? Is this price passed onto consumers? Does a weak dollar contribute to inflation?

I'd appreciate anyone's help. Thanks!

- Jennifer

[DuaneBidoux]

22. Okay, are you ready for econ 101?

It's complicated (but you knew that already right?).

Generally, when a currency falls against other currencies AND if (as in the case of the US) the country with the falling currency imports many goods, this means rising prices for imported goods. Which means inflation (for a whole variety of reasons). But THIS is an EXTREMELY complicated situation because most of the nations selling us goods are also financing our deficit (you see they are saving at annual rates of 10-20% of GDP (Gross Domestic Product)vs. our savings rates of 0 or even -1% annual which means they have a lot of investible cash to invest. So, they finance our deficit, and we use the money to buy goods from them. It's like if you go down to circuit city and buy a computer and they loan you the money. Circuit City is the rest of the world, and you are the U.S. How did circuit city actually make any money? Well, they didn't, really, until you pay them back all they've done is give to you.

How are we coming up with all this cash? We borrow it. That means expanding supply of dollars, which means falling value of dollar. This works for a while, but at some point if the dollar keeps falling, let's say 10% a year, and they are getting paid 6% a year, this means they are losing 4% a year loaning us money. So eventually they say: we're sick of this shit. We loan you money and lose money. So, from now on we want 18% interest so that we can make at least 10% if your currency falls by 8%. Who is borrowing all this money in the U.S.? The government. If they are forced by foreigners to pay 18%, then U.S. homeowners or homebuyers will be foreced to pay 20% interest to buy a house. Houses become unaffordable at current prices, so prices fall...ya da..ya da...ya da..(replaced for the equivalent of 3 semesters of economic theory at University level)=depression.

It's complicated, but like (IMHO) a Pollock painting, it ain't pretty. This is why a falling dollar IS NOT GOOD for the US economy.

[DuaneBidoux]

18. Next time here is how you deal with that argument:

Our borrowing is being supported with foreign borrowing. When foreigners buy our bonds (i.e., finance our government deficit and trade deficit) they buy dollar denominated bonds which at some point they wish to reconvert into their own currencies so they can spend the money they earned for loaning their money. If they buy a US gov. bond at 4% and the currency falls 10%, they have lost 6% when they try to redeem.

Now how long will you do this? Year after year? Don't fuckin' think so. So, the real risk is that suddenly they say: no more. If the dollar is falling 10% a year, and you want my money (transfered from French francs, or Swiss francs, etc.) then I need a bond that pays 18% (so that in the end I can at least make 8%). A government bond that pays 18 percent means mortgate rates at 20%. So then ask your guy "how good will it be when we need to pay 20% a year to buy a house? That helps you?!

Clear? Don't think it fucking helps us at all.

[VolcanoJen]

21. Oh, wow.

DuaneBidoux, thank you very much for your clear explanation of a possible scenario.

I'm still trying to fully understand this issue and how it affects us; I'd certainly not thought of that angle.

It's terrifying, honestly, and even more terrifying is the way very few of us really, really grasp this issue.

Thanks again!!

[sandnsea]

20. Good for cheap trick corporate profits

Sell products in foreign currency, convert to US, quick profit that makes companies look like they're doing better than they really are. We can't get the dollar low enough to help US manufacturers. Just another big lie.

[AngryAmish]

9. If it is any consolation

If the dollar plunges our trade deficit must almost automatically get better (unless continued oil price hikes).

[AP]

15. I don't know if we make enough shit in America to make up for the deficit.

The problem isn't just that the dollar is strong. The problem is that we don't make anything anymore.

[quaker bill]

19. Yes, but

The incentive for foriegn investors to purchase our debt will evaporate. There is no happy scenario here.

[AP]

14. The Republican agenda today is EXACTLY the same agenda they had up to 1932

And the result will probably be exactly the same.

[DuaneBidoux]

16. Are you willing to fight for what you believe?

Are you willing to possibly die for what you believe? I don't know if it will come to that...but should it, you may (and I may) need to.

Look at Germany...there was a period...very brief before the Nazi's came to full power when, with a little bloodshed, civil disobedience, and resistance, 6 million Jews would never have died. We might then not have Israel and the strife that has come with it, we then might have Jews living in peace across the world and the virtual disappearance of anti-semitism. The result: the world and the Middle East at relative peace.

Don't be discouraged. Be steadfast. Don't be a chicken hawk the way Bush is (and most definitely Hitler and Stalin were). The last great generation were our grandparents, who fought Hitler and the Imperial Armies of Japan. Who truly fought evil. To every thing there is a season. This may be ours.

[quaker bill]

17. You should, because we are.

If foriegn investors catch a cold and dump their assets on the market, its 1929 all over again. Nothing Bush is proposing will address the structural problems and some of his proposals, like "income tax reform", will actually make things worse.

I am rather bearish and intend to fully divest from equities of any sort.