A touching story yes however, I think the point of Bush botching the execution of the ‘war on terror’ is academic at this point. While there are a few things which can be blamed for the current economic crisis we now face, prolonged expensive wars are a large contributing factor on multiple levels which go far beyond the cost of the war itself. I would really like to find the right words to help people truly understand what the world is facing now without adding partisanship to the topic.
Instead of talking about the war I will talk about economics because to date we are not paying for this war, I would have you consider the fiscal implications of continuing the war. Our national debt has doubled in 8 years from $5.6 trillion to $11.32 trillion, a staggering amount no where near the final toll.
For those who care; I will put forward a few thoughts. As an investor who has studied markets and economics for a number years now, my queues come from people such as Jim Rogers, Peter Schiff, Marc Faber, Nouriel Roubini, Robert Kiyosaki, Warren Buffett, Donal Trump and many others. These are names worth writing down so you can search the Internet to see what they say; all saw our current plight coming years ago. Then ask yourself what is best for the US (if you are a citizen) and the world after you are done with your research. If you don’t take the time now; you may wish you had by this time next year, there are things everyone should be doing now to prepare for the changes.
The crisis is a result of 30 years of bad policies and expensive wars historically are the downfall of currencies. People need to understand FIAT currencies are not real money, it is in fact a debt to the people. When a dollar is printed it is printed and then loaned to the banks with interest. That’s right the dollar itself is a debt, it has no intrinsic value. There is no ground zero with fiat currency as when the dollar was pegged to gold until 1971. So when the government runs out they just print more, it’s value has dropped more than most know since then.
Mike Maloney an advisor to Robert Kiyosaki on precious metals recently wrote a book called “Guide to Investing in Gold and Silver”. It leans heavily on Robert Kiyosaki’s book “Prophesy” written in 2002 that talks about the retiring baby boomers who have all bet their retirement on the stock market. It’s important to note Mike’s book was published on August 28, 2008 before the big stock slide and so far is 100% dead on.
From page 112 to 116, this is well worth the read, your future may depend on it.
Soon the world will wake up to the fact that though mortgage backed securities (MBS) are a big problem, there is an even bigger problem looming out there, the zero-down loan. MBS are the big problem for the financial sector. MBS only speed up the global transmission of problems through the banking sector. It’s the zero-down loan that threatens to suck the world economy into a black hole.
In the end, I think we’re in for a wild roller coaster of ride, with a few whipsaws thrown in. First the threat of deflation, followed by real deflation, and then followed by hyperinflation.
This scenario is the one that fulfills predictions made by Robert Kiyosaki, and several other people I have great respect for. I think that our current subprime fiasco will turn into a larger problem than it is now, and as the real estate sector begins to plummet, and the credit currency that was borrowed into existence begins to evaporate, the threat of deflation will loom. Then Ben Bernanke will come to the rescue and bail us out by orchestrating another helicopter drop of currency.
In his book “Rich Dad’s Prophesy”, Robert Kiyosaki predicted that one of the greatest stock market booms in history was yet to come, and would last at least until 2007. This was amazing considering that the book was written back in 2002. The country was still reeling from 9/11 and the financial scandals like Enron, while the Dow was finishing a three-year brutal bear market, and many analysts were predicting a bear market for years to come. But Robert made his ultra-bullish prediction in the midst of all that bearish sentiment based on fundamentals of the baby boom demographics and their retirement needs. The so-called experts called Robert a lunatic. Current events reveal he is a genius.
The day of reckoning will come when the millions of baby boomers reach the age where they have to take mandatory distributions from their IRAs. As they find the investments they were counting on for their retirement, their homes and their IRAs full of mutual funds, have actually lost value, that the amount of stuff they can buy from the proceeds if they sell their home is actually less than when they bought their home. And as they realize their dream of comfortable retirement was just that, a dream, all those baby boomers will get scared and pull in their horns. They will stop spending. They will start selling off their assets. And Rich Dad’s second prophesy, the greatest stock market crash in history, will unfold. More and more boomers will panic and sell. I believe this will also be accompanied by the greatest real estate crash the world has ever seen.
This perfect storm of bankruptcies and foreclosures will cause the currency supply to contract as the giant credit bubble pops, and all those big spenders become big savers. When people save their currency, it stops circulating. The economic engine runs out of oil and the whole thing locks up. This is Bernanke’s worst nightmare. This is real deflation, and poor Ben is about to discover the true scale of the horrors of a credit bubble implosion.
When that happens, Ben “burn the currency” Bernanke will once again send out his armada of money-dropping helicopters, but this time something will be different. Something will have gone horribly wrong. The bombs will have been defused. The Fed will try pumping the banking sector by buying every kind of debt they can get their hands on, but to no avail. They will go to extraordinary measures they had said they were prepared to go to. They will buy every mortgage, MBS, and any other type of debt that panicky investors and banks are trying to sell, but nothing good will come of it. They will start buying stocks to buoy the markets, but retail sales will continue to plunge. They will try broad-based tax cuts, but it won’t jump-start the economy. They will work with foreign central banks to buy each other’s debt, but the global economy will continue to plummet. People will finally see through the veil. They will what Dorothy, the Scarecrow, the Lion, and the Tin Man saw. That the Wizard of Oz is really just a dopey old guy frantically puling levers.
Remember when we talked about how during WWI the Germans increased their currency supply by 400 percent yet there was no price inflation because of the public’s anxiety over the war and the uncertainty of their future? Imagine the anxiety 75 million baby boomers will feel as they approach retirement, only to find their homes and mutual funds are now worth next to nothing. The nest egg, ladies and gentlemen, has just cracked. When they get the tax rebates from Ben, are they going to buy that new big screen TV and the latest cell phone? I think not. I think they are going to save every dime they can get their hands on. Just like in Germany during the war.
But there will be a point at which a threshold is reached. For each income class it will be different. It will be the point where they feel they’ve finally got enough saved for retirement. For some it will be $100,000, for others it will be $1,000,000 and for others still it will be $10,000,000. Ben knows that there is a point where they’ll feel safe enough to replace that aging computer, and maybe get that new TV. At this point the boys at the Fed will buy enough government debt to fund tax rebates for all the taxes paid in the previous year, but still nobody will buy that new car. The threshold the Fed is looking for will not be reached.
[Interjection: I think we are about at this point in the game, Ben is pushing congress to do just this now]
Then in not so quiet desperation, Ben will say, “Screw the helicopters. Send in the bombers.” And as the shadows of millions of stealth currency bombers darken the skies, currency will begin to fall like rain in the desert. As Joe Six-pack and John Q. get tax rebate checks in the mail for all the taxes they paid during their entire lifetimes, fear will be temporarily alleviated and some of that currency will come out of hiding, just as in Weimar Germany. Prices will rise quickly and dramatically as all the stored-up currency energy is released. In a panic, “B2 Ben” (as I predict his new stealth bomber nickname will be) will call back the bombers, but it will be too late. There’s nothing Ben will be able to do to stop it now, because the hyperinflation will have already begun. The Dow will begin an invisible crash of epic proportions, and gold prices will shoot to the moon. If you were wise enough to moor you boat in the safe harbors of gold, silver, and other commodities, you will weather the storm. It won’t be pretty but at least you’ll be safe.
At this point, confidence in currency will fall faster than it can be created. Cost of living will increase for government employees and the cost of all government projects, the subcontractors, the labor, the materials, will all skyrocket. And each time more currency is created to pay for the increases, the value of the currency will fall even faster.
In times like that, governments have only two choices: shut down the government and all of it projects and services, send everybody home without pay, turn off the printing presses, and wait for the free market system to discover levels that account for the quantity of currency in supply; or print the currency into oblivion. Governments have always chosen the latter.
But the stored-up energy of excess currency creation doesn’t have to take place within the United States, and it doesn’t necessarily have to be in the future. In fact, there is an abundance of stored-up currency just waiting to be released right now. As I mentioned earlier, all the dollars we sent overseas to other countries to buy their goods are now sitting in their bank accounts, just waiting to be spent. Eventually, the world economy will lose faith in the U.S. dollar and will want to dump it by buying up goods. This will of course, cause the price of goods to rise, and could, and probably will, trigger a scenario much like the one I have finished describing.
Throughout history economists have suffered from what I like to call “this time syndrome”. This time they’ve become masters of the economic universe. This time they’ve figured it out. This time they’ve tamed the economy. This time they’ve mastered the art of infinite currency amplification. This time a fiat currency will work!
History gives this probability of zero. Each time we sailed toward economic doom the greatest financial minds in the world were at the helm. Do you really think we should continue letting them steer the ship?
Want to know how much money has been printed in the last few months, this a link to the FED's US Monetary Base, look at the chart we have never done this before and it will be a lot higher by this time next year. Pray China and Japan don't release their dollars which just sit dead in a vault, we're screwed if they do.
We can't continue this, the bailouts will only make it worse, look into what a 'zombie bank' is, the mental comparison between them and the 'zombies' in D3 are appropriate, that's right Ben Bernanke is a currency witch doctor. Now ask yourself what should we do about the war? The decision is not so easy, reality won't be either.
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Supporting big shoulderpads and flashy armor since 2004.
Magistrate I’m saying no matter what we do now the price is going to be heavy, much more than most understand. In short we can’t pay bad debt off with more bad debt. It’s the same desperate act people resort too when they pay off credit cards with another credit card.
Neither McCain or Obama (or each respective party) have come to grips with the belt tightening decisions that must be made. The deleveraging we are experiencing now ‘is the medicine’ to the problem that is why it’s called a correction. Both parties in bipartisan union are trying to stop the painful correction with a bailout, the more they do this the worse the correction will be. The Mac-daddy question is with what money? With what money are we fighting these wars? We haven’t finished paying off the debt for the Vietnam War yet, ouch.
Here are some closing thoughts from Craig Karmin’s Biography of the Dollar: How the Mighty Buck Conquered the World and Why It's Under Siege:
In 2005, U.S. interest payments on foreign debt topped the $100 billion mark for the first time – coming in at $114 billion dollars. That breaks down to $310 million per day, according to Joseph Quinlan, Bank of America’s chief market strategist. This equates to more than a dollar per day of interest alone for every man, woman, and child in America. Not only is America addicted to foreign oil, America is addicted to foreign capital. This is not healthy, wealthy, or wise.
This is why it makes little difference who got elected as president or if we raise or lower taxes in America (the Democrats may tax but the Republicans just spend it a.k.a. stealth tax, which is worse?), as a subprime nation, does not stop living on borrowed money. I could post many links on this but for those who want to know more the few video links I have added are good start.
I.O.U.S.A.: Byte-Sized - The 30 Minute Version
If you want to understand what we are facing in simple terms, this is a must watch. YouTube
[Video] Jim Rogers Says Markets May Go A Lot Further Down
Jim Rogers, chairman of Rogers Holdings, talks with Bloomberg’s Betty Liu in New York about the U.S. government’s rescue of troubled banks, and why bailouts are bad, hello zombie banks of Japan.
Peter Schiff Video
Schiff is on the same page as Jim Rogers, he thoroughly pimp slaps every counter point Bloomberg’s Rhonda Schaffler makes. He makes and explains some of the soundest points I have heard. This is hands down one of the best videos I have seen yet, must watch you will learn a ton. 19:18 min video.
We are not paying for the war, foreign money we borrow which will never be repaid is. WHEN will they get tired and decide we aren't credit worthy any longer? It's just a matter of time.
[quote name='Carloseus']
i am a strong beleiver that these terrorists are like the guerillas of vietnam. they are masters of propaganda. quote]
oh wow...
i dont even know how to respond.
get a clue?
your country, if you are an american, which i am as well, is the one and true super power in the world not only when it comes to the economy, and military, we are the greatest distorters of truth.
you think fox news is "on your side"? cnn? msnbc? if you do your a joke.
those are multi-billion dollar corporations that have thing in mind
backing their investors, which YOU are probably not one of, and getting the votes from the poeple that their selective partys need.
someone said it perfectly when he said
"the news media can not back a party for a single event, you have to do it right, and hand over your network for eight years."
if you ever supported bush, im so sorry you have no education
poeple like you are the reason poeple around the world do not respect this would-be great nation, or the poeple who reside with-in it
Rollback Post to RevisionRollBack
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Instead of talking about the war I will talk about economics because to date we are not paying for this war, I would have you consider the fiscal implications of continuing the war. Our national debt has doubled in 8 years from $5.6 trillion to $11.32 trillion, a staggering amount no where near the final toll.
For those who care; I will put forward a few thoughts. As an investor who has studied markets and economics for a number years now, my queues come from people such as Jim Rogers, Peter Schiff, Marc Faber, Nouriel Roubini, Robert Kiyosaki, Warren Buffett, Donal Trump and many others. These are names worth writing down so you can search the Internet to see what they say; all saw our current plight coming years ago. Then ask yourself what is best for the US (if you are a citizen) and the world after you are done with your research. If you don’t take the time now; you may wish you had by this time next year, there are things everyone should be doing now to prepare for the changes.
The crisis is a result of 30 years of bad policies and expensive wars historically are the downfall of currencies. People need to understand FIAT currencies are not real money, it is in fact a debt to the people. When a dollar is printed it is printed and then loaned to the banks with interest. That’s right the dollar itself is a debt, it has no intrinsic value. There is no ground zero with fiat currency as when the dollar was pegged to gold until 1971. So when the government runs out they just print more, it’s value has dropped more than most know since then.
Mike Maloney an advisor to Robert Kiyosaki on precious metals recently wrote a book called “Guide to Investing in Gold and Silver”. It leans heavily on Robert Kiyosaki’s book “Prophesy” written in 2002 that talks about the retiring baby boomers who have all bet their retirement on the stock market. It’s important to note Mike’s book was published on August 28, 2008 before the big stock slide and so far is 100% dead on.
From page 112 to 116, this is well worth the read, your future may depend on it.
Want to know how much money has been printed in the last few months, this a link to the FED's US Monetary Base, look at the chart we have never done this before and it will be a lot higher by this time next year. Pray China and Japan don't release their dollars which just sit dead in a vault, we're screwed if they do.
http://research.stlouisfed.org/publications/usfd/page3.pdf
We can't continue this, the bailouts will only make it worse, look into what a 'zombie bank' is, the mental comparison between them and the 'zombies' in D3 are appropriate, that's right Ben Bernanke is a currency witch doctor. Now ask yourself what should we do about the war? The decision is not so easy, reality won't be either.
Sorry, I understood everything but that final point- do you mean any decision would not be conducive to a good economy? :confused:
Neither McCain or Obama (or each respective party) have come to grips with the belt tightening decisions that must be made. The deleveraging we are experiencing now ‘is the medicine’ to the problem that is why it’s called a correction. Both parties in bipartisan union are trying to stop the painful correction with a bailout, the more they do this the worse the correction will be. The Mac-daddy question is with what money? With what money are we fighting these wars? We haven’t finished paying off the debt for the Vietnam War yet, ouch.
Here are some closing thoughts from Craig Karmin’s Biography of the Dollar: How the Mighty Buck Conquered the World and Why It's Under Siege:
This is why it makes little difference who got elected as president or if we raise or lower taxes in America (the Democrats may tax but the Republicans just spend it a.k.a. stealth tax, which is worse?), as a subprime nation, does not stop living on borrowed money. I could post many links on this but for those who want to know more the few video links I have added are good start.
I.O.U.S.A.: Byte-Sized - The 30 Minute Version
If you want to understand what we are facing in simple terms, this is a must watch.
YouTube
[Video] Jim Rogers Says Markets May Go A Lot Further Down
Jim Rogers, chairman of Rogers Holdings, talks with Bloomberg’s Betty Liu in New York about the U.S. government’s rescue of troubled banks, and why bailouts are bad, hello zombie banks of Japan.
Bloomberg
Peter Schiff Video
Schiff is on the same page as Jim Rogers, he thoroughly pimp slaps every counter point Bloomberg’s Rhonda Schaffler makes. He makes and explains some of the soundest points I have heard. This is hands down one of the best videos I have seen yet, must watch you will learn a ton. 19:18 min video.
Bloomberg
We are not paying for the war, foreign money we borrow which will never be repaid is. WHEN will they get tired and decide we aren't credit worthy any longer? It's just a matter of time.
i am a strong beleiver that these terrorists are like the guerillas of vietnam. they are masters of propaganda. quote]
oh wow...
i dont even know how to respond.
get a clue?
your country, if you are an american, which i am as well, is the one and true super power in the world not only when it comes to the economy, and military, we are the greatest distorters of truth.
you think fox news is "on your side"? cnn? msnbc? if you do your a joke.
those are multi-billion dollar corporations that have thing in mind
backing their investors, which YOU are probably not one of, and getting the votes from the poeple that their selective partys need.
someone said it perfectly when he said
"the news media can not back a party for a single event, you have to do it right, and hand over your network for eight years."
if you ever supported bush, im so sorry you have no education
poeple like you are the reason poeple around the world do not respect this would-be great nation, or the poeple who reside with-in it