Stock Market Second big tank???

[Zakaree Sandberg]

I try and try to tell people.. but I just get called a "conspiracy nut"

Oh well.. ill be prepared.. they wont :violin:

 

[Gavin Greenwalt]

Seems pretty simple to me. We're now a consumer culture not a manufacturing culture.

When "recessions" used to "end" was when the stock market would rebound. Now we have to wait for consumers to start buying to restore employment since a substantial portion of our employment is in service and retail.

So now we have to wait for the people unemployed to start spending money in order to re-employ them. Bad catch 22 economy. And it'll take a lot of time without massive spending to get enough of them back to work, to get them spending to employ more people etc... It's the old Supply Side vs Demand Side economics. In a consumer economy it's pretty heavy on the demand and much less so on Supply. We're also faster in responding to demand now. Before factories would see the end of a recession, re-employ a bunch of people and wait for the inevitable customers. Now it's a lot of disposable consumer crap or services which don't make any sense to anticipate. Factories also have little incentive to anticipate demand since they can much more quickly respond.

After 1980s we saw the decline of the Union so there isn't much push back to hold on excess employees. In non-union sectors "efficiency" has also shifted employment culture from one where companies held onto employees during the down periods as long as they could to a disposable job market where companies hire and fire rapidly in response to the market. So we should expect far more volatile job markets as a result. That's good for each company but bad for the economy as a whole since every person they lay off during a recession is one less customer who is going to go into survival mode and stop spending.

I would offer Zakaree a hefty bet that the US currency will survive through 2012 but he probably wouldn't take it since he doesn't think my money will be worth anything then.

 

[Elsie N]

I thought 2012 was the end of the world or something... Did the Mayans make a new calendar? Oh, forgot, there are no Mayans left. Seems their calendar ended long before 2012.

 

[Zakaree Sandberg]

.

I would offer Zakaree a hefty bet that the US currency will survive through 2012 but he probably wouldn't take it since he doesn't think my money will be worth anything then.

US currency is fiat.. its worth the paper its written on.. we are in our 39th year of a nothing backed based currency..
the mathematical limitations are 40 years max... thats all im sayin

 

[Gavin Greenwalt]

Care to cite this mathematical theorem of impossibility?

lim (f(fiatcurrencyage) = bullshit)
fiatcurrencyage -> 40y+

 

[Meryem Ersoz]

Care to cite this mathematical theorem of impossibility?

lim (f(fiatcurrencyage) = bullshit)
fiatcurrencyage -> 40y+

that's funny.

Actually, our currency is worth even less than the paper that it is printed on because the majority of transactions are electronic bits and bytes of data that flow across computer screens. All forms of currency, in the form of paper or gold or bits and bytes on a screen, are nothing but symbols of a collective agreement. No currency has intrinsic value. That is a myth, a Big Lie that keeps the engines of commerce churning.

We live in this weird time where suddenly people are waking up to this reality and reacting with fear. But it has always been that way. At least, in my adult lifetime.

What is changing is the velocity of money, with faster and faster computer systems able to move enormous quantities of it around the globe in nanoseconds. This relatively recent phenomenon has really only been in play on a global scale within the past 20 years, let's say.

Our inability to keep up with the velocity on money that we (collectively) have created is what is creating an unstable environment for valuations - not just of money, but of every symbolic transaction of commerce - debt, shares of stock, derivatives, currency, you name it.

This phenomenon also allows for global financial engineering on an unprecedented scale. Where it will all end, no one really knows - after all, it never really ends, it only morphs...

There will be a price to pay for pushing on the financial string, but really we don't know when or how it will look. These data points, as I mentioned before, are still unfolding. The truth is...we really don't know, and there are many not-yet-visible forces which will come into play.

But we fear what we don't know, and since we're Americans with a long love affair with our own demise - it is written all over our popular culture, especially our movies, we think it always means that THE BIG ONE is right around the corner. Y2K, anyone?

Currency collapse is a real threat but not for the reasons that everyone seems to think. And it is certainly not going to play out overnight and definitely not in November. Inflation, deflation - these are real possibilities, but we don't know which and we don't know when.

The most likely, in my opinion, scenario will be inflation in the things we actually need (commodities) and deflation in the things that we think we need (gadgets and other discretionary goodies). There will be a lot of push-pull and crosscurrents in these market places for a long time.

The thing that is more likely to harm us is a slowdown or bear market in China's economy - we will have no way to continue financing our debt, and all the bad paper that we already sold them (Fannie Mae/Freddie Mac) will have to be backstopped just to keep the debt they are already carrying afloat. Big potential hairball there.

These are real concerns that have nothing to do with our currency's 40 year itch...