S&P --downgraged U.S. debt
- Thread starter Allen
- Start date
- Status
Mike
Well-Known Member
I'm trying to present this in a manner that won't cause VegasBruce to ban me from the site. :winkn:
I am of the opinion that watching the Dow and S&P numbers has become a dated means of taking snapshots of our economic health. I quit watching those numbers over a year ago and started keeping watch on gold (and subsequently, silver). I just looked at gold and it's at 1495.30. Remember when our jaws all dropped when it went over 1100.00? Record gold prices are a very solid indicator of the devalued dollar.
And while the Standard & Poor report issued yesterday had a very negative market effect, I think that effect was on a market full of hot air.
S&P says it believes there's a risk U.S. policymakers may not reach agreement on how to address the country's long-term fiscal pressures. Gee, do you think?
Since 1971's Nixon Shock, that slammed the gold door on our economy, we have been operating on a fiat currency. Throughout all recorded history, not one culture has managed to survive the use of fiat currency. Our dollar is not backed by any commodity, such as silver or gold. As such, our currency can only derive worth from two things - a possible scarcity and the faith of the American people.
The most common reason for switching to fiat currency is excessive public debt. When a government no longer has enough silver or gold reserves to pay its debts, they create money out of thin air.
When a country uses fiat currency, there is no limit on the creation of money. And that lack of limitations allows the unlimited creation of credit. The creation of unlimited credit gives the illusion of financial security and growth, but we are forgetting that the unlimited creation of credit came because of a switch to fiat currency and the switch to fiat currency came because the country was financially broke.
See if any of this sounds familiar to you. When people have unlimited credit creation, spending explodes. Businesses do booming business and profit margins soar, creating an overall illusion of financial well-being. Equity prices climb along with profit margins, which support the illusion.
In every instance of cultures using fiat currency, the end result is hyperinflation. This occurs when people lose confidence in their currency and money becomes absolutely worthless, overnight. Look at what happened to Zimbabwe. Can you imagine paying hundreds of billions of dollars for a dozen eggs? Public toilets in Zimbabwe have warning signs, telling people to not use Zim dollars as toilet paper, because it plugs toilets. Hyperinflated prices in Zimbabwe have led to the printing of 100 billion dollar bills, so people do not have to carry cash around in wheelbarrows. Inflation was exploding at a rate of fifty million percent at one point.
Now, let's look at how easily this country will fall into hyperinflation. The government goes to the Federal Reserve Bank (which has as much association with our federal government as does Federal Express) and asks for more money. The Fed requires we hand over interest-bearing bonds to cover the loan, but then they issue an order to the U.S. Mint to print off some cash. The Mint takes a sheet of paper and prints U.S. currency on that sheet. What you need to remember is that the price of that sheet of paper has nothing to do with what bills are being printed on it. It doesn't cost any more to print a page of $100 bills than it does to print a page of $1 bills. The Fed's costs remain the same, no matter the denomination of bills being printed. The newly-printed bills are then placed into circulation, so the country can access the cash.
But remember what I said about scarcity being one of the determining factors in the value of fiat currency? So, every time the Fed dumps another stack of funny money onto the table, they are devaluing the funny money that is already in circulation. So our dollar gets devalued, but we still owe the Fed for all of those dollars, plus interest. And make no mistake, this country cannot afford to pay the interest it owes the Fed. Because it is you and I who owe that debt. As of this very instant, every tax-paying U.S. citizen owes $128,647.00 in this country's national debt. Want to get sick to your stomach? Look at the U.S. National Debt Clock.
So when S&P says U.S. policymakers might not reach an agreement on how to address this country's fiscal pressures, my response to that is that U.S. policymakers are the cause of this country's fiscal pressures. (Bruce, take the mods to another topic, OK?) Look at the current budget issues. The Dems were prepared to cut $6 billion from the annual budget. To people like you and I, that sounds like a helluva lot of money. Until you come to the realization that our national Debt is increasing at an average rate of $4.09 billion EACH DAY!! And that average has been happening since 28 September 2007. Can someone please tell me how we are going to right this ship by making a annual budget cut that will save us about the same amount of debt we incur in 24 hours?
And before someone suggests I am slamming liberal Democrats for making stupid budget cut suggestions, let me point out that RINO socialists wearing Republican skins were willing to cut only $61 billion, which amounts to nothing more than 2% of our 2012 projected spending.
People were wringing their hands and gnashing their teeth over a possible government shutdown. As for myself, I was on my telephone, calling my elected representatives to remind them of the overwhelming conservative vote that placed several of themin the lap of luxury on Capital Hill (pun very much intended) and asking them to act as if they had a pair, by demanding that government be cut down or shut down. I heartily applaud Congressman Todd Rokita for standing up for myself and my fellow Hoosiers.
S&P only put into words what most right-thinking U.S. taxpayers have known for years - there is absolutely no fiscal responsibility in our nation's capitol and if their spending continues unchecked, we are going to be the culture buying groceries with hundred billion dollar bills. We are going to have to pin our dollar back to a commodity before much longer, or the whole house of cards is going to fall in on us. People are going to start trading dollars for valuable commodities and then we will not only have lost scarcity of our fiat currency, but also faith in that currency. Without both, fiat currency schemes all fail. If you've never heard of John Law and the Mississippi Bubble, spend some time with Mr. Google. Those who fail to learn from history are doomed to repeat it.
I am of the opinion that watching the Dow and S&P numbers has become a dated means of taking snapshots of our economic health. I quit watching those numbers over a year ago and started keeping watch on gold (and subsequently, silver). I just looked at gold and it's at 1495.30. Remember when our jaws all dropped when it went over 1100.00? Record gold prices are a very solid indicator of the devalued dollar.
And while the Standard & Poor report issued yesterday had a very negative market effect, I think that effect was on a market full of hot air.
S&P says it believes there's a risk U.S. policymakers may not reach agreement on how to address the country's long-term fiscal pressures. Gee, do you think?
Since 1971's Nixon Shock, that slammed the gold door on our economy, we have been operating on a fiat currency. Throughout all recorded history, not one culture has managed to survive the use of fiat currency. Our dollar is not backed by any commodity, such as silver or gold. As such, our currency can only derive worth from two things - a possible scarcity and the faith of the American people.
The most common reason for switching to fiat currency is excessive public debt. When a government no longer has enough silver or gold reserves to pay its debts, they create money out of thin air.
When a country uses fiat currency, there is no limit on the creation of money. And that lack of limitations allows the unlimited creation of credit. The creation of unlimited credit gives the illusion of financial security and growth, but we are forgetting that the unlimited creation of credit came because of a switch to fiat currency and the switch to fiat currency came because the country was financially broke.
See if any of this sounds familiar to you. When people have unlimited credit creation, spending explodes. Businesses do booming business and profit margins soar, creating an overall illusion of financial well-being. Equity prices climb along with profit margins, which support the illusion.
In every instance of cultures using fiat currency, the end result is hyperinflation. This occurs when people lose confidence in their currency and money becomes absolutely worthless, overnight. Look at what happened to Zimbabwe. Can you imagine paying hundreds of billions of dollars for a dozen eggs? Public toilets in Zimbabwe have warning signs, telling people to not use Zim dollars as toilet paper, because it plugs toilets. Hyperinflated prices in Zimbabwe have led to the printing of 100 billion dollar bills, so people do not have to carry cash around in wheelbarrows. Inflation was exploding at a rate of fifty million percent at one point.
Now, let's look at how easily this country will fall into hyperinflation. The government goes to the Federal Reserve Bank (which has as much association with our federal government as does Federal Express) and asks for more money. The Fed requires we hand over interest-bearing bonds to cover the loan, but then they issue an order to the U.S. Mint to print off some cash. The Mint takes a sheet of paper and prints U.S. currency on that sheet. What you need to remember is that the price of that sheet of paper has nothing to do with what bills are being printed on it. It doesn't cost any more to print a page of $100 bills than it does to print a page of $1 bills. The Fed's costs remain the same, no matter the denomination of bills being printed. The newly-printed bills are then placed into circulation, so the country can access the cash.
But remember what I said about scarcity being one of the determining factors in the value of fiat currency? So, every time the Fed dumps another stack of funny money onto the table, they are devaluing the funny money that is already in circulation. So our dollar gets devalued, but we still owe the Fed for all of those dollars, plus interest. And make no mistake, this country cannot afford to pay the interest it owes the Fed. Because it is you and I who owe that debt. As of this very instant, every tax-paying U.S. citizen owes $128,647.00 in this country's national debt. Want to get sick to your stomach? Look at the U.S. National Debt Clock.
So when S&P says U.S. policymakers might not reach an agreement on how to address this country's fiscal pressures, my response to that is that U.S. policymakers are the cause of this country's fiscal pressures. (Bruce, take the mods to another topic, OK?) Look at the current budget issues. The Dems were prepared to cut $6 billion from the annual budget. To people like you and I, that sounds like a helluva lot of money. Until you come to the realization that our national Debt is increasing at an average rate of $4.09 billion EACH DAY!! And that average has been happening since 28 September 2007. Can someone please tell me how we are going to right this ship by making a annual budget cut that will save us about the same amount of debt we incur in 24 hours?
And before someone suggests I am slamming liberal Democrats for making stupid budget cut suggestions, let me point out that RINO socialists wearing Republican skins were willing to cut only $61 billion, which amounts to nothing more than 2% of our 2012 projected spending.
People were wringing their hands and gnashing their teeth over a possible government shutdown. As for myself, I was on my telephone, calling my elected representatives to remind them of the overwhelming conservative vote that placed several of them
S&P only put into words what most right-thinking U.S. taxpayers have known for years - there is absolutely no fiscal responsibility in our nation's capitol and if their spending continues unchecked, we are going to be the culture buying groceries with hundred billion dollar bills. We are going to have to pin our dollar back to a commodity before much longer, or the whole house of cards is going to fall in on us. People are going to start trading dollars for valuable commodities and then we will not only have lost scarcity of our fiat currency, but also faith in that currency. Without both, fiat currency schemes all fail. If you've never heard of John Law and the Mississippi Bubble, spend some time with Mr. Google. Those who fail to learn from history are doomed to repeat it.
Differen T
Member
A hard money (backed by gold, silver....) is an extremely restrictive policy for economic growth. The real value of a country's currency is its ability to produce durable goods. The basis for our current debt problem is how we have spent the money that we borrowed. In the classic economic argument of "guns vs butter" we have chosen the guns side of the equation. To put it plainly, we invested in things that did not have a long productive life or in things that enabled business to invest in capital goods that would have a long productive life.
It is very interesting to examine the major sources for the money that has enabled our federal government to go on this spending spree. It is you and me, my friends. We have contributed the money to pay for over much of the debt. The largest contributor of funds is a program that a recent president wanted to privatize, the current congress wants to cut and we are lead to believe will not be there for younger workers. Yes, Social Security holds 17.9% of the debt, civil service retirement accounts hold 6% and military retirement accounts hold 2.1%. A full 26% is from accounts that must, by law be invested in federal paper and are based on long term payback schedules. The single largest group of debt holders are U.S. institutions (some of this is also from corporate retirement accounts) and private citizens at 42.1%. We owe over 2/3 of the debt to ourselves. The balance is foreign countries investing in us because we are the strongest economy in the world with the largest China and Hong Kong 11.7%, Japan 9.5%, Britain 1.4%, oil exporting nations 1.6%, Brazil 1.3% and all other nations combined 11.7%. I hope seeing these figures put the debt in a more realistic perspective.
We made it easy for the federal government to have an almost unlimited flow of funds above the tax revenue generated and they proceeded to waste it instead of investing in the country's future. We need better government, one based on growing the future of our nation, better education, better health care , a cleaner environment and better infrastructure. Not government that wants to reduce the things that we have paid for with our payroll deductions and taxes.
The debt will continue to be a problem as long as we allow government to spend money in wars, defense systems we do not need and policies that enable corporations to make excessive profits instead of things that will increase the productivity of our nation. Look past the smoke and mirror issues that politicians spout to stir up the masses while covering up their actions that are designed to line the coffers of their sources of election funding.
Our current economic situation is due to deregulation of our financial industry that allowed practices similar to those that lead to the great Depression. Then as now, greed took over and rampant speculation lead to a massive economic bust. This time the government spent far more money to prime the economy while continuing to pore money into wars we could not afford. The result was a huge increase in our debt. The best way to reduce the debt is over the long term through increased revenues and properly targeted government spending to increase productivity. The government has three branches to prevent each other from becoming too powerful. The economy has two forces, management and labor. It is the job of government to maintain a balance of power between them while protecting the environment of our nation.
:soapbox:
Al
Allen
Member
U.S. manufacturing is a shadow of its former self. NO great modern nation has ever endured without being an industrial power. The most potent symbol of America's decline is Detroit.Once known as the ARSENALOF DEMOCRACY'.-- WAL-MART --is a case in point. In essence, it is a huge Chinese convenience store, where almost every product is made in China.
putz
Member
Agreed Walmart is not helping our economy they think they are with low prices but it just sends more money overseas.
Mike
Well-Known Member
As long as the agreements set forth in NAFTA and CAFTA are allowed to exist, U.S. manufacturing is going to continue leaving this country. And once they are gone, there will be no bringing them back. It's the old analogy of putting toothpaste back into the tube.
I used to deal with a lot of people located in the Detroit area and some of what they were saying was enough to really stop you in your tracks. When people are raising livestock on their lawns, it's pretty safe to say time's ain't what they used to be.
We've seen the same thing take place in what is known in Indiana as The Region. The steel mills up in that area were rockin'-n-rollin' with more business than they could handle. Tax bases were getting skewed as a result of it, and now with those mills being reduced to ghost towns, there are municipalities struggling to see how they are going to remain afloat. In the North-Central region were once hordes of RV manufacturers, that are now overgrown with weeds.
Fiat currency and "unlimited" credit go hand in hand. Until hyper-inflation sets in. And, if you've been watching, gold continues to set record prices, silver's price increase of 51% this year has it at a 31-year high and the dollar index continues to tank. The devalued dollar is, in large part, accountable for the high prices we're paying at the pump. There have been estimates released to suggest that as we see increased hostilities in the Middle East, an increased threat of storm disruptions to oil production and the continuing drop of the dollar, gasoline prices are ripe to soar well over $6/gallon by summer's end.
There is one other problem in the nation.No coment!!!
Johnny
Member
Don't be afraid to say it. Having a DAMN Communist as our President!
Differen T
Member
I totally agree that we must have a strong manufacturing economy, but things are not quite what the pols would have us believe.
According to United Nations data, the U.S. is still the largest manufacturing country in the world. In 2009, American manufacturing output (in real terms) was nearly $2.2 trillion. That's about 45% larger than China's, at just under $1.5 trillion. (For statistical reasons, I chose to use figures that include mining and utilities as part of manufacturing.) Though China, of course, is growing very quickly, the U.S. has also maintained its global share of manufacturing, at 20% in 2009 compared to just over 22% in 1980. What's more, American manufacturing is becoming more productive. In 2009, productivity in U.S. manufacturing increased by 7.7%, more than any other country
Read more: http://curiouscapitalist.blogs.time...te-with-american-manufacturing/#ixzz1KJ7TvAd7
We are not ready to roll over and die just yet. Our productivity has allowed us to manufacture more with fewer people, but the down side of this is less jobs. Our trade agreements would be a good thing for everyone if we were playing on a level field. Unfortunately we do not insist that our trade partners meet our safety standards, child labor laws and environmental regulations. If we did we would have far less problems competing with low wage nations. We need better government, elected officials who care more about the big picture for our future than for the corporations who support them today.
End smoke and mirrors fear politics, investigate all sides of a problem, then make your own decision.
Al
"I totally agree that we must have a strong manufacturing economy, but things are not quite what the pols would have us believe.
According to United Nations data, the U.S. is still the largest manufacturing country in the world. In 2009, American manufacturing output (in real terms) was nearly $2.2 trillion. That's about 45% larger than China's, at just under $1.5 trillion. (For statistical reasons, I chose to use figures that include mining and utilities as part of manufacturing.) Though China, of course, is growing very quickly, the U.S. has also maintained its global share of manufacturing, at 20% in 2009 compared to just over 22% in 1980. What's more, American manufacturing is becoming more productive. In 2009, productivity in U.S. manufacturing increased by 7.7%, more than any other country
Read more: http://curiouscapita.../#ixzz1KJ7TvAd7"
Just what is it the polls would have us believe? And what do polls have to do with facts? Polls are designed and conducted to achieve a predetermined outcome.
According to the United Nations? This is about the last place I would look for an objective assessment of anything. The UN has proven itself to be the Useless Nations financially supported by income tax payers and idealogically supported by the Obama Adminsitraion, Democrats and the forty-seven percent of people in this counrty who pay no income taxes at all.
Included in the next dumpster full of less-than credible sources of Brock-Suckers is Time and CNN of the dominant liberal establishment media.
When the Brock Adminstration increases the EPA's budget by 139% does anyone actually believe they exist to help manufacturing? The EPA now stands for Ending Productivity in America.
Democrats favor Cap and Trade to futher suppress manufacturing supported by the liberal decision of the Supreme Court to make carbon dioxide subject to numerous and far reaching regulations. Well, far reaching only as far as our borders reach while other countries pay more attention to their growing ecomonies which provide productive jobs for their people. This administration is only interested in punishing business, expanding goverment with non-productive extremely well paid government employment and keeping the borders open to admit illegals who will likely be granted voting rights to help Obama turn this once great country into a third world nation.
According to United Nations data, the U.S. is still the largest manufacturing country in the world. In 2009, American manufacturing output (in real terms) was nearly $2.2 trillion. That's about 45% larger than China's, at just under $1.5 trillion. (For statistical reasons, I chose to use figures that include mining and utilities as part of manufacturing.) Though China, of course, is growing very quickly, the U.S. has also maintained its global share of manufacturing, at 20% in 2009 compared to just over 22% in 1980. What's more, American manufacturing is becoming more productive. In 2009, productivity in U.S. manufacturing increased by 7.7%, more than any other country
Read more: http://curiouscapita.../#ixzz1KJ7TvAd7"
Just what is it the polls would have us believe? And what do polls have to do with facts? Polls are designed and conducted to achieve a predetermined outcome.
According to the United Nations? This is about the last place I would look for an objective assessment of anything. The UN has proven itself to be the Useless Nations financially supported by income tax payers and idealogically supported by the Obama Adminsitraion, Democrats and the forty-seven percent of people in this counrty who pay no income taxes at all.
Included in the next dumpster full of less-than credible sources of Brock-Suckers is Time and CNN of the dominant liberal establishment media.
When the Brock Adminstration increases the EPA's budget by 139% does anyone actually believe they exist to help manufacturing? The EPA now stands for Ending Productivity in America.
Democrats favor Cap and Trade to futher suppress manufacturing supported by the liberal decision of the Supreme Court to make carbon dioxide subject to numerous and far reaching regulations. Well, far reaching only as far as our borders reach while other countries pay more attention to their growing ecomonies which provide productive jobs for their people. This administration is only interested in punishing business, expanding goverment with non-productive extremely well paid government employment and keeping the borders open to admit illegals who will likely be granted voting rights to help Obama turn this once great country into a third world nation.
Mike
Well-Known Member
Illegals? Illegals??? :nono: I'm sure you actually meant to say "undocumented guests", didn't you? We cannot call these border jumpers "illegals", because that bears negative connotations. We can't have that, can we?
Don'tCallMeJimmie
Member
ORF, I believe he was referring to "Pols" as in Politicians or Politico's vs "polls" as in "opinion". I think the quotes are appropriate because as we all know,
"There are three kinds of lies. Lies, damned lies, and statistics!" - MarkTwain
"There are three kinds of lies. Lies, damned lies, and statistics!" - MarkTwain
Allen
Member
Ever since I can remember, this country's been at war. The United States war machine and Capitalism has turned into a double-edged sword. An enormous part of the manufacturing jobs is creating weapons for our prosperity. Politicians are liars. No one has to answer for anything. - And the oil companies, the greed is Un-American. There are families now that have been without work for more than two years, we give money to bank bailouts to aristocratic billionaires-- fungi, fungi, yet we cannot help the poor people that are on fixed incomes and Social Security. Yep, I say off with their heads.
Differen T
Member
Thank you for the needed clarification on pols and polls. Perception is in the mind of the perceiver. I have made up my mind, don't bother me with the facts. Therefore I won't say that the highest illegal immigration occurred from 2000 through 2007 and has been reduced by almost half since then or that the 101st congress passed much of the environmental legislation that affects us today and it was signed by a republican president. Nor would I say that if the U.N. hates the U.S. so much I wonder why they would want to place us at the top of the list of manufacturing countries.
I have been blessed with a wide variety of experiences in my life, many of which came from twenty plus years of doing business with people all over the world. I learned to understand many different versions of English. I had to understand the cultural background of each person I dealt with in order to understand what they meant when they spoke English. I never dealt with anyone who did not desire to come to America and always had questions about our society. I had friendships with half a dozen families that came here on long term work contracts. Most, but not all of them would have loved to live here. The only consistently negative comments came from Europeans when they had to deal with our medical system. It left them confused and concerned about their care received. Not one complained about long waits for treatment or poor care in their home lands, although they did state they paid somewhat more in taxes to get the better service.
A college logic course was the most important course I ever had. It taught me to look at all sides of an issue without inserting emotional preferences. I wish I could say I've been 100% successful at it, but at least I try. I watch three different news networks on a regular basis and when I look up an issue on the net I try to get several different views that are not totally based on emotional feelings. Interestingly, I have found that often both sides of a position use the same figures in different ways to justify their positions which makes it difficult to see the truth.
:soapbox:
Al
Mike
Well-Known Member
Al, you might be correct in saying the flow of immigrants may have slowed. It is also a possibility that many illegals may have left this country to return to their homes, south of the border. Since they are here illegally and are unwilling to become part of any official statistics, it's a bit difficult to quote statistics about them. And when people start using estimates for statistics, we're all in trouble, because estimates can, and do vary. Without hard data, who is to say Pew's estimate is any closer to the correct number than Bear Stearns' estimate? The day we get illegals to stand up and be counted, on an annual basis, then and only then will any of us be able to develop statistics on the numbers of illegals in this country.
What the guesstimates fail to address is the fact that while migration patterns might be changing, this has nothing to do with the fact that most illegals are not leaving this country, while tens of thousands of illegals continue to enter this country each year. What these guesstimates cannot hide is the the connection between the estimated increase in illegal immigration in 2007, and how that possibly coincided with the consideration Congress was giving to the legalization of illegals. The estimated drops in illegal immigration also coincides with the failure to pass that legislation. And none of this has anything to do with the fact that our current president wants to see amnesty granted for illegals and has repeatedly backed away from any enforcement efforts. All of which suggests we will more than likely see illegal immigration numbers returning to their former numbers, whenever our economy recovers. No need to ignore the elephant in the parlor, you see. It's tough for this country to be a milk and honey haven for illegals, when the number of unemployed U.S. citizens rivals the numbers of illegals vying for the same jobs and government aid programs. Overlay any graphs of estimated illegal immigrant numbers from the last two decades over a graph of U.S. unemployment numbers from that same time period.
What the guesstimates fail to address is the fact that while migration patterns might be changing, this has nothing to do with the fact that most illegals are not leaving this country, while tens of thousands of illegals continue to enter this country each year. What these guesstimates cannot hide is the the connection between the estimated increase in illegal immigration in 2007, and how that possibly coincided with the consideration Congress was giving to the legalization of illegals. The estimated drops in illegal immigration also coincides with the failure to pass that legislation. And none of this has anything to do with the fact that our current president wants to see amnesty granted for illegals and has repeatedly backed away from any enforcement efforts. All of which suggests we will more than likely see illegal immigration numbers returning to their former numbers, whenever our economy recovers. No need to ignore the elephant in the parlor, you see. It's tough for this country to be a milk and honey haven for illegals, when the number of unemployed U.S. citizens rivals the numbers of illegals vying for the same jobs and government aid programs. Overlay any graphs of estimated illegal immigrant numbers from the last two decades over a graph of U.S. unemployment numbers from that same time period.
- Status
Similar threads
