Betting against the American economy has been a sucker bet for a long long time
the cause of the great depression was WWI. I have learned this from "Freedom From Fear" by David M. Kennedy, Oxford Press. edited to add: The American People in Depression and War, 1929-1945
I have also learned from previous studies, the USA can thank its great success to WWII.
So, what will be the catalyst for our greatness this time?
I am 30 years old and open to suggestions. Thank you.
I hope you're kidding. The United States had a very minor role in World War I and the aftermath was a boom economy similar to what we had after World War II. The cause of the great depression is lack of consumers, the cause of a lack of consumers is when a small minority holds all the money. The great depression started in 1929 with massive layoffs and huge inventories. People simply ran out of money and credit, and couldn't fuel production any longer.
"...reality has a well-known liberal bias." -- Stephen Colbert
With a current GNP of over $10 trillion both Gates and Buffett are below 1/200 of GNP. This still does not place them in the top 10.
So here we have the top 20 richest men in US history AND 3 OF THEM ARE FROM THE LAST 15 YEARS!!!
I could also say that the 17 year period from 1831 to 1848 saw 3 of the top 9 richest Americans. So again our current times are not comparable.
stated that between World War II and the present era the mega rich didn't exist. Not a single person on your list falls in this range
Henry Ford is on the list at #11. died in 1947 Edward Harkness died in 1940 at #47 Robert Woodson Jr died in 1968 at #64 with $1 billion. Arthur Davis died in 1962 at #77
There have always been periods in this country that have fostered wealth creation better than others. Fortunately we are in one of those times now. Dont run from the opportunity, use it.
I only posted this to prove my point that there has always been an "aristocracy". There is no way you can refute that. You say there were no "billionaires" during the depression, but "billionaire" is a meaningless term. There were and always will be mega-rich.
My point is still very sound and supported by everything you posted.
This is not just a period of massive wealth redistribution (to the mega-rich) but it is also a period of debt unseen in the history of the world. Not only is the top VERY heavy, but the bottom is below zero!! The cause of depressions is WEALTH DISPARITY and the disparity is between the consumer class and the NON-consumer class cannot be compared to any other time in the history of the United States.
If you think there's always been an aristocracy then fine, but you CANNOT compare the aristocracy of the post World War II New Deal to what's been created today. It's 10 times worse by ANY measure.
"...reality has a well-known liberal bias." -- Stephen Colbert
in the spring of 1931, Hoover explained, "just as we had begun to entertain well founded hopes that we were on our way out of the depression, our latent fears of Europe were realized in a gigantic explosion which shook the foundations of the world's economic, political, and social structure. At last the malign forces arising from the economic consequences of the war, the Versailles Treaty, the postwar military alliances with their double prewar armament, their frantic public works programs to meet unemployment, their unbalanced budgets and their inflations, all tore the system asunder."
Yes, Iwog, you are right about big inventories at that time. Massive layoffs. But the scale was much larger than that.
Iwog, I think you are a nice guy and I read what you post with much interest. Keep up the good work. I respect your opinion.
I'm sure he did a lot of explaining, (mostly to try and save his own rear) but I don't buy it. I believe pre-depression import/export only accounted around 5% of the total economy. Considering the GNP dropped by 13.4% in 1931 ALONE means that foreign consumption problems could not have caused the depression with something else major going on.
I think the reason people assume the depression was caused by foreign trade was that it was so worldwide in scope. There's an alternate reason involving technology that can explain an economic collapse simultaneously around the world without looking at exports. The 1920's in many ways was the beginning of the modern age. Automobile and radio technology became available to the working class, not just in the USA but in Europe and other developed countries. Consumer credit was introduced for many items and just like today, people decided to go into debt so they could afford their bling blings. In my opinion, the new technology and easy credit resulted in the last bit of wealth being sucked out of the working class and into the pockets of the aristocracy.
When the bottom fell out, the jobs disappeared and the MAIN ecomomic motor (demand) was broken. What really needed to happen at this point was the devaluation of the dollar, and the return of spending ability to the consumer classes. Instead FDR stuck us on the gold standard preventing the necessary inflation and locked the door to wealth redistribution. At the time he figured that faith in the money supply was necessary due to all the bank failures, and took action accordingly. Most of his social programs involved transferring wealth back to the bottom, but it was a pretty small effort considering how many were unemployed.
"...reality has a well-known liberal bias." -- Stephen Colbert
Cohodk, Date of death............wealth as a percentage of GNP, This is also great info.
The below article is a little surprising, so who are the largest beneficiaries of all these PROMISES TO PAY? What is that you say? Government employees?
Wealth transference through inflation and the printing press.
June 20, 2005 Inflation Breeds Many Evils by Hans F. Sennholz
The primary beneficiaries of the new order are its own managers: legislators, regulators, and a huge army of civil servants. They are first in power, prestige, and benefits. Many U.S. Senators and Congressmen are the admired and esteemed benefactors of countless petitioners for handouts and favors. They are revered for every benefit they bestow. And there are the officials of the Department of Commerce with 7 benefit programs, the Department of Education with 34 programs, the Department of Energy with 6, the Department of Health and Human Services with 8, the Department of Housing and Urban Development with 14, the Department of the Interior with 3, the Department of Labor with 9, the Department of Transportation with 9, and various government commissions and authorities with another 10 programs. Federal politicians and agents are the wise and virtuous judges and juries of benefits amounting to more than $1 trillion every year. How "honorable" would they be, pray tell, without Federal Reserve assistance in financing the deficits and its power to print more money?
I don't think that number of deaths is a good indicator of how involved we were in WW1. We have lost less than 2000 people in Iraq, does that mean we aren't that involved, especially economically ?
The only point I've proven is that is country has always been endowed with wealthy people.
In other news............OIL briefly traded over $59, blame the Norwegians........and gold is more than $2 higher. Other economic news is sparce this morning.
the cause of the great depression was WWI. I have learned this from "Freedom From Fear" by David M. Kennedy, Oxford Press. edited to add: The American People in Depression and War, 1929-1945
I have also learned from previous studies, the USA can thank its great success to WWII.
So, what will be the catalyst for our greatness this time? I am 30 years old and open to suggestions. Thank you. >>
The simple fact is that humans fill an ecological niche. Just as beavers will adapt their enviroment to make it more capable of supporting more beavers, humans do the same. Humans have proven far more adept at wringing from their enviroment the conditions which support life even where those enviroments were not initially suited for us.
It is the technological advances which have made us so successful in the past and will in the future even if we have some pratfalls along the way. With each new invention we are able to do more with less. This creates wealth which always has caused popu- lation increase (this connection has been breaking down and is largely caused by our choice of leisure time activities).
The greatest threat to the species at the current time is our dependence on oil at a time that it appears to be running out. The greatest opportunities are manifold and are not always foreseeable because other breakthroughs can nullify the obvious ones. Certainly an economical fusion reactor would be a tremendous advance which might dou- ble the world population over a few decades. Room temperature superconductivity would have the same effect if the energy problem is solved in some other way.
There can also be some meaningful breakthroughs in almost any area such as the ability to produce bumper crops with genetic engineering.
While modern societies are totally dependent on technology and the smooth operation of the economy, there has never been a regression in knowledge in the past.
I don't think that number of deaths is a good indicator of how involved we were in WW1. We have lost less than 2000 people in Iraq, does that mean we aren't that involved, especially economically ?
Nope, we're very involved economically with Iraq. The main reason is we now fight wars with technology instead of human life. That wasn't the case with WWI. We entered late, were only involved in one major battle, and our time in Europe was relatively short. Our involvement compared to the rest of the world was minor in both manpower and expense.
The only point I've proven is that is country has always been endowed with wealthy people.
The period between WWII and 1980 was significant because the creation of super-rich was greatly reduced or eliminated all together. (depending on how you define the super-rich) It also corresponds with economic stability and NO depressions. Since 1980 however we've been systematically removing all the checks to wealth aquisition at the top, and simultaneously heaping huge debt on the consumer class. We've even made bankruptcy more difficult to make sure the working poor stay broke and incapable of creating demand. A new large scale worldwide depression is absolutely inevitable, and will happen in the next 10 years unless something isn't done to repair it.
One thing I haven't mentioned is the economic decline we've been exporting to other countries. By building a factory in Indonesia for example and paying a very low wage to make shoes, we effectively put a cap on how much wealth that country can generate for its own prosperity. In our country, we pay executives large amounts who then either spend it or invest it in our own economy allowing that wealth to be recycled. However corporations like Nike can pay American executives those high wages leaving the foreign workers with the scraps. This isn't just a theory, many foreign nations are in big trouble and are techically in depressions right now.
I used Indonesia as an example because a 1999 New York Times article showed a growth in poverty there from 80 million to 130 million in a single year. (They had a population in the year 2000 of 206 million)
"...reality has a well-known liberal bias." -- Stephen Colbert
Interesting article in todays paper about the staff at some of the resorts around Palm Springs. The employees can't afford to live around there because they make about $7 an hour. Rooms go for 500+ a night. Executive Management says the employees are "fairly compensated". If we didn't have gov't regulation they wouldn't make that much. A totally free market is surfdom and slavery and thats where we're headed.
Stocks trade so fast no one cares that the execs give themselves multimillion dollar compensation even when the company loses money. These execs work less than the 7 buck an hour dishwasher. I'm not gonna cry if they pay 50% tax. Same for the guy who inherits millions. He didn't earn it. The rich always get richer. No one person works enough hours to earn a million a year. There are plenty of people who did the work, one person just took the money. Legally of course.
I agree with you totally. This is the system Ronald Reagan created when he popularized the outright fraud of supply side economics.
I still say the estate tax repeal is the most outrageous and unethical action taken against the American people in decades. To argue that a dead person is being unfairly taxed is incredible. It defies logic. For every dead person who benefits from this tax cut, YOUR CHILDREN will have to cover the difference.
"...reality has a well-known liberal bias." -- Stephen Colbert
I thought that the below two statements were the most interesting I had found the last few weeks. We all suspect that workers that belong to the unions, and most of us that are expecting S.C. will have to bite the bullet on reductions in pension monies, but what about government employees? When are they going to be told that the money just won’t be there to pay for all of their retirement expenses?
We also know that from the last statement here that there is no way to tax our way, or even confiscate, enough money to pay for all the promises being made. So when do you think the folks in the first paragraph are going to get the bad news?
Gee $1 Trillion per year for jobs that create no real products, how much does the U.S. Treasury take in each year in total taxes?
June 20, 2005 Inflation Breeds Many Evils by Hans F. Sennholz
”The primary beneficiaries of the new order are its own managers: legislators, regulators, and a huge army of civil servants. They are first in power, prestige, and benefits. Many U.S. Senators and Congressmen are the admired and esteemed benefactors of countless petitioners for handouts and favors. They are revered for every benefit they bestow. And there are the officials of the Department of Commerce with 7 benefit programs, the Department of Education with 34 programs, the Department of Energy with 6, the Department of Health and Human Services with 8, the Department of Housing and Urban Development with 14, the Department of the Interior with 3, the Department of Labor with 9, the Department of Transportation with 9, and various government commissions and authorities with another 10 programs. Federal politicians and agents are the wise and virtuous judges and juries of benefits amounting to more than $1 trillion every year. How "honorable" would they be, pray tell, without Federal Reserve assistance in financing the deficits and its power to print more money?”
“ The U.S. has a total debt (Government, Corporate, and Household combined) of $38 Trillion. In addition, in 2002 Treasury Secretary Paul O'Neill commissioned a report identifying that the U.S. had future unfunded entitlement liabilities (Medicare, Medicaid, and Social Security) with a present value of $43 Trillion16 of which in 2002 would have required an immediate and perpetual income tax of 69% for everyone if they were to be met. The U.S.'s net annual economic production (Gross Domestic Product or GDP) is $11.75 Trillion with a current budget deficit of $500 Billion per year (includes Iraq War costs). It is clear from these numbers that, even if the economy was healthy, these debts and liabilities cannot be paid.”
June 20 (Bloomberg) -- Berkshire Hathaway Inc. Chairman Warren Buffett said the dollar's rally this year against major currencies hasn't changed his view that the growing U.S. trade deficit will cause the currency to decline over time.
``There's no change in the underlying factors affecting currencies, in my view,'' Buffett said today at press conference in Boise, Idaho, while attending a meeting of state utility commissioners. ``The policies that we're following are likely to lead to a weaker dollar over a long period of years. It's not a forecast for next week, or next month or even next year.''
Berkshire's bet against the dollar stood at $21.8 billion of currency forward contracts as of March 31 and caused a $307 million first-quarter pretax loss as the dollar advanced, the company said on May 6. The dollar this year has pared some of its three-year decline versus the euro on expectations U.S. economic growth would outpace Europe and the Federal Reserve's eight interest-rate increases since last June would boost demand for U.S. debt and other dollar-based assets. Buffett and Bill Gates, chairman of Microsoft Corp., are among investors who have bet against the dollar. Buffett's firm began betting against the dollar in 2002 on concern widening U.S. trade and budget deficits would erode its value. Berkshire has recorded $2.65 billion of gains from its currency position since it began that bet.
``That position is likely to be very long-term,'' Buffett said today. ``It reflects things that will happen over years and years absent some major change in policy in this country.''
"...reality has a well-known liberal bias." -- Stephen Colbert
``The policies that we're following are likely to lead to a weaker dollar over a long period of years. It's not a forecast for next week, or next month or even next year.''
Berkshire's bet against the dollar stood at $21.8 billion of currency forward contracts as of March 31"
O.K. can someone please tell me how you can purchase "foward contracts" on anything that lasts for years?
Buffett is in the currency long term so a few hundred million dollar loss on short term trading is not going to dissuade him. There is literally no way the dollar will not continue to weaken long term....unless repairs are done to the economy. His bet is only 1% of what is traded daily in the Forex. A fairly minor bet to the market.
the cause of the great depression was WWI.
One could also say that the creation of the FED in 1913 lead to the fallout in 1929. Immediately the FED started printing excess money since a 1:1 FRN to gold ratio was no longer required. The money supply grew by over 50% with no additional backing in those first several years. By the 1920's credit was awash. The steam ran out in the fall of 1929. Govt interventions only made things worse and made the recession "great."
O.K. can someone please tell me how you can purchase "foward contracts" on anything that lasts for years?
Well last I heard Berkshire-Hathaway was holding over 40 billion in cash so 21.8 represents about half of that. He obviously doesn't need the leverage so I'm betting he has it invested in foreign bonds. A government bond is a type of forward contract.
"...reality has a well-known liberal bias." -- Stephen Colbert
Well China has to spend all that U.S. debt money somewhere so why not lend it to its corporations to buy the remainder of what manufacturing, and hard asset companies, are left in the U.S.? Told Ya
“June 21 (Bloomberg) -- Haier Group, China's largest refrigerator maker, and two buyout firms bid $1.28 billion for Maytag Corp.
The buyout would be bigger than this year's $1.25 billion purchase of International Business Machines Corp.'s PC unit by China's Lenovo Holdings Ltd.
TCL Corp., China's biggest publicly traded consumer electronics maker, bought out the handset operations of Paris- based Alcatel SA last month.
Haier Group marked its ambitions for the U.S. when it bought the 79-year-old Greenwich Bank building at 36th Street and Broadway in New York City --which boasts 25 Corinthian columns -- for $14.5 million. It also has invested $40 million in a refrigerator factory in Camden, South Carolina and makes half a million fridges a year in the U.S.
Chinese companies are also pursuing acquisitions to secure raw materials. CNOOC Ltd., China's largest offshore oil producer, may bid about $20 billion for Unocal Corp., the eighth-biggest U.S. The Beijing-based company will offer about $71.50 a share, 10 percent higher than a bid made by San Ramon, California-based Chevron on April 2. Paying with borrowed funds would cost state-controlled CNOOC about $1.2 billion in yearly interest payments. CNOOC is about 71 percent owned by state-controlled China National Offshore Oil Corp.”
Naturally our guys on Wall Street will do anything to make a buck. Selling Americas assets to a communist country does not bother them in the least.
“Goldman Sachs Group Inc. and JPMorgan are advising CNOOC on the transaction. The New York-based investment banks would share about $200 million in fees for a successful takeover of Unocal.”
The whereabouts of China's currency stash Mon Jun 20, 2005 11:38 AM ET
WASHINGTON (Reuters) - Recurring talk China may be diversifying its swelling pot of foreign currency reserves away from U.S. dollars has been fueled by large gaps in U.S. data on Beijing's holdings, The whereabouts of China's foreign reserves -- some $659 billion in March -- puzzles analysts.
Economists also reckon China is likely to be buying at least some U.S. securities via third party brokers and custodians based, possibly, in British or Caribbean financial centers.
Many are forced to rely as much on guesswork as data to locate the stash -- up $256 billion since 2003 and the world's second largest behind Japan's eye-popping $842 billion.
Sweden cuts rates a larger than expected 50 basis points. Growth forcasts were also cut in France. Expectations are for more cuts throughtout Europe. The dollar looks better everyday. I wonder if Buffett knew anything about the larger than expected rate cuts?
Also reports from Japan show stronger growth. If the dollar is going to fall it is going to have to be because of the yen. Japan has been a sleeping giant for 15 years, perhaps it is finally awakening.
Warren Buffett doesn't do anything short term so I doubt he cares much. A worldwide economic deterioration is identical to what happened in 1929 with the world's capital flooding into the supposed safe haven of the USA. The difference is that back then all the money went into stocks because the government bond market didn't exist.
Buffett will hit the jackpot when the fed finally wakes up and realizes we're in a new recession. Rates will get slashed and the dollar will no longer be attractive.
Long term interest rates are a huge wildcard right now. You can't compare what's happening now to any time in history. You'd expect interest rates to continue to fall because the lack of other investments, but the current administration is borrowing money at insane rates. Increased bond supply will drive rates up. I'm not sure which pressure will win. If long term interest rates go up drastically it will be the worst case senario forcing millions of Americans into bankruptcy because of their adjustable and interest only mortgages. Needless to say, it will also pop the housing bubble.
"...reality has a well-known liberal bias." -- Stephen Colbert
To be certain from the purchases going on by the Asian countries, and I think China has just gotten started, the liberals won’t be able to complain about rich Americans taking advantage of their work forces much longer, they can send their complaints to the Red Chinese.
It appears that the Asians have also figured out what all these PROMISES TO PAY are worth.
One has to wonder what the unions, and the other labor powers, were thinking when they did not advise their millions of members that buying all this stuff from foreign countries was not good for American jobs. What I mean is, did any of the labor guys, or liberals, inform their constituents that buying Asian cars, Asian clothes, Asian shoes, etc.etc.etc. was real bad for their jobs?
Of course the U.S. congress could just say NO. They could stop any acquisition of American companies by these foreign devils, but then again, who is going to buy all these PROMISES TO PAY?????
One has to wonder why all these houses are being built when the country has outsourced all its work...who is going to be able to afford all these houses being built...Does Washington know something we outside Americans don't know...where are all these people coming from and what will their role in America be...who will be the survivors of all of this...What will America become...are we headed down the road...to be left in a condition like the rest of the World and lose our status as number one...I would like to know if anyone has a view on what America will become in the future...will we become the Business Control Center of the World...something is happening that most of us do not understand.
What I believe is that we are in a state much like the industrial revolution of the 1900's....I believe that we will become the control center for the manufacturing and all industrial and manufacturing products from around the world....New Areas of the Country will prosper and grow...you are seeing many cities in the South which are building which were very poverty stricken at one time...you will see foreign corporations buying land to build on....I think we are just standing on the Eve of a New Industrial Revoulution in which America will become Corporate Headquarters.
England already tried the empire system. It failed because other countries don't like being exploited. I don't see any reason why America's soft empire strategy will be any more successful in the long run. We are transferring actual wealth from foreign countries and replacing it with American dollars, dollars that we have absolute control over. Which means........
The resolution will be a giant screwing of the world economy by devaluation of our currency. It has unlimited historical precident and has been used repeatedly by third world countries so burdoned with debt that they can't function. It happened in Mexico in 1994 and we bailed them out to the tune of $50 billion. Obviously there will be no world power rich enough to bail us out. It's interesting to note that Mexico's devaluation happened after government spending went out of control. (thanks George) We will not be the business control center of the world without being able to borrow money.
The resolution might be the death of fiat currency and a return to metal money, (the most honest solution) or it might be a restoration of faith in our government by being fiscally responsible for a change. Either way we're going to have huge inflation before it's all over with. Ultimately economic power is based on military might, and military might is based on technology so I don't see any of this being a threat to national security or our position as the world's superpower. It's not going to be fun for most people however.
"...reality has a well-known liberal bias." -- Stephen Colbert
I've read a lot lately about the national debt as a % of the GDP, and why it's not as bad as it seems. So my question is.......how can you have a Gross Domestic Product if your country no longer makes any products?
"...reality has a well-known liberal bias." -- Stephen Colbert
Could it be that we or the world is working toward a one world Economy...the dollar will no longer be and there will be one world currency...much like the euro!!!!
There is already a one world currency. It's called gold. (and to a lesser extent silver)
I doubt you'll see a single world fiat currency. The dollar is probably the strongest contender and our government's response has been to soak up the world's wealth and spend money like water. Governments love to cheat.
"...reality has a well-known liberal bias." -- Stephen Colbert
Well I believe that a new World Order is coming about face...we can not see it or understand it at the moment but to me it appears to be what is happening....I could be wrong...but I do not think so...It is one way For America to Stay the World Power and control the rest of the world....We will be the worlds control center from banking to corporate headquarters to the strongest policing agency...much like the Roman Empire!
<< <i>which America will become Corporate Headquarters. >>
Of course because we have the military willing to go out on behalf of the multinational corporations. They will headquarter here and use our taxpaid military and our young people to fight on behalf of corporate profits.
Now the best thing we can do is tax the crap out of them for doing it
The Roman empire was constantly at war, and relied heavily on slavery. I'd rather not follow in their footsteps. We have enough problems to solve without trying to subjugate the rest of the planet.
"...reality has a well-known liberal bias." -- Stephen Colbert
Could come down to a one world pay scale also...that is why Americans have to change the way they are currently doing things....Education has to be stressed and Education must get better for the people of America...
Certainly if Americans are going to continue as the world’s greatest economy the very first thing we must have is an attitude change. We had all better start thinking again like Americans, and not be defined by which class, or political party we belong to. When the average American watches the nightly news he/she is sheltered from the truth for their “own good”. This is nuts how are we going to find out what is happening to our country if we never get the facts. We must stop playing the good guy around the World and start protecting our own. We are playing the game of “don’t worry be happy” while most of the rest of the world is playing the game of “them against us”.
This is not doomsday but if you add up all of the information just contained in this one thread over the last few months there are lots of real disasters out there just waiting for the trigger to be pulled.
Just look at the game the Asians are currently playing.
Several months ago several of our congressmen started making noise about the Yuan being revalued, or tariffs would be on the way.
Shortly after that most of the Asian nations stopped buying our debt.
Now the Chinese are using debt to buy our assets. Who do you think will be on Unocal’s priority shipping list when it comes to their oil products?
The congress can’t say NO, who will then buy the debt?
For nearly 8 months now as disasters form all around us, these fools in Washington have argued about what person would be a judge, or who would be sent to the U.N. or what poor terrorists in Cuba were having for lunch, WHO CARES!
I think we can expect two things next, the other countries holding our debt will also being to buy our assets. The Japanese for example would be fools to let their old rival China buy up all the good American properties.
Next we can all expect to find lots of Asians entering the country to take American jobs. Why not, we have no immigration policy and after all it’s going to be their companies.
Your class is being determined for you right now...it will be rich verses the poor in this country....you better get educated cause they are bringing them in wheather you like it or not...they work for half or a third of what you work for ...they get benifits of all government tax breaks because it saves the US MONEY!!!!! You want to work in America then educate yourself because these people in Math and Science have got us beat...you dont want to go overseas then smarten up!!!! Are you going to wind up the way of the American Indian...you bet you are...only worse off!
No education, you wind up in the armed forces or shipped abroad to work...or stay in America and become apart of the poverished! If you are in a great deal of debt...you better find a way to get out of debt...for the debt will be what takes you down to your lowest levels.
Education has never been a pre-requisite for wealth. Bill Gates was a college drop out. Wealth will always be determined by who your family is, and how much business sense you have.
It's only in America that people have been sold the lie of anyone can make it big. In most of the world during most of history, the truth of CLASS and all its implications have been known, taught, and delt with accordingly. It's not that we live without an aristocracy in this country because we certainly do. (especially now) It's just very well hidden.
"...reality has a well-known liberal bias." -- Stephen Colbert
If you want to survive the economic crisis, you have to take the following steps:
1. Get out of debt. This includes debt for real estate, automobiles, and student loans. One might think that you should just wait for the devalued dollar and pay off your debts with discounted money. This is a bad idea because you may not have a job for awhile, creditors will use your debt to take away your assets, (which you should protect) and interest on adjustible rate money will kill you.
2. Buy a house. If you can't afford a house, pool your resources and buy a house with family members. Real Estate is one asset that will always have value, and you will always need. If I had a $500,000 house with $300,000 equity, I'd sell it and buy a $300,000 house.
3. Stop spending money on crap. No one needs 90% of the stuff they buy. Don't feed the robber barrons, the overpaid CEOs, or the chinese. Buy that plasma screen from your neighbor for 25 cents on the dollar. Fix your car instead of buying a new one. And for god sake, stop paying $100 for friggin shoes!!!!
4. Aquire real assets like gold, silver, land, tools, fruit trees, and family. The aristocracy understands the value of strong family ties but for some reason middle and lower class America wants to spread kids on the wind like pollen.
5. Learn spanish. I have a feeling we'll be doing a lot more business with Mexico.
"...reality has a well-known liberal bias." -- Stephen Colbert
Bill Gates was born into a Wealthy family...his father fought the government and won!!! Do you remember...if you want to get ahead in this new coming world you are going to have to become educated more so than ever before...or you'll be picking that peanut farmers peanuts!!!! for sure!!!
Educated does not necessarily mean a college education...Bill Gates came from a highly educated family...your education lies with what you are willing to learn in your lifetime...education can not be taught it is something you have to take upon yourself to do for yourself...for noone or thing can educate you but yourself! You can pay a University to guide you, but if the will is not there, nore is the education....many Educatated people have never seen the inside of a college!...Imagine that!
Comments
the cause of the great depression was WWI.
I have learned this from "Freedom From Fear" by David M. Kennedy, Oxford Press.
edited to add: The American People in Depression and War, 1929-1945
I have also learned from previous studies, the USA can thank its great success
to WWII.
So, what will be the catalyst for our greatness this time?
I am 30 years old and open to suggestions. Thank you.
I hope you're kidding. The United States had a very minor role in World War I and the aftermath was a boom economy similar to what we had after World War II. The cause of the great depression is lack of consumers, the cause of a lack of consumers is when a small minority holds all the money. The great depression started in 1929 with massive layoffs and huge inventories. People simply ran out of money and credit, and couldn't fuel production any longer.
So here we have the top 20 richest men in US history AND 3 OF THEM ARE FROM THE LAST 15 YEARS!!!
I could also say that the 17 year period from 1831 to 1848 saw 3 of the top 9 richest Americans. So again our current times are not comparable.
stated that between World War II and the present era the mega rich didn't exist. Not a single person on your list falls in this range
Henry Ford is on the list at #11. died in 1947
Edward Harkness died in 1940 at #47
Robert Woodson Jr died in 1968 at #64 with $1 billion.
Arthur Davis died in 1962 at #77
There have always been periods in this country that have fostered wealth creation better than others. Fortunately we are in one of those times now. Dont run from the opportunity, use it.
I only posted this to prove my point that there has always been an "aristocracy". There is no way you can refute that. You say there were no "billionaires" during the depression, but "billionaire" is a meaningless term. There were and always will be mega-rich.
Knowledge is the enemy of fear
This is not just a period of massive wealth redistribution (to the mega-rich) but it is also a period of debt unseen in the history of the world. Not only is the top VERY heavy, but the bottom is below zero!! The cause of depressions is WEALTH DISPARITY and the disparity is between the consumer class and the NON-consumer class cannot be compared to any other time in the history of the United States.
If you think there's always been an aristocracy then fine, but you CANNOT compare the aristocracy of the post World War II New Deal to what's been created today. It's 10 times worse by ANY measure.
hopes that we were on our way out of the depression, our latent fears of Europe were
realized in a gigantic explosion which shook the foundations of the world's economic, political,
and social structure. At last the malign forces arising from the economic consequences of
the war, the Versailles Treaty, the postwar military alliances with their double prewar
armament, their frantic public works programs to meet unemployment, their unbalanced budgets
and their inflations, all tore the system asunder."
Yes, Iwog, you are right about big inventories at that time. Massive layoffs.
But the scale was much larger than that.
Iwog, I think you are a nice guy and I read what you post with much interest.
Keep up the good work. I respect your opinion.
WRong again.
4.3 million troops mobilized and 350,000 casualties.
I'm sure he did a lot of explaining, (mostly to try and save his own rear) but I don't buy it. I believe pre-depression import/export only accounted around 5% of the total economy. Considering the GNP dropped by 13.4% in 1931 ALONE means that foreign consumption problems could not have caused the depression with something else major going on.
I think the reason people assume the depression was caused by foreign trade was that it was so worldwide in scope. There's an alternate reason involving technology that can explain an economic collapse simultaneously around the world without looking at exports. The 1920's in many ways was the beginning of the modern age. Automobile and radio technology became available to the working class, not just in the USA but in Europe and other developed countries. Consumer credit was introduced for many items and just like today, people decided to go into debt so they could afford their bling blings. In my opinion, the new technology and easy credit resulted in the last bit of wealth being sucked out of the working class and into the pockets of the aristocracy.
When the bottom fell out, the jobs disappeared and the MAIN ecomomic motor (demand) was broken. What really needed to happen at this point was the devaluation of the dollar, and the return of spending ability to the consumer classes. Instead FDR stuck us on the gold standard preventing the necessary inflation and locked the door to wealth redistribution. At the time he figured that faith in the money supply was necessary due to all the bank failures, and took action accordingly. Most of his social programs involved transferring wealth back to the bottom, but it was a pretty small effort considering how many were unemployed.
What is this supposed to mean anyway? Lets look at the facts and see if our role was minor..........
There were 53,000 U.S. deaths in World War I.
England lost 908,000
France lost 1,240,000
Germany lost 1,770,000
Austria-Hungary lost 1,200,000
Nope, I was right the first time......the United States had a very minor role in World War I. Are you just desperate to catch me in a mistake?
Cladking,
I am thinking about your post.
Cohodk,
Date of death............wealth as a percentage of GNP,
This is also great info.
The below article is a little surprising, so who are the largest beneficiaries of all these PROMISES TO PAY? What is that you say? Government employees?
Wealth transference through inflation and the printing press.
June 20, 2005
Inflation Breeds Many Evils
by Hans F. Sennholz
The primary beneficiaries of the new order are its own managers: legislators, regulators, and a huge army of civil servants. They are first in power, prestige, and benefits. Many U.S. Senators and Congressmen are the admired and esteemed benefactors of countless petitioners for handouts and favors. They are revered for every benefit they bestow. And there are the officials of the Department of Commerce with 7 benefit programs, the Department of Education with 34 programs, the Department of Energy with 6, the Department of Health and Human Services with 8, the Department of Housing and Urban Development with 14, the Department of the Interior with 3, the Department of Labor with 9, the Department of Transportation with 9, and various government commissions and authorities with another 10 programs. Federal politicians and agents are the wise and virtuous judges and juries of benefits amounting to more than $1 trillion every year. How "honorable" would they be, pray tell, without Federal Reserve assistance in financing the deficits and its power to print more money?
In other news............OIL briefly traded over $59, blame the Norwegians........and gold is more than $2 higher.
Other economic news is sparce this morning.
Knowledge is the enemy of fear
<< <i>
the cause of the great depression was WWI.
I have learned this from "Freedom From Fear" by David M. Kennedy, Oxford Press.
edited to add: The American People in Depression and War, 1929-1945
I have also learned from previous studies, the USA can thank its great success
to WWII.
So, what will be the catalyst for our greatness this time?
I am 30 years old and open to suggestions. Thank you. >>
The simple fact is that humans fill an ecological niche. Just as beavers will adapt their
enviroment to make it more capable of supporting more beavers, humans do the same.
Humans have proven far more adept at wringing from their enviroment the conditions
which support life even where those enviroments were not initially suited for us.
It is the technological advances which have made us so successful in the past and will
in the future even if we have some pratfalls along the way. With each new invention
we are able to do more with less. This creates wealth which always has caused popu-
lation increase (this connection has been breaking down and is largely caused by our
choice of leisure time activities).
The greatest threat to the species at the current time is our dependence on oil at a time
that it appears to be running out. The greatest opportunities are manifold and are not
always foreseeable because other breakthroughs can nullify the obvious ones.
Certainly an economical fusion reactor would be a tremendous advance which might dou-
ble the world population over a few decades. Room temperature superconductivity would
have the same effect if the energy problem is solved in some other way.
There can also be some meaningful breakthroughs in almost any area such as the ability
to produce bumper crops with genetic engineering.
While modern societies are totally dependent on technology and the smooth operation of
the economy, there has never been a regression in knowledge in the past.
Nope, we're very involved economically with Iraq. The main reason is we now fight wars with technology instead of human life. That wasn't the case with WWI. We entered late, were only involved in one major battle, and our time in Europe was relatively short. Our involvement compared to the rest of the world was minor in both manpower and expense.
The only point I've proven is that is country has always been endowed with wealthy people.
The period between WWII and 1980 was significant because the creation of super-rich was greatly reduced or eliminated all together. (depending on how you define the super-rich) It also corresponds with economic stability and NO depressions. Since 1980 however we've been systematically removing all the checks to wealth aquisition at the top, and simultaneously heaping huge debt on the consumer class. We've even made bankruptcy more difficult to make sure the working poor stay broke and incapable of creating demand. A new large scale worldwide depression is absolutely inevitable, and will happen in the next 10 years unless something isn't done to repair it.
One thing I haven't mentioned is the economic decline we've been exporting to other countries. By building a factory in Indonesia for example and paying a very low wage to make shoes, we effectively put a cap on how much wealth that country can generate for its own prosperity. In our country, we pay executives large amounts who then either spend it or invest it in our own economy allowing that wealth to be recycled. However corporations like Nike can pay American executives those high wages leaving the foreign workers with the scraps. This isn't just a theory, many foreign nations are in big trouble and are techically in depressions right now.
I used Indonesia as an example because a 1999 New York Times article showed a growth in poverty there from 80 million to 130 million in a single year. (They had a population in the year 2000 of 206 million)
Stocks trade so fast no one cares that the execs give themselves multimillion dollar compensation even when the company loses money. These execs work less than the 7 buck an hour dishwasher. I'm not gonna cry if they pay 50% tax. Same for the guy who inherits millions. He didn't earn it. The rich always get richer. No one person works enough hours to earn a million a year. There are plenty of people who did the work, one person just took the money. Legally of course.
I still say the estate tax repeal is the most outrageous and unethical action taken against the American people in decades. To argue that a dead person is being unfairly taxed is incredible. It defies logic. For every dead person who benefits from this tax cut, YOUR CHILDREN will have to cover the difference.
I thought that the below two statements were the most interesting I had found the last few weeks. We all suspect that workers that belong to the unions, and most of us that are expecting S.C. will have to bite the bullet on reductions in pension monies, but what about government employees? When are they going to be told that the money just won’t be there to pay for all of their retirement expenses?
We also know that from the last statement here that there is no way to tax our way, or even confiscate, enough money to pay for all the promises being made. So when do you think the folks in the first paragraph are going to get the bad news?
Gee $1 Trillion per year for jobs that create no real products, how much does the U.S. Treasury take in each year in total taxes?
June 20, 2005
Inflation Breeds Many Evils
by Hans F. Sennholz
”The primary beneficiaries of the new order are its own managers: legislators, regulators, and a huge army of civil servants. They are first in power, prestige, and benefits. Many U.S. Senators and Congressmen are the admired and esteemed benefactors of countless petitioners for handouts and favors. They are revered for every benefit they bestow. And there are the officials of the Department of Commerce with 7 benefit programs, the Department of Education with 34 programs, the Department of Energy with 6, the Department of Health and Human Services with 8, the Department of Housing and Urban Development with 14, the Department of the Interior with 3, the Department of Labor with 9, the Department of Transportation with 9, and various government commissions and authorities with another 10 programs. Federal politicians and agents are the wise and virtuous judges and juries of benefits amounting to more than $1 trillion every year. How "honorable" would they be, pray tell, without Federal Reserve assistance in financing the deficits and its power to print more money?”
“ The U.S. has a total debt (Government, Corporate, and Household
combined) of $38 Trillion. In addition, in 2002 Treasury Secretary Paul
O'Neill commissioned a report identifying that the U.S. had future unfunded
entitlement liabilities (Medicare, Medicaid, and Social Security) with a
present value of $43 Trillion16 of which in 2002 would have required an
immediate and perpetual income tax of 69% for everyone if they were to be met. The U.S.'s net annual economic production (Gross Domestic Product or GDP) is $11.75
Trillion with a current budget deficit of $500 Billion per year (includes
Iraq War costs). It is clear from these numbers that, even if the economy
was healthy, these debts and liabilities cannot be paid.”
Buffett Maintains Bearish Long-Term View of Dollar
June 20 (Bloomberg) -- Berkshire Hathaway Inc. Chairman Warren Buffett said the dollar's rally this year against major currencies hasn't changed his view that the growing U.S. trade deficit will cause the currency to decline over time.
``There's no change in the underlying factors affecting currencies, in my view,'' Buffett said today at press conference in Boise, Idaho, while attending a meeting of state utility commissioners. ``The policies that we're following are likely to lead to a weaker dollar over a long period of years. It's not a forecast for next week, or next month or even next year.''
Berkshire's bet against the dollar stood at $21.8 billion of currency forward contracts as of March 31 and caused a $307 million first-quarter pretax loss as the dollar advanced, the company said on May 6. The dollar this year has pared some of its three-year decline versus the euro on expectations U.S. economic growth would outpace Europe and the Federal Reserve's eight interest-rate increases since last June would boost demand for U.S. debt and other dollar-based assets. Buffett and Bill Gates, chairman of Microsoft Corp., are among investors who have bet against the dollar. Buffett's firm began betting against the dollar in 2002 on concern widening U.S. trade and budget deficits would erode its value. Berkshire has recorded $2.65 billion of gains from its currency position since it began that bet.
``That position is likely to be very long-term,'' Buffett said today. ``It reflects things that will happen over years and years absent some major change in policy in this country.''
Berkshire's bet against the dollar stood at $21.8 billion of currency forward contracts as of March 31"
O.K. can someone please tell me how you can purchase "foward contracts" on anything that lasts for years?
This is a serious question.
the cause of the great depression was WWI.
One could also say that the creation of the FED in 1913 lead to the fallout in 1929. Immediately the FED started printing excess money since a 1:1 FRN to gold ratio was no longer required. The money supply grew by over 50% with no additional backing in those first several years. By the 1920's credit was awash. The steam ran out in the fall of 1929. Govt interventions only made things worse and made the recession "great."
roadrunner
Well last I heard Berkshire-Hathaway was holding over 40 billion in cash so 21.8 represents about half of that. He obviously doesn't need the leverage so I'm betting he has it invested in foreign bonds. A government bond is a type of forward contract.
Well China has to spend all that U.S. debt money somewhere so why not lend it to its corporations to buy the remainder of what manufacturing, and hard asset companies, are left in the U.S.? Told Ya
“June 21 (Bloomberg) -- Haier Group, China's largest refrigerator maker, and two buyout firms bid $1.28 billion for Maytag Corp.
The buyout would be bigger than this year's $1.25 billion purchase of International Business Machines Corp.'s PC unit by China's Lenovo Holdings Ltd.
TCL Corp., China's biggest publicly traded consumer electronics maker, bought out the handset operations of Paris- based Alcatel SA last month.
Haier Group marked its ambitions for the U.S. when it bought the 79-year-old Greenwich Bank building at 36th Street and Broadway in New York City --which boasts 25 Corinthian columns -- for $14.5 million. It also has invested $40 million in a refrigerator factory in Camden, South Carolina and makes half a million fridges a year in the U.S.
Chinese companies are also pursuing acquisitions to secure raw materials. CNOOC Ltd., China's largest offshore oil producer, may bid about $20 billion for Unocal Corp., the eighth-biggest U.S. The Beijing-based company will offer about $71.50 a share, 10 percent higher than a bid made by San Ramon, California-based Chevron on April 2. Paying with borrowed funds would cost state-controlled CNOOC about $1.2 billion in yearly interest payments. CNOOC is about 71 percent owned by state-controlled China National Offshore Oil Corp.”
Naturally our guys on Wall Street will do anything to make a buck. Selling Americas assets to a communist country does not bother them in the least.
“Goldman Sachs Group Inc. and JPMorgan are advising CNOOC on the transaction. The New York-based investment banks would share about $200 million in fees for a successful takeover of Unocal.”
The whereabouts of China's currency stash
Mon Jun 20, 2005 11:38 AM ET
WASHINGTON (Reuters) - Recurring talk China may be diversifying its swelling pot of foreign currency reserves away from U.S. dollars has been fueled by large gaps in U.S. data on Beijing's holdings,
The whereabouts of China's foreign reserves -- some $659 billion in March -- puzzles analysts.
Economists also reckon China is likely to be buying at least some U.S. securities via third party brokers and custodians based, possibly, in British or Caribbean financial centers.
Many are forced to rely as much on guesswork as data to locate the stash -- up $256 billion since 2003 and the world's second largest behind Japan's eye-popping $842 billion.
Sweden cuts rates a larger than expected 50 basis points. Growth forcasts were also cut in France. Expectations are for more cuts throughtout Europe. The dollar looks better everyday. I wonder if Buffett knew anything about the larger than expected rate cuts?
Also reports from Japan show stronger growth. If the dollar is going to fall it is going to have to be because of the yen. Japan has been a sleeping giant for 15 years, perhaps it is finally awakening.
Knowledge is the enemy of fear
Buffett will hit the jackpot when the fed finally wakes up and realizes we're in a new recession. Rates will get slashed and the dollar will no longer be attractive.
Long term interest rates are a huge wildcard right now. You can't compare what's happening now to any time in history. You'd expect interest rates to continue to fall because the lack of other investments, but the current administration is borrowing money at insane rates. Increased bond supply will drive rates up. I'm not sure which pressure will win. If long term interest rates go up drastically it will be the worst case senario forcing millions of Americans into bankruptcy because of their adjustable and interest only mortgages. Needless to say, it will also pop the housing bubble.
It appears that the Asians have also figured out what all these PROMISES TO PAY are worth.
One has to wonder what the unions, and the other labor powers, were thinking when they did not advise their millions of members that buying all this stuff from foreign countries was not good for American jobs.
What I mean is, did any of the labor guys, or liberals, inform their constituents that buying Asian cars, Asian clothes, Asian shoes, etc.etc.etc. was real bad for their jobs?
Of course the U.S. congress could just say NO. They could stop any acquisition of American companies by these foreign devils, but then again, who is going to buy all these PROMISES TO PAY?????
The resolution will be a giant screwing of the world economy by devaluation of our currency. It has unlimited historical precident and has been used repeatedly by third world countries so burdoned with debt that they can't function. It happened in Mexico in 1994 and we bailed them out to the tune of $50 billion. Obviously there will be no world power rich enough to bail us out. It's interesting to note that Mexico's devaluation happened after government spending went out of control. (thanks George) We will not be the business control center of the world without being able to borrow money.
The resolution might be the death of fiat currency and a return to metal money, (the most honest solution) or it might be a restoration of faith in our government by being fiscally responsible for a change. Either way we're going to have huge inflation before it's all over with. Ultimately economic power is based on military might, and military might is based on technology so I don't see any of this being a threat to national security or our position as the world's superpower. It's not going to be fun for most people however.
I dunno bout that. America lacks the natural resources to have an industrial economy. Lumber? Oil? Mining? Steel?
And with regards to corporate HQ's, I think those need to be where the financials are. If the money is overseas, why put a HQ distant from it?
I've read a lot lately about the national debt as a % of the GDP, and why it's not as bad as it seems. So my question is.......how can you have a Gross Domestic Product if your country no longer makes any products?
I doubt you'll see a single world fiat currency. The dollar is probably the strongest contender and our government's response has been to soak up the world's wealth and spend money like water. Governments love to cheat.
<< <i>which America will become Corporate Headquarters. >>
Of course because we have the military willing to go out on behalf of the multinational corporations. They will headquarter here and use our taxpaid military and our young people to fight on behalf of corporate profits.
Now the best thing we can do is tax the crap out of them for doing it
And then moan and groan cause they relocated to Bermuda or another nice Caribbean island?
This is not doomsday but if you add up all of the information just contained in this one thread over the last few months there are lots of real disasters out there just waiting for the trigger to be pulled.
Just look at the game the Asians are currently playing.
Several months ago several of our congressmen started making noise about the Yuan being revalued, or tariffs would be on the way.
Shortly after that most of the Asian nations stopped buying our debt.
Now the Chinese are using debt to buy our assets. Who do you think will be on Unocal’s priority shipping list when it comes to their oil products?
The congress can’t say NO, who will then buy the debt?
For nearly 8 months now as disasters form all around us, these fools in Washington have argued about what person would be a judge, or who would be sent to the U.N. or what poor terrorists in Cuba were having for lunch, WHO CARES!
I think we can expect two things next, the other countries holding our debt will also being to buy our assets. The Japanese for example would be fools to let their old rival China buy up all the good American properties.
Next we can all expect to find lots of Asians entering the country to take American jobs. Why not, we have no immigration policy and after all it’s going to be their companies.
It's only in America that people have been sold the lie of anyone can make it big. In most of the world during most of history, the truth of CLASS and all its implications have been known, taught, and delt with accordingly. It's not that we live without an aristocracy in this country because we certainly do. (especially now) It's just very well hidden.
1. Get out of debt. This includes debt for real estate, automobiles, and student loans. One might think that you should just wait for the devalued dollar and pay off your debts with discounted money. This is a bad idea because you may not have a job for awhile, creditors will use your debt to take away your assets, (which you should protect) and interest on adjustible rate money will kill you.
2. Buy a house. If you can't afford a house, pool your resources and buy a house with family members. Real Estate is one asset that will always have value, and you will always need. If I had a $500,000 house with $300,000 equity, I'd sell it and buy a $300,000 house.
3. Stop spending money on crap. No one needs 90% of the stuff they buy. Don't feed the robber barrons, the overpaid CEOs, or the chinese. Buy that plasma screen from your neighbor for 25 cents on the dollar. Fix your car instead of buying a new one. And for god sake, stop paying $100 for friggin shoes!!!!
4. Aquire real assets like gold, silver, land, tools, fruit trees, and family. The aristocracy understands the value of strong family ties but for some reason middle and lower class America wants to spread kids on the wind like pollen.
5. Learn spanish. I have a feeling we'll be doing a lot more business with Mexico.
It's always nice to have a diploma, but I would put the things I listed before a formal education.
Mandarin would be a much smarter move.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870