Mogambo is Right.
jmski52
Posts: 22,800 ✭✭✭✭✭
It's all about taxes and government revenues.
Tax policy and inflation are really the only options that our bloated federal government has to avoid cutting it's own size and reach.
The problem with deflating home values and stock market losses is that the tax revenues drop off significantly, just as the politicians want to ramp up spending once again. Under current IRS Regs, those stock loss carryovers will not only affect this year's tax revenues, but future years as well.
With the interest on the national debt gaining as a % of GDP as Treasury debt is increased out the wazzoo, there's really no way to keep piling it on by increased borrowing without getting their hands slammed while they still have both of them in the cookie jar.
So, with tax revenues dropping and with the debt burden quickly growing on its own, what's an out-of-control government with massive spending plans to do? Pump up the stock market, raise tax rates and then tax the crap out of those gains, once again?
That's the standard formula. And that doesn't even account for the toxic debt that is still on the books. So the accounting rules got changed, but that doesn't make it go away - it simply decriminalizes a criminal enterprise. Note, it doesn't make the toxic crap go away.
Having said all that, who really thinks that the dollar isn't toast? I mean completely toast. The question isn't "whether or not" - the question is "when?"
Tax policy and inflation are really the only options that our bloated federal government has to avoid cutting it's own size and reach.
The problem with deflating home values and stock market losses is that the tax revenues drop off significantly, just as the politicians want to ramp up spending once again. Under current IRS Regs, those stock loss carryovers will not only affect this year's tax revenues, but future years as well.
With the interest on the national debt gaining as a % of GDP as Treasury debt is increased out the wazzoo, there's really no way to keep piling it on by increased borrowing without getting their hands slammed while they still have both of them in the cookie jar.
So, with tax revenues dropping and with the debt burden quickly growing on its own, what's an out-of-control government with massive spending plans to do? Pump up the stock market, raise tax rates and then tax the crap out of those gains, once again?
That's the standard formula. And that doesn't even account for the toxic debt that is still on the books. So the accounting rules got changed, but that doesn't make it go away - it simply decriminalizes a criminal enterprise. Note, it doesn't make the toxic crap go away.
Having said all that, who really thinks that the dollar isn't toast? I mean completely toast. The question isn't "whether or not" - the question is "when?"
Q: Are You Printing Money? Bernanke: Not Literally
I knew it would happen.
I knew it would happen.
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Comments
roadrunner
Japan's GDP is dropping at a 15% annualized pace.
European banks have been either nationalized or are still leveraged 40x and citizens already pay 70% in taxes.
China is a communist state.
Russia, LOL, Russia.
If you sell dollars, what are you gonna buy?
I agree that the US has problems but so does every other country and since currencies trade relative, those looking for a collapse in the dollar are most likely to be dissapointed.
Knowledge is the enemy of fear
No, I don't think so. What do you think?
If you sell dollars, what are you gonna buy?
I buy platinum, gold, silver, guns, ammo, toilet paper, water treatment, farmland, farm implements, fruit trees, walnut trees, pumps, piping, wiring, generators, fuel storage, fuel, electrical supplies, and some paper dollars.
What are YOU buying, coho?
I agree that the US has problems but so does every other country and since currencies trade relative, those looking for a collapse in the dollar are most likely to be dissapointed.
I AM looking for a dollar collapse. If it doesn't happen, I will NOT be disappointed. Why would you even say that someone looking for a dollar collapse would be disappointed if it didn't happen?
That's what bothers me about this whole situation. Everyone seems to think that bad things ain't gonna happen to them, especially in the USA.
It is interesting to me that not many people get the idea of a democratic Republic. It's not a democracy. However, it WAS designed by some very educated and enlightened people who knew what they had to design to protect the people.
That ideal is being destroyed by a student of Constitutional Law. Whoever thinks that their personal security and safety can exist where the ideals built into the Constitution have been destroyed is fooling himself in a very hazardous manner.
But, I digress. Back to the dollar collapse. Yes, I see a dollar collapse and a collapse of most fiat paper currencies. Then I see a Bretton Woods III somewhere in the mist. I remember giving a summary of Bretton Woods II way back when I was in high school. The dollar and other currencies were supposed to be supported by a "basket of commodities"** or some such concept.
It took about 3 years before Nixon slammed the gold window shut because our gold was being claimed by our balance of payments deficit, which was based on that "basket of commodities"**. I think that's pretty much how it went.
**Edited - maybe it was a basket of currencies. Either way, no matter.
Now, we are back to the drawing board. Fiat currency anyone? Special IMF Drawing Rights, anyone? Here, look at the pretty new bills with the goddess of whatever emblazoned on the pretty new paper. Don't look now, but if you don't duck you might get whacked hard. Just my two cents.
I knew it would happen.
Comrade Renski
Conspiracy theorists vs. those who believe it's all maya anyway. Who wins in the end?
vs. those whose ostrich heads are in another place altogether.
Which are you, KJ? Everything's coming up roses on your end. Good for You!
I knew it would happen.
> Which are you, KJ?
I think I've already made it clear I don't easily get suckered into conspiracy theories. Maya, in the greater scheme of things, with a few very rare exceptions, gets everyone. We tend to create much of our own reality so it's completely possible you will in the long run experience these events you fear and believe in. What can I say? Have fun!
Fine, please state the conspiracy theory that you think I'm advancing here. This is the second thread you've jumped into without any facts of your own, only smart alecky commentary.
Do you think that a massive debt and a destruction of the dollar are a conspiracy theory? I don't quite get your spin on what is already known to be fact.
You don't think that ammo and toilet paper are a good investment? Want me to provide an internal rate of return calculation for you in about a year?
You haven't really refuted anything, other than to start going on about "maya", so please be a little more specific. Then maybe we can have a discussion. Or not.
I'm just sayin'...
I knew it would happen.
jmski52,
With all due respect, there probably isn't much to discuss. You get what you need. You can have what you want. Maybe the best explanation of maya can be found in one of the three short stories at the back of a Hermann Hesse book _Magister Ludi_ (also known as the Glass Bead Game). The story I'm thinking of is titled _The Indian Life_. It's an easy read. THe book is not hard to find. Also, as the Grateful Dead sing ...
"And it’s just a box of rain, I don’t know who put it there
Believe it if you need it, or leave it if you dare
And it’s just a box of rain, or a ribbon for your hair
Such a long, long time to be gone and a short time to be there"
roadrunner
KJ - I'm glad that you're "enlightened" however you define it. I guess that we won't be discussing anything heavy like how inflation and tax policy are now passe' and minor league, compared to big bank bailouts, unfunded entitlement programs in the $Trillions and leveraged derivatives that are hanging over every T-Bill offering from now until a hundred years from now, or longer.
You work for a living, right? Maybe it's just my imagination, but those are your dollars disappearing into the great divide, too.
I knew it would happen.
jmski52,
Again, appearances are often deceiving. Yes, I agree there are stage props that look and feel incredibly real, dollar devaluations included. However, all traders know it doesn't really matter if things go up or down. You profit from being on the correct side of any move. As far as investments are concerned, I'm simply not to the point where I feel any compelling need to stockpile ammo and toilet paper. Maybe that is necessary in your world. Maybe someday it will be necessary in mine. Who knows? Even if that is how it plays out it will not be more than a blip on the radar screen, in the greater scheme of things. BTW, that Hesse short story I recommended really is an interesting read
The 10% of derivatives (mostly mortgage backed and some CDS) that have so far been removed from the system and caused massive damage is far from just a blip. And the remaining $600+ TRILLION (mostly interest rate swaps that have yet to hit) in derivatives are not stage props that can just be walked off the set with no negative feedback. When the dollar index finally hits around the .50 level that will be very real just as its first attempt to hit .70 in 2008 had real ramifications. 5 years ago around here most had little concern of the derivatives in the shadow banking system. Now most fiat bugs think the majority of the damage has passed. Next comes Act 2 in this 5 Act play.
roadrunner
i do agree that currencies trade realative, yet something external will accelerate too fast with too much mass and hammer the USD to a point that a nail setter won't be needed to bury it.
The most of Europeans have been living on a high tax system long b4 two years ago. Japan has been Japan for many years.
Russia still has a ton of $$$$ from their manipulation of the crude market last year, now ther strategy is to sell and move away from USD and into Euros (latest rumor)
jmski52 is spot on as much as it hurts and will hurt even more.
> that will be very real
Yes, it may appear real, very real. Maya by nature appears real. However, the Truth that is maya transcends what appears to be maya. That's all I'm saying. It's an interesting game we play, with a lifetime full of opportunities to move forward or become even more sucked into playing. Because light is more powerful than dark, instantly banishing the dark whenever it appears, there is no real need to be compellingly attached to whatever drama plays itself all around us. However, it is not being stupid to pay some attention to what is happening on the stage
Well, from a practical standpoint neither one is going to spoil and both will be used eventually, most likely at higher prices than now. From an inflation standpoint, which I do believe will occur in a very robust way - it doesn't matter what you buy, because you will be buying less as the dollar deflates. Isn't that what we are being told anyways - buy stuff to keep the economy moving?
Yes, I agree there are stage props that look and feel incredibly real, dollar devaluations included.
All this focus on existentialism has got me thinking about the esoterics our fiat currency. Now, there's a stage prop for ya! It's only "worth something" because the US Treasury Dept. says it's "worth something". And that's the sum total of the legitimacy behind our currency. In my humble opinion, there is always the possibility that it will become vaporware - now it's "worth something", and now it's not - simply because the government feels compelled to declare a state of emergency. As for conspiracy theories, it sure wouldn't be the first time that such a thing has ever happened. Why be a sittin' duck?
The same thing that applies to the money in our pockets applies to our retirement savings, our home values, and our salaries.
If you weren't aware of it, our port system and our freight distribution systems were backed up and nothing was moving when Hank Paulson stood at the podium last Sept. 15th to announce that we had a worldwide credit problem. In other words, we were pretty darned close to having major supply disruptions in the USA. (*Sidebar - those shipments may not have contained toilet paper, since it's a domestic product, but they probably contained repair parts for the trucks that the shipping companies use to keep the trucks that deliver the toilet paper running.) The next "emergency" will probably have wider implications and will probably require a more radical "fix".
That's my take. I feel like you ought to be paying me a consulting fee for this, but hey - because I'm such a nice guy, it's free.
the remaining $600+ TRILLION (mostly interest rate swaps that have yet to hit) in derivatives are not stage props
rr, just imagine the sales commissions and processing fees that were skimmed off those $600 Trillion in transactions! And the legal fees raked off in the structuring of those deals! Man - I wonder who the lucky devils were that got those virtual freebies? Probably nobody with ties to Goldman Sachs or JP Morgan. Nah, probably not. It's ok to discredit anyone who questions the arrangement, tho.
I knew it would happen.
> I feel like you ought to be paying me a consulting fee for this, but hey - because I'm such a nice guy, it's free.
You're very kind but even though it's got new twists and turns this story is old.
The glass is both half full and half empty. It depends on how you see it.
Again, in the long run, the minutia of how this plays out is inconsequential.
Even after humanity gets it right, moving on to other planets and stars, the game will only be maya.
Endlessly fascinating, endlessly entrancing, playful maya!
Relax. It gives all of us something to do
ps. I want some of whatever KentuckyJ is smoking or eating or drinking .
Reminds me of the sixties. (what I can remember of them) LOL
> Will someone explain to this old man wth is "maya"?
unknowncomic,
The short story I recommended earlier is a good place to start. It gives you the basic idea. Maya rarely reveals itself as maya. Sometimes you catch a glimpse of it, which can be a powerful life altering event completely changing your path. The fish spending all of life in the water, surrounded by water, can't comprehend life on land or life in the air. Maya, for humans, is something like that. We believe the economic collapse of the dollar is real. It's real, yes, but it's also unreal. Go deeper and look beyond mere surface appearances.
I started about a dozen replies to this thread but none of them conveyed the things I wanted to say about this "maya" crap.
I dont want to be "enlightened". I did that 40 years ago and look where it got me . LOL
<< <i>> Will someone explain to this old man wth is "maya"?
unknowncomic,
The short story I recommended earlier is a good place to start. It gives you the basic idea. Maya rarely reveals itself as maya. Sometimes you catch a glimpse of it, which can be a powerful life altering event completely changing your path. The fish spending all of life in the water, surrounded by water, can't comprehend life on land or life in the air. Maya, for humans, is something like that. We believe the economic collapse of the dollar is real. It's real, yes, but it's also unreal. Go deeper and look beyond mere surface appearances. >>
I certainly don't want to bust on somebody's religion, but I can say I've been there and the answers do not lie therein.
Whatever this "maja" you speak of may or may not be does not give us any clues into how a wise man is to hide himself from the impending danger we all face. I prefer specifics, which some here are thankfully forthright with.
Go in peace, sire.
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
I won't continue this other than to say, since there seems to be a general belief in "impending danger," maya is like the movie in the theatre. Sometimes the movie is a really great film with places where we momentarily forget we're in a theatre watching a movie. The movie becomes our reality. However, if you break free of the story and turn to look behind you it then becomes obvious none of the action of the movie is real. The film is being projected onto the movie screen by a beam of light. The life and deaths of the actors in the movie are completely illusory. The whole entire thing is only an entertaining play of shadows and light. That is maya. To know this, I believe, is the eventual destination of everyone. If not in this life then maybe in another. Coins, collecting, precious metals, preparing to survive fire and flood, it's just part of how you get there. Again, Grateful Dead, "believe it if you need it, or leave it if you dare."
I happen to like physical silver and gold. I've known both since the mid 70's. Someday I'll have to let it go. That's just how the bank account gets balanced. The trick is to realize it's really no big deal. You are greater than any of however you measure, value or take pride in apparent wealth. If you want the survival scenario bad enough you can probably get it. I don't think it will be much fun but Mogambo types seem determined to try and go there. To each his own, so they say.
I knew it would happen.
<< <i>> Will someone explain to this old man wth is "maya"?
unknowncomic,
The short story I recommended earlier is a good place to start. It gives you the basic idea. Maya rarely reveals itself as maya. Sometimes you catch a glimpse of it, which can be a powerful life altering event completely changing your path. The fish spending all of life in the water, surrounded by water, can't comprehend life on land or life in the air. Maya, for humans, is something like that. We believe the economic collapse of the dollar is real. It's real, yes, but it's also unreal. Go deeper and look beyond mere surface appearances. >>
there is a rubber room with your name on it. Good Luck with that!
Fred, Las Vegas, NV
<< <i>I won't continue this other than to say, since there seems to be a general belief in "impending danger," maya is like the movie in the theatre. Sometimes the movie is a really great film with places where we momentarily forget we're in a theatre watching a movie. The movie becomes our reality. However, if you break free of the story and turn to look behind you it then becomes obvious none of the action of the movie is real. The film is being projected onto the movie screen by a beam of light. The life and deaths of the actors in the movie are completely illusory. The whole entire thing is only an entertaining play of shadows and light. That is maya. To know this, I believe, is the eventual destination of everyone. If not in this life then maybe in another. Coins, collecting, precious metals, preparing to survive fire and flood, it's just part of how you get there. Again, Grateful Dead, "believe it if you need it, or leave it if you dare."
>>
I like the Dead too, by the way. One of my favorites (though I doubt it's their own material, like so many of their songs) is "me and my uncle" from which we get sage truth from these lyrics:
"He taught me so well, Lord, I grabbed that gold, and left his dead ass there by the side of the road."
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22