What happened to all of the doom and gloom economic threads?

[Ham Murabi]

Manufacturing numbers are down "to the lowest level since April 2009, during the worst of the global recession"...

...and manufacturing is the fuel of the capitalist economy engine.

The prognosis for the next year and a half, at least, is not looking good at all, folks...

As long as the current crew stays in charge, there is no reason to expect improvement. Our economy mirrors Western Europe's.
What we can expect, if the current crew stays in charge, is a meltdown like we haven't seen in our lifetimes.

 

[Beco]

As long as the current crew stays in charge, there is no reason to expect improvement. Our economy mirrors Western Europe's.
What we can expect, if the current crew stays in charge, is a meltdown like we haven't seen in our lifetimes.

How you do one thing, is how you do everything....

 

[RobDownSouth]

How you do one thing, is how you do everything....

Huh?

 

[unregistered]

 

[richard_daily]

In other words Obama will continue to apply his inexperience, misunderstanding of reality, his profound benightedness of all things economic and political, to the problems of our day and astound himself and the nation at his unerring success at making them worse. Get it now, clown?

it's good that you're fluent in Idiot.

 

[unregistered]

 

[richard_daily]

I have to be in order to communicate with subcultures such as yourself.

it's your native tongue, grandpa jeans...

 

[4est_4est_Gump]

Deflation's Here, and the Downward Spiral Has Started
Frank Ryan

Denmark, Germany, Switzerland, and Finland have been issuing short term government notes at negative interest rates since mid-year 2012!

This dangerous precedent has happened before. Most recently, Japan experienced negative interest rates in the 1990s. The effects of the economic quandary in Japan and the efforts to restore growth were so misguided that the Japanese are still attempting a recovery. In almost twenty years, Japan has yet to make a full economic recovery.

The United States and the European Union are next and are headed into the same disaster as Japan unless decisive action is taken now.

Alan Greenspan clearly understood the growing dangers in the economic world in his book, The Age of Turbulence, in which he explains the continuing saga of an increasingly turbulent world economy.

Deflation is characterized by falling prices, falling incomes, declining value of real estate, and an inability to fund government debt and unfunded obligations.

Deflation has begun, and governments continue to push the "cliff" date as far into the future as possible when only quantitative easing is considered by the Federal Reserve and more government spending is considered by the White House.

Unfortunately, current fiscal and monetary policies of most Western nations are merely moving us farther up the fiscal cliff rather than away from it.

...

At this point, the death spiral of deflation begins, and our economy will collapse. Economic recovery will be difficult at best because deflation's spiral is so difficult to reverse. Buyers are rewarded with even lower prices by waiting to purchase goods and services.

After the negative interest rates, collapsing real estate prices, state and local government pensions, the education bubble will then bust.

At the university level, for example, the burgeoning student debt and the substantial increase in tuition rates are making the reality of higher education a nightmare for many rather than the dream the youngster was promised. Increases in tuition beyond the general inflation rate have been going on for decades. That trend is about to end. Many universities are increasing aid due to this reality. Tuition increases are not sticking in the marketplace as was once commonly accepted. The next step is for tuition to fall.

Students and parents will begin to question the value of the degreee. Schools are already being audited because they allegedly failed to accurately reflect opportunities for students upon graduation. This action is just the beginning. It will follow that schools either reduce tuitions or lose students. However, the fixed costs at universities are so great that schools will have no alternative except to reduce tuitions to keep enrollment up.

During the First Depression (1930s), Keynesian economic theory proposed fiscal policy measures to stimulate an economy and argued that negative interest rates, while possible, would be unusual. Unfortunately, this White House does not consider any solution other than a Keynesian one.

In our current Second Depression (circa 2008), a German economist in 2009 proposed Keynesian Economics 2.0, arguing for a monetary approach to solving our current economic quagmire.

These academic exercises fail, however, to consider the tragic effects of misguided fiscal and monetary policy as the potential cause of the current economic disaster.

The federal government's perception is that government spending creates demand. The monetarist believes that lower interest rates stimulate demand.

Both fiscal and monetary policies have some merit under many circumstances; however, when those circumstances do not exist any longer, following the historical policies of more spending and lower interest rates will trigger a horrific deflationary cycle, as seen in the real estate and banking industries in Japan.

http://www.americanthinker.com/2012/09/deflations_here_and_the_downward_spiral_has_started.html

 

[mercury14]

Deflation's Here, and the Downward Spiral Has Started
Frank Ryan


http://www.americanthinker.com/2012/09/deflations_here_and_the_downward_spiral_has_started.html

So we're having deflation and hyperinflation at the same time now?

 

[4est_4est_Gump]

Who said hyperinflation?



That dialog is rampaging in your head now. You should ignore it; it causes stupidity...

 

[unregistered]

 

[mercury14]

Who said hyperinflation?



That dialog is rampaging in your head now. You should ignore it; it causes stupidity...

You've posted predictions of problematic inflation and hyperinflation in this very thread. That's the outcome of Keysianism and QE according to you. I'd quote you but I don't feel like pasting 18 quotes that search found.

 

[RobDownSouth]

Deflation's Here, and the Downward Spiral Has Started
Frank Ryan


http://www.americanthinker.com/2012/09/deflations_here_and_the_downward_spiral_has_started.html

http://www.mindhuestudio.com/lulz/WinnersThinker.jpg

 

[mercury14]

Merc, you're a stupid clown.

Run a search of AJ's history for deflation, inflation, and hyperinflation and tell me what comes up. Bonus: search his history for predictions of stagflation (which apparently happened already WTF?).

 

[4est_4est_Gump]

Run a search of AJ's history for deflation, inflation, and hyperinflation and tell me what comes up. Bonus: search his history for predictions of stagflation.

You do it asshole.

You're the one who is ascribing positions.

Prove it or out yourself as a liar, yet again, a HYPERpartisan...

 

[4est_4est_Gump]

You've posted predictions of problematic inflation and hyperinflation in this very thread. That's the outcome of Keysianism and QE according to you. I'd quote you but I don't feel like pasting 18 quotes that search found.

In other words, you cannot find it in anything I said and rather admit, that once again, you were wrong, you try to put up a smoke cloud, drop your dye and run there ol' YellowStain!



WHERE DID I PREDICT HYPERINFLATION???????

When did I say we were in it now since you seem to think I'm claiming both at once!

You just enjoy lying for effect: http://forum.literotica.com/showthread.php?t=800325

 

[mercury14]

You do it asshole.

You're the one who is ascribing positions.

Prove it or out yourself as a liar, yet again, a HYPERpartisan...

I did. You're screwed bro.

*braces for "I didn't really think those NRO blogs were accurate, I was just putting them out there for discussion and please disregard my comments saying they were right on target, Kthanks!"*

 

[mercury14]

WHERE DID I PREDICT HYPERINFLATION???????

I have speculated that this ultimate ending becomes a hyperinflationary depression:

... we likely end up with the worst of all worlds. In a hyperinflation, money will cease to be a medium of exchange. Markets will cease to work, except on a barter basis. The middle class will be wiped out. Their savings will become worthless along with the dollar.

This ending is not predicted for 2011, although it could begin tomorrow. Recent and continuing policies by government move us closer to Mises' outcome -- a devastation of the economy. When this ending comes, it will be typhoon-like, appearing suddenly and rapidly destroying everything.

That paste ring a bell?

 

[4est_4est_Gump]

HA!

There you go again, ascribing to me the words of others, words I provide just to keep the thread bumped up to keep the impotence of Democratic Economics on display and where experts think they are leading to counter all the experts who said that by now unemployment would be under 6%!

Now you may call me a racist.

While you're at it, could you come up with a plan to cancel out America's nigger amnesty policy? And who gave Pocahontas and her drunk-ass tribe citizenship?

 

[4est_4est_Gump]

I did. You're screwed bro.

*braces for "I didn't really think those NRO blogs were accurate, I was just putting them out there for discussion and please disregard my comments saying they were right on target, Kthanks!"*

Now, PROVE IT! or you are still a fucking liar.

WHERE ARE MY REMARKS SAYING THAT WHICH YOU ARE ASCRIBING TO ME!!!

 

[mercury14]

HA!

There you go again, ascribing to me the words of others, words I provide just to keep the thread bumped up to keep the impotence of Democratic Economics on display and where experts think they are leading to counter all the experts who said that by now unemployment would be under 6%!

Now you may call me a racist.

Oh so you were just bumping a thread with 22,000 posts? The most heavily-trafficked thread ever on Literotica needs bumping.

Would you like me to quote you in your own words supporting pastes like this? I've got them open right here in the next tab over.

 

[4est_4est_Gump]

QE3 will fail like QE1&2

In the purely free and unhampered market, there will be no cluster of errors, since trained entrepreneurs will not all make errors at the same time.[4] The "boom-bust" cycle is generated by monetary intervention in the market, specifically bank credit expansion to business. Let us suppose an economy with a given supply of money. Some of the money is spent in consumption; the rest is saved and invested in a mighty structure of capital, in various orders of production. The proportion of consumption to saving or investment is determined by people's time preferences — the degree to which they prefer present to future satisfactions. The less they prefer them in the present, the lower will their time preference rate be, and the lower therefore will be the pure interest rate, which is determined by the time preferences of the individuals in society. A lower time-preference rate will be reflected in greater proportions of investment to consumption, a lengthening of the structure of production, and a building-up of capital. Higher time preferences, on the other hand, will be reflected in higher pure interest rates and a lower proportion of investment to consumption. The final market rates of interest reflect the pure interest rate plus or minus entrepreneurial risk and purchasing power components. Varying degrees of entrepreneurial risk bring about a structure of interest rates instead of a single uniform one, and purchasing-power components reflect changes in the purchasing power of the dollar, as well as in the specific position of an entrepreneur in relation to price changes. The crucial factor, however, is the pure interest rate. This interest rate first manifests itself in the "natural rate" or what is generally called the going "rate of profit." This going rate is reflected in the interest rate on the loan market, a rate which is determined by the going profit rate.[5]

Now what happens when banks print new money (whether as bank notes or bank deposits) and lend it to business?[6] The new money pours forth on the loan market and lowers the loan rate of interest. It looks as if the supply of saved funds for investment has increased, for the effect is the same: the supply of funds for investment apparently increases, and the interest rate is lowered. Businessmen, in short, are misled by the bank inflation into believing that the supply of saved funds is greater than it really is. Now, when saved funds increase, businessmen invest in "longer processes of production," i.e., the capital structure is lengthened, especially in the "higher orders" most remote from the consumer. Businessmen take their newly acquired funds and bid up the prices of capital and other producers' goods, and this stimulates a shift of investment from the "lower" (near the consumer) to the "higher" orders of production (furthest from the consumer) — from consumer-goods to capital-goods industries.[7]

If this were the effect of a genuine fall in time preferences and an increase in saving, all would be well and good, and the new lengthened structure of production could be indefinitely sustained. But this shift is the product of bank credit expansion. Soon the new money percolates downward from the business borrowers to the factors of production: in wages, rents, interest. Now, unless time preferences have changed, and there is no reason to think that they have, people will rush to spend the higher incomes in the old consumption–investment proportions. In short, people will rush to reestablish the old proportions, and demand will shift back from the higher to the lower orders. Capital goods industries will find that their investments have been in error: that what they thought profitable really fails for lack of demand by their entrepreneurial customers. Higher orders of production have turned out to be wasteful, and the malinvestment must be liquidated.

A favorite explanation of the crisis is that it stems from "under-consumption" — from a failure of consumer demand for goods at prices that could be profitable. But this runs contrary to the commonly known fact that it is capital-goods, and not consumer-goods, industries that really suffer in a depression. The failure is one of entrepreneurial demand for the higher order goods, and this in turn is caused by the shift of demand back to the old proportions.

In sum, businessmen were misled by bank credit inflation to invest too much in higher-order capital goods, which could only be prosperously sustained through lower time preferences and greater savings and investment; as soon as the inflation permeates to the mass of the people, the old consumption–investment proportion is reestablished, and business investments in the higher orders are seen to have been wasteful.[8] Businessmen were led to this error by the credit expansion and its tampering with the free-market rate of interest.

The "boom," then, is actually a period of wasteful misinvestment. It is the time when errors are made, due to bank credit's tampering with the free market. The "crisis" arrives when the consumers come to reestablish their desired proportions. The "depression" is actually the process by which the economy adjusts to the wastes and errors of the boom, and reestablishes efficient service of consumer desires. The adjustment process consists in rapid liquidation of the wasteful investments. Some of these will be abandoned altogether (like the Western ghost towns constructed in the boom of 1816–1818 and deserted during the Panic of 1819); others will be shifted to other uses. Always the principle will be not to mourn past errors, but to make most efficient use of the existing stock of capital. In sum, the free market tends to satisfy voluntarily-expressed consumer desires with maximum efficiency, and this includes the public's relative desires for present and future consumption. The inflationary boom hobbles this efficiency, and distorts the structure of production, which no longer serves consumers properly. The crisis signals the end of this inflationary distortion, and the depression is the process by which the economy returns to the efficient service of consumers. In short, and this is a highly important point to grasp, the depression is the "recovery" process, and the end of the depression heralds the return to normal, and to optimum efficiency. The depression, then, far from being an evil scourge, is the necessary and beneficial return of the economy to normal after the distortions imposed by the boom. The boom, then, requires a "bust."

Since it clearly takes very little time for the new money to filter down from business to factors of production, why don't all booms come quickly to an end? The reason is that the banks come to the rescue. Seeing factors bid away from them by consumer-goods industries, finding their costs rising and themselves short of funds, the borrowing firms turn once again to the banks. If the banks expand credit further, they can again keep the borrowers afloat. The new money again pours into business, and they can again bid factors away from the consumer-goods industries. In short, continually expanded bank credit can keep the borrowers one step ahead of consumer retribution. For this, we have seen, is what the crisis and depression are: the restoration by consumers of an efficient economy, and the ending of the distortions of the boom. Clearly, the greater the credit expansion and the longer it lasts, the longer will the boom last. The boom will end when bank credit expansion finally stops. Evidently, the longer the boom goes on the more wasteful the errors committed, and the longer and more severe will be the necessary depression readjustment.

Thus, bank credit expansion sets into motion the business cycle in all its phases: the inflationary boom, marked by expansion of the money supply and by malinvestment; the crisis, which arrives when credit expansion ceases and malinvestments become evident; and the depression recovery, the necessary adjustment process by which the economy returns to the most efficient ways of satisfying consumer desires.[9]

What, specifically, are the essential features of the depression-recovery phase? Wasteful projects, as we have said, must either be abandoned or used as best they can be. Inefficient firms, buoyed up by the artificial boom, must be liquidated or have their debts scaled down or be turned over to their creditors. Prices of producers' goods must fall, particularly in the higher orders of production — this includes capital goods, lands, and wage rates. Just as the boom was marked by a fall in the rate of interest, i.e., of price differentials between stages of production (the "natural rate" or going rate of profit) as well as the loan rate, so the depression-recovery consists of a rise in this interest differential. In practice, this means a fall in the prices of the higher-order goods relative to prices in the consumer-goods industries. Not only prices of particular machines must fall, but also the prices of whole aggregates of capital, e.g., stock-market and real-estate values. In fact, these values must fall more than the earnings from the assets, through reflecting the general rise in the rate of interest return.

Since factors must shift from the higher to the lower orders of production, there is inevitable "frictional" unemployment in a depression, but it need not be greater than unemployment attending any other large shift in production. In practice, unemployment will be aggravated by the numerous bankruptcies, and the large errors revealed, but it still need only be temporary. The speedier the adjustment, the more fleeting will the unemployment be. Unemployment will progress beyond the "frictional" stage and become really severe and lasting only if wage rates are kept artificially high and are prevented from falling. If wage rates are kept above the free-market level that clears the demand for and supply of labor, laborers will remain permanently unemployed. The greater the degree of discrepancy, the more severe will the unemployment be.

Murray N. Rothbard, Mises.org

 

[mercury14]

Now, PROVE IT! or you are still a fucking liar.

WHERE ARE MY REMARKS SAYING THAT WHICH YOU ARE ASCRIBING TO ME!!!

The dire warnings were pretty much on target.

Shrug. Took me 5 seconds to find that example.

 

[4est_4est_Gump]

Oh so you were just bumping a thread with 22,000 posts? The most heavily-trafficked thread ever on Literotica needs bumping.

Would you like me to quote you in your own words supporting pastes like this? I've got them open right here in the next tab over.

Still cannot admit that you are lying by ascription.

We get that and we see that.

Back on ignore until you can prove it.

 

[mercury14]

QE3 will fail like QE1&2


Murray N. Rothbard, Mises.org

Is this your own thought or something you will not take responsibility for?