American government has gailed to nothice that time is going on changing. We must have bring good jobs to provide the middle class with a proper income growth and must have planned to improve the efficiency of our economy.
---------------
Stellathomas

MLS

The classic novel, Brave New World, was first published in 1932. The author, Aldous Huxley, conveyed the possible events that would take place if the government took complete control of our daily lives. He wrote in reflection of his own surroundings, of how his hometown of London may look in the year 2540, if they continued with the programs to end war, divergence, suffering, and unreceptive ruling. It defines exactly how everyday lives would be like, with no ability to utilize their voice or live the way they choose to live. This brought a large number of criticisms knocking on Huxley’s door. Conversely, many of the same seeds have been planted in America, which have created a similar scare as was in the classic piece of literature. Although the socialist and the communist movements have been around for several generations in America, it hasn’t taken much prevalence until this one. It’s preposterous that politicians are trying to put a great number of things under the exclusive control of the government. Let’s take the state of California for instance. In some parts of Los Angeles, dishonest officials have put restrictions on various areas, forbidding where fast food restaurants are allowed to set up new shops. That’s right. You can’t have a hamburger in certain places in South Los Angeles, whether you like it or not. On top of the petty matters they base their focus on, they intend to stretch out even further and conquer more than what they currently control. State and national politicians are trying to remove the admission to fast and easy payday loans, only to assemble enough votes to carry out their own self-interest. Undoubtedly, this further proves our government’s intention to stringently control our daily lives.
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America and Capitalism are both based on the freedom of choice. We as Americans and Capitalists should have the financial freedom to choose how we use our money, and we should be able to choose where we get a loan. The fact that certain states are banning a financial resource such as the payday loans industry is ridiculous. These states are taking away the availability of a loan to those who need money quickly, who don’t have the credit to attain one from a bank, who only need a few hundred dollars loaned instead of thousands. Don’t let the legislation take away your financial freedom and vote for your rights as an American citizen.

Being misinformed can lead to disastrous results especially if you are making crucial decisions based on skewed facts and false information. The advantages and disadvantages of payday loans are often misconstrued. Many politicians across the United States are making an effort to pass legislation that would limit or completely abolish your ability to get a payday loan. Sad to say, the anti-payday loan legislation has been passed in some states, and there are many states that are beginning to follow suit. These new laws are foolishly based on the supposition that payday loan companies utilize the same poor ethical standards as predatory lenders and illegal loan sharks. Your financial independence relies on the knowledge of the American people. So don’t be misinformed on the facts and don’t let your friends and family be misinformed either; share what you know about the advantages of the payday loan industry.

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Had a senior moment there, which means I am stupid. It wasn't Barnes Nobel, it was the wealthiest and most prestigeous brokerage firm on Wall Street.

America desperately needs a leader who is willing to set aside partisan sound bites and support innovative policies that will make a real difference in the lives of Americans. Our government has failed to notice that times have changed and that America can no longer afford to keep shooting itself in the foot. We need incentives to bring good jobs back to America, a plan to improve the efficiency of our economy, and serious action to provide the middle class with the real income growth that they have been deprived of for the past 30 years. One simple, powerful and viable proposal is set forth at www.sharedeconomicgrowth.org. I hope that enough people will demand action on such proposals that we can make the politicians act before it is too late - and we end up with a nuclear nation in a depression and feeling nationalistic.

We had a pre-Christmas dinner party last night with a large gathering of friends. Three of the ladies pesent are in their 80s. During a discussion of the depression of 1929, they told of how difficult it was to have a variety of food, even though they all lived on small farms. They said that they frequently ate rabbit stew, muskrat and o'possum pie and a lot of sourdough bread, catfish and yams.

They never went humgry, but they are certainly concerned about another depression, because they don't live on farms anymore. The small farms are about gone, neither do a 'whole lot' of Americans live on a farm now.

It's going to be very nasty for those who aren't able to trap muskrats, rabbits and o'possum, catch catfish and have the flour to bake bread. Our cell phones, I-pods, SUVs, digital TVs and computers are not food. ___ Food for thought perhaps.

Try to purchase solar panels made in Germany, about the only decent ones available.

Because of the weakened dollar, they won't ship them to American distributers, just another clue of many.

As of this morning, China owns 10% of Barnes Nobel. They had to sell it to them or go belly up. __ And some don't believe we will have a depression. ___ The clues are obvious.

cyboman1
Your comment sounds strangely like GWB telling us "Don't worry, the economy is in fine shape." You don't really believe that do you?

KEM PATRICK - I've read your posts and they're very interesting. I see you wrote how you were a youngster in the Great Depression. My parents were too - it was incredibly traumatic for my mother, who had to move from apartment to apartment when the rent money ran out - many families did this. Once, she remembered, her family moved to an apartment with an abandoned piano there. It fascinated her as it would have any child and she sat on her dad's lap and they played it together. But then in the middle of the winter her father - my grandad - had to break up that piano for firewood to keep the apartment heated.

But no depression is coming; the U.S. economy is not terribly sound, but it will remain functional - at least until our latest wars stop and the highly inflationary military spending to support them ends. Also, China's economy will slow as all economies do, and the shortages of energy, precious metals and food being exploited by speculators will then subside.

Many people dispute over why the Great Depression happened, as I am sure you already know. (I assume the Great Depression of the 30s is the one you are speaking of - not the Reagan Depression of the early 80s, which is sometimes described as a recession, but which qualifed as a depression for about a year.)

But the fundamental mechanism was that people stopped consuming - possibly starting with the loss of their savings and investments in the Crash and the bank failures of the early 30s - a massive "destruction of mass purchasing power" in an environment in which income was drastically maldistributed. Even though incomes today are skewed in the direction of the richest, nothing remotely like the early 30s is in the offing, though the Wall Street crowd likes to raise that specter for its own self-serving reasons. (There are also responsible folks who hark back to the Great Depression in order to urge the need for a return to better regulation of the financial markets, and for a return to closer oversight of the banking system in particular.)

It's possible to oversimplify here but, basically, demand plummeted after the Great Crash as billions in paper wealth were wiped out, and many people could not be kept at work, taking in an income - and because they could not do that, even more people could not consume at previous levels. Because they could not consume, a vicious downward cycle - a deflationary cycle - of increasing unemployment, decreasing consumption, and more unemployment.

There will be no depression next year or anytime soon thereafter because if one threatens, people can be kept at work - that is where the wealth is, of course - in people, in us, in our skills and in our work - not in money or in gold or in precious metals, but in our human labor.

The sum total of my points then is (1) that a panic is being created for no ultimate good reason, since there are many remedies central bankers, financial capitalists and corporate capitalists and governments have learned in the past 70 years, if and when the true wealth creation process stops.

And (2) that in this panic billions of dollars are being made out of a temporary freeze up of interbank "liquidity" and a temporary glut of homes for sale, by the very same financial thimbleriggers who brought about the housing bubble, and the sub-prime debacle - and who have hyped since June of 2007 the exaggerated, but temporary, financial panic we are being forced to undergo.

Best for the holidays to you. Once more: unscrupulous financiers make money in panics as well as in bubbles - even in the panics they help to generate. And that's my last post to this thread!

No wonder to me that your prior posts were permanently pitched CYBOMAN 1.

I do Believe Mr. Krugman is quite credible as a so called leftist, middle of the road liberal, or a progressive, or a man who displays a high degree of intelligence, honesty and common sense and no gereralized labels need to be attached.

He also may very well have his name carved in one of the restaurant tables at the Nassau Inn. That accomplishment of course reflects neither liberalism, or any other rather useless terminology such as you seem to believe is of importance.

My posts of 1:03 pm December 14, 2007 and of 8:13pm December 13, 2007 have been removed from this board - both were pointedly critical of Paul Krugman as an authentic progressive voice; both pointed up the currently surreal political and economic mileau in the U.S. - a mileau which, in my estimation as stated in those posts, Mr. Krugman is an witting, if perhaps unwilling, participant in perpetuating.

And both wondered about the future of American economic life when a handful of hedge fund and investment bank "geniuses" can rake in billions in fees while they shake down central banks for more handouts after previously having helped to wreck the household balance sheets of milllions of Americans. .

I'm surprised - but not shocked really - this happens often on "liberal" and "progressive" and even some "left" talkboards (never in my experience on authentically libertarian ones). "No problem" - as some friend of mine likes to say - I've retained copies of those posts - along with screenshots of them - and will send them along to friends and acqaintances of mine who are authentic "progressives" so as to apprise them of just what constitutes "thought crime" on a Commondreams talkboard.

(More and more I notice that it is libertarians, not liberals, or so-called "progressives" and "libertarian leftists" who value freedom of speech and opinion as nearly absolutely - and all our Bill of Rights guarantees - as they ought to be valued. Either one or both of those posts would have remained, for example, on the haloscan talkboards at informationclearinghouse , a news site whose founder appears sympathetic to libertarians and libertarianism. )

Both those "expurgated" posts of mine of December 14 wondered how the $5.7 BILLION - figure supported with links to two financial news articles - made by speculators betting that the sub-prime crisis would happen when it did - how $5.7 BILLION raked in by just a hedge fund and a major investment bank could have been made ethically in a financial environment in which said hedge funds and investment banks were screaming for huge handouts in the form of ready cash from our central bank.

One of those posts, the second, wondered whether, with fees of that size at stake, at least some journalists - I excluded Paul Krugman specifically - might be taking money to "gin up" a panic or make an existing one worse - since journalists were paid off in the highly speculative stock market environment of 1920s - an environment like our own in 2007, in which a handful of insiders enriched themselves while impoverishing other unsuspecting investors .

Both of my December 14 "thought-crime" posts wondered why Paul Krugman never, ever had anything to say, critically or otherwise, about speculative international finance -as embodied in the predatory activities of the world's 9000 hedge funds (many of them headquartered in the New York City area) and the major mega-sized investment banks, and the hardship those financial speculators have been giving to millions of Americans household balance sheets with their economically sterile, and frequently damaging, financial activities - not to mention the harm they are doing to the economic fortunes of many more millions of poorer people around the world.

Both of those "expurgated" posts of mine wondered why Paul Krugman, an economist I deem to have a 19th century outlook on how modern economies should be controlled, belongs on a "progressive" website like Commondreams.

And one post pondered aloud what would happen to the false "empathy" of establishment liberal institutions like the New York Times once Rupert Murdoch begins competing head-on with the Times, as when he starts adding regular news content to the Wall Street Journal. And, especially, when he makes the Wall Street Journal free online, as he is expected to do any day now.

Lest some readers interpret my comments on Rupert Murdoch - a man who is one of the world's greatest hazards to the future of free expression - in the first December 14, 2007 1:03p.m. post- as approving of him and his operations, I was going to elaborate on them before this thread gives out, with another post and some supporting links showing how "chameleon-like" Murdoch could be - the links would have shown how Murdoch could strike a socially concerned, empathetic pose just as easily as any daily "liberal" newspaper.

But why bother when this very post - for all I know, another possibly "dangerous" post -- might disappear from this thread in the dead of night, overnight - or, as in the case of the two I mention here - after the elapse of several days?

So, I wonder again, just how "liberal" is the "conscience of a liberal" if that liberal is Paul Krugman?

And, just how progressive - and freedom loving - are the "dreams" dreamt by "Commondreams"?

One wonders, also, if the economy is so top-heavy that the very top can weather out an economic downturn for several years, keep people employed -- even in non-productive capacities, etc. -- just to keep them out of trouble, so they can put food on their plates, to minimize radicalism, etc. That is, they'd stand to lose much more than short-term profits if people began to embark on identity/class politics, their own identities.

Paul Bramscher at December 17th, 2007 11:27 am

You are right: "Certainly there is gross foolishness or apathy in that bottom 80%, and this has an aggregate effect."

This is "custom" - "the way we do things here" - at work in a negative way. People - we people - tend to copy others and simply to continue to do what we and others do - and to ostracize those among us who urge rebellious action - even when with a little ingenuity or "push" we could make things better for ourselves.

Darwin noticed this in relation to a naturally punishing environment, with the inhabitants of Tierra del Fuego during his "Beagle" voyage around the world. The locals could have easily improvised bodily coverings to protect themselves from the "rude and boisterous elements" but they didn't.

Check out this Google books link to Darwin's "Voyages of a Naturalist" http://books.google.com/books?id=DYM0AAAAMAAJ&pg=PA260&dq=Darwin+A+Naturalist%27s+Voyage++coiled+up+li...

for Darwin's description of what I am speaking of.

So, if people continue to do what they've always done in regard to nature itself, why should it be any different in the man-made world?

People have struck back at their exploiters and even their destroyers only rarely in history, and then often under the most extreme provocation.

Hundreds of thousands of Russian soldiers had to die in the trenches of World War I before Russian soldiers finally turned their guns on their own military commanders, beginning the ill-fated Russian Revolution.

That is not an exaggeration about suitcases full of practically worthless paper money in Japan and Germany. I agree with you to put your eggs in different baskets. When the depression hits, be prepared for absolute mayhem___ all across the country. The Morman communities and those who live in the Appalachian like areas may be the best off.

Kem, "After the Second World War, people in Germany and Japan had to have a suitcase full of PAPER CASH to purchase a day's supply of bread and eggs" Wow! That's certainly grim.

Frankly Kem, admittedly I'm not sure about anything, but I'm willing to put my eggs in a lot of different baskets just in case. I absolutely agree that food, water, weapons and a safe place are a necessity in any event.

Site to rate your bank: http://www.thestreet.com/tsc/ratings/screener.html

I recently read a book How to Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression. Very interesting book however, I'm not sure how accurate, but it included a short List "Do's" and "Don'ts". Here are some of them:

Don't:
• Generally speaking, don't own stocks.
• Don't own, any but the most pristine bonds.
• Generally speaking, don't invest in real estate.
• Generally speaking, don't buy commodities.
• Don't invest in collectibles.
• Don't trust standard rating services.
• Don't presume that government agencies will protect your finances
• Don't buy goods you don't need just because they are a bargain. They will probably get cheaper.

Do:
• Fight the inertia that will keep you from taking action to prepare for the downturn. Start taking steps now.
• Involve your significant others in your decisions. Put your home or business partners in tune with your thinking before it's too late.
• Think globally, not just domestically.
• Open accounts at two or three of the safest banks in the world.
• Own some physical gold, silver
• Have some cash on hand.
• Make sure that you have insurance policies only with the safest firms and make sure that they deal only with safe banks.
• Sell any collectibles that you own for investment purposes.
• If it is right for your circumstances, sell your business.

Cash is the only asset that assuredly rises in value during deflation. One safe "parking place" for capital during a deflationary crash is cash notes — for example, $100 bills, £50 notes or the equivalent in your home currency in a safe depository that you can always access. That way, you will have money if the bank fails, you will have money if credit collapses, and you will have money if the government defaults on its debt. I suggest that you have at least some currency on hand if you expect a deflationary crash.

cyboman:

The problem as I see it is that D.C., the banks, etc. are run by a small cadre of inbred elite and while they are good at keeping their power short-term, they are totally clueless and/or unconcerned about real sitations affecting the great majority of Americans. Certainly there is gross foolishness or apathy in that bottom 80%, and this has an aggregate effect. I've often wondered how slave owners, Stalin, etc. could keep large numbers of people imprisoned -- without them binding together in a hive intelligence/organization and deep-sixing their captors. The collective tolerance for being shafted among the bottom 80-95% is their own folly. The inbred and insular nature of the very top, which may produce reptilian intelligence but not a shred of wisdom, is the their self-undoing.

Kem Patrick,

Probably the best education to be had today is nothing more than real-life experiences, travel, public libraries, the internet -- and a keenly curious mind. My respect for academic credentials declines yearly, especially when I see how power/politics trumps all else.

What I meant to suggest earlier is that we are ultimately depdendent on nature's bounty, and the natural productivity of people. The megacorps have reached higher scales in agriculture -- but they've clearly gone too far. They have narrow pipelines of processing, packaging, etc. such that a little bit of contamination means throwing out many, many tons of produce. I don't believe that our choice is this idiocy or starvation. On the contrary, there are almost always natural & sensible balances at which societies reach their so-called "carrying capacities". The ability of a culture to obtain enough food to feed itself.

Our current way of life is non-sustainable in many ways, and what may be around the corner is proof of that. But what is non-sustainable isn't nature, or people's willingness to help one another. What is non-sustainable is the ability to incessantly expand, runaway capitalism, paving fertile land, putting small farmers out of business, speculating rural land into the stratosphere so that nobody can afford it, GMO'ing or spraying our way out of trouble, etc. It's all screwed up.

To anyone who's concerned, I would suggest looking into community supported agriculture (CSA's), tapping your relatives until you find someone who's married to someone who's married to someone who has a farm or large plot of land, consider moving to the countryside yourself, etc.

I'm not entirely convinced that silver/gold are the best investments either. Their current prices are based on the same bloat that drove IT and real estate into the realm of total unreason. I'd say your better bet is to gather a lot of useful junk. Things you can barter, things that people are interesting in having. Fill up a garage or basement with useful things you got at second-hand shops, thrift stores, etc. The other side of this coin, the new economy, is to learn a bunch of useful skills that you might -- in turn -- barter as service for someone else's junk that you need. I've taken up drywall, basic carpentry, tile-cutting & laying, electrical/appliance/computer repair, gardening, now dabbling in homebrewing and bread-making.

I heard a story from someone about their trip to a consignment shop, dropping off clothing to sell. The owner mentioned that a carpenter had been in recently and dropped off a bunch of good quality woman's clothing that he got -- in part -- for doing some work on an older woman's house.

There's an underground economy that's growing, and will eventually replace the above-ground economy. No hard feelings to the wealthy bankers out there, but the above-ground economy can only screw over so many people for so long, until they begin to manage their own transactions.

I'm still glad I'm here and so are my kids. If my parents ever used condoms, they never discussed it with me. And yes I do wish some parents had used them. In fact, Cheney's mother is guilty for not dropping him on his head. __ Ummmm, maybe she did and that's the problem.

You can't prove that last comment MILITANT. We just don't know who we may have been, or where we were before being born here. ___ We don't know.

"Aren't we pleased that our parents weren't issued condoms."

My parents did have condoms (not "issued" but purchased). And I am very glad, because there is a hereditary
illness in our family which causes babies great agony. So we only had to have one of those.

As to my own birth, of course if I had never been alive, I wouldn't miss it.

Don't you wish that some of our current leaders parents had been issued condoms?

Aren't we pleased that our parents weren't issued condoms.

Driving all the misery -- no food, no water, no air, no wildlife -- is of course the unchecked population explosion of PEOPLE!

If instead of arming ourselves, stockpiling canned goods, etc. we decided to try to stop this, we might have a chance.

Think of the misery we could address if we assured that women in cultures where they have no right or ability to control childbearing had a chance to restrict it.

It is convenient indeed for our government to support the RC Church by imposing the global ban on US money going for abortion. Women bleeding out their lives to produce children who themselves become cheap labor and produce more children who themselves become . . . . . . The status of women and children is the true measure of regress or progress. Trying to increase food production, protect water, and so forth is ridiculous without population control. It is like running up a down escalator -- eventually you just get too tired and fall down.

Delivering mass quantities of condoms and other BC methods along with trained personnel to explain their use could prevent so much misery. The existing resources just aren't able to do the job. The most tragic words in Abrahamic scripture is the command "be fruitful and multiply".

I'm dunking my pocket watch in my tea, but somehow it only reads yesterday or today:

There is no Tomorrow

Maybe I'll ask the Queen,
as there are too many already that are "Mad and Hate" R freedom S

Namaste … … … … … … … … … … … … … … … … … Mahatma Gandhi … … … … … … … … … …
« We must be the change we wish to see in the world »
« There is a sufficiency in the world for man's need but not for man's greed »

you are absolutely right MIKE. It is also absolutly right to stock up on dry or canned food, seeds and have a good source of drinking water. The depression is going to occur. I believe by April or May of 2008.

Precious metals are not a stand-alone strategy, and you MUST physically have the bullion in your possession. When the lights go out barter will replace worthless paper money, but for those things for which you do not have what the other party needs, silver or gold coin can be used as a medium. I advocate Canadian silver mapleleaf coins for several reasons. 1 - Its face value of $5 Canadian for 1 ounce of .9999 fine silver is the closest to its spot market price of $15. 2 - The Canadian dollar has reached parity with the American dollar. 3 - When Bush stole the presidency an American dollar was worth $1.60 Canadian. The American dollar has fallen even below the value of a Canadian dollar recently. 4 - At $800 an ounce, gold is no where near its face value on any governments minted coins. 5 - It is also easier to buy $15 coins than $800 coins for most people.
Unless and until we return to a gold or silver standard, paper money's worth is dependent on how much of it is in circulation, and you can see the Fed dumping enormous amounts of greenbacks into circulation, the presses are dripping green ink, to try and prop up a failing stock market. And now more countries like Iran and other oil exporting nations are refusing to accept worthless American dollars as payment for their oil.
Get prepared, that's all I'm saying.

Kem, it may not be a bad idea to invest in gold and silver, but not just a piece of paper that SAYS you own so much gold or silver. Those who sell you such "investments" will most likely take the gold or silver (if they really have any) and run. The best thing any of us can do (and I'm sure Rebel Farmer would concur) is to become as self-sufficient as possible, and learn to make or grow something that we can barter with others. Remember, you cannot eat or heat a house with gold, and such precious metals will be worthless if real needs are not met first.

Thanks cyboman1.

I like your links.

Dom11 December 14th, 2007 10:00 pm -- Thanks much for your positive and thoughtful and critically corrective comments - not just on my post on this most recent column of Paul Krugman's, but also yours my rant on the last Paul Krugman essay, "Henry Paulson's Priorities, I mean at Dom11 December 12th, 2007 6:49 pm on that "Henry Paulson's Priorities" Commondreams thread, and just for all you have have written - they're all very thoughtful and socially-concerned posts also.

I believe Amy Goodman is one of the great journalists of our time, along with John Pilger and Robert Fisk, and Alan Nairn and others who would be totally unknown but for Pacifica and for Amy's shows and other Pacific programs. I have been encouraged by what I've found in Zmag down the years and especially what I have heard on Doug Henwood's WBAI New York Thursday radio show in the last five or so years - just about every one of those shows make interesting hearing and they are all archived and downloadable at Doug's site, www.leftbusinessobserver.com. Of particular interest is Doug's recent radio interview with the author of the "Richistan" book - he's a "Wall Street Journal" reporter.

In the early 1930s, a journalist Marquis Childs published a very prescient book on the Swedish (and Norwegian and Finnish and - in those days - Czech ) "Middle Way" - which of course is a pragmatic, non-ideological approach to building the elements of a good social order. It is not perfect, and involves too much of the government as a moral agent to suit our American tastes, but it is the only planned means I know of that can come up with an equitable society that has made a start on solving its social problems.

Franklin D. Roosevelt, as you can find on the Wikipedia article on Marquis (pron. "Marcus") Childs, said positive things about the book way back when it was published - but then proceded to compromise by producing a "rescue-capitalism-from-its-greedy-rescuers" liberalism we are stuck with today. This will have to change, and I think that Gar Alperovitz' "America Beyond Capitalism" http://www.americabeyondcapitalism.com/ points the way.

And it's a fine thing indeed that Commondreams helped to bring Gar's book to public notice when it came out.

I feel a bit of guilt about criticizing Paul Krugman when there are others with a late-19th century worldview similar to his - like Robert Samuelson of the Washington Post, who like Professor Krugman, pose as public sages on business and economics "As-If-People-Don't-Matter," and have a perhaps unwarranted reputation for profundity in their economic analyses (because they know how to crunch numbers on statistics), but who care even less than Krugman does about what happens to the vast majority of Americans who pull a paycheck for a living.

But these criticisms must be raised - we must not be intimidated by economists' pretensions to having the predictive and controlling skills of true scientists, which they don't - and as a certain Arnold said once (in a movie) on one of the few occasions when he's ever made sense, "I'll be back."

Gold is much better, but it is not a bargain. Silver is right now. Few will have either gold or silver if we have a depression. Of course you can't put either one in a blender and mix it into a pancake either. What will have real value is, a two year stock of dry and canned foods, some vegetable seeds, some weapons and a safe place to shack up for a couple of years. By that time, most of the gangs will have killed each other off, and it may be safe to plant some seeds. I can see a government of many seperate gangs with strong leaders all over the country, fighting one another for territory and water rights.

What comes around gets back where it was, KARMA. ____ Did I say that rite?

HI Paul, sorry but your last post was not clear to me. Of course I'm not highly educated.

My point was and is, there won't be enough food for the vast majority to eat when a deprssion hits. There may be plenty of oats, wheat and barley, but that won't stop people from fightig and killing for food after about a week. Hell, in any major metro area of this country, people now kill for money, cars, drugs, or just for the hell of it. You get mullti-millions without food and the government not being able to respond, 'like Katrina', the wars will begin and it will be all across the country.
Another thing, all credit cards will be frozen the day the crash occurs. Businesses will close, millions of people will be out of work, no income and right now the average American is living from paycheck to paycheck. It's gonna be anarchy, no matter what the governmnt does to correct it, local or federal, there is going to be civil war. I do hope that I am wrong.

To Paul Bramscher, December 15th, 2007 10:08 am

"Does anyone know of a good analysis of what various central banks in Europe, the USA and Japan did this week?"

Here's a good one, from BBC Newsonline - not always a good source of completely candid and comprehensive news on global finance, but this item is:

http://news.bbc.co.uk/1/hi/business/7141934.stm

The amount of money made available by this special multi-central-bank credit facility is paltry - but it is only a beginning. Note how a "wider range of securities" may be used as collateral. That means those suspect sub-prime mortgage credit instruments - written down in value, but still worth something - can be used by the banks to get money. This may work to get them to open up as to the degree of their exposure to sub-prime-tainted debt without the "stigma" (as bankers consider it) of "going to the discount window," and to improve liquidity in general.

If not - there are other rabbits the bankers can pull out of their hats until election day, November 2008. Our economy will only develop devastating problems when the huge stimulus it is getting from our overseas wars begins to subside - when those wars end- as they must - and military expenditures are cut back to pre-war levels.

What all this may amount to in a few months is a sharp drop in mortgage interest rates - which have already fallen to 5.85% on 30 year mortgages. As mortgage interest rates move closer to 5% that may help clear the very large inventory of homes for sale.

Of course, there are additional problems - like rising commodity prices. Many of those price rises are not due to actual shortages but to speculation by the world's mega-sized investment banks and its 9000 hedge funds.

That speculation cannot be shut down, but it can be cut back - by simply taxing non-commercial trades in those commodities. Some free-market economists (so-called) have claimed this will result in a black market. They are being intellectually dishonest - remember that there have been tight markets before in recent economic history - and they have not have dire inflationary consequences before the advent of those 9000 hedge funds and before the world's big investment banks became the masters, rather than the servants of what is called "the real economy."

The really big economic problem we as a nation have - a problem which is practically an obsession with conservative commentators like Paul Craig Roberts - who makes good sense when he isn't talking about income taxation and some other "utopian capitalist" themes that are favorites of his - is re-industrializing our economy in the U.S. so that U.S. citizens will have a government and an ecnomic system that works for their economic well-being, rather than against it.

And on that point, commentators like Paul Krugman - who is a decent chap, but mostly completely clueless when it comes to the real-world economics which concern roughly 80 % of Americans - have absolutely nothing to say and therefore no solutions whatsover to offer.

The Gift of the Magi

by O. Henry

Namaste … … … … … … … … … … … … … … … … … Mahatma Gandhi … … … … … … … … … …
« We must be the change we wish to see in the world »
« There is a sufficiency in the world for man's need but not for man's greed »

Buy Gold. Never , ever forget the gifts of the Magi. There's an esoteric truth to the beginning of every story.

KEM, the big difference between now and the great depression is in the reversal of the demographics. Back then 70% lived in the country on farms and 30% in the urban areas. Now it is just reversed with the vast majority living in cities and urban sprawl. Much of the good land has been paved over and sudivided for McMansions. Most of the farming is now done on huge petrochemical dependent megafarms run by the likes of ADM with genetically modified seeds and animals. The average travel distance of everything we buy, food included, is 1500 miles. And to make things even worse, America, which used to be the breadbasket of the world, is now a net food importer. Things are going to get really ugly really fast.

I find that buying anything when its at an historical high is a severe risk.

Kem,

If what you say is true, the only sensible thing to do right now is to probably move to some place like New Zealand, Greenland (it'll be getting warmer, if the scientists are correct), get a bunch of guns, and learn how to handle a flock of sheep, farm, etc.

But I don't see a hyped-Y2K scenario here. The ability of mother nature to cause wheat and vegetables to grow is not dependent on the grid. On the contrary, the modern economic grid is a parasitic layer resting on top of this, reliant on nature's bounty, and people's ordinary productive natures. There aren't single points of failure where it really matters.

I do see a certain amount of hell breaking loose, a certain amount which would be completely preventable if sensible people would course-correct us right now. But those who stand to lose the most will be those who have the most to lose.

MIKE BInSC That is correct, right now silver is a bargain, it will not be for very long.

I know SANDY, was kidding you. "In my sock" is another depression expression.

Kinda sad how so many seem to believe a depression will just be a real bad time. I was a child during the last depression and indeed it was a bad time. There was little money, but there was ample food. There will not be this time, those literally millions of small farmers with 20 to 40 acres are history. The truck farmers of New Jersey and California who often tilled just a couple of acres are history.

During the depression, those who lived in the cities could go to a farmers market at the end of the day and purchase a whole bushel of vegetables for a dime. A chicken was 15 cents and a turkey for a quarter. People canned and dried food, everyone made home made bread, unbleached flour was a penny a pound.

Few starved or even went hungry. Not this time. This time our supermarkets will be empty within days and will not be restocked. If they have food, it won't be for a dime a bushel. Within days there will be armed gangs roaming, looking for food, money, anything of value and anarchy will ensue within a short period of time. That is when the killing and rioting will begin. It won't be like 1929 thru 1937. There aren't enough military and police to stop it, besides they will need food and milk for their babies too. It will be Katrina in New Orleans, magnified 30,000 times.

When the depressin hits it will come like a speeding bullet and that's how it will end too. There won't be a United States anymore. Very briefly, that's how it will be, anarchy and racial rioting almost everyplace. Any small farmers left will have to band together for protection, for the street gangs from the cities will be preying upon them.

Get your money out of the stock market. Move it to an interest bearing money market account. You can do that in most 401k plans. The market is going down and is about to be starved for investors money. As the baby-boomers retire, their money is coming out of the stocks in favor of more secure investments. This is why the Bush crime family pushed so hard for the fat-cats on Wall Street to privatize Social Security. They know that investment capital is drying up. The only money going in now is from the Fed and foreign investments buying up America, like the tens of billions pouring in now from the middle east countries into financial and chemical companies. Think about buying some precious metals. Right now onof the best ones would be Canadian Mapleleaf $5 silver coins. They only cost about three times their face value for an ounce of .9999 fine silver.
Visit this site -
www.economyincrisis.org

What this means is:

First, don't buy stock in a substandard mortgage company. Example: Countrywide. Yes, some foreigners got stuck with the bad mortgages too.

Second, all the banks, maybe with a very few exceptions, maybe not, are shaky. They're relying on the government to lie for them. I don't think the whole stock market will go down but I'd short most banks. The same goes for all brokerage firms that just fired their CEOs because of subprime mortgages. Idiots.

Third, if you own a one family house, enjoy it. It still beats renting. If you have marginally performing income property, sell it now. Don't be a pig.

Fourth, your government can't ever pay off its debts. I'm expecting stagflation. Not post-Indochina stagflation, worse.

KEM PATRICK December 15th, 2007 6:37 pm
SANDYK77, under your mattress? ___ BTW, where exactly do you reside?

I'm not telling you, you might come and take it!!!

The mattress is an expression like in the Godfather movies. That's an old Depression era slogan - it means I have my cash available at home and not in a bank which could fail. Many good people lost everything in '29 because they put their trust in banks.
When I look at the deficit spending we owe to China financing Georgie's war debt and the knowledge I received from my Depression era parents my mattress looks pretty damn good!

I hate to be so uncharacteristically optimistic but in ol Jerzey here we got lots and lots of folks already here and arriving every day who will buy houses at cheaper prices. The housing market here is far from doomed if you ask me.

SANDYK77, under your mattress? ___ BTW, where exactly do you reside?

How true. The CEO's are not the "Captains of Industry", but rather the "Pirates of Wall Street".....Arrggghhh
Speaking of religion, politics,war and the Federal Reserve System, check this out -
http://video.google.com/videoplay?docid=5547481422995115331

Ephraim, I stand humbly corrected. Brian fart. Don't know where Yale came from. I 'spect Princeton will do as well though. The Richfilth Rule is always the same: "Do the crime. Pay the Fine. Take the profits." That's what they teach the spawn of the Richfilth. When their daddies OWN the Politicians and through them the Law, the Courts, and the Judges, it's all very easily done. Just like always.

In all these discussions of economics, politics, ethanol, food, and the exercise of POWER, there is one salient historical fact never to be forgotten: Not just our Richfilth today but our Richfilth for the last 3000 years have always been ready to see us starve for their wealth and privilege while blaming us for the calamity, using their benighted armies and secret police to oppress us, all the while invoking the blessings and the name of some flat-earth genocidal blood god for justification. Always. These psychotic animals are a disgrace to the animal kingdom and organic Life will only survive these creatures by putting them down. Period. Tell'em Gaia told you to do it.

Pieces of 8. They were always pirates. Arrggghh.

bbr-001
The problem is, that will not reduce C02. It just allows those with money to use the remaining fossil fuels as they see fit, and that won't be to feed and take care of the rest of the people, because by and large, they could give a sh_t less what happens to the sheeple.

Mike:
If that's what it takes to reduce CO2, let the rich farts have their money. A new world will emerge, and they will be irrelevant and their money worthless.

The depression is being manufactured by the ruling class to mitigate the effects of peak oil on their lifestyle during the long emergency. It's kind of the same way turning 500 pounds of corn into a tank of fuel for an SUV takes away the entire food source for 1 person for one year. Those without lots of money will always suffer the consequences.

I remeber a quote from a working family guy whose good job went off shore. "I can't find a job that pays more than $10.00/hr, and I can't find a house that costs less than $250,000". A lot of that going around.

If there is an up side to a depression, it will slow CO2 emissions. The amount of conservation needed to keep CO2 from reaching 450 ppm and the effects of world wide depression are probably about the same thing.

Many see small pieces of the puzzle, but few ever see the big picture.
The currency change is in the works already, just ask Lou Dobbs, it's the Amero that will replace the dollar along with shredding and burning of the last bits of the Constitution by the Corporate Neo-Fascists. There is a huge problem in the mortgage and banking business, with forclosures reaching record highs. And interestingly enough, the vast majority of the forclosures are NOT subprime loans. The housing market is experiencing the first national decline in value since the great depression, and individual savings rates are negative for the first time since the great depression. By the way, that was also the last time republicans were in control of all three branches of government.

lucky lefty, Krugman is at Princeton, not Yale. Otherwise, your comment is right on.

The ruling elite managed serfdom quite well for centuries without interment camps. They do this by maintaining prison dynamics embedded in the economy itself. They gain in wealth/prestige when the serfs are unchained -- just enough -- to work the fields, or whatever counts for them in the modern age.

With millions of Americans locked up in camps, who's going to work? Who's going to spend? It would also be a sure-fire way of galvanizing large-scale organized and militant opposition. Their technique has been far more subtle, tweaking the rules of the economy itself, to make sure that a critical mass of people never obtain enough real estate equity to pass it onto their children. They keep people just poor enough so each generation must run the treadmill to just to break even, stuck on the economic grid that works against them.

I agree with the second part of your analysis, though, that class consciousness is verboten. And in the rare situations that it is brought up, they are careful to sub-prime it. That is, they try to stuff it into a much smaller box. "Working-class" or "working poor". They don't include the (now endangered, if not illusory) middle-class as well.

Something Malcolm Martin said in comment on Paul Krugman's article got my attention. It was that internment camps were being constructed as part of keeping the working class-consciousness from mobilizing a "Boston Tea Party". Then, the citing of a Visa ad on TV followed Martin's comment. This all reminded me of George Herbert Walker Bush's move to essentially declare TV a public utility by regulating cable TV rates back in 1991. There is certainly a lot of strong arming going on, but mostly the working class-consciousness is being kept out of the streets and away from the gates by what is perceived by most Americans as a cultural imperative, television, drug of the nation.

Does anyone know of a good analysis of what various central banks in Europe, the USA and Japan did this week? As I understand it, we've had about a century of runaway usury and predatory lending -- which would be "fine and dandy" if it hurt only those who make poor decisions. But it also nailed responsible people by causing their property assessments to increase by double-digits for years, their home owner's insurance to rise, etc.

Rather than a nationwide round-up of the perpetrators or much stiffer lending rules, the managers of banks decided to essentially print more money. Correct me if I'm wrong, but isn't this basically insult to injury? All but guaranteed to cause inflation of prices, or devaluing of the dollar's buying power?

They nail us poor serfs coming and going.

MiMiCcS December 15th, 2007 2:00 am

"What this tells us is that homes are underpriced compared to 1990 when prices were depressed AFTER a housing slump in the late 80's.
It also tells us that housing prices are high relative to peoples ability to afford them, but not because the housing is over valued, but that people make less than they did in 1990 in real dollars."

It also tells us that "people" are "undervalued" and that feudalism is on the rise in this country.

According to Paul Craig Roberts, an economist who served as Assistant Secretary of the Treasury under the Reagan Administration: "Greenspan covered up the adverse effects of offshoring on the U.S. economy by engineering a housing boom. The boom created employment in construction and financial firms, and pushed up home prices, thus creating equity for consumers to spend to keep consumer demand growing."

You can read his article at http://www.economyincrisis.org/articles/show/1175.

Damn but it's easy to feel apocalyptic these days.

Know what drives me nuts? The chickens elect Colonel Sanders and get really pissed when they find themselves getting eaten. But then the wingers concentrate so much wealth at the top, the system collapses guaranteeing a popular swing back.

Of course, We the People once again wait until after hitting the ground before opening the chute.

Didn't Kurt Vonnegut write this novel?

Once China decides that they've sold us all they can on credit and begin to call in the bill, the price on EVERYTHING will go up. Worse, yet, there will not be any ready alternative, as we have shipped our production elsewhere (guess where?). Ironically, then, it will be those very so-called "American" Corps in another part of the world that will bring us to our financial knees--even a bigger slap in the face given that our tax dollars financed their betrayal!

"So keep them well fed, entertain them, give them their drugs and alcohol, keep them uninformed or confused with lies, incarcerate the wild ones, and they are harmless."

Their plan is working on Britney Spears! I shudder to think "who's next".....

What happened to my comment?

Woe to us poor critters. The problem with economic analysis is that it is based on government statistics, which are just lies. Those who read this site probably know they should question what they are told, but it is not always easy to get answers.

But I had a little time and found Krugman has some problems with his analysis. The main issue I have is his incorrect assertion that home prices are overvalued, and this is because he probably relies on the governments CPI figures.

The CPI figures are such a lie it is criminal, and it started in the Clinton years, another gift from the Greenspan virus. Inflation is a tax on the middle class, so they want to hide it.

http://www.shadowstats.com/cgi-bin/sgs?

You can check above link for more details.

Lets see how median home process compare with gasoline and wages from 1990, in 2007 dollars, using the pre-Clinton CPI methodolgy.

House 2007: 221,000
House 1990: 243,800 (92,000 1990)

Gas 2007: 3:00+
Gas 1990: 2.88 (1.09 in 1990)

Salary 2007: 38,000
Salary 1990: 53,455 (20,172 in 1990)

What this tells us is that homes are underpriced compared to 1990 when prices were depressed AFTER a housing slump in the late 80's.

http://www.realestateabc.com/graphs/natlmedian.htm

It also tells us that housing prices are high relative to peoples ability to afford them, but not because the housing is over valued, but that people make less than they did in 1990 in real dollars.

The control points are the price of gasoline, which has followed the real inflation since Bush took over, probably due to pressure from Big Oil, OPEC and Europe.

GDP is a sham as well, since it is overstated because of inflation not being recognized officially. The 4.9% adjusted for pre-Clinton inflation is about 1.4%. Another adjustment needs to be made for imports which inflate the productivity figures, and also GDP. Some estimates I read about indicated this could be equal to at least 1% of GDP, so we are probably less than 0.4% GDP, maybe lower.

Truth=Lie

The critters get it from behind again.

The Housing bubble is the Lie which has become the Truth. The Salary Depression is the Truth that we are told is the Lie. There should not be housing deflation, there should be salary inflation, at least there should be if the government statistics on the health of the economy were the Truth, which sadly, they are not.

So what is going on?. Remember Brezinski (co-founder of the Trilateral Commission and former NSA adviser to Carter who created Political Islam in preparations for the end of the Cold War)? He wrote in his book in 1970, Between Two Ages, on page 300, relating to the economy of the New World Order and it's impact on Americans.

"1. A new monetary system replacing the American dollar
2. A reduced standard of living in order to achieve it."

We have the reduced standard of living, although it has not hit bottom. The trigger for a new currency will probably be a Depression or War, or both. But Krugman would be out of a job writing stuff like that. Can't alarm the critters. They can bite, but good thing they are so gullible. So keep them well fed, entertain them, give them their drugs and alcohol, keep them uninformed or confused with lies, incarcerate the wild ones, and they are harmless.

Batbird December 14th, 2007 12:45 pm
AHHHHH!!!!!!
Can someone please tell me when to sell my mutual funds before they disappear?????
Panic.

I think the time is NOW. I'm cashing all my assets out and putting my cash under my mattress. Laugh all you want - China now owns us via our enormous debt and the Chimp has another year to add to that debt. The dollar will continue to fall against the Euro.
I think the Fed will keep the US afloat for the next year but once the election is over or Numb Nuts leaves office we will begin to pay for his policies.
But, hey, by then he'll be at the Bush compound in Paraguay laughing all the way to the Swiss bank to collect his war profits - laughing at the stupidity of the dumb fuck Americans who bought his utter bullshit.

BTW some of these posts are WAY too long. Get your own blog site, condense yourself or STFU!!!

I see Paul M Smith has blogged. Good idea to listen to him, discovered he and Rebel Farmer know the score.

Yikes, I have no survival skills; I guess I'm just dead meat. Well, I already knew that I couldn't take it with me.
I can see a possible perfect storm, or harmonic convergence, of catastrophic events befalling the U.S. and the world in general: decline of oil, climate change, water and food shortages, increased war and migration. Billionaires will be made and destroyed. Corporations will fall on their own or drag whole governments down with them. It will be the end of times, it will be the beginning of times.
The best values will be land, and Latin America, which had the good sense to divorce itself from the World Bank/IMF cabal and take charge of their own economies.

cyboman1

Rupert Murdoch give people the straight news? Are you out of your mind?

Gail: You and all the other regular people are going to pay for it with a massive dislocation of the economy. All of the regulations and laws that were put in place after the crash of '29 to make it so that wouldn't happen again, have been gutted or repealed. My hunch is that we are facing something a lot more serious than a recession.

All the chess pieces have been put into place. It's taken over thirty years, but the corporatist finally got what they wanted. And they will come out of this smelling like a rose. Not to mention the foreign interests that are buying up American assets in a feeding frenzy on the falling prices and valuation of the dollar. Not to mention the fact that it is going to more profitable for American companies to export goods, including food. That means that Americans will be stuck with paying for imported goods at a premium. Oh, and did I forget about the impact of oil in this whole mess?

The only thing any of us can do at this point is get prepared for the long haul. The depression is coming. Don't know when, but I give it about a year to come to full flower. But you better start now putting your $$$ in some tangible goods for yourself, friends, and barter. This could get very dicey.

There is 45.5 trillion of outstanding credit risk in junk bond markets.
The exact amount of "toxic waste" is unknown but same principles were applied as with the "housing crisis". No oversight, repackaging and selling of the risk downstream, huge fees for everybody involved.
This one is about to explode and the scale of it is dwarfing housing bubble by an order of magnitude.

Link:

http://www.fxstreet.com/futures/market-review/outside-the-box/2007-11-27.html

Cyboman1 mentions certain investors making huge amounts of money by betting against the markets. Basically, making money out of other people's misery. It's criminal. I agree. Financial sector "airlifted" itself from the real economy long time ago. Reality is for "little people".
Above article that I linked to might be a prime example. It was written by a seasoned investment analyst. The guy is probably "shorting" everything except gold and oil.

Still. It does not mean that he's wrong in his analysis.

"On Wednesday, the Federal Reserve announced plans to lend $40 billion to banks."

That would be on top of the $240+/- Billion they have already pumped into the system? I can't speak highly enough of this maganimous gesture by the "privately owned" Federal Reserve Bank that uses taxpayer's money in their lending practices to save Wall Street from collapse after they bundled and sold some of the worse toxic shit on the planet!

Why is it that we never see a socio-economic analysis of the devastation that Wall Street's "addiction" to money has created over the decades?

During the S&L Scam of the 1980's, tax payers footed the bill to the tune of $580+/- Billion. How much is this f-king mess going to cost us while the wealthy continue to get their tax cuts?

There is much more housing available as a result of the bubble. These houses will not be bulldozed, they will be available to the highest bidders. Prices of houses will come down. Cost of renting will go up but not because of this (unless these houses lay empty which is not likely). A massive transfer of wealth took place but exactly who benefited and who lost is supposedly not known yet. Certainly developers, real estate agents, mortgage brokers etc. made money. Losers were the entities which purchased the packaged mortgages. Many of these purchasers were overseas. Isn't it more than a little ironic that the people who were supposedly so frustrated, angry and disapproving of the economic and foreign affairs of the U.S.A. had no moral objection to purchasing financial instruments from the U.S.A when they thought that they could make a bundle of money. People who borrowed money on the increased equity of their homes, which has now evaporated or is in the process of evaporating, at least got to go on really nice vacations and may still have an SUV or a couple of ATV's in the driveway, purchased with the borrowed money. Our civilization is headed for a cliff but this 'crises' will not be what breaks us; it is just a symptom of our shallowness and duplicity.

People, you must realize that this economic situation is the DIRECT result of 8 years of Bush policies.

Ask your self if you are better of now or 8 years ago. (Still a great political question)

The fed creates money by creating debt (it loans banks money and the banks must repay it, banks in turn loan money to their clients and if they need to pay back money they borrow it from the fed[that's today's problem]]). The fed can create as much debt(money) as they want. Greenspan created tons of debt(money) during his tenure. But all this debt reduces the value of the dollar and U.S. assets.

In the past, the Fed always was available to back up banks and thus ensure the stability of the financial system. The side effect was that bank CEOs took on inordinate risk since they could get a big payoff if it paid off but the bank was protected on the downside, if it didn't pay off. Everyone caught on to this. So if every bank takes on very risky business, like teaser mortgages, the ability of the fed to rescue the banks comes at a steep price - the further devaluation of the dollar and asset. Translation: everything is going to cost way more in the future.

Welcome to George Bush's America.

Everyone interested in how the Federal Reserve operates should go to video.google.com and type in "Freedom to Fascism".

Watch the movie and you will see how this private bank (that's right, NOT part of the government, despite using the title "federal", like Federal Express) stole the monopoly over creating money from thin air and printing it from Congress, which has the constitutional right and authority to print bank notes WITHOUT INTEREST to the average American taxpayer.

The Fed doesn't actually 'print' money, the US Mint does, then the private bankers purchase these 'notes' through the Fed at the rate of about $1,000 per billion dollars. This billion in created from virtually nothing 'asset' is then leveraged into $15 billion in loans that draw interest. Not a bad return on a grand, eh? Want to see more? Go to:

The FED must go: http://www.justiceplus.org/bankers.htm

RE: Malcolm Martin December 14th, 2007 12:27 pm

Great post, Malcolm, very organized, well written, and you covered many important crucial points. Why are we 'waiting', though? What do you think we can do to be pro-active instead of just 're-active'? Let's speed this process up a bit.

This is the second time I've heard Krugman echo The Talking Heads. You may ask yourself "How did I get here?"

It's all about the oil folks. Has been for decades. The economy isn't going to fold because of the sub-prime nonsense. It's going to fold because oil is the basis of our economy and it is going to do nothing but rise in cost. That alone is going to effect the cost of EVERYTHING. Then, of course, there is the impact of peak oil and a climate crisis that is pretty much unstopable.

So, I've come to the conclusion that this catastropy might as well happen sooner rather than later. And by my calculations, we have less than a year to prepare. I think Paul is right that there will be a lessoning of economic turmoil prior to the elections in '08, but that will only be a breather. Our economy is unsustainable by any measure. Unfortunately, this freight train left the station a long time ago when corporations could make money on money instead of actually providing a useful product based on labor. Now the wall of disaster is just closer and the train has picked up an unstoppable head of steam.

In preparation I sold my farm, took the proceeds and prepaid on a two year lease back. I've prepaid my utilities, health insurance (COBRA), and invested in all the essentials that I will need for a two year run. And I have talked with most of my neighbors about what I see coming. I will be working over the next year to set up community gardens and buying open pollenated seeds to put into the ground collectively. I'm also looking around for water sources that are not dependent on oil imputs. Access to water is going to become a critical issue.

Look, we're all in this sinking boat together and we all have to bail collectively. Nobody is going to be able to do this alone. We have to reestblish the commons and work together as communities. Besides, you might even like your neighbors, even if they are republicans. It's funny how survival can bring people together.

Peace

Establish a Federal 'Credit' Insurance Corp.

.
2006 Wall Street bonuses; $25 Billion. 2007 Sub prime losses: $25 billion.

As the big boys on Wall Street direct trillions in capital flows to derivatives, rank speculation and the latest hot packaged products like sub-prime mortgages they whet their beaks, like the mob, at every turn.
Why not place a one one hundreth of a per cent tax on these flows to fund the financial and social dislocation costs caused by the the financial industry's recurring greed driven excesses?
It would be a manifest boon to American workers who toil at multiple jobs to create this capital and certainly smooth out a glaring economic pratfall.
The banks and major financial institutions go on binges as a matter of their nature. REITS, Latin American lending, S&Ls;, hi-tech bubble and now sub prime loans have each wiped out an enormous amount of the financial industry's equity capital. To rebuild equity, subsequent financial instruments such as car loans, mortgages and credit cards must carry higher profit margins. Thus Jane and John Doe have to pay a penalty to rebuild this equity base.
We know these binges occur and have a deposit insurance mechanism in place (the Federal Deposit Insurance Corp -FDIC) which forces the bankers to set aside emergency money so that the deposit base of banks and their customers will not evaporate.
Likewise we need a Federal Credit Insurance Corp so that when these binges wipe out financial equity there is a source of credit (i.e.loans) available.
Banks do two things. They hold deposits and they offer loans. We insure that these bingers will not take American's deposits with them as they go bust from time to time. Why not extract a minuscule fee from each credit offering in order that the availability of credit will not be so totally hemorrhaged as to affect gross interest rates, the dollar's standing, prices and inflation?
--cognitorex blogspot com--

KEM PATRICK December 14th, 2007 3:30 pm ...China has most of it in the form of Securities. The real money...probably in Gold, silver, diamonds and land has gone to the Rothchilds, Bilderbergers et al for the past hundred years or so via our debt based money system. Legalalized usury via Congressional sellout long ago.

METAL DOG He is nominated by the President, because it is stupid to have it that way. And we are stupid.

AFTER THE MONEY'S GONE? The money is already gone. China has it.

Helix -- you're not contradicting Batbird. You're both right. The Federal Reserve *does* print money out of thin air, and the government does in fact borrow that money from the Fed. The Federal Reserve is not, contrary to common assumptions, a governmental entity. Which leads me to this, somewhat tangential question: Given that the Fed is not part of the Govt, why is the Chairman of the Federal Reserve nominated by the President? Anyone?

Batbird mentioned "Yes! They make it our of thin air! The Fed over the years has somehow been permitted to print paper money!"

Ahhhh! If only it were so! But, of course, it is very convenient in certain quarters for this myth to persist.

Yes, the government can print money, and indeed should print money to match the expansion of the economy. However, the Captains of Industry figured out long age that it's better for the government to borrow money -- from them! At the moment, those folks skim $200 billion per year right off the top of the U.S. Treasury in the form of interest payments on the Public Debt. I'm just going to guess that, in round figures, there are about 200 million taxpayers in the US, who are on the hook for those interest payments. On average, that's $1000 per taxpayer.

And these guys claim that they're opposed to redistribution of wealth via the tax code!!

You'll know the revolution is coming when the press suddenly falls in behind gun control measures. Get your ammo now.

As dismal as Paul's analysis is it's only half of the crisis, while housing values are falling the costs of energy and food are set to soar, a year from now there will be enough ethanol plants to convert every bushel of corn we now export into ethanol. The U.S. accounts for 75% of the world's corn exports. Converting that much food into fuel will cause food prices to explode (there's nothing like images of famine to cause food prices to skyrocket).

Meanwhile petroleum prices will probably double again from their present levels as increased world demand exceeds production capacity.

Talk of a recession from institutions like investment bankers is actually happy talk, a severe depression, like the Great Depression, is VERY PROBABLE.

Helix, J.P. Morgan died in 1913. The Great Depression didn't start until the early 1930's.

John R. Hall exhalted "I'll be happy as a clam when Wall Street crumbles under the load and corporate CEOs are standing in breadlines."

The problem is, it won't be corporate CEOs standing in the breadlines. It will be Mr. & Mrs. Average American.

Despite all those legends about Wall Street bankers jumping out of windows during the Great Depression, that's not what really happened. What really happened was that 25 million people lost their jobs, but J. P. Morgan became fabulously rich.

Really WILSHA? After the Second World War, people in Germany and Japan had to have a suitcase full of PAPER CASH to purchase a day's supply of bread and eggs.

If we have a depression, and we surely are headed for one, the signs are obvious, the only things of real value will be food, water, weapons, and a safe place to hole up for a year or two. After the killing slows down or stops, then precious metals will have value. They always have and always will. When a government is out of business, their paper currency is worthless.

Thank you Paul for the update. Let's see if I've got this: Trickle down America, 13.7mn-20mn families are evicted, all of those families will be looking for rental housing or apts. Big boom for the rental industry. Occupancy rates max out against available stocks (market forces), rents spike through the ceiling, renters at the bottom are "pushed out of the market" e.g., the rental market = homeless.

I wonder how many of us there will be. Not Paul Krugman, he's a professor of Richfilth at Yale - Yale ran full even during the Great Depression (Richfilth untouched by the Depression). Not "them", they will not be pushed out of the market, "we" are the ones forced out. Oooooppsie. Here's the Rule: Master never pays - WE PAY AND PAY AND PAY AND PAY until we have NOTHING and Master has EVERYTHING. That is what the Class War for 35 years has always been about - Wealth Transfer to MASTER by any means necessary. They are parasites.

Gee, I guess we have to nuke Iran NOW. The only way to distract the public and keep the economy afloat. After all, apart from imposing human slavery around the globe, this is America's only growth industry.

Never forget: It never had to be this way. We allowed evil men to make themselves our Masters who have sold us and our children into slavery. America looked away when we were betrayed by Democrats and ruined by Republicans as they delivered us into the hands of Monsters. Perfect storm.

Air America: You just keep telling people that voting Democrat is our only choice. I can hear it now: Yes, Hillary bought the nomination with money from Big Oil, Big Pharma, Wall Street, & Arms Merchants but she's the only candidate you've got so you have to vote for her. HAVE FAITH. PRAY THAT the flat-earth genocidal blood got YAHWEH WILL GUIDE OUR FUHRER into progressive policies. THAT IS YOUR only ROLE.

What are we going to do about it? Nothing? Why aren't we in the Streets? Why aren't millions of us in Gulags as Enemy Combatants against King George? Nothing to be done but dodge the flying rubble?

Thank you, Paul. I thank Yahweh that you will never share our agony as we lose our jobs our homes and our families. I smile when I think that you will be safe in your sinecure while you describe for the readers of the New York Times how we have come to this terrible place. I read people like you 35 and 40 years ago, and they didn't change anything either.

Here's the conundrum: Our "commentators" do not have their asses on the line and will not put their asses on the line. Are they ever going to call for specific actions by US? Will they ever suggest we tear down the System that enslaves us OR PROPOSE REAL ACTIONS? Or are they simply another form of Overseer, keeping the races, the genders, and the classes IN THEIR PLACE. You already know the answer to that. They will document for you step by step how the game is rigged and how your lives are ruined and they will never offer an alternative, "it's all out there somewhere", "never have enough votes", "Not their job".

Peece.

"pnac December 14th, 2007 12:36 pm
the Federal Reserve announced plans to lend $40 billion to banks.

I find it hard to still believe, but where does the Fed get this money?
Is it just created? If the Fed creates this money can it also destroy it too?"

Yes! They make it our of thin air! The Fed over the years has somehow been permitted to print paper money!

This is soooo scary.

AHHHHH!!!!!!
Can someone please tell me when to sell my mutual funds before they disappear?????
Panic.

Want to know what gets my goat? There's a commercial on TV for Visa where everyone is in joyous lockstep to music as they process by the cashier with those touch-and-go credit cards. Then a person gets to the register with cash and everything stops. The music dies, confetti and balls fall to the ground. Once the next person flips out the card the music cranks up and everything is once again joyous and happy.

The message is more than clear. It hits you like a freight train. Credit is good, cash is bad. Use more credit.

Debt, more debt and even more debt. What did Bush say? Reagan taught us that debt doesn't matter. (Reagan raised taxes every year in office except one.) The media won't play fair. The media must start examining real issues.

David M. Walker, the Comptroller General of the United States and head of the U.S. Government Accountability Office (GAO) has been going around and warning people about debt. Where's the TV coverage? Why won't they talk about this?

the Federal Reserve announced plans to lend $40 billion to banks.

I find it hard to still believe, but where does the Fed get this money?
Is it just created? If the Fed creates this money can it also destroy it too?

Our bourgeois democracy, which has been narrowing in recent years will in time be shut down completely under the pressures of an expanding war in the Middle East and the deep economic crisis presaged by Mr. Krugman.

And there will be no "recovery" this time because as our capitalist economy enters its death throes. The economic system's political window dressing reflects this as a nearly seamless transition to fascism is taking place. The trappings of bourgeois democracy are a brake on profits and so they are being shredded. The Constitution and its Bill of Rights are being rendered meaningless by plans for perpetual war, by presidential signing statements and the theory of the unitary executive, extraordinary rendition, government surveillance programs and the like. Programs based on democratic principles like the public schools, Social Security, Medicare, affirmative action and welfare are being starved to death. Separate and parallel InterNet and military forces are being constructed along with internment camps and the legal construct for a martial law declaration. Blackwater will ultimately fight US military regulars in the streets of this country. (Too many sons and daughters of the working class in the US military to be trusted by the bourgeoisie.) The mass media and electoral machinery and both major political parties are now fully under the control of those in power. Bloodless coups in 2000 and 2004 installed George W. Bush in the White House and no future ballot will remove the candidates of the ruling class from power.

Paul Krugman is a brilliant economist and columnist but the sad truth is that the petty bourgeois cannot defeat the capitalist ruling class! They are a timid and passive group who gather at the gates of the palace to nag and complain essentially to each other. There are scores of Internet websites, magazines, newspapers, radio programs and networks, and some small television networks where liberal, left, progressive, and other commentators show up to whine out loud. They rail against the outrages and inhumanity of the U.S. government and the Bush Administration. They point out the duplicity, the corruption, the hypocrisy, the inhumanity, and the utter criminality loosed in the world today but to no useful end since capitalism will not be reformed nor shamed to death. Pointing out the defects of capitalism has become as easy as shooting fish in a barrel. The ruling class brushes its liberal democratic critics off like gnats as long as they stay away from the third rail. But let one of these voices dare mention unity based on working class-consciousness and a mobilization to strike at profits (think Boston Tea Party, the raid on Harper's Ferry, the Flint Sit-down, the Montgomery Bus Boycott) and great danger would shortly thereafter visit. That's why the camps are being constructed and that's why relative safety will only be provided in mass resistance.

Let's dream for a minute, like Dr. King did before he became too focused on economic justice and too anti-imperialist to be allowed to live beyond 1968. In this dream, on an appointed day, at an appointed hour, Americans across the country turn their cars off in the street, pocket the keys, and walk home to wait. Wait for the oil industry to be nationalized and the ExxonMobil directorate to be arrested, or better yet, wait for Bush and Cheney to vacate government housing. Hey, this Sunday is the anniversary of the Boston Tea Party!