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alstry (35.41)

Are We Running Out of TIME???

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17

June 26, 2009 – Comments (8)

From the former Chief Economist at the International Monetary Fund: 

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.....

The conventional wisdom among the elite is still that the current slump “cannot be as bad as the Great Depression.” This view is wrong. What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.

http://www.theatlantic.com/doc/200905/imf-advice

Total mortgage delinquencies are up 50% from the year-ago level and up 5% from the previous month, reaching an 8.49% rate in May, according to a monthly report released by Lender Processing Services.

Foreclosure inventories climbed as May saw a 2.79% increase in the foreclosure rate from April. The foreclosure rate sits 88.3% above the year-ago level.

http://www.housingwire.com/2009/06/25/may-delinquency-rate-up-50-from-2008/

(Reuters) - An increase in exports is needed for a sustained recovery in the United States and this may require an adjustment in the value of the U.S. dollar, IMF chief economist Olivier Blanchard said on Monday.

'For the US, it is absolutely no question that a sustained recovery has to come from a large increase in exports, that may not be very easy to do. This may require fairly substantial adjustments in the dollar,' he told a conference.

http://www.forbes.com/feeds/afx/2009/06/22/afx6569595.html

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending. And in each case, that fear became self-fulfilling, as banks that couldn’t roll over their debt did, in fact, become unable to pay. This is precisely what drove Lehman Brothers into bankruptcy on September 15, causing all sources of funding to the U.S. financial sector to dry up overnight. Just as in emerging-market crises, the weakness in the banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people.

But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

http://www.theatlantic.com/doc/200905/imf-advice

And some of you Fools are frustrated with Alstry?????????????????????????

Smile......Bubba is about to bend you and your family over.............

My suggestion.....................PREPARE or learn to scream silently.....because no one will care to listen once time runs out!!!!!!!!!!!!!!!!!!!!!!!!

8 Comments – Post Your Own

#1) On June 26, 2009 at 4:57 AM, greensurfer (< 20) wrote:

What would you suggest one do to prepare for this worst case scenario?

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#2) On June 26, 2009 at 8:55 AM, dickseacup (67.01) wrote:

What would you suggest one do to prepare for this worst case scenario?

If you have significant debt, it may be too late. I wonder if people who are upside down in their homes, have no real assets (because they lease their cars, boats and other paycheck-consuming toys) and no means of getting out of the hole quickly shouldn't just go all-in. Leverage themselves to the maximum, quit paying the mortgage and wait for hyperinflation to come around to pay it all down. 

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#3) On June 26, 2009 at 9:05 AM, alstry (35.41) wrote:

dick,

Mathematically....all of America has too much debt....more debt than can EVER be paid back, even if you have none personally.  The city you live in has too much debt, do does the county, very likely the state, and the Federal Government and the Fed as well.

You are taking the same path as Cities, Counties, States, The Fed and Federal Govt.  It apprears the goal is to make the dollar worthless wihich will destroy savers and investors alike as few business can survive in a hyperinflationary environment.

The issue is government and bankerscan last a lot longer than you when they are the only ones given a lifeboat.

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#4) On June 26, 2009 at 9:25 AM, h2ound08 (< 20) wrote:

Smile......Bubba is about to bend you and your family over.............

 alstry, i appreciate your posts, even though they are frequently over the top and self-aggrandizing. ive found if you can look past those aspects, they contain some pretty insightful and interesting macro-economic views.

but i thought this line was in particularly bad taste. i think you're better then that. clean it up.

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#5) On June 26, 2009 at 9:32 AM, dickseacup (67.01) wrote:

I wasn't really advocating that path, alstry. As far as I can tell, there are only two ways for the country to get out from underneath this mountain of debt.

1) Monetary inflation on a massive scale; even more massive than what we have witnessed over the last nine months*.

2) An increase in production and exports on a scale never before seen.

I don't believe 2) is possible, barring some massive shift in technology or some unexpected novelty of innovation. My initial reply was more of a "if you can't beat 'em, join 'em," tongue-in-cheek thought.

* Although, considering the FedRes(tm)(r) stopped reporting M3 several years ago, one wonders just how long this bubble pumping has been going on.

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#6) On June 26, 2009 at 9:40 AM, alstry (35.41) wrote:

h2,

As you know Alstry has a unique personality....sometimes he gets so mad he has some issues controlling his emotions....you won't believe what he really wanted say.....

but Alstry edited a lot before saying what he did......and in the end, he just calls it as he sees it......and that is how he sees it.

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#7) On June 26, 2009 at 11:25 AM, jddubya (49.10) wrote:

"My suggestion.....................PREPARE or learn to scream silently.....because no one will care to listen once time runs out!!!!!!!!!!!!!!!!!!!!!!!!"

Laughable.  Middle class americans can do nothing at this point.  Preparations for what's occuring takes years. 

No one cares to listen now.  No one will be listening when time runs out.

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#8) On June 26, 2009 at 11:31 AM, davejh23 (< 20) wrote:

I'd say we're out of time.  I just read an interesting opinion piece from yesterday's WSJ.  It's titled "Congress Must Pay for What It Spends", and was writted by Steny Hoyer and George Miller.  It explains how Bush is to blame for the national debt and all deficit spending, and notes that the current administration and Democratic Congress are fiscally conservative...that they find savings for every dollar spent.  We're on a path to double the national debt in Obama's first term, and they're saying they're fiscally conservative?  I seriously thought the article was a joke at first.  If our government really believes this, I'd say we're in big trouble.

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