Not Your Grandma's Depression, Ending the BRIC Story, World's Most Worthless Money
Many Indian and Chinese economists studied at Western universities. They are taught the Keynesian model of economics which includes Central banking inflation to promote growth and employment. They believe there can be a permanent prosperity, growth and near full employment if interests rates and money supply are manipulated by Central bankers/planners to varying levels.
What the Chinese and Indians do not know is the Austrian theory of economics, which discusses the business cycle and the exacerbation of the business cycle and damage to the overall economy by Central bankers. They do not know what an economic recession or depressions are; they have not seen a Central bank created recession/depression, yet. The slow down in the US will affect a lot of people, but Americans will not be as severely impacted as the poorer high population Asian economies, where there are limited resources. Which may push many into severe poverty or/and starvation. In China and India, there will be civil unrest. China has instituted price controls, which will create more shortages. What will be the levels of civil unrest? It is playing out now....
In the US they do NOT discuss the US depression in Austrian economic terms. Austrian economists blame the FED inflation for the Great Depression. Austrian theorists who wrote about the Depression include Hayek and Murray Rothbard, who wrote "America's Great Depression" in 1963. In their view, the key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit driven boom. In their view, the Federal Reserve, which was created in 1913, shoulders much of the blame. (ref wikipedia The Great Depression)
In fact, Hayek, writing for the Austrian Institute of Economic Research Report in February 1929 predicted the economic downturn, stating that "the boom will collapse within the next few months."
Marc Faber here on Bloomberg (07 July 08), I agree with his ideas here:
FYI - World's Most Worthless Money
There is a reason Vietnamese citizens prefer to own Gold to paper? Does not mean the Central Banks will allow it: FYI - Vietnam Suspends Gold Imports 24 Jun 08
For those that think I am to bearish, or that cannot happen, lets watch Mother Nature at work here for a discussion and point:
Have you ever seen that? Would you believe, if I told you?
The goat never saw it coming. He never believe it could happen? No one ever told him? He was ignorant of the hawk as many are of the business cycle and the consequences. The US govenment could not stop the Great Depression. Even after Roosavelt confiscated all the citizen gold and instituted 66% monetary inflation. The US stock market/economy did not recover for 30 years. Today, most Americans have no gold and most banks just hold paper to back up the paper.
I hope that I am really over doing it, here. But you had better understand what is going on, you should make an educated assessment of your financial health. You should realize that the amount of government support will be limited. The US government is borrowing $1-2 billion a day and the US economy is "strong". What happens when Asians will not loan the US more money?
DO NOT BE A STUPID GOAT. Look around, make an accessment and make the correct LONG TERM plan for yourself and family. I am expecting deflation and a severe recession.
Worth a read and the comments are decent: Not Your Grandma's Depression
You have to replace the X with a u do to a profanity filter.
I know fear sells, that is not what I am trying to do/say. I do not fear, there will be money on the downside for those that make the right calls.
2And you will know the truth, and the truth will set you free.”
I was told in my youth, God hates a coward
Battle at Kruger
FYI - I have climbed to #8 points, which I am happy about. I recognize that may change.