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I'm not worried. All this is just hype, things are quite fine in the world. Money does not disappear until value does, and people are still producing a lot of v

I'm not worried. All this is just hype, things are quite fine in the world. Money does not disappear until value does, and people are still producing a lot of value.

jmtame 18y ago
What you should worry about are two things, regarding value: 1) You should worry when your country produces significantly more "money" than your country produces value. See Bailout Bill (I fail to see the value produced in writing up $700 billion taxed on firefighters and teachers). 2) You should worry when organizations like IMF and the World Bank extend loans to these other countries, jack up in the interest and take up more than half of the country's budget on the interest instead of the principal. Most of the countries we "help out" end up becoming more impoverished after we extend a loan to them, and much of what we build ends up doing more harm than good. Worse, the money does not even exist in the first place.
- maxklein 18y ago
  It's not my country - harr harr! The U.S may not produce as much money as it produces value, but it still produces more value than any country in the world! That value is not going anywhere. Seriously, don't be afraid. This is a media recession. If this were a real economic problem, companies would be tightening their belts, buying shares, merging, selling off stuff, and the vultures would be there pecking at carcasses. It's not happening. The papers make things sound bad, but imagine you didn't read the papers. When you go out, things are pretty much the way they always where.
  - run4yourlives 18y ago
    Please name which products that the world relies on the US to produce. Exactly.
    - maxklein 18y ago
      Google, Boeing, Ford, Windows XP, iPhone, Nike, Levis, McDonalds, Coke. That's just by looking around the room I am sitting in.
      - tom_rath 18y ago
        He said "relies". I could do without all of those during hard times.
        maxklein 18y ago
        You could do without airplanes? Clothes? Soft drinks? If you are doing without those, then what do you need from China?
        tom_rath 18y ago
        There are less-expensive alternatives for all of the examples you provided. Take a look at what happened to each of those companies (which existed) back in the early 90s. For planes, there's already a nice inventory of used aircraft backing up thanks to the latest airline bankruptcies. Do you think an airline will be buying new (or any?) aircraft if vacation and business travel drops off a cliff?
        maxklein 18y ago
        So you really think in a time of globalisation and opening markets, a country will suddenly become an island because people are too poor to travel? Anyone who believes this is seriously believes this needs to read some books.
        rsheridan6 18y ago
        If you're talking about the kind of hard times where your economic needs are reduced to 1400 calories/day, a lump of coal to cook your millet gruel, and some shoes made of old tires, the US is at least a major food exporter. I don't expect times to get that tough.
lst 18y ago
There are simply too many people deeply in debt, and for the majority of them there's no possibility to balance their financial situation -- and their number is increasing continuously...
- maxklein 18y ago
  Yes, many people are in debt, but they converted the debt to assets. And those assets are still around. They have to produce value to be able to finance those assets, and so in all, it balances itself out. In economic terms, I don't see how population debt is bad for an economy. If this 'debt' was paid from money that was excess in the economy anyways, then for the country, there is no direct loss. Let me explain. A bank has $10.000. The government gives then $2000 for free. You come to the bank and ask for $1500. They give it to you. Over the next 4 years you work for an employer, giving him about $4000 of value. Of that, you pay $500 in taxes, payback $2000 to the bank and keep §1500 for yourself. The bank makes more money, the government makes more money, and you had to work harder to stay in the same spot. Debt is a way to make slaves of citizens, but for the economy, it is good because it forces productivity out of people.
  - arockwell 18y ago
    You do understand that the reason the economy sucks right now is that people are defaulting on their mortages? There's a lot of debt out there that will not get paid back... much more than anyone was willing to admit.
tom_rath 18y ago
Wow. It just occurred to me that folks here younger than 28 have never seen an actual recession (I'm assuming that under-12s could not care less about business news and missed the early 90s bust). It's just been one long boom for you, right? I suspect the world is about to surprise you in a very unpleasant way.
- maxklein 18y ago
  You want to bet? I say there will be no recession, you say there will be a recession. Sure, I've never seen a recession, but that does not mean that I am unable to differenciate a real problem from a manageable problem. McCain was right - the fundamentals of the economy ARE strong. A recession starts at the bottom - it starts when people stop spending. It does not start at the top. What is happening right now is just a restructuring. A flesh wound, one could say.
  - tom_rath 18y ago
    Believe whatever you want. It doesn't make it true. Do you know that Detroit was once one of the wealthiest cities in the United States? Things change. What you're seeing now is a period of dramatic change. Approach it as you'd like.
    - maxklein 18y ago
      Sorry, I don't know much about Detroit. From Wikipedia, it seems like Detroit is fine. But I have no real idea how it looks like in the city.
      - sown 18y ago
        Executive summary: it is a shit hole.
      - thaumaturgy 18y ago
        Try searching for, "Detroit urban decay", "Detroit empty lots", or "Detroit vacant". I'm sure Detroit's residents will be happy to know that Wikipedia gave them a sound bill of health. If you'd like to buy some property in Detroit and tell 'em yourself, you can get it reeeeeeeaaaally cheap: http://www.lewrockwell.com/blog/lewrw/archives/022350.html http://www.lewrockwell.com/blog/lewrw/archives/022350.html
astine 18y ago
So long as the factories run, miners mine, and farmers farm, it's true, society will see this through. But you must understand that what's at stake is our very ability to do these things. Merely producing goods is not enough; we need to get them to consumers and consumers need to be able to compensate the producers. To this end, we need a financial system through which wealth can easily and painlessly be transfered. Without a healthy financial system, simple things like employment, commerce, shopping, become difficult if not impossible. Key point: write all the code you want; without a financial system nobody will be able to pay you for it. True, we'll get through this eventually, the financial system will change and adapt to new circumstances, such is the nature of the market, (It would happen faster if the government wasn't so insistent on propping up the very institutions that were failing.) but it will take a while, and in the meantime, jobs, commerce, industry, all will suffer, especially those elements dependent on easy liquidity and cheap credit, like startups. Long story short: You should be very worried. Protect your assets. Focus on tangible goods and increase your productivity. Realize that excessive 'trust' is what got us into this mess in the first place, and weather the storm accordingly.
- maxklein 18y ago
  What caused this problem was excessive liquidity and the tendency of people to gamble. The U.S needs to get more material, and this correction is part of that.
- noonespecial 18y ago
  Think of the value (real wealth) in the system (the farmers farming, etc) like ships. The financial system (the money, the credit, etc) like water. We need both. If all of the water freezes, the ships are still technically there. The wealth still exists, but there's shit-all the boats can do but wait for the spring thaw if they're frozen in the ice.
  - maxklein 18y ago
    Yes, but don't forget all the men standing round with hot water hoses. You think they'll just wait for nature to come thaw things out when they just need to turn on the hose?
rsheridan6 18y ago
People were producing a lot of value in every previous recession and depression too.

I'm not worried. All this is just hype, things are quite fine in the world. Money does not disappear until value does, and people are still producing a lot of value.

jmtame 18y ago

What you should worry about are two things, regarding value: 1) You should worry when your country produces significantly more "money" than your country produces value. See Bailout Bill (I fail to see the value produced in writing up $700 billion taxed on firefighters and teachers). 2) You should worry when organizations like IMF and the World Bank extend loans to these other countries, jack up in the interest and take up more than half of the country's budget on the interest instead of the principal. Most of the countries we "help out" end up becoming more impoverished after we extend a loan to them, and much of what we build ends up doing more harm than good. Worse, the money does not even exist in the first place.

maxklein 18y ago
It's not my country - harr harr! The U.S may not produce as much money as it produces value, but it still produces more value than any country in the world! That value is not going anywhere. Seriously, don't be afraid. This is a media recession. If this were a real economic problem, companies would be tightening their belts, buying shares, merging, selling off stuff, and the vultures would be there pecking at carcasses. It's not happening. The papers make things sound bad, but imagine you didn't read the papers. When you go out, things are pretty much the way they always where.
- run4yourlives 18y ago
  Please name which products that the world relies on the US to produce. Exactly.
  - maxklein 18y ago
    Google, Boeing, Ford, Windows XP, iPhone, Nike, Levis, McDonalds, Coke. That's just by looking around the room I am sitting in.
    - tom_rath 18y ago
      He said "relies". I could do without all of those during hard times.
      - maxklein 18y ago
        You could do without airplanes? Clothes? Soft drinks? If you are doing without those, then what do you need from China?
        tom_rath 18y ago
        There are less-expensive alternatives for all of the examples you provided. Take a look at what happened to each of those companies (which existed) back in the early 90s. For planes, there's already a nice inventory of used aircraft backing up thanks to the latest airline bankruptcies. Do you think an airline will be buying new (or any?) aircraft if vacation and business travel drops off a cliff?
        maxklein 18y ago
        So you really think in a time of globalisation and opening markets, a country will suddenly become an island because people are too poor to travel? Anyone who believes this is seriously believes this needs to read some books.
      - rsheridan6 18y ago
        If you're talking about the kind of hard times where your economic needs are reduced to 1400 calories/day, a lump of coal to cook your millet gruel, and some shoes made of old tires, the US is at least a major food exporter. I don't expect times to get that tough.

lst 18y ago

There are simply too many people deeply in debt, and for the majority of them there's no possibility to balance their financial situation -- and their number is increasing continuously...

maxklein 18y ago
Yes, many people are in debt, but they converted the debt to assets. And those assets are still around. They have to produce value to be able to finance those assets, and so in all, it balances itself out. In economic terms, I don't see how population debt is bad for an economy. If this 'debt' was paid from money that was excess in the economy anyways, then for the country, there is no direct loss. Let me explain. A bank has $10.000. The government gives then $2000 for free. You come to the bank and ask for $1500. They give it to you. Over the next 4 years you work for an employer, giving him about $4000 of value. Of that, you pay $500 in taxes, payback $2000 to the bank and keep §1500 for yourself. The bank makes more money, the government makes more money, and you had to work harder to stay in the same spot. Debt is a way to make slaves of citizens, but for the economy, it is good because it forces productivity out of people.
- arockwell 18y ago
  You do understand that the reason the economy sucks right now is that people are defaulting on their mortages? There's a lot of debt out there that will not get paid back... much more than anyone was willing to admit.

tom_rath 18y ago

Wow. It just occurred to me that folks here younger than 28 have never seen an actual recession (I'm assuming that under-12s could not care less about business news and missed the early 90s bust). It's just been one long boom for you, right? I suspect the world is about to surprise you in a very unpleasant way.

maxklein 18y ago
You want to bet? I say there will be no recession, you say there will be a recession. Sure, I've never seen a recession, but that does not mean that I am unable to differenciate a real problem from a manageable problem. McCain was right - the fundamentals of the economy ARE strong. A recession starts at the bottom - it starts when people stop spending. It does not start at the top. What is happening right now is just a restructuring. A flesh wound, one could say.
- tom_rath 18y ago
  Believe whatever you want. It doesn't make it true. Do you know that Detroit was once one of the wealthiest cities in the United States? Things change. What you're seeing now is a period of dramatic change. Approach it as you'd like.
  - maxklein 18y ago
    Sorry, I don't know much about Detroit. From Wikipedia, it seems like Detroit is fine. But I have no real idea how it looks like in the city.
    - sown 18y ago
      Executive summary: it is a shit hole.
    - thaumaturgy 18y ago
      Try searching for, "Detroit urban decay", "Detroit empty lots", or "Detroit vacant". I'm sure Detroit's residents will be happy to know that Wikipedia gave them a sound bill of health. If you'd like to buy some property in Detroit and tell 'em yourself, you can get it reeeeeeeaaaally cheap: http://www.lewrockwell.com/blog/lewrw/archives/022350.html http://www.lewrockwell.com/blog/lewrw/archives/022350.html

astine 18y ago

So long as the factories run, miners mine, and farmers farm, it's true, society will see this through. But you must understand that what's at stake is our very ability to do these things. Merely producing goods is not enough; we need to get them to consumers and consumers need to be able to compensate the producers. To this end, we need a financial system through which wealth can easily and painlessly be transfered. Without a healthy financial system, simple things like employment, commerce, shopping, become difficult if not impossible. Key point: write all the code you want; without a financial system nobody will be able to pay you for it. True, we'll get through this eventually, the financial system will change and adapt to new circumstances, such is the nature of the market, (It would happen faster if the government wasn't so insistent on propping up the very institutions that were failing.) but it will take a while, and in the meantime, jobs, commerce, industry, all will suffer, especially those elements dependent on easy liquidity and cheap credit, like startups. Long story short: You should be very worried. Protect your assets. Focus on tangible goods and increase your productivity. Realize that excessive 'trust' is what got us into this mess in the first place, and weather the storm accordingly.

maxklein 18y ago
What caused this problem was excessive liquidity and the tendency of people to gamble. The U.S needs to get more material, and this correction is part of that.
noonespecial 18y ago
Think of the value (real wealth) in the system (the farmers farming, etc) like ships. The financial system (the money, the credit, etc) like water. We need both. If all of the water freezes, the ships are still technically there. The wealth still exists, but there's shit-all the boats can do but wait for the spring thaw if they're frozen in the ice.
- maxklein 18y ago
  Yes, but don't forget all the men standing round with hot water hoses. You think they'll just wait for nature to come thaw things out when they just need to turn on the hose?

rsheridan6 18y ago

People were producing a lot of value in every previous recession and depression too.