6 ms·

The Economic News Isn't All Bleak

50 points by robg 18y ago

jerf 18y ago
No comment on whether the future is bleak or not. But extending beyond economics, also consider the US political commentary of the past year and a half. It was, not to put too fine a point on it, shit. Take the conventional wisdom for any day of your choice four weeks before the election to a year before the election, then come back to it two months later. Uniformly, the boldly-made predictions and much-blabbered conventional wisdom were horribly, horribly wrong. As I like to say, if it had been right, we'd be awaiting President Clinton's swearing in after defeating Guiliani 75-25. Future predictions have never been that great, and maybe it's just that I'm paying attention now, but the "horizon of wrongness" seems to have moved a lot closer to the present now. Pundits are rarely even close to right for events a month in the future now, and it's getting to the point that I can't understand why anybody even listens to them, because they are so wrong, I can't hardly even point out the people who were right. Play it conservative. Keep your savings up. Any techie after 2001 should know that anyhow. Maybe the future will indeed be awful, but at this point, I'm burned out on punditry, and I would say that at the very least, try not to let this doom and gloom depress you too unduly. The people selling you doom and gloom... and I use the term "selling" on purpose, because it's the literal truth... have a horrible track record. Let's wait and see what happens.
- timr 18y ago
  Great post. One thing I found interesting about this piece was the blatant revisionism on display in the second paragraph of the article: "less than two years ago, conventional wisdom dictated that the housing bubble would be painful but that global economic growth would remain stable." Forgive me, Mr. Writer, but my recollection is that less than two years ago, few people in the mainstream were acknowledging that a housing bubble even existed. Hell, even a year ago, half of the mainstream press was essentially reprinting press releases from hacks like Lawrence Yun (widely quoted "expert" for the National Association of Realtors), who never saw a bad housing statistic that he couldn't spin for the positive. Those who were calling a bubble a bubble early on (as early as 2003) were labeled jealous curmudgeons who missed out on the easy-money party. I keep trying to come up with a lesson from this, but the only thing I can think of is that our society doesn't reward dissent. No matter how insane and extreme the conventional wisdom, it doesn't pay to be the guy who vocalizes against the herd. If you're a contrary thinker, it's best to just keep your head down, your mouth shut, and do whatever you were going to do anyway.
  - tokenadult 18y ago
    "my recollection is that less than two years ago, nobody in the mainstream was acknowledging that a housing bubble even existed." My recollection is different, because I was reading Business Week more than three years ago. The housing bubble has looked like a bubble for a long time to people who considered how much faster house prices increased than wages. Michael Lewis's collection of articles, Panic, http://www.amazon.com/Panic-Story-Modern-Financial-Insanity/dp/0393065146/ http://www.amazon.com/Panic-Story-Modern-Financial-Insanity/... includes articles that foresaw the housing crash more than two years ago.
    - timr 18y ago
      Yes, there were a few people who were calling the bubble early. However, their view wasn't in the mainstream two years ago. It certainly wasn't "conventional wisdom". I have edited my post to replace the word "nobody" with "few". Mea culpa.
      - fallentimes 18y ago
        They focused on the exception; you focused on the rule. It's entertaining watching the tulip bulb story happen over and over again. Hopefully next time I'll have more capital to take advantage of the situation.
    - davidw 18y ago
      The Economist, which isn't exactly some small rural newspaper, talked about housing looking bubbly a few years ago.
  - petercooper 18y ago
    A Google for [ "property bubble" site:news.bbc.co.uk ] will show many references to the British property bubble in the 2002-2007 timeframe. However, your last paragraph is totally on the money.
  - angstrom 18y ago
    A bubble is indistinguishable from a pyramid scheme legally run amok for the appearance of economic growth. Which is why I don't care for the naysayers opinions because they are far less useful than knowing a few average Joes who have the curiosity of cucumbers when it comes to economics, politics, etc. Once your average Joe catches onto the long tail of the curve, you know a bubble has run its course. The next bubble will likely be the green one. It's large, necessary, and completely possible to go overboard regardless of what you'll hear every pundit saying for the next 10 years.
- captainobvious 18y ago
  This dude has consistently nailed it: http://www.prospect.org/csnc/blogs/beat_the_press http://www.prospect.org/csnc/blogs/beat_the_press
- jfornear 18y ago
  The gloom and doom shouldn't depress you unless you derive all your happiness from wealth. Believe it or not, there were happy people living through the Great Deppression, both rich and poor prior.
  - Prrometheus 18y ago
    Material comfort and stability is an important contributor to happiness. Go to a middle class gathering place, like a Chipotle restaurant in a business district at lunch, and then go to an unemployment office. See which population is happier.
    - jfornear 18y ago
      I'll give you that, but nonetheless depression is fairly rampant in America despite those things. I've met orphans in poverty stricken areas of Mexico that were happier than middle to upper class kids in day care centers here in America. Really my point was that we shouldn't let ourselves get depressed over whatever the doomsayers may be spouting.
- DenisM 18y ago
  Do you realize that by suggesting to "keep your savings up" you are predicting stable purchasing power of US dollar? It's entirely possible for someone to play it safe, stick to cash savings and then get burned if/when dollar is devalued by 75% simialr to Argentina 2001, Russia 1998 or Iceland 2008.
  - jerf 18y ago
    If massive inflation occurs, you're pretty much screwed no matter what. It is not currently possible to live fully, truly off the grid in the manner in which anybody posting to Hacker News is accustomed. Planning for events that you can do nothing about is a waste of time; the fact that that is unfortunate changes nothing. (Which is not to say some reasonable preparation for emergencies is a bad idea. I'm just saying that once you're proposing massive inflation, it's not like having a huge stash of gold in your basement is going to save you, or there's anything else you can hoard that can't be taken from you by force by a rampaging mob.)
    - patrickg-zill 18y ago
      I am amazed at the hatred for gold among some HN'ers. This is the second thread I have seen where gold was mentioned, and the second time I have seen a vitriolic response about gold. Gold will always be valuable and it will always be part of a sane person's plan for dealing with a "things are going to crap" scenario. Along with some form of food storage to deal with logistic interrruptions and some form of personal defense (mace, pepper spray, knives, guns, etc.)
      - fallentimes 18y ago
        Gold will always be valuable... How do you know? While I'm all for world & class asset diversification, the whole reason is because I/we don't know.
        patrickg-zill 18y ago
        1. It is needed for industrial/electronics purposes. 2. It is internationally recognized as being valuable, regardless of culture. That is, cultures as diverse as India, China, England, Russia, pan-Arabic (i.e. non-Jews in the Middle East) have all viewed gold as having value, and that over at least 1000 years of recorded history each. 3. It does not corrode or rot the way paper money does. In Israel they recently found some Byzantine-era gold coins, aside from the obvious numismatic/collector value they still retain value for the gold itself. 4. Gold does not require a government to enforce its value. It's value is innate or intrinsic to the thing itself. As such if a government falls or decides to modify the value of a paper dollar (as Mexico, Argentina etc. have done in the past) then the value changes. Gold that you have in your pocket cannot have its value modified by a government order.
medearis 18y ago
A few months ago, Goldman Sachs "experts" were predicting oil at over $200/barrel. Obviously, things didn't work out that way, which is why the concluding paragraph is exactly right -- information now travels faster than ever in our economy, which will affect the way the economy rebounds. Still, nobody knows exactly what will happen. It seems to me that the best predictor of how the economy is doing is the way that it is perceived. For all the talk of this being the "worst economy since Hoover," we're not in a depression and not all is lost. I see a lot of optimism accompanying the incoming administration, which will probably do more for the economy in the short-term than any sort of monetary or fiscal policy could.
- unrealwh 18y ago
  $200/barrel is indeed wrong, its a lowball number. i expect $500 or more. where do you think all those trillions the Fed is printing up now will end up? what happened the last time the Fed printed up trillions in 2002? commodity bubbles! excess liquidity ALWAYS creates inflation, and inflation always chases up the value of finite stores of value, namely commodities. nothing goes straight up or straight down...the thirty year commodities ultrabubble is just getting started, and has experienced its first (of many) breakdowns towards an eventual higher price once this pocket of deflation is monetized. zimbabwe here we come!
  - fallentimes 18y ago
    You would be a nice foil to Jim Cramer.
  - anamax 18y ago
    > $200/barrel is indeed wrong, its a lowball number. i expect $500 or more. Where are you stashing what you're buying? You are putting your money on that prediction, right?
michaelneale 18y ago
I was thinking the other day: lets assume that there is some average economic cycle that 1 out of 7 years is a recession. If that cycle is invariant, but via some means the time variable could be compressed, such that 1 in 7 days was a recession - suddently that seems not so bad (kind of what the article was hinting at?). So you compress time, increse the severity of changes but reduce the impact time (which is I guess where the real human damage is done). Will be interesting to see.
markessien 18y ago
I keep saying it - things are fine. Real value has not been wiped out - the amount of real value lost is not big when compared to the general economic numbers. The U.S has a bigger problem than the rest of the world, but the U.S is still very dynamic, and many world currencies still measure against the USD. China is developing fast, but a lot of the development does not go very deep. So China is not yet ready to function as a counterweight to the U.S. Europe is doing fine, even if it is sluggish as always. Africa is at it's most conflict-free of the last 50 years and lots of >5 growths there. In general, the U.S needs to get a bit more dynamic, modernize it's infrastructure, take back the production, and it will be as fine as always. The fundamentals of the economy are fine.
- jfornear 18y ago
  The fundementals of our role within the global economy are anything but sound. Our economy is fueled by consumerism and the service industry. When shit goes down, which do you think has a chance of surviving when countries like China decide to stop subsidizing our spending (by holding down their currencies) in order to enjoy the fruits of their own labor themselves? Forthcoming political unrest in some of these countries are significant factors that lie outside of our own control. (I'm writing this on my iPhone so I apologize for not ellaborating with a more coherent response, but just think about some of these things. No one knows what will happen, but things could easily get pretty 'bleak'. I hope not. I hope we can figure out ways to prolong any mess from occuring.)
  - unrealwh 18y ago
    china will be as doomed as the rest. what do they hold? US debt. its toilet paper. their economy is coupled to US consumption. they are developing a domestic market but to do so will take another twenty+ years....the tidal wave of debt is crashing now
    - fallentimes 18y ago
      With people saying things like this, it might be time for me to start buying. US debt is a lot of things, but it's not toilet paper. If they start defaulting then we'll talk.
jfornear 18y ago
I (along with many of you I'm sure) have been listening to Peter Schiff's podcast since his predictions from 2004-2006 have materialized, and his outlook on the future of the US economy is very bleak. http://europac.net http://europac.net Duh, no one knows exactly what will happen or how, but I do believe it is foolish to write off these 'bleak' predictions from analysts who have proven their credibility and can back up their predictions with logic and reason. Plus, this article is self-defeating is it not? If we are supposed to ignore these 'bleak' predictions because of how innacurate predictions have been in the past, shouldn't we ignore the optimistic predictions like this one, too? EDIT: I don't endorse everything Schiff says.
- zack 18y ago
  There are a lot of high-powered investment analysts who had proven their credibility with a string of years of success, guided, I'm sure, by logical and well-reasoned investments. That's just not how it works pal. Everyone is bound to be wrong in the long run. Sorry.
  - jfornear 18y ago
    You can't measure credibility through success in the stock market, and that's not what I was implying. Do you take any advice? By your logic it doesn't look like it. I wouldn't want you running our country right now, sorry.
gjm11 18y ago
I've seen maybe half a dozen articles that say "everyone agrees that this might be the worst economic downturn since the Great Depression" (so presumably there are far, far more than that, because I don't spend a lot of time reading that sort of article). I haven't yet seen one that acknowledges the possibility that it might be worse than the Great Depression. That seems to me to be obviously wrong. If what we're in is likely to be worse than everthing else since the 1930s, can it really be so clear that it's not actually worse than the G.D. too? It seems like the readily available journalistic cliches just don't allow for that possibility...
- arockwell 18y ago
  25% unemployment seems very unlikely, ditto for bread lines and hoovervilles.
- unrealwh 18y ago
  i believe not only will this be worse than the depression for the US, it will indeed do in the US entirely. a nation's most important piece of paper is not its constitution (you can burn and rewrite one of those anytime you want one), it is its currency. you can only burn your currency once. there is a very strong historical parallel - the french revolution. no matter what interpretation of this event you find in literature, they will all point to excess debt as one of the key, if not the key motivation for the revolution. weimar germany is another scenario where excess currency abuse literally did in the nation, and incidentally ushered in nazism. there is no way the US can now get out of debt or even hope to slow down deficits. the rate of growth of the debt is astounding. one must wonder where the death bond lies...that dollar of debt that we issue that is rejected by all buyers and signals the end of the US. once the US dollar is rejected by all buyers, the US govt immediately ceases to exist by definition. police, army, firefighters...none of their paychecks have value anymore, so none of them will report for work. how much is too much? our debt is around twelve trillion now, my guess is that at around twenty five trillion, its game over. we will reach that point by 2018 at the latest. the US is gone by 2020 at the latest. if any political structure survives, it will be helmed by an american stalin who will gorge on the nation and utterly obliterate it. it will take the world one hundred years to reconstruct after the obliteration of the USD-backed fiat-debt financial system. pax romana was nothing more than a promise and a hope...once it went away the west lost centuries. the USD is no more than the pax romana of our era...a idea backed only by faith, not values
anewaccountname 18y ago
>As the credit system eases, historically low interest rates also augur debt refinancing and constructive access to credit for those with good histories and for small business creation in the year ahead. As though we can just "augur" that. Small business loans might not pick up even in a low interest environment if banks reveal more off-balance sheet holdings and run into more troubles with capital requirements. >The rush to declare the future bleak has obscured the fact that no one knows the outcome of an unprecedented event. No one. I think he (minorly) slipped up and didn't follow his own advice a little earlier in the article =P.

50 points by robg 18y ago

jerf 18y ago

No comment on whether the future is bleak or not. But extending beyond economics, also consider the US political commentary of the past year and a half. It was, not to put too fine a point on it, shit. Take the conventional wisdom for any day of your choice four weeks before the election to a year before the election, then come back to it two months later. Uniformly, the boldly-made predictions and much-blabbered conventional wisdom were horribly, horribly wrong. As I like to say, if it had been right, we'd be awaiting President Clinton's swearing in after defeating Guiliani 75-25. Future predictions have never been that great, and maybe it's just that I'm paying attention now, but the "horizon of wrongness" seems to have moved a lot closer to the present now. Pundits are rarely even close to right for events a month in the future now, and it's getting to the point that I can't understand why anybody even listens to them, because they are so wrong, I can't hardly even point out the people who were right. Play it conservative. Keep your savings up. Any techie after 2001 should know that anyhow. Maybe the future will indeed be awful, but at this point, I'm burned out on punditry, and I would say that at the very least, try not to let this doom and gloom depress you too unduly. The people selling you doom and gloom... and I use the term "selling" on purpose, because it's the literal truth... have a horrible track record. Let's wait and see what happens.

timr 18y ago
Great post. One thing I found interesting about this piece was the blatant revisionism on display in the second paragraph of the article: "less than two years ago, conventional wisdom dictated that the housing bubble would be painful but that global economic growth would remain stable." Forgive me, Mr. Writer, but my recollection is that less than two years ago, few people in the mainstream were acknowledging that a housing bubble even existed. Hell, even a year ago, half of the mainstream press was essentially reprinting press releases from hacks like Lawrence Yun (widely quoted "expert" for the National Association of Realtors), who never saw a bad housing statistic that he couldn't spin for the positive. Those who were calling a bubble a bubble early on (as early as 2003) were labeled jealous curmudgeons who missed out on the easy-money party. I keep trying to come up with a lesson from this, but the only thing I can think of is that our society doesn't reward dissent. No matter how insane and extreme the conventional wisdom, it doesn't pay to be the guy who vocalizes against the herd. If you're a contrary thinker, it's best to just keep your head down, your mouth shut, and do whatever you were going to do anyway.
- tokenadult 18y ago
  "my recollection is that less than two years ago, nobody in the mainstream was acknowledging that a housing bubble even existed." My recollection is different, because I was reading Business Week more than three years ago. The housing bubble has looked like a bubble for a long time to people who considered how much faster house prices increased than wages. Michael Lewis's collection of articles, Panic, http://www.amazon.com/Panic-Story-Modern-Financial-Insanity/dp/0393065146/ http://www.amazon.com/Panic-Story-Modern-Financial-Insanity/... includes articles that foresaw the housing crash more than two years ago.
  - timr 18y ago
    Yes, there were a few people who were calling the bubble early. However, their view wasn't in the mainstream two years ago. It certainly wasn't "conventional wisdom". I have edited my post to replace the word "nobody" with "few". Mea culpa.
    - fallentimes 18y ago
      They focused on the exception; you focused on the rule. It's entertaining watching the tulip bulb story happen over and over again. Hopefully next time I'll have more capital to take advantage of the situation.
  - davidw 18y ago
    The Economist, which isn't exactly some small rural newspaper, talked about housing looking bubbly a few years ago.
- petercooper 18y ago
  A Google for [ "property bubble" site:news.bbc.co.uk ] will show many references to the British property bubble in the 2002-2007 timeframe. However, your last paragraph is totally on the money.
- angstrom 18y ago
  A bubble is indistinguishable from a pyramid scheme legally run amok for the appearance of economic growth. Which is why I don't care for the naysayers opinions because they are far less useful than knowing a few average Joes who have the curiosity of cucumbers when it comes to economics, politics, etc. Once your average Joe catches onto the long tail of the curve, you know a bubble has run its course. The next bubble will likely be the green one. It's large, necessary, and completely possible to go overboard regardless of what you'll hear every pundit saying for the next 10 years.
captainobvious 18y ago
This dude has consistently nailed it: http://www.prospect.org/csnc/blogs/beat_the_press http://www.prospect.org/csnc/blogs/beat_the_press
jfornear 18y ago
The gloom and doom shouldn't depress you unless you derive all your happiness from wealth. Believe it or not, there were happy people living through the Great Deppression, both rich and poor prior.
- Prrometheus 18y ago
  Material comfort and stability is an important contributor to happiness. Go to a middle class gathering place, like a Chipotle restaurant in a business district at lunch, and then go to an unemployment office. See which population is happier.
  - jfornear 18y ago
    I'll give you that, but nonetheless depression is fairly rampant in America despite those things. I've met orphans in poverty stricken areas of Mexico that were happier than middle to upper class kids in day care centers here in America. Really my point was that we shouldn't let ourselves get depressed over whatever the doomsayers may be spouting.
DenisM 18y ago
Do you realize that by suggesting to "keep your savings up" you are predicting stable purchasing power of US dollar? It's entirely possible for someone to play it safe, stick to cash savings and then get burned if/when dollar is devalued by 75% simialr to Argentina 2001, Russia 1998 or Iceland 2008.
- jerf 18y ago
  If massive inflation occurs, you're pretty much screwed no matter what. It is not currently possible to live fully, truly off the grid in the manner in which anybody posting to Hacker News is accustomed. Planning for events that you can do nothing about is a waste of time; the fact that that is unfortunate changes nothing. (Which is not to say some reasonable preparation for emergencies is a bad idea. I'm just saying that once you're proposing massive inflation, it's not like having a huge stash of gold in your basement is going to save you, or there's anything else you can hoard that can't be taken from you by force by a rampaging mob.)
  - patrickg-zill 18y ago
    I am amazed at the hatred for gold among some HN'ers. This is the second thread I have seen where gold was mentioned, and the second time I have seen a vitriolic response about gold. Gold will always be valuable and it will always be part of a sane person's plan for dealing with a "things are going to crap" scenario. Along with some form of food storage to deal with logistic interrruptions and some form of personal defense (mace, pepper spray, knives, guns, etc.)
    - fallentimes 18y ago
      Gold will always be valuable... How do you know? While I'm all for world & class asset diversification, the whole reason is because I/we don't know.
      - patrickg-zill 18y ago
        1. It is needed for industrial/electronics purposes. 2. It is internationally recognized as being valuable, regardless of culture. That is, cultures as diverse as India, China, England, Russia, pan-Arabic (i.e. non-Jews in the Middle East) have all viewed gold as having value, and that over at least 1000 years of recorded history each. 3. It does not corrode or rot the way paper money does. In Israel they recently found some Byzantine-era gold coins, aside from the obvious numismatic/collector value they still retain value for the gold itself. 4. Gold does not require a government to enforce its value. It's value is innate or intrinsic to the thing itself. As such if a government falls or decides to modify the value of a paper dollar (as Mexico, Argentina etc. have done in the past) then the value changes. Gold that you have in your pocket cannot have its value modified by a government order.

medearis 18y ago

A few months ago, Goldman Sachs "experts" were predicting oil at over $200/barrel. Obviously, things didn't work out that way, which is why the concluding paragraph is exactly right -- information now travels faster than ever in our economy, which will affect the way the economy rebounds. Still, nobody knows exactly what will happen. It seems to me that the best predictor of how the economy is doing is the way that it is perceived. For all the talk of this being the "worst economy since Hoover," we're not in a depression and not all is lost. I see a lot of optimism accompanying the incoming administration, which will probably do more for the economy in the short-term than any sort of monetary or fiscal policy could.

unrealwh 18y ago
$200/barrel is indeed wrong, its a lowball number. i expect $500 or more. where do you think all those trillions the Fed is printing up now will end up? what happened the last time the Fed printed up trillions in 2002? commodity bubbles! excess liquidity ALWAYS creates inflation, and inflation always chases up the value of finite stores of value, namely commodities. nothing goes straight up or straight down...the thirty year commodities ultrabubble is just getting started, and has experienced its first (of many) breakdowns towards an eventual higher price once this pocket of deflation is monetized. zimbabwe here we come!
- fallentimes 18y ago
  You would be a nice foil to Jim Cramer.
- anamax 18y ago
  > $200/barrel is indeed wrong, its a lowball number. i expect $500 or more. Where are you stashing what you're buying? You are putting your money on that prediction, right?

michaelneale 18y ago

I was thinking the other day: lets assume that there is some average economic cycle that 1 out of 7 years is a recession. If that cycle is invariant, but via some means the time variable could be compressed, such that 1 in 7 days was a recession - suddently that seems not so bad (kind of what the article was hinting at?). So you compress time, increse the severity of changes but reduce the impact time (which is I guess where the real human damage is done). Will be interesting to see.

markessien 18y ago

I keep saying it - things are fine. Real value has not been wiped out - the amount of real value lost is not big when compared to the general economic numbers. The U.S has a bigger problem than the rest of the world, but the U.S is still very dynamic, and many world currencies still measure against the USD. China is developing fast, but a lot of the development does not go very deep. So China is not yet ready to function as a counterweight to the U.S. Europe is doing fine, even if it is sluggish as always. Africa is at it's most conflict-free of the last 50 years and lots of >5 growths there. In general, the U.S needs to get a bit more dynamic, modernize it's infrastructure, take back the production, and it will be as fine as always. The fundamentals of the economy are fine.

jfornear 18y ago
The fundementals of our role within the global economy are anything but sound. Our economy is fueled by consumerism and the service industry. When shit goes down, which do you think has a chance of surviving when countries like China decide to stop subsidizing our spending (by holding down their currencies) in order to enjoy the fruits of their own labor themselves? Forthcoming political unrest in some of these countries are significant factors that lie outside of our own control. (I'm writing this on my iPhone so I apologize for not ellaborating with a more coherent response, but just think about some of these things. No one knows what will happen, but things could easily get pretty 'bleak'. I hope not. I hope we can figure out ways to prolong any mess from occuring.)
- unrealwh 18y ago
  china will be as doomed as the rest. what do they hold? US debt. its toilet paper. their economy is coupled to US consumption. they are developing a domestic market but to do so will take another twenty+ years....the tidal wave of debt is crashing now
  - fallentimes 18y ago
    With people saying things like this, it might be time for me to start buying. US debt is a lot of things, but it's not toilet paper. If they start defaulting then we'll talk.

jfornear 18y ago

I (along with many of you I'm sure) have been listening to Peter Schiff's podcast since his predictions from 2004-2006 have materialized, and his outlook on the future of the US economy is very bleak. http://europac.net http://europac.net Duh, no one knows exactly what will happen or how, but I do believe it is foolish to write off these 'bleak' predictions from analysts who have proven their credibility and can back up their predictions with logic and reason. Plus, this article is self-defeating is it not? If we are supposed to ignore these 'bleak' predictions because of how innacurate predictions have been in the past, shouldn't we ignore the optimistic predictions like this one, too? EDIT: I don't endorse everything Schiff says.

zack 18y ago
There are a lot of high-powered investment analysts who had proven their credibility with a string of years of success, guided, I'm sure, by logical and well-reasoned investments. That's just not how it works pal. Everyone is bound to be wrong in the long run. Sorry.
- jfornear 18y ago
  You can't measure credibility through success in the stock market, and that's not what I was implying. Do you take any advice? By your logic it doesn't look like it. I wouldn't want you running our country right now, sorry.

gjm11 18y ago

I've seen maybe half a dozen articles that say "everyone agrees that this might be the worst economic downturn since the Great Depression" (so presumably there are far, far more than that, because I don't spend a lot of time reading that sort of article). I haven't yet seen one that acknowledges the possibility that it might be worse than the Great Depression. That seems to me to be obviously wrong. If what we're in is likely to be worse than everthing else since the 1930s, can it really be so clear that it's not actually worse than the G.D. too? It seems like the readily available journalistic cliches just don't allow for that possibility...

arockwell 18y ago
25% unemployment seems very unlikely, ditto for bread lines and hoovervilles.
unrealwh 18y ago
i believe not only will this be worse than the depression for the US, it will indeed do in the US entirely. a nation's most important piece of paper is not its constitution (you can burn and rewrite one of those anytime you want one), it is its currency. you can only burn your currency once. there is a very strong historical parallel - the french revolution. no matter what interpretation of this event you find in literature, they will all point to excess debt as one of the key, if not the key motivation for the revolution. weimar germany is another scenario where excess currency abuse literally did in the nation, and incidentally ushered in nazism. there is no way the US can now get out of debt or even hope to slow down deficits. the rate of growth of the debt is astounding. one must wonder where the death bond lies...that dollar of debt that we issue that is rejected by all buyers and signals the end of the US. once the US dollar is rejected by all buyers, the US govt immediately ceases to exist by definition. police, army, firefighters...none of their paychecks have value anymore, so none of them will report for work. how much is too much? our debt is around twelve trillion now, my guess is that at around twenty five trillion, its game over. we will reach that point by 2018 at the latest. the US is gone by 2020 at the latest. if any political structure survives, it will be helmed by an american stalin who will gorge on the nation and utterly obliterate it. it will take the world one hundred years to reconstruct after the obliteration of the USD-backed fiat-debt financial system. pax romana was nothing more than a promise and a hope...once it went away the west lost centuries. the USD is no more than the pax romana of our era...a idea backed only by faith, not values

anewaccountname 18y ago

>As the credit system eases, historically low interest rates also augur debt refinancing and constructive access to credit for those with good histories and for small business creation in the year ahead. As though we can just "augur" that. Small business loans might not pick up even in a low interest environment if banks reveal more off-balance sheet holdings and run into more troubles with capital requirements. >The rush to declare the future bleak has obscured the fact that no one knows the outcome of an unprecedented event. No one. I think he (minorly) slipped up and didn't follow his own advice a little earlier in the article =P.