Last gasp of a doomed currency - Mountain Buzz
 



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Old 09-16-2008   #1
 
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Last gasp of a doomed currency

"Last Gasp of a Doomed Currency" by Peter Schiff, FSU Editorial 09/12/2008

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Old 09-16-2008   #2
 
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Subprime Mortgage Meltdown: Paulson's Quick Draw

It is just starting to get scary
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Old 09-16-2008   #3
 
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Yep, we are in deep shit and I'm not sure how we climb out of the crapper.
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Old 09-16-2008   #4
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No offense to Marko, but I usually count on him for the "worst case." I'm neither optimistic nor pessimistic about the future of the dollar right now. This is an unique occurrance we're witnessing.

Paulson and Bernanke have played a really shitty hand safely thus far. No one could have done it better, IMO.

What remains to be seen is whether the US leadership in the Executive and Legislative branches will quit ignoring the problem of the budget deficit and overall federal deficit.
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Old 09-16-2008   #5
 
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No offense taken, Helio. I do seem to post mostly the "not so fun to acknowledge" articles. I guess when you live in a world that is so politically and economically corrupt it is hard to find the good articles.

As for this article. Well, Peter Schiff has been getting the forecasts right for nearly 2 decades. The only thing that you could argue about in this article is that the dollar won't collapse because the countries who finance our debt (China, Japan, Europe) won't pull their money out of the American economy. The reason they potentially won't do that is because it would crush their economy as well. In theory this process could last indefinitely. Peter seems to think that they will eventually realize that they will never be paid back and will flee somtime in the future. He also thinks they will eventually realize that they actually don't need America to keep their economies running. If these countries did pull out it would initially hurt them but they at least would be able to restructure their factories to produce the stuff for themselves because they HAVE FACTORIES THAT PRODUCE, whereas America would be screwed because we gave away all of our factories that produce. Some factories still exist but it would take years for us to rebuild an economy that actually produces something, rather than being just a country that consumes using debt.

The only good news out of yesterdays financial news was the Fed allowing Lehman to fail. Now we will have to wait to see how they deal with inevitable bankrupties of AIG, Washington Mutual, Bank of America (possibly, because they have issues as well), the auto companies, and the airline industries, and I bet more to come.

America is BROKE! Any suggestions on how we plan to pay off these debts?
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Old 09-16-2008   #6
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There's more to argue than that. I'm no economist but as I learn more about the PFM (pure fucking magic) that is modern economics, the more I learn that the answer to every question is "It depends..."

Letting Fannie/Freddie fail was probably an armageddon scenario for the US economy. I agree that we've postponed that consequence for the time being (to the US deficit, which is a bill that will come due in some measure over some period of time), but that's why they call it "leveraging debt" - can you make more money with the money you borrow than you lose in interest...

But one of the things your linked-to article is way too doomsday-y about is housing prices and more specifically, housing sectors. Remember that the free-fall is primarily happening in SoCal, SoFlorida, Phoenix, and Nevada. The reason medians are used is because high outliers skew data, making an average inaccurate. In any event, these four (and there's a fifth I can't remember) states are dragging numbers down nationally.

Inflation is THE key right now. The fed left the rate unchanged, which is buying time again.

I'm not real worried about how much foreign investment exists right now. What bothers me is the idea of tapping more foreign investment. THis deficit is staggering, and the consequence is more real than anyone but Ron Paul seems to realize.

To balance this economy, either benefits must go down, or taxes must go up. The reality is some of both.
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Old 09-17-2008   #7
 
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Peter Schiff (author of this article) is one of Ron Pauls economic advisers. So, most of the reason Ron Paul has a clue of what is going on is because of this guy. Schiff has also been labeled Dr Doom by the MSM. BUT, he has been right with all of his economic outlooks. So, I'm going with this guys opinion over yours. Sorry, Helio, your smart but this dude knows much more about the current situation. Check out his book, Crash Proof... it explains everything in great depth.

Ravi Batra is another economist who is claiming similar things about the econ.
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Old 09-17-2008   #8
 
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Quote:
Originally Posted by heliodorus04 View Post
There's more to argue than that. I'm no economist but as I learn more about the PFM (pure fucking magic) that is modern economics, the more I learn that the answer to every question is "It depends..."
What Marko said. Helio - read the book, follow the sources, and you will realize that the worst case scenario is happening. "Buying time" is like continuing your heroin addiction because the withdrawls would be painful. Meanwhile, you continue to make it worse.... Stupid stupid stupid, cut the cord, let it happen, quit making the taxpayer suffer by funding corporations. What ever happened to the religion of "free market"?
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Old 09-17-2008   #9
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I'm not smart on specifics at all right now, but I am reading a lot. My take is based on what the aggregate opinions amount to, as I understand them. Bad, probably going to get worse. It's just a matter of how precipitous the downward line will be. Remember, people make money in Bear markets.
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Old 09-17-2008   #10
 
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So what steps to the pessimists recommend we take?
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