Perspectives on the global economic meltdown

John Snow
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Re: Perspectives on the global economic meltdown

Postby John Snow » 17 Feb 2009 06:00

ramana and Sudhir

The most important thing to be learnt in this economic melt down is the with the declining dharma (i (i.e to be duty bound as indicated in the laws prevailing in the society which ever country it may be) the slippery slope of melt down starts.
Example when expediency takes precedence over dharma

1) Regulatory affairs and bodies were relagated to the back

2) This is an exception ( like world com and Enron, Anderson consulting destroying the records inspite of Supreme court injunction and subsequent dissolution of it) kind of attitude to let go criminals

3) Mike Milkem teaching students

4) Savings and Loan scandal leaders in Senate and even running for presidency

5) Round Robin CEO, ex congressmen senators to Lobbyists

6) VP outing the CIA operator going scott free

7) Preaching Non proliferation to aherers of the rules while winking at blatant at the real proliferators

These are the thing people emulate and hence the collapse of the system (individuals greed taking cue from the system)

Twenty five years ago I left a blank check written for $5000.00 in the university admisions hall crowded with students enrolling and came back after a 2 hour session with my advisor and realized that I misplaced the check in a different hall almost half a mile away went back still there intact with even more crowd going about their business, in 2000 I left my Rayban glasses with case in Sams on the rack while browsing my pictures developed, "Gone in thirty seconds" :mrgreen:

The New Rules
1) Ob ey the law if possible (for common citizen)
2)Obey the law if its not inconvenient
3) Otherwise Change the law

2 and 3 are for CEOs, lobbists, Congressmen Senators

In India
you flaunt the law if you are a law maker or a goonda or acelebrity or well connected
If you are commener you LIVE BUY THE LAW

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 17 Feb 2009 06:55

Wow.

Awesome finds Ramana garu.

I remain thankful to having found through you that Carrol Quigley lecture of 1950. This is no less illuminating.

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Re: Perspectives on the global economic meltdown

Postby Singha » 17 Feb 2009 08:04

imo the US consumption will take a decade to climb back to previous levels and the
salad days of the east asian exports into US are gone.

Japan and PRC will probably bite the bullet and start spending their cash on internal
stimulus packages rather than simply handing it over to a grinning Massa in exchange
for t-bonds. same for Soko and Taiwan who have huge reserves.

overall does that point to higher inflation in US, smaller trade deficit, higher rate of
interest, weaker dollah and the end to the era of high consumption, low inflation, low
interest on the back of recycled money via t-bills and the "strength of the dollah" (aka
print more notes with abandon with no repercussions) ?

car cos and consumer electronics who pander to the endless vanity of the US consumer
will take a brutal hit.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 17 Feb 2009 08:37

I agree. The number of car ads on local massa tv reek of desperation.

Kansas follows Calif in announcing 'delays' in giving tax refunds. The scramble preceding the loot has just begun. Expect a rash of city and municipal bankruptcies (via a chapter 9 filing) in the coming weeks. Bank failures are also mounting.

Scene gets worse with each passing day.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 17 Feb 2009 08:43

Numerology, anyone?

Interestingly enough, the thirty-eight large and medium-sized American facilities spread around the globe in 2005 -- mostly air and naval bases for our bombers and fleets -- almost exactly equals Britain's thirty-six naval bases and army garrisons at its imperial zenith in 1898. The Roman Empire at its height in 117 AD required thirty-seven major bases to police its realm from Britannia to Egypt, from Hispania to Armenia. Perhaps the optimum number of major citadels and fortresses for an imperialist aspiring to dominate the world is somewhere between thirty-five and forty.


Link

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Re: Perspectives on the global economic meltdown

Postby vina » 17 Feb 2009 09:00

Terrible times for Japan
Honda Expects No Relief
Evidently, Honda cannot be profitable if yen is below 100 to a dollar (think it is 85 or so now). Says will have to move R&D out of Japan and boost manufacturing abroad if Yen remains strong.

Chinese dont know it /wont acknowledge it. But they too are in exactly the same boat. Renminbi is artificially high , it needs to appreciate. China needs to know that it cannot export its way out of trouble this time. It worked in earlier crisises, because the source of demand , the US , remained robust. Now this recession is due to demand meltdown.

Honda says, Japanese economy cannot survive without it's exporters. How is the Chinese economy very different ?.

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Re: Perspectives on the global economic meltdown

Postby John Snow » 17 Feb 2009 11:56

Not long ago people were bitching about US economy consuming too much resources and advocating cut down in consumption. People were alos advising savings should go up domestically. Now they have their wishes come true how come people want US to consume more and go back to the addicted ways?

US is consumption driven economy like hippo on which many parasites depend.... :mrgreen:

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Re: Perspectives on the global economic meltdown

Postby sanjaykumar » 17 Feb 2009 12:21

From Ramana's link

A Brief History of Human
Evolution and Economic
Progress
http://www.hsdent.com/tngbb/tlv1.pdf


The true beginning of science
and the mere beginnings of the
concept of democracy occurred
in Greece between around 600
B.C. and 200 B.C. (from
Socrates to Aristotle to
Archimedes). In fact, the greatest
thinkers of this time also
communicated some of the most
advanced esoteric spiritual doctrines
that have stood until
today’s times. The Greeks first
spread this new knowledge
through a short-lived empire
back through Persia with
Alexander the Great into the
300’s B.C. This represented the
next major step in human evolution
and laid the foundations for
growth and productivity trends
into modern times. Western or
scientific and technology-driven
civilization emerged out of
Greece (and to a lesser degree
out of China). In fact, there were
no major revolutions in science
and philosophy after Greece
until the 1500s into the 1700s
in Western Europe (The
Enlightenment Period).


Absurd.

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Re: Perspectives on the global economic meltdown

Postby Singha » 17 Feb 2009 14:14

The true beginning of science
and the mere beginnings of the
concept of democracy occurred
in Greece between around 600
B.C. and 200 B.C.


:rotfl:

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Re: Perspectives on the global economic meltdown

Postby ss_roy » 17 Feb 2009 15:09

The west has realize that falsifying or interpreting history to project that idea does not make it true.

Maybe they should look up the concept of "hubris". Most of these morons do not realize that the true dawn of western science was in macedonian egypt and the early roman empire, and was driven by need, cultural exchange and opportunities.

Democracy lite arose independently in many city states throughout eurasia (greece, india)

The true beginning of science
and the mere beginnings of the
concept of democracy occurred
in Greece between around 600
B.C. and 200 B.C.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 17 Feb 2009 18:25

I know.

That Dent chap certainly seems full of himself.

The innate belief that nothing worthwhile (even in the AD1-AD1000) period flourished in the 'weaker regions' of Asia was glaringly dumb.

Carroll Quigley too had certain notions about the explicitly inevitable soup-e-rearity of the western way and the implied worthlessness of the unwashed non-west.

Still, their analysis is worth a read after ignoring their asia predictions. IMVVHO, of course.

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Re: Perspectives on the global economic meltdown

Postby Arya Sumantra » 17 Feb 2009 18:41

Singha wrote:The true beginning of science
and the mere beginnings of the
concept of democracy occurred
in Greece between around 600
B.C. and 200 B.C.


:rotfl:

AND
ss_roy wrote:Democracy lite arose independently in many city states throughout eurasia (greece, india)


In India, the first known example of democracy was the Vaishali empire. IIRC the history, at that time the kings of other regions despised the concept which if it became popular in India threatened to take away their power. There were repeated attacks on Vaishali by king Ajatshatru of neighbouring Magadha.

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Re: Perspectives on the global economic meltdown

Postby Nayak » 17 Feb 2009 19:56

AoA

Looking to Make Good Money? Why not Abuse Shelters!

In hard economic times, you have to be on the constant look-out for lucrative opportunities. So have you checked into the domestic violence industry?

This $4 billion-a-year industry has unlimited upside potential thanks to its irresistible message: “Help us protect the victims of battering and abuse.” Domestic violence entrepreneurs have proved to be adept at broadening the definition of abuse so it now encompasses anything a man does that a woman doesn’t like. That’s what we call an unparalleled growth opportunity.

These programs are no longer the back-alley operations you once imagined. Some shelters now resemble an upscale hotel, complete with internet access, a childcare center, beauty salon, and pet care facilities.

Shelters enjoy a variety of profit centers. One of their favorites is to drive down to the local courthouse to get a restraining order. For $300 a pop, it’s incredibly easy money. At the Bethany House of Northern Virginia, “Women with almost no marital problems are declared abused and are coached by the staff to go to court and get a protective order against their husbands,” recounts a former shelter volunteer.

As a result, many shelters have become multi-million dollar operations. In Florida, the average shelter income exceeds $1.9 million each year. In Bridgeport, Conn. the Center for Women and Families takes in well over $3 million.

With all that loose change floating around, it’s not surprising that shelter heads would want to cut loose every once in a while.

That got Florida shelter directors in trouble a few years ago when news leaked out of a retreat to be held on pricey Captiva Island where four-star resorts tout “beds with triple sheeting and 300-thread-count linens.” According to the Miami Herald article, a state manager had “instructed her staff last summer to ‘manipulate’ the agency’s contract with the Florida Coalition Against Domestic Violence to hide the costs of the retreat ‘so no one would know’” that Florida taxpayers were footing the bill.

Another attractive feature of the abuse industry is the near absence of regulatory hassles and paperwork demands. When you’ve dedicated your life’s work to helping battered women, why should anyone have to fret about time cards and expense reports?

But if you’re going to cut corners, just be sure you don’t get caught.

At the YWCA abuse shelter in Knoxville, Tenn., managers got so busy helping victims that they forgot to fill out their tax and audit reports. Last summer the local United Way cut off funding because of the facility’s slip-shod accounting practices.

At the South Central Region Domestic Violence Coalition in Oklahoma, staffers Cindy Lou Shores, Wenona Barnett, and Angela Camp were caught red-handed taking federal grant monies from the group’s account at the Payne County Bank. Last March Shores was sentenced to 17 months in federal prison and ordered to pay $170,000 in restitution.

A number of shelter scams have been reported. My investment advice: Steer clear of these flim-flam operations.

Many shelters are involved in immigrant running operations. Like the SHIELD Foundation in Phoenix, Ariz., which coaches Russian women to file restraining orders, gets their husbands or boyfriends thrown into jail, and then strips his house of anything that can be hawked on the Black Market.

In Milwaukee, engineering professor Michael Wnuk found himself caught up in a Green Card hustle when his new Polish wife cleverly staged a public confrontation scene and then ran off to a local abuse shelter. According to the police report, there were “no injuries in the spot where she reported she was hit.”

In Mountain View, Calif., a donate-your-car-for-a-worthy-cause operation started the Community Fellowship for Battered Women. In 2002, the donated cars were re-sold for $186,000, but only $10,000 went for program services. The shelter residents turned out to be drug addicts, not victims of battering. Women are welcomed with open arms “If they just tell a good story and they are very persistent,” admits shelter owner/car dealer Gary Kegel.

Just down the road in Palo Alto, Calif., the North American Islamic Shelter for the Abused bills itself as the “first Bay Area domestic violence program sensitive to the needs of Muslims.” But the Atlas watchdog group has a different story to tell — the shelter is actually a “bogus Islamic charity” that “has no shelter and offers no services other than referral to government shelters.”

There is no requirement that shelter workers take a vow of poverty, and many shelter directors are rewarded handsomely for their efforts. In Dallas, Family Place director Paige Flink lives the good life with $163,000 in salary and benefits.

In rural Lake City, Fla., Another Way head Donna Fagan receives $95,000 – that’s a bigger haul than area bank presidents. And shelter managers routinely pilfer donated toys, jewelry, and entertainment tickets, former employees reveal.

So who says you can’t do well by doing good?


:rotfl: :rotfl: :rotfl:

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Re: Perspectives on the global economic meltdown

Postby Arya Sumantra » 17 Feb 2009 20:16

EU getting really nasty. First they blocked shipment in transit through Europe of Indian drugs to South America by calling them "counterfeit". Their definition of "counterfeit drugs" being drugs not patented in Europe. Now a shipment of Indian steel to Russia is being called Radioactive and blocked in transit at Germany.

Finds of Radioactive Steel on the Rise in Germany

Even though the end-market is not in Europe they are even blocking the transit of our goods. :evil:

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Re: Perspectives on the global economic meltdown

Postby ss_roy » 17 Feb 2009 21:09

The sad reality is that whites (especially europe, canada, australia and new zealand) have deluded themselves into believing that their peak influence was due to their ability, when it was really due to a combination of chance events and conditions in human history.

They have no real future (bad demographic profile, f**ked retirement system, f**ked taxation system, f**ked social pardigms, f**ked finacial system, loss of technological edge, loss of ability to get things done, poor integration of immigrants). But they still are delusional about their ability, role and future.

Give them some more rope to hang themselves!

South america had a chance if they weren't so self-destructive. Africa is still no there.

Look.. the future superpowers are going to the the US and large asian countries.

The question is- Are you ready to fill that role? It will be necessary to get rid of jholiwallas, NGOs, fifth columnists, older leaders and bureaucrats. Are you prepared to act rationally and in your own long term interest? Are you prepared to abandon established but self-destructive behavior?

We will find out the answer- one way or the other.

EU getting really nasty. First they blocked shipment in transit through Europe of Indian drugs to South America by calling them "counterfeit". Their definition of "counterfeit drugs" being drugs not patented in Europe. Now a shipment of Indian steel to Russia is being called Radioactive and blocked in transit at Germany.Even though the end-market is not in Europe they are even blocking the transit of our goods.

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Re: Perspectives on the global economic meltdown

Postby ramana » 17 Feb 2009 21:39

Arya, All those atmospheric tests of nukes before 1963, have contaminated the iron ore supplies the world over. Maybe AmberG or another physicst can explain better but there is an affiity for the ferric oxide to absorb radioactivity bye-products. With modern geiger counters even this small contamination will be detected.

BTW this is another non-tariff barrier that EU is imposing. It will drive the shipping cost.

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Re: Perspectives on the global economic meltdown

Postby ramana » 17 Feb 2009 21:47

One has to be like the legendary swan and drink only the milk (facts) and not get distracted by the water (psy-ops).

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Re: Perspectives on the global economic meltdown

Postby SwamyG » 17 Feb 2009 22:24

All these shows, how India should charter its own course. Devise its own principles and say "meri marzi". India should leave the debate between Capitalism and Socialism to the West. I am sure we can call our system Dharmic - do what is necessary to maintain stability, justice and prosperity (in that order). I don't see any education yet on the Western sphere; the thought is still that people ought to keep the economy running. Economy is for the people, not the other way around.

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Re: Perspectives on the global economic meltdown

Postby svinayak » 17 Feb 2009 22:36

ss_roy wrote:The sad reality is that whites (especially europe, canada, australia and new zealand) have deluded themselves into believing that their peak influence was due to their ability, when it was really due to a combination of chance events and conditions in human history.


How can we explain this point better. I was trying to explain this in the Indian econ thread regarding Jared Diamond.

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Re: Perspectives on the global economic meltdown

Postby amdavadi » 17 Feb 2009 23:01

Alan standford is in trouble. He & his company will be charge with securities fraud of missive amount.

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Re: Perspectives on the global economic meltdown

Postby sanjaykumar » 17 Feb 2009 23:30

How can we explain this point better. I was trying to explain this in the Indian econ thread regarding Jared Diamond.

You don't need to.

The riots are only a few months away.

Nothing like economic failure due to own's own doing to cause a reassesment of one's beliefs.

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Re: Perspectives on the global economic meltdown

Postby Singha » 18 Feb 2009 00:11

Calif gives notice that 20k govt employees may be let go...

meantime (BBC)

US tycoon charged over $8bn fraud

Texan billionaire and cricket promoter Sir Allen Stanford has been charged over a $8bn (£5.6bn) investment fraud, US financial regulators say.

The Securities and Exchange Commission said the businessman, had orchestrated "a fraudulent, multi-billion dollar investment scheme".

US investigators earlier entered the Stanford Financial Group Texas office.

The SEC said the fraud was "based on false promises and fabricated historical return data".

Three of Sir Allen's companies have been charged as well as several executives of the companies.

A US judge has also frozen the assets of Sir Allen and the other defendants as well as those of the Antigua-based Stanford International Bank (SIB), the Texas-based investment firm Stanford Group and investment advisor Stanford Capital Management.

'Close circle'

Sir Allen is a cricket promoter behind the Stanford Series which saw a West Indian all-star team - the Stanford Superstars - beat an England team for a $20m prize.

The England and Wales Cricket Board has suspended sponsorship negotiations with Sir Allen following the fraud charges.

The SEC said that Stanford International Bank sold approximately $8bn worth of certificates of deposit to investors, promising "improbable and unsubstantiated high interest rates".

The bank was "operated by a close circle of Stanford's family and friends", the SEC said in a statement.

"We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world," said Rose Romero of the SEC.

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Re: Perspectives on the global economic meltdown

Postby Singha » 18 Feb 2009 00:13

I spiderknew he was a bad egg when saw him for first time. real self made billionaires are generally pretty tight in keeping ship shape. few if any pull other people's wives on their laps and drink too much in public.

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Re: Perspectives on the global economic meltdown

Postby SwamyG » 18 Feb 2009 00:31

John Snow wrote:Not long ago people were bitching about US economy consuming too much resources and advocating cut down in consumption. People were alos advising savings should go up domestically. Now they have their wishes come true how come people want US to consume more and go back to the addicted ways?

US is consumption driven economy like hippo on which many parasites depend.... :mrgreen:


A hijacker hijacks the plane and is piloting it. The original pilot is unconscious, and now the lone person who can fly the plane - i.e hijacker is having a heart-attack. The passengers are bound to pray to their ishta daivatham for the hijacker's well being. No choice.
Last edited by SwamyG on 18 Feb 2009 00:54, edited 1 time in total.

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Re: Perspectives on the global economic meltdown

Postby SwamyG » 18 Feb 2009 00:33

And for the records, the Knighthood to Allen was given by Antigua.

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Re: Perspectives on the global economic meltdown

Postby ramana » 18 Feb 2009 00:41

Folks the Stanford scam case don't belong here. May be in global economy thread but not here.
So please delete and exercise judgement in future.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 18 Feb 2009 01:11

A golden oldie. Dylan fans will recognize sans effort onlee. .....might just belong in this thread, IMVVHO

The Times They Are A-Changin'

Come gather 'round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You'll be drenched to the bone.
If your time to you
Is worth savin'
Then you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin'.

Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won't come again
And don't speak too soon
For the wheel's still in spin
And there's no tellin' who
That it's namin'.
For the loser now
Will be later to win
For the times they are a-changin'.

Come senators, congressmen
Please heed the call
Don't stand in the doorway
Don't block up the hall
For he that gets hurt
Will be he who has stalled
There's a battle outside
And it is ragin'.
It'll soon shake your windows
And rattle your walls
For the times they are a-changin'.

Come mothers and fathers
Throughout the land
And don't criticize
What you can't understand
Your sons and your daughters
Are beyond your command
Your old road is
Rapidly agin'.
Please get out of the new one
If you can't lend your hand
For the times they are a-changin'.

The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is
Rapidly fadin'.
And the first one now
Will later be last
For the times they are a-changin'.


And howz that for perspective, eh? Dylan last sang it praising the 'cultural revolution' that enveloped the west in the 60s onwards. He could sing it again for the 'economic revolution' blowing their way now.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 18 Feb 2009 01:35

Two-Year U.S. Swap Spread Surges as Stocks Fall on Bank Concern

Huh. I'd be surprised if that news item surprised anybody but anybody onlee...

“There is a loss of confidence in the government’s ability to fix the problems” in the economy and credit markets, said Arthur Bass, a managing director of derivatives in New York at the brokerage Newedge USA LLC. “The continued breakdown in stock prices are also causing swap spreads to widen.”


Meanwhile on online forums across Amristan, the audacity of hope changes to the banality of fear..... excerpting some selectively biased comments onlee

OT - have been speaking with my boomer peers (early/mid 40s) and the unanimous response is that no one ever expects to retire.


Speaking with a few folks in their 50s and 60s, the number one thing putting the fear of god in them regarding retirement: health care costs.

One in particular has put their kids through college and own their own home. Very, very upset about losses in IRA account and loss of interest income on cash. Even this person is absolutely terrified of unexpected health care costs.


"Anyone know price out a nursing home or home health aide lately? Not cheap."

I think the price of live-in help is about to get much cheaper. It will be interesting to see how the tatooed post-MTV generation adapts to being a new servant class.


Your parents are coming back home to die.

Sorry.

And...most likely those kids you just through college are coming back home too.

You think we have too much housing inventory now?

HA!!


Starts out with being funny and soon degenerates into pre-depression depressing onlee.....

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Re: Perspectives on the global economic meltdown

Postby Chinmayanand » 18 Feb 2009 02:12

U.S. stimulus package threatens to let history repeat itself


Imagine this: A group of community organizers, aided by mesmerizing rhetoric and calls for equality, fraternity and hope, remove the privileged from power. But the government they inherit is heavily in debt to the tune of a third of the GDP. The debt comes due, the government can't pay, so the economy tanks.

What to do? Taxes are out – the taxpayers have fled (or are broke). The ingenious solution: Print more money as a stimulus package! What about interest on the printed stimulus? Piffle. Just print it also!

This is not the United States in 2009 – at least not yet. It is France, 1789, right after the French Revolution.

Why mention this history? For three reasons: First, because it is an obvious equivalent to what is happening today; second, because its ending could provide a clue to how today's events could end; and third, because a book I recently read about that period changed my thinking and made me into a semi-reluctant gold bug.

The book is Fiat Money, Inflation in France, written 50 years ago by Andrew Dickson White (a co-founder of Cornell University). I was handed the book last week when I went to visit a friend at a brokerage company, leafed through the book on the subway back, then got caught up in the narrative and finished it that day. It was delightful and terrible: Delightful, because it was written in the elegant plain style no longer in use today, and terrible, because it was so reminiscent of current events that, if the present unfolds as the past did, hard times lie ahead.

What evidence is there that today resembles that particular past so much that the ending is bound to be similar? First, in 1789, power shifted from those who had money to those who mostly didn't – similar to today. Second, the revolutionary French government tried to pay the debt racked up by the deposed regime with freshly printed money – again like today. Third, any dissenting voices in the National Assembly were shouted down with dire warnings of a “catastrophe” if the stimulus package were not approved – once more, like today.

But fourth and worst, as soon as the freshly printed money was used, the cry arose that it was not enough – and so more was printed. Then more, more and more.

That last part is not yet in evidence today. However, once the recently approved U.S. stimulus is used up, more will be demanded of Congress, just as it was in 18th century France – you can bet on it.

In France, many assembly members had been bribed by debtors, and by others who benefited from the new spending – just as in U.S. Congress, where there are many who are alleged to sell their vote.

And what of differences between then and now? Of course there are some. First, revolutionary France was violent, and those who refused to take the newly printed assignats – the currency of the day – or insisted on payment in gold, were arrested or guillotined.

Second, in revolutionary France, the massive printing caused inflation immediately. This is not yet the case, since the economy is so stagnant. Isn't this, then, a flaw in the argument?

Not really. In 18th century France, that first money-printing caused a brief economic revival, before the inevitable slide began. Seven years later, the French economy was in ruins and Napoleon appeared, to sop up the unemployed and their anger in a continental war.

If the same scenario follows today, we are about to experience the first flush of false spring, as the first massive stimulus wends its way through the economy; but then the economy would falter, and there'd be demands for more stimulus, which would rekindle inflation and make gold rise – same as in France, more than two centuries ago.

Yes. I know I opined before that short-term gold may decline. It hasn't, though it still might. But longer term, it would likely benefit, as more and more paper money is printed. (I told you the book converted me.) Benefit until when? Until the inevitable squeeze is instituted to purge the economy of inflation – the kind of interest rate hike that Paul Volcker performed in 1982 that killed inflation, but also tanked gold.

But we are still a few years away from it, and a war to go through first, as U.S. President Barack Obama sends more divisions into Afghanistan, sopping up some unemployment, even as the Russians, Pakistanis and Iranians unite to block their supply routes and, together with China, work (out of pure national interest) to push the U.S. out of Central Asia.

So: Inflation, economic decline, an escalating war, a Volckerish purge at the end – what's a good investment in such a scenario? Treasury inflation-protected securities, gold and cash – plus a stack of good, first-edition volumes on economic history to keep you well informed.

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Re: Perspectives on the global economic meltdown

Postby Raghav K » 18 Feb 2009 03:58

Things are getting scarier by the day.

Europe Unwinding.
Posted: Feb 17 2009 By: Jim Sinclair Post Edited: February 17, 2009 at 12:14 am
Filed under: General Editorial

Dear Friends,

To underscore my statement that "It has hit the fan," please review the following:

Forex failure continues in Poland
Posted by Izabella Kaminska on Feb 16 21:43.

It’s getting bleaker by the minute in Eastern Europe. In case you didn’t catch the latest from the Telegraph’s Ambrose Evans-Pritchard, he warned at the weekend how a growing crisis in Eastern Europe could cause nothing less than a total collapse in the West, or as he put it: “If one spark jumps across the euro zone line, we will have global systemic crisis within days.

To make his point Evans-Pritchard quotes Morgan Stanley’s Stephen Jen on the fact that Eastern Europe has borrowed a total of $1,7oobn abroad. Furthermore about $400bn of that debt has to be rolled over this year - a number equivalent to about a third of the region’s GDP.

As we outlined a couple of weeks ago, the concern is now greatest not for the retail mortgage sector, which practiced the issuance of foreign-currency based mortgages on a grand scale, but for corporates — which it appears practiced the art of derivative forex exposure on an even grander scale.

And so it comes as no surprise on Monday that yet another corporate forex failure has occurred in Poland, this time at Polski koncern Miesny Duda, a Polish meatpacking business. The stock sank to a record low on the news. As Bloomberg reports:

More…http://ftalphaville.ft.com/blog/2009/02/16/52508/forex-failure-continues-in-poland/

An unwind is taking form right now, this minute, (9:10PM ET) that may or may not be contained by international Central Bank action.

Even if central Europe does not financially implode the world money system today, it is just around the corner.

There are so many risks threatening us now that survival of any monetary status quo is doubtful.

Protect yourself.

It has hit the fan, right now, and all that is thanks to OTC derivative manufacturers and distributors.

Respectfully yours,
Jim


I am curious as to what would be the effect on India?

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 18 Feb 2009 05:25

Namaskar.

D&G samachar mein aapka swagat hai.


Rumors swirl around GE's health (opinion piece)

Looks like the market thinks GE is big in huge trouble with GE Capital. According to this link they have outrageous leverage of 140x!!! If this is correct GE is toast!


OK. take that with a pinch of salt.

Here's from Shedlock's blog on the D&G roundup.

Sales tax time bomb explodes

Retail goes from excess to freefall in a year.
What's happened to consumption since the middle of 2008 is nothing short of stunning, both in speed and magnitude. Several examples will make this point.


Interesting graphs there. check out.

States budget troubles worsen

Obama signed into reality the biggest stimulus program ever. Of its $700+ bn (?), some $140 bn goes to help prop states. But its just band aid coz the problems remain and the states will need money to fill their holes (pun unintended) again within mere months.

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Re: Perspectives on the global economic meltdown

Postby Satya_anveshi » 18 Feb 2009 08:12

vsudhir wrote:Namaskar.
D&G samachar mein aapka swagat hai.

:)

I would like to think that some top executives have a very good idea as to how all this thing is going to be played out in the short term and are changing (or not changing) their strategies in regard to that. What I mean by that is at least there is some end state that is acting like a guidance for these gents and that end state is not suggesting a drastic change of affairs.
This is in the short/medium term. In the long term - as we all know - we are all dead.:) TWIW

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Re: Perspectives on the global economic meltdown

Postby ss_roy » 18 Feb 2009 09:02

No, the vast majority of these top execs either believe that they can continue playing the old game or they are scared s***tless..

I would like to think that some top executives have a very good idea as to how all this thing is going to be played out in the short term and are changing (or not changing) their strategies in regard to that. What I mean by that is at least there is some end state that is acting like a guidance for these gents and that end state is not suggesting a drastic change of affairs. This is in the short/medium term. In the long term - as we all know - we are all dead. TWIW

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Re: Perspectives on the global economic meltdown

Postby ss_roy » 18 Feb 2009 09:07

We could have done well, if India had mediocre leaders and a population that did not buy into the western images of their abilities. Of course, we have leaders that are worse than incompetent and a population that mindlessly fawns over everything western (no critical thinking).

I am curious as to what would be the effect on India?

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Re: Perspectives on the global economic meltdown

Postby svinayak » 18 Feb 2009 09:19

http://www.financialsense.com/editorial ... /0120.html

Image

Image

Image

GHOST MALLS – COMING TO YOUR TOWN
by James Quinn
January 20, 2009

The illustration of Old West ghost towns is something that every American can relate to. During the great gold rush of the mid 1800’s in California, Nevada, and Wyoming towns sprung up out of nowhere to support the gold mining efforts of those looking to strike it rich. General stores, bars, hotels, brothels, and jails appeared out of nowhere based on demand from delusional prospectors hoping to hit the jackpot. Thousands of malls emerged throughout suburban America in the last twenty years as delusional shoppers thought they could spend their way to prosperity and achievement. Both delusions will end in the same manner.

When the gold rush ended as quickly as it started, the artificial demand collapsed and the towns were abandoned. These ghost towns sat vacant for decades, slowly decaying and rotting away. As you drive around today, you notice more and more For Lease signs on vacant retail buildings. Strip malls, inhabited by mom and pop stores, karate studios, pizza joints, and video stores have felt the initial onslaught of consumer deleveraging. As the pace of retailer collapse accelerates in 2009, larger malls will begin to go dark. Once bustling centers of conspicuous consumption and material decadence, built upon a foundation of consumer debt, will become ghost malls. Decaying, rotting malls inhabited by rats, wild dogs, and homeless former retail employees, will be a blight on the suburban landscape for decades.

For the last twenty years the American consumers have carried the burden of the world on its broad shoulders. This
has been a heavy yoke, but when you take steroids it doesn’t seem so heavy. The steroid of choice for American consumers was debt. They have utilized home equity loans, cash out refinancing, credit card debt, and auto loans to live far above their means. It has been a wild ride, but the journey is over. They can’t score steroids from their dealer (banks) anymore. The pseudo-wealth created in the last twenty years has begun to unwind, and will increase in speed in 2009.

Major Banks offered credit cards using your home equity as a way to pay everyday expenses like groceries, cigarettes, beer, gas and clothes. Eating your house was never so easy. The enormous amount of excess home sales and equity extraction led to titanic demand for home furnishings, remodeling services, appliances, electronic gadgets, BMWs, and exotic vacations. This led to immense expansion plans by retail and restaurant chains based on extrapolation of this false demand.

A permanent psychological change has occurred in American consumers. They have lost $30 trillion in value from their homes and investments in the last few years. No amount of fiscal stimulation will reverse this psychological trauma. The savings rate will increase from 0% to at least 8%. Mike Shedlock recently described the state of affairs. “Peak credit has been reached. That final wave of consumer recklessness created the exact conditions required for its own destruction. The housing bubble orgy was the last hurrah. It is not coming back and there will be no bigger bubble to replace it. Consumers and banks have both been burnt, and attitudes have changed.” Now the impact of a retrenching consumer will be felt far and wide, from Des Moines to Shanghai. Consumer spending has accounted for 72% of GDP. It will revert to at least the long term mean of 65%. David Rosenberg, the brilliant economist from Merrill Lynch, describes will happen:

"This is an epic event; we're talking about the end of a 20-year secular credit expansion that went absolutely parabolic from 2001-2007.Before the US economy can truly begin to expand again, the savings rate must rise to pre-bubble levels of 8%, that the US housing stocks must fall to below eight months' supply, and that the household interest coverage ratio must fall from 14% to 10.5%. It's important to note what sort of surgery that is going to require. We will probably have to eliminate $2 trillion of household debt to get there, this will happen either through debt being written off, as major financial institutions continue to do, or for consumers themselves to shrink their own balance sheets.”


There are at least 1.1 million retail stores in the United States according to the Census Bureau. There are approximately 1,100 Malls in the United States, not counting thousands of strip centers. These numbers will be considerably lower by 2011. ICSC chief economist Michael Niemira explained, "In the midst of all this doom and gloom, it's hard to imagine it getting better... But keep in mind, what happens in strong downturns is there's a hefty pent-up demand. It's wrong to extrapolate these conditions for the next year or two." Mr. Niemira will be wrong this time. There is no pent-up demand. If the phrase unpent-up demand existed, it would apply today. Americans have bought everything they’ve desired for the last twenty years. There is no pent-up demand if you own 20 pairs of jeans and 60 pairs of shoes. The over-spending and over-leverage will take a decade to unwind.




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Re: Perspectives on the global economic meltdown

Postby Singha » 18 Feb 2009 09:23

NYT - does not sit well with the 5th ave shop windows, the snow, the tinkling of bells, "noo yok, noo yok" songs from a piano bar.


For Uninsured Young Adults, Do-It-Yourself Medical Care
By CARA BUCKLEY
Published: February 17, 2009

They borrow leftover prescription drugs from friends, attempt to self-diagnose ailments online, stretch their diabetes and asthma medicines for as long as possible and set their own broken bones. When emergencies strike, they rarely can afford the bills that follow.

“My first reaction was to start laughing — I just kept saying, ‘No way, no way,’ ” Alanna Boyd, a 28-year-old receptionist, recalled of the $17,398 — including $13 for the use of a television — that she was charged after spending 40 hours in October at Beth Israel Medical Center in Manhattan with diverticulitis, a digestive illness. “I could have gone to a major university for a year. Instead, I went to the hospital for two days.”

In the parlance of the health care industry, Ms. Boyd, whose case remains unresolved, is among the “young invincibles” — people in their 20s who shun insurance either because their age makes them feel invulnerable or because expensive policies are out of reach. Young adults are the nation’s largest group of uninsured — there were 13.2 million of them nationally in 2007, or 29 percent, according to the latest figures from the Commonwealth Fund, a nonprofit research group in New York.

Gov. David A. Paterson has proposed allowing parents to claim these young adults as dependents for insurance purposes up to age 29, as more than two dozen other states have done in the past decade. Community Catalyst, a Boston-based health care consumer advocacy group, released a report this month urging states to ease eligibility requirements to allow adult children access to their parents’ coverage.

“There’s a big sense of urgency,” said Susan Sherry, the deputy director of Community Catalyst. She described uninsured young adults as especially vulnerable. “People are losing their jobs, and a lot of jobs don’t carry health insurance. They’re new to the work force, they’ve been covered under their parents or school plans, and then they drop off the cliff.”

If Governor Paterson’s proposal is approved, an estimated 80,000 of the 775,000 uninsured young adults across New York State would be covered under their parents’ insurance plans. That would leave hundreds of thousands to continue relying on a scattershot network of improvised and often haphazard health care remedies.

In dozens of interviews around the city, these so-called young invincibles described the challenge of living in a high-priced city on low-paying jobs, where staying healthy is one part scavenger hunt and one part balancing act, with high stakes and no safety net.

“For a lot of people, it’s a choice between being able to survive in New York and getting health insurance,” said Hogan Gorman, an actress who was hit by a car five years ago and chronicled her misadventures in “Hot Cripple,” a one-woman show that was a hit at last summer’s Fringe Festival. “There was no way that I could pay my rent, buy insurance and eat.”

Nicole Polec, a 28-year-old freelance photographer living in Williamsburg, Brooklyn, said she has attention deficit hyperactivity disorder and has a client who procures Ritalin on her behalf from a sympathetic doctor who has seen Ms. Polec’s diagnosis. Ms. Polec’s roommate, Fara D’Aguiar, 26, treated her last flu with castoff amoxicillin — “probably expired,” she said — given to her by a friend.

When Robert Voris last had health insurance, in 2007, he stockpiled insulin pumps, which are inserted under the skin to constantly monitor blood-sugar levels and administer the drug accordingly. He said the tubing for the pump costs $900 a month, so lately he has instead been injecting insulin with a syringe. But Mr. Voris, 27, a journalism student at the City University of New York who works at a restaurant in Park Slope, Brooklyn, is constantly worried about diabetes-induced seizures like the one that sent him to the hospital last summer. (Because it happened at work, his boss covered the ambulance and other bills.)

“That’s definitely the concern: what happens if I have to pay for this?” he said. “And the answer, I guess, is credit cards. Hopefully it won’t happen until I find a job that actually gives me insurance, which probably won’t happen anytime in the near future, given the way the economy works.”

Most family insurance policies cut off dependents when they turn 19 or finish college, and many young adults start out in New York cobbling together part-time or freelance work with no benefits. To qualify for Medicaid, a single adult can earn no more than $706 a month — more than minimum wage. Yet the average insurance premium for a single adult is $900 a month, according to a spokesman for the State Insurance Department.

“At this point, I can’t really justify it monetarily,” said Ian McElroy, a musician who moved to Bushwick, Brooklyn, from Omaha, Neb., last year. “It’s not like I think I’m invincible, I’m 29, the world can’t touch me. It’s the very opposite of that. I’ve got to make rent and eat.”

With insurance out of reach, Mr. McElroy has taken to playing doctor, using online resources like WebMD, which offers medical news, descriptions of various diseases and drugs, and discussion groups. As he spoke, Mr. McElroy was icing his feet, which, one day in January, had become cripplingly painful; he was unable to walk.

“I think I have plantar fasciitis,” he said. “I’ve been laid out for two weeks.”

(Even if the Paterson proposal passes, Mr. McElroy, like Mr. Voris and Ms. Polec and her roommate, would not qualify because their parents live out of state.)

Internet diagnoses, self-medicating and trading prescriptions, of course, come with potentially dangerous side effects. Dr. Barbie Gatton, who has worked in emergency rooms throughout the city since 2002, said she often sees young people who have taken the wrong antibiotics borrowed from friends.

“We see people with urinary tract infections taking meds better suited for ear infections or pneumonia — the problem is, they haven’t really treated their illness, and they’re breeding resistance,” she explained. “Or they take pain medicine that masks the symptoms. And this allows the underlying problem to get worse and worse.”

There are clinics throughout the city that provide the young and uninsured free or cheap snippets of medical help, like the Community Healthcare Network mobile unit, which was parked in the East Village one snowy night. Lindsay Bellinger, 26, who does administrative work through a temp agency and lives in Astoria, Queens, said she relied on the mobile unit for pap smears and tests for sexually transmitted diseases.

“This takes care of gynecological work,” Ms. Bellinger said. “And I get a visit to the dentist from my parents as a Christmas gift.”

Levon Aaron, who has asthma and works as a bouncer at a West Village bar, has not had insurance since he was 19. Mr. Aaron, now 23, said that his asthma attacks had been less frequent since he began playing handball and working out, but they had not gone away. He tries to use his inhalers sparingly, but four times in the past year he has found himself out of medicine during a severe attack and landed in the emergency room.

In the hospital, he gets a prescription for a new inhaler, which costs about $30 to fill. But his outstanding bills total about $3,000, he said, an amount he cannot fathom paying.

Mr. Aaron was one of several young adults who said living without insurance meant trying to take better care of themselves.

“I’ve stopped eating fast food,” said Santiago Betancour, who is 19 and lives in Rosedale, Queens. “I’m eating rice, vegetables and fruits. And when I get sick, I exercise to sweat it off.”

Of course, there are those who do feel invincible, like Eric Williams, who is 24, unemployed and currently in the middle of a six-week snowboarding adventure in Wyoming, Montana, Colorado, Utah, British Columbia and California. Mr. Williams said by cellphone near Bozeman, Mont., that he looked into buying health insurance before he left, but abandoned the idea after being unable to find anything for less than $400 a month. Instead, he is just trying to be careful, though not always with success.

“I’ve hit a couple of trees,” Mr. Williams said. “But I’m trying not to.”

vina
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Re: Perspectives on the global economic meltdown

Postby vina » 18 Feb 2009 09:38

Singha wrote:NYT - does not sit well with the 5th ave shop windows, the snow, the tinkling of bells, "noo yok, noo yok" songs from a piano bar.
:rotfl: :rotfl:

No it doesn't. And its Noo Yawk, Noo Yawk . The way you wrote it makes it sound so Noo Joisey. Strictly verbotten , something not mentioned in polite Manhattan society or rather ANY Manhattan society, more like something the cat brought in.

Singha
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Re: Perspectives on the global economic meltdown

Postby Singha » 18 Feb 2009 09:50

its a theme in many films of the "rebel guy" and either a very poor seamstress girl or
a very rich trust fund girl finding their "dreams" in the big city. its always a white christmans and the beautiful shopwindows are lit up. in a jazz bar a black guy is playing the sax slowly or in a piano bar the hero is playing and the girl is leaning over the piano in black dress with a string of white pearls, looking intently at his eyes.

"Noo yok Noo yok" :twisted: .... music streams out from the rahway prison, where our
protagonist is serving time for securities fraud and violation of fiduciary trust

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 18 Feb 2009 17:45

Makes me wonder, why isn't nationalizing all healthcare or 'universal healthcare' as the yanks call it, not more popular in th US? is it all just pharma lobying? really?

Can't see why the canadian system is worse than the US one frm the POV of many who are at rik and can't pay all the bills.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 18 Feb 2009 17:58

Drudge headline: Obama moves towards a Swedish model for banks'.

Seems like they're finally decided now. Better the Swede model than the Jap one, IMO.

And here, the FT fires the forst salvo of softening up even improbable oppn...

Bank nationalisation gains ground with Republicans

Long regarded in the US as a folly of Europeans, nationalisation is gaining rapid acceptance among Washington opinion-formers – and not just with Alan Greenspan, former Federal Reserve chairman. Perhaps stranger still, many of those talking about nationalising banks are Republicans.


Barack Obama, the president, who has tried to avoid panicking lawmakers and markets by entertaining the idea, has moved more towards what he calls the “Swedish model” – an approach backed strongly by Mr Graham. In the early 1990s Sweden nationalised its banking sector then auctioned banks having cleaned up balance sheets. “In limited circumstances the Swedish model makes sense for the US,” says Mr Graham.

Mr Obama last weekend made clear he was leaning more towards the Swedish model than to the piecemeal approach taken in Japan, which many would argue is the direction US public policy appears to be heading.

“They [the Japanese] sort of papered things over,” Mr Obama said. “They never really bit the bullet . . . and so you never got credit flowing the way it should have, and the bad assets in their system just corroded the economy for a long period of time.”

Administration officials acknowledge that the rescue plan unveiled by Tim Geithner, Treasury secretary, last week could result in the temporary nationalisation of some weak banks.

The plan sets out a framework for revealing the extent of the likely credit losses facing banks. Most private sector analysts believe the exercise will reveal that some banks have large capital shortfalls.


The time for biting the bullet may also be fast approaching.

In early April, big institutions will publish their first-quarter results. If the intervening Treasury stress tests have not by then revealed the true state of their balance sheets, then their first-quarter results may do so.

The first week in April – that’s when the children’s party is over,” says Chris Whalen, co-founder of Institutional Risk Analytics. “That is when the obvious will become apparent.”

The Obama administration remains opposed to federal control. Mr Geithner last week said: “Governments are terrible managers of bad assets.”

Others say he may eventually face no choice. “The danger we face is a Freddie Mac/Fannie Mae scenario where government gives the banking sector guarantees and then socialises the losses,” says Adam Posen, an economist. “That’s the worst thing we could do.”


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