Sure, they're unloading shit paper on the suckers... and someone like MoO would say the idiots deserve what they get for being so stupid as to fall for it.
Don't you see - they're plundering the last wealth out of the US. After which they'll stay in little fenced-in fiefdoms or move elsewhere. Because they're better than you, they're the beautiful people who deserve to live like royalty because they have money and you don't. Well, maybe if you lick their boots and kiss their asses they'll let you play at their games just a tiny bit, so you can get a tiny bit and glimpse of the good life but they will never, ever let you actually achieve it. Because that would mean they aren't special any more and we can't have that, oh no.
As it is, I have nothing in the stock market. I can't decide whether that's a good thing or not at this point.
The only way for this to stop is for the traders to refuse to buy the worthless toilet paper... but of course that would crash the markets. They haven't got anything else but fast talk, smoke and mirrors at this point, so that's what they're using at this point. Eventually, the peasants will notice the man behind the curtain has no clothes.
Here are some interesting tidbits:
John D. Rockefeller back in 1929 wrote:These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again
Don't worry folks - the fundamentals of the economy are sound! It's just another downturn! It no different than any other recession!
From
here
The Great Depression was not a sudden total collapse. The stock market turned upward in early 1930, returning to early 1929 levels by April, though still almost 30 percent below the peak of September 1929.[6] Together, government and business actually spent more in the first half of 1930 than in the corresponding period of the previous year. But consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by ten percent, and a severe drought ravaged the agricultural heartland of the USA beginning in the northern summer of 1930.
Everything is OK, folks, the DOW close up! The market is rebounding and good times are here again!
Debt is seen as one of the causes of the Great Depression. (What follows relates to the USA).
Macroeconomists including Ben Bernanke, the current chairman of the U.S. Federal Reserve Bank, have revived the debt-deflation view of the Great Depression originated by Arthur Cecil Pigou and Irving Fisher: in the 1920s, American consumers and businesses relied on cheap credit, the former to purchase consumer goods such as automobiles and furniture, and the latter for capital investment to increase production.
Well, today it's SUV's and plasma TV's for consumer debt, and oversize houses. For business... well, maybe CEO salaries and bonuses?
This fueled strong short-term growth but created consumer and commercial debt. People and businesses who were deeply in debt when price deflation occurred or demand for their product decreased often risked default.
See, this is one reason I really, really think it's important to stay out of debt as much as possible. While there are some debts that make sense to take on, they aren't many, and with my education loans paid off and no desire to buy a house right now I can't think of any that make sense for me.
Many drastically cut current spending to keep up time payments, thus lowering demand for new products.
We're seeing that now.
Businesses began to fail as construction work and factory orders plunged.
We're seeing that now.
Massive layoffs occurred, resulting in US unemployment rates of over 25% by 1933.
We're getting lots of layoffs, but ALSO a lot of people are getting their hours cut to part time which isn't showing up on the unemployment stats. I think that not taking into account forced part time status is skewing the view of how bad things are.
Then, too, people didn't lose their jobs en masse in 1929 - it took a year or two to shake out, and didn't get truly dire until '31
Banks which had financed this debt began to fail as debtors defaulted on debt and depositors became worried about their deposits and began massive withdrawals. Government guarantees and Federal Reserve banking regulations to prevent such panics were ineffective or not used. Bank failures led to the loss of billions of dollars in assets.
Same shit, different century.
I guess the current administration is
trying to do something, but I haven't a clue whether it will do anything positive or not.
The debt became heavier, because prices and incomes fell by 20–50% but the debts remained at the same dollar amount.
Ah... deflation, the great bogey-man of those with debt. It's being "upside down" with your mortgage equity. The current crowd doesn't want hyperinflation, but they DO want to avoid deflation as well. As one of the few with more savings than debt deflation might actually
benefit me - assuming there's enough economy left to put food on the grocery shelves.
Bank failures snowballed as desperate bankers called in loans which the borrowers did not have time or money to repay. With future profits looking poor, capital investment and construction slowed or completely ceased. In the face of bad loans and worsening future prospects, the surviving banks became even more conservative in their lending.[8] Banks built up their capital reserves and made fewer loans, which intensified deflationary pressures. A vicious cycle developed and the downward spiral accelerated. This kind of self-aggravating process may have turned a 1930 recession into a 1933 great depression.
And THAT's why they want to prop up all the bad debt - they're afraid of the same damn deathspiral happening again.
Monetarists, including Milton Friedman and current Federal Reserve System chairman Ben Bernanke, argue that the Great Depression was caused by monetary contraction, the consequence of poor policymaking by the American Federal Reserve System and continuous crisis in the banking system.[10][11] In this view, the Federal Reserve, by not acting, allowed the money supply as measured by the M2 to shrink by one-third from 1929 to 1933. Friedman argued[12] that the downward turn in the economy, starting with the stock market crash, would have been just another recession. The problem was that some large, public bank failures, particularly that of the Bank of the United States, produced panic and widespread runs on local banks, and that the Federal Reserve sat idly by while banks fell. He claimed that, if the Fed had provided emergency lending to these key banks, or simply bought government bonds on the open market to provide liquidity and increase the quantity of money after the key banks fell, all the rest of the banks would not have fallen after the large ones did, and the money supply would not have fallen as far and as fast as it did.[13]
Well, that explains WHY a few things have happened the way they did the last week or two - Bernake & Co. are attempting to stave off GD2 by implementing their theories.
And, from across the pond, the Austrian school had a different take:
In the Austrian view it was this inflation of the money supply that led to an unsustainable boom in both asset prices (stocks and bonds) and capital goods. By the time the Fed belatedly tightened in 1928, it was far too late and, in the Austrian view, a depression was inevitable.
The artificial interference in the economy was a disaster prior to the Depression, and government efforts to prop up the economy after the crash of 1929 only made things worse. According to Rothbard, government intervention delayed the market's adjustment and made the road to complete recovery more difficult.[18]
Furthermore, Rothbard criticizes Milton Friedman's assertion that the central bank failed to inflate the supply of money. Rothbard asserts that the Federal Reserve bought $1.1 billion of government securities from February to July 1932, raising its total holding to $1.8 billion. Total bank reserves rose by only $212 million, but Rothbard argues that this was because the American populace lost faith in the banking system and began hoarding more cash, a factor quite beyond the control of the Central Bank. The potential for a run on the banks caused local bankers to be more conservative in lending out their reserves, and this, Rothbard argues, was the cause of the Federal Reserve's inability to inflate.[19]
Marriner S. Eccles, who served as Franklin D. Roosevelt's Chairman of the Federal Reserve from November 1934 to February 1948, detailed what he believed caused the Depression in his memoirs, Beckoning Frontiers (New York, Alfred A. Knopf, 1951)[21]:
As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery. [Emphasis in original.] Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped. That is what happened to us in the twenties. We sustained high levels of employment in that period with the aid of an exceptional expansion of debt outside of the banking system. This debt was provided by the large growth of business savings as well as savings by individuals, particularly in the upper-income groups where taxes were relatively low. Private debt outside of the banking system increased about fifty per cent. This debt, which was at high interest rates, largely took the form of mortgage debt on housing, office, and hotel structures, consumer installment debt, brokers' loans, and foreign debt. The stimulation to spending by debt-creation of this sort was short-lived and could not be counted on to sustain high levels of employment for long periods of time. Had there been a better distribution of the current income from the national product -- in other words, had there been less savings by business and the higher-income groups and more income in the lower groups -- we should have had far greater stability in our economy. Had the six billion dollars, for instance, that were loaned by corporations and wealthy individuals for stock-market speculation been distributed to the public as lower prices or higher wages and with less profits to the corporations and the well-to-do, it would have prevented or greatly moderated the economic collapse that began at the end of 1929. The time came when there were no more poker chips to be loaned on credit. Debtors thereupon were forced to curtail their consumption in an effort to create a margin that could be applied to the reduction of outstanding debts. This naturally reduced the demand for goods of all kinds and brought on what seemed to be overproduction, but was in reality underconsumption when judged in terms of the real world instead of the money world. This, in turn, brought about a fall in prices and employment. Unemployment further decreased the consumption of goods, which further increased unemployment, thus closing the circle in a continuing decline of prices. Earnings began to disappear, requiring economies of all kinds in the wages, salaries, and time of those employed. And thus again the vicious circle of deflation was closed until one third of the entire working population was unemployed, with our national income reduced by fifty per cent, and with the aggregate debt burden greater than ever before, not in dollars, but measured by current values and income that represented the ability to pay. Fixed charges, such as taxes, railroad and other utility rates, insurance and interest charges, clung close to the 1929 level and required such a portion of the national income to meet them that the amount left for consumption of goods was not sufficient to support the population. This then, was my reading of what brought on the depression.
Now, I realize that IS a Wiki I'm taking this from, but while one must read Wiki with a large grain of salt they can be a starting point. I do see parallels between then and now, and I see a mad scramble among the financial elite and the political figureheads to DO SOMETHING!!!! Every day on CNN I see "economics" and "financial advisors" telling people not to panic, to stay in the stock market, it's all going to be OK... but you know, at some point the average Joe REALLY wants to restuff the bedroom mattress and money starts to look like good stuffing. Let's face it, if we're headed for deflation that putting your money into a safe savings account, or just a sturdy lockbox, makes a lot of sense. Of course, the government could just print more money to generate inflation, hoping they don't overdo it and create hyperinflation which, frankly, is also disastrous.
'Course, part of my sour mood comes from being laid up at home with a bad leg and nothing to do.... ordinarily I'd be outside working and at least earning a few more dollars to squirrel away.
