Galt's Gulch

Birth Pangs Of The Coming Great Depression | The Daily Sheeple

Posted by UncommonSense 9 years, 3 months ago to Economics
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Interesting things are adding up. But still, nobody really knows exactly when things will crash. This is For Your Situational Awareness (FYSA).
SOURCE URL: http://www.thedailysheeple.com/birth-pangs-of-the-coming-great-depression_022015

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  • Posted by term2 9 years, 3 months ago
    I am retired, and this whole thing scares and disgusts me. I saved all my life only to have my savings stolen by the Obama crew printing money, and the resulting depression that will happen when the wealth is used up for his stupid giveaway programs and wars.
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    • Posted by Herb7734 9 years, 3 months ago
      You are not alone, my friend. There are so many ways a retiree can be impoverished in an economic meltdown that you have every right to be scared. If it gets as bad as it looks, even metal money will lose much of its value. Luckily, I probably won't be around to witness the worst of it.
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    • Posted by Robbie53024 9 years, 3 months ago
      Put your wealth into a store of value that has a proven track record. Actually, you are probably in a better position than many of us. I, for one, still have a mortgage for example. In order for me to pay that off, I need to rely on being employed. If things go in the tank, and income goes to zero, the equity in the house will likely go down as well.
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      • Posted by xthinker88 9 years, 3 months ago
        Well it depends on whether we have an actual depression or hyperinflation. In a hyperinflation scenario salaries will temporarily keep pace with the inflation whereas your mortgage will not. Ultimately you could end up paying off your mortgage with one month's salary in a wheelbarrow of worthless dollars.

        John Reed has a great book on protecting yourself from hyperinflation and depression. He's also a west pointer and a Harvard MBA.

        http://www.johntreed.com/hyperinflationd...

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      • Posted by $ jlc 9 years, 3 months ago
        My mother told me that, during The Great Depression, anyone who paid anything on their mortgage - even a few dollars per month - was left alone by the mortgage companies. There was no potential profit in foreclosing on many mortgages at once, so people who paid something every month were ignored.

        Just FYI.

        Jan
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  • Posted by Ben_C 9 years, 3 months ago
    Its a recession when a neighbor loses their job. Its a depression when you use your job. However, when there is 30% unemployment there is still 70% employment. The movie Cinderella Man points out how not all were severely affected by the depression. The trick is to offer goods and services to those with money. Businesses who cater to the bottom of the economic scale are the ones who close their doors. Those who cater to the top of the economic scale may see a decline but still have their doors open. I have lived through two Great Recessions (the first had 20% inflation which was worse than the 2008 fiasco) so I know a little of what I speak.
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  • Posted by PeterAsher 9 years, 3 months ago
    Calling the oil price decline a crash shows a critical lack of understanding of functional (as opposed to monetary) economics. This was a much needed correction of hyperinflation excess

    The price of crude and gasoline is now much more in alignment with overall inflation.

    The gross increase in purchasing power of the nation’s consumers resulting from the drop in prices at the pump times the for the consumer is huge

    This should create far more economic expansion than what is lost in the one oil industry.

    Also, more of our purchasing power is now staying on-shore.
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    • Posted by Rocky_Road 9 years, 3 months ago

      I have always believed that this nation was built on cheap labor, and cheap energy.

      We don't have any cheap labor anymore (at least legally), but we do have the means to keep our energy costs reasonable low...and it warms my heart to see this part of the equation getting some credit in the current economic improvement.
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    • Posted by $ jlc 9 years, 3 months ago
      Thank you. This was my instinct: that lower oil prices were a boon, since they freed up cash from utility category of spending and made it available for an elective category.

      I have no proof of this, however, so I am glad to see that you have come to a similar conclusion.

      Jan
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      • Posted by GMudd 9 years, 3 months ago
        I dont have proof, but I have put my money on this several times over the past weeks and been correct every time. It definitely happened but the long term effect is something that still needs to be addressed.
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    • Posted by Robbie53024 9 years, 3 months ago
      But many of the domestic sources are now idling wells/fracking ops due to price decline below costs of production. Once domestic sources have been put out of business, OPEC prices will again rise.
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      • Posted by plusaf 9 years, 3 months ago
        And everyone seems to forget EVERY TIME that ALL of these swings are Cyclical! If frackers cap wells, the oil is still there, waiting for the next upswing in crude prices. The resources don't decay with age, y'know....

        Virtually all natural resource price swings work the same way. When gold prices drop, mines shut down until the prices firm up and then they're reopened until supply exceeds demand and the price of the shiny drops again... at which point they shutter the mines again.

        Or you can forget history. Ken Fisher points out that the LONG Term Gains from investments in Gold (or virtually any other precious metal) average less than that of the S&P 500.

        If you want to time any market, more power to you. I've hit a couple good ones with lucky timing (or skill, as I might prefer to call it) but over the long haul, you're better off not counting on that strategy for your retirement nest egg...

        Ah, shit... what do I know? I'm just an 'injunear', not an MBA or a Ph.D. in some flashy discipline like "investing" or "economics"... :)

        ps... "Economics is NOT a 'science'... they never get to run controlled experiments..."
        :)
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        • Posted by Robbie53024 9 years, 3 months ago
          A social science, not a hard science.

          The issue with capping wells and closing down fracking ops is that it takes a higher price to justify the start-up costs, so we end up paying higher prices overall than would be otherwise the case. Oh, well, I'm enjoying the current prices while they last (which doesn't seem to be for much longer - jumped 15 cents just in the past week).
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          • Posted by plusaf 9 years, 3 months ago
            Social Science?
            Candidate for the Oxymoron of the Day for today?
            :)

            And, Rob... I enjoy the 'price of the day' for gasoline as much as I can, but I only drive about 6000 miles a year in my Prius, even counting five jaunts across the US, so at 400 miles per tank, the pendulum swing in the price of gas can swing full cycle or more as I burn off one tank!

            I essentially don't care about the price of gasoline. I'm just lucky that way at this point in my life. If I commuted 100 miles round trip to work each day, it probably would have more impact on me.

            But you're just supporting my comments about the cyclical nature of all nearly everything. You might try a subscription to Reason Magazine for their views on such issues, as well as their periodic summaries of recent events and their take on 'em... much like MarketMinder's reviews.

            Cheers!
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            • Posted by Robbie53024 9 years, 3 months ago
              No oxymoron. A hard science would state that if you raise prices, for example, all people would stop buying. Economics as a social science says that if you raise prices some number of customers will stop (those who's marginal benefit is lower than the increased marginal cost). You cannot know which, since it is impossible to know those internal marginal benefits - heck, sometimes the people themselves don't know them, hence the proliferation of impulse items around the cash registers). But in the aggregate, discernible patterns can be established. There is much more variation, but it is definitely a science.
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              • Posted by plusaf 9 years, 3 months ago
                :)... Robbie, 'hard science' uses distribution curves very often. Many events and measurements are not 'either-or'... :)

                Still, I've never heard of an ECONOMIST running a double-blind Controlled Experiment...

                Real folks like people in marketing do very often.
                :)
                Economists just seem to forecast futures based on past events that are never close enough to 'current conditions' to make the bases of the predictions viable.

                My favorite is the number of "economists" and financial gurus who have "predicted 25 of the last four recessions."

                Need more evidence than that?
                :)
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      • Posted by PeterAsher 9 years, 3 months ago
        That could occur to some degree but as Jan describes also, we may have a stronger real GDP base by then and be able to absorb that cost and domestic sources would come back on line. It’s a constant tug of war between free markets and manipulations by Governments and Megopolys.
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  • Posted by DrZarkov99 9 years, 3 months ago
    Now that the Europeans are exercising "quantitative easing", printing more Euros, these fiat currencies begin to resemble Al Capp's infamous Lower Slobbovian Razbukniks. How long before we start to see trillion Euro notes like the Zimbabwean dollar?
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  • Posted by CircuitGuy 9 years, 3 months ago
    If you write calls, people are paying for the volatility you mention. I have no calls ( or short puts) but I may take a position if we see more drop in SPY. I have a history of bad market timing though so maybe you'll sell me a year's worth of time premium and the options expire worthless. Only time will tell. Predicting the future is fun and profitable if you're right. :)
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    • Posted by plusaf 9 years, 3 months ago
      "Foreseeable Future Is An Oxymoron"....
      --- me.

      Depression? Hyperinflation?
      Follow the Money, Follow the Power, Follow the Control over Others...
      Do those two scary scenarios (scenaria?) follow logically from that? Who stands to lose in those kinds of future worlds? Crony Capitalists? They might have a vested interest in NOT letting that shit hit the fan... lucky for us, maybe?

      We shall see... but I still don't trust ANY of these Cassandras OR Wild-Eyed Optimists, especially if they're also selling subscriptions to their Advice Letters...
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  • Posted by plusaf 9 years, 3 months ago
    That was funny.... I checked MarketMinder for some history and was not disappointed, although their last mentions of the BDI was quite a few years ago... sample at http://www.marketminder.com/a/fisher-inv...

    I love predictions of "this [whatever] will continue linearly (or exponentially) forever and we're all doomed..."

    Want a good read? Buy/download/read any or all of Ken Fisher's books... and although I AM a client of his company, I do NOT get a toaster or any such reward if you partake of any of his services... except maybe if you cough up 0.5 Mil or more and become a client. In which case, I think they send me a Thank You letter... :)
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