Excellent point.

And boy howdy, I shudder to recall my thrifty Dad's robust use of the Anglo-Saxon language during the Carter administration.

Those were the days when may parents taught me about precious metals as a hedge.

Those were strange days, strange days indeed.  Yes, we live in even more bizarre times today, but this is far from the first rodeo for some of us here.




In fact I remember back in the 70s, hearing stories about people who did just that.  People with assets, those who could just 'close up shop and walk away' and get out of the game when it all fell down.

They would borrow money they had no special need or use for at 'today's rate', then turn around and put it in a bank at 'tomorrow's' (higher) rate.

I was a kid at the time, but even I figured out how insane it was.  But –– the stories went –– there for a while, people came out ahead doing just that.

Like I said:  Strange days.




Guilty as charged.  I have a deep, gut-level distrust of personal debt.  The people I knew of who were playing musical chairs with inflation were gambling on Profit vs Loss of Interest Income.  They were gambling on how much they would or would not lose on the interest on their money, not the principle.

Buying precious metals is also gambling of a sort.

The people I grew up with during the Carter years weren't looking to get rich, simply to preserve the bulk of their assets.



Agreed.  It will not end well.

The whole damned thing is an experiment.

Also Known As : "Slavery"

It's sheer marketing genius to convert the dirty word "slavery" into "consumer credit".

How about we go a shade less dramatic and call it:  Indenturement.

Slavery was for life, no way out.  A slave could be tortured, maimed, sold, or even killed.  

Indenturement was for a fixed period of time, or until the servant worked and paid his way out.  There existed a hope of freedom.

Of course an indenturedman had sense enough to do everything possible to work his way out of indenturement, and realised it was not a good way to live.

Whether we know the old stories or not, many of us had ancestors who were indenturedmen.  I know that one of mine came over from Scotland under that wretched condition.

Indenturement was a matter of shame back then.  

Now people are proud and happy to go flipping out those gold-colored and platinum-colored cards.

So much is lost to those who do not know their own history.

I just read the first three chapters of Glenn Beck's "Common Sense" and I have to say we're so screwed.  

The national debt ain't going to get any better and we have no chance if it doesn't.  Obama care or any other panzi scheme they come up with is going to put us over the top and this economy is going to hyper inflate.  I don't think we can make it to the next Presidential election fellas the ship is going down.

Si I got to thinking what do I do, and I realized not a darn thing differently than I already do.  I guess all I can do is wait for the crunch.

But I Thought The Economy Was Improving?

In a word: Poverty

You are all going to love this one:





This is more our speed methinks:

Marketing and advertisement.

I think some of the advertisements the past few years should be archived for future teaching.

"Visa, it's everywhere you want to be".   The hidden message..."get your freedom now".

What a joke.  

China is now self perpetuating like America once was. Workers make enough to buy Chinese goods from Chinese people that are working and are also buying goods "Made in China". I wish I had bought stock in that company that makes those little gold "Made in China" stickers..........
The fortunate short bastages are making money exporting to those stupid Americans too.........

How funny, I was contemplating doing a thread of guns and "common sense" myself. Great minds...

I think our world views are similar, and we certainly seem to share the same financial attitude WRT the uses of debt. The reason I describe it as "pulling forward future income" is because, well, that's what it IS, basically, there was no attempt to make it sound heroic at all. Although to be fair I should clarify it as "potential" or "assumed" future income, because it certainly isn't assured. I suppose an even better phrase is debt a "claim against theoretical future income". The first person I heard use that phrase was Karl Denninger, and I still think it's one of the best descriptions of what debt is supposed to be(at least as intended for business uses)

For some examples of business usage I'll use myself. I have a little video business on the side, mainly doing independent films/editing/event videography stuff. I'm not as active as I once was, but at one time it payed the bills for me a few years ago when I went back to college full time. I managed to stay out of personal debt, but there were times I had a decent job come up where I needed a particular piece of equipment that I just couldn't quite swing at the time, so I'd borrow the money. Most of the time the equipment would be paid off by the first job alone, and I would have something extra to use to sell myself to later clients and/or charge a higher rate, so everything ended up paying for itself several times over.

In those cases I used debt like it is supposed to be used, by increasing productivity. Sure, things could have gone wrong(and believe me I was aware of it) but I must have done something right because it didn't happen.

Now the idea of "consumer credit" on the other hand, is something I've never had any desire to use, and the concept is a complete anathema to me. It's a claim on assumed future income so you can consume NOW, with no corresponding increase in productivity or income. That is unsound, will only end badly.

The upside to using debt for business purposes is at least theoretically if it's done properly you're increasing income and therefore increasing your ability to handle the debt you've just taken on(which is one reason it's called "leverage", you're increasing not only the upside but also the downside in case you're wrong) but with pure consumption you're actually negatively impacting your future earnings and ability to handle debt.

In business you take on debt to make more money, not to operate. If you are borrowing to operate, reality is telling you your business model is wrong.

Yes, of course we can take on short term debt to operate for X amount of time because we believe after X we will be profitable and be able to both pay of the debt and profit. But we should have made enough during the good times to put money away for the bad (short bad) If the bad is long we need to get our emotional investment in check and move on to a new model.

If you are using savings, retirement, etc. to pay you bills and get by IMO you are ignoring reality. Reality is telling you to make a significant and possibly radical change in your lifestyle. Now if like in business, you are just dong it for X time and then you are going to make so much from the investment that you can quickly pay back the loan and profit, then it’s a good decision.

If on the other hand you are just in denial over your current situation, then spending your savings and retirement to prop up your façade of success and keeping up with the Jones is insane.

Reality is telling a lot of people to get a smaller house, get cars that are paid for, stop using credit whenever possible, get a second job, sell all your extra crap, etc., etc. Very few people are listening.

Wrong, because of mere timing

Good then.  -for Modus, you, and all the rest of us :








"It is the most serious financial crisis of our lifetime,

It is an idle dream to think that you could have this kind of crisis

without the real economy being affected.

We are facing a recession -and it is slow in coming...


...but the slower it comes, the more powerful it is."

George Soros
To Reuters
07.14.08

Over at TickerForum there is discussion that some retailers are already disguising desperate deflation-driven price-cutting as "Christmas Sales".

Thus, over 25% of all the days of the year –– I mean, it's over a month until Halloween –– are oriented towards the one big retail event that will make or break a number of retailers this year.

Here is my counterintuitive, illogical prediction:

Retailers will actually have a remarkably good Christmas season.

My reasoning:

Americans have had their credit debt-enabling limits slashed.  Their feelings are hurt over it.

Everywhere they turn, some talking head is going on about "cutting back".  Consumers have been hearing this for a whole freaking year.  

They are foundationally adrift, raised since childhood to have "self-esteem", but few real coping skills.

They are sick at heart over actually buying those austere-looking generic-packaged groceries and feeding it to their families.  

They feel like they perpetrated child abuse by not buying their kids lavish back-to-school clothes.

All this talk about "home-made Christmas gifts" might be great for little old grandmas, but they realise that they, as consumers, have no skills in cooking, sewing, woodworking, or other worthwhile gift-making skills.  Besides, that's just for people "out in the country".  Surely they would not give their own family and friends anything homemade.  It would be an admission of failure.

People are just tired of frugality, whether enforced or by choice.  

This past year of frugality has been entirely antithetical to everything they were raised to believe in.  It is foreign and scary and somewhat shameful.

They mistake the percieved shame of prudent frugality with the real shame of frivolous consumer debt.

And they just cannot take it any more.

And they are going to whip out that plastic and go for broke in one whopping blaze of glory.

They will do it in kind of a mindless, joyless mental fugue state.

Sure, they will make prudent, frugal Christmas Lists, and they will talk about "cutting back".

They will make some noble efforts at baking cookies and building bird houses.

Then... suddenly... privately –– not discussed at the dinner table, or planned in any way –– they will be like any other addicts who have managed to stay away from their drug for some period of time, knuckles whitened, and head pounding... until they too succumb under stress...

They will buy, and buy, and buy in a SICK EXPIATION and CATHARSIS of something they do not –– cannot –– understand.

And then, come January, unable to pay –– they will not pay.

Pinned 10 round mag fail :


 

Maybe modus'  timing was off. WE have another prediction in this thread for Nov 5th or something like that. That will come and go with no final meltdown also......I hope

George Soros .....

that was 7/14/08 He was Bashing the economy so his boy Obama would get elected.

I predicted the Stock Market would be below 5000 by June, what I failed to take into account was the unprecedented and over-reaching involvement of the government in the inner workings of the market place.  

Just like every other bubble, the further you put it off, the worse it is going to be when you actually do hit the bottom.  We have been pushing this recession off for almost a decade. They will fiddle with this and tweak that and prop this up just to keep it limping along and once all those bandaids finally fail, it is going to be a disaster.  Once you start propping it up, you have to continue, because no president wants a depression on their legacy.  

This time, we have a POTUS that is on a mission to take us to Marxism, if a depression is needed to do it, so be it.  At least this will be all on the shoulders of the Liberal Democrats.

I almost hope there is not a '94 style take over of Congress, let the Democrats own this whole mess for 4 years and then repeal everything they did and they will be neutered for a generation.

I just hope this time it can happen

the problem is the focus is on the market right now. the market will fall again and go up, but what we saw was the worse of it until the commercial market can't hide. when all the fancy hotels start to tank you will be seeing the start of the next crash. who here has been to NYC recently? see all those empty stores and offices, now imagine the entire country. bars, hotels, offices, former homes of mega electronic stores. how about Vegas? Miami, we are looking at a real problem that not even gold or Ron Paul can fix

We need to start by ridding our Govt. of the lifetimer Politicians and get some real
unobscured thinkers in there to get this spending under control.  What the hell is
wrong with a BALANCED BUDGET amendment???

AC

Received this in an IM on Facebook..........sorry if it's a dupe..........

I could see this being correct if we were farther along in the "recovery" (as reported in the MSM, though I personally don't think we're there yet).  Unemployment is still rising, people starting to lose unemployment benefits, foreclosures and BK's aren't slacking off, credit is still tight, interest rates and fees on lines of consumer credit are still high, etc.  While I think people would love to be spending more, I think at this point many just can't.  Not only is the money not there, the line of credit isn't there either.  The folks still employed are hunkered down and waiting for the axe to drop.  If they do spend more at Christmas, it's because they put off buying things they would need anyway (e.g. clothing for the kids) and that becomes "Christmas".

Having said that, if we see the lines of people at 0-dark-early at the stores to get that "must have" toy of the season, then I suspect we won't see the bottom for a while longer.

It always gets put off "till later" doesn't it.  


Well modus, I don't think the economy will collapse today, so one down.  Two more to go.


modus  Posted: 8/7/2009 2:19:36 PM EDT[Last Edit: 8/7/2009 2:29:24 PM EDT by modus]
What kind of business? If it's .gov that's expected as Obama pours funny money into economy. Car dealers are doing well right now too. Of course this is completely crazy and tragic for TANSTAASFL! Our currency, the US dollar, is hemorrhaging legitimacy and inability to service old debt at all levels or incur new debt is here.

I have pretty much said my peace in various posts.

We have about 50 days left.



Be back in 3 days.

A vision of our future:

Where's mad max, the toe cutter, and a picture of the basement I am hiding in?

Sure looks like the Detroit suburbs in them pics.............?

The Fed bought a trillion dollars worth of bonds and Securities on the open market? Really? That's all?

Social Security Strained by Early Retirements

Older workers who can’t find employment opt to collect their benefits

WASHINGTON - Big job losses and a spike in early retirement claims from laid-off seniors will force Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that's happened since the 1980s.

The deficits — $10 billion in 2010 and $9 billion in 2011 — won't affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit.

Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn't expect the increase to be so large.

What happened? The recession hit and many older workers suddenly found themselves laid off with no place to turn but Social Security.

"A lot of people who in better times would have continued working are opting to retire," said Alan J. Auerbach, an economics and law professor at the University of California, Berkeley. "If they were younger, we would call them unemployed."

This country is eating itself alive, from the inside out

No. Not indefinitely.

The owners of this present financial system, working in concert with their congressional harem, will do everything in their power to, as you say, "put it off".

They will, however, along with yourself, find that they can neither deny, nor outrun, reality .

Absoutely.

The most seasoned, experienced "brain trust" of business management ever, that is our generation of typical:

Male
White
Straight
Educated
VietNam Vets

are sitting this one out, looking over the fishin' hole, and finally saying:

Y'all got no place for me?  I'll just find me a place for my ownself.

China is now selling its first Yuan bonds.

Expected.

I'll be looking to buy. -Link?

Looks good.  A nice clear lot right there and a lot of bricks to build my new house.  Probably some pipe to reclaim as well.  I could do worse.

I didn't see this one posted yet.  I used to think that this sort of stuff was tin-hat territory, but I don't guess I can write off "crazy" stuff like I used to.

http://www.zerohedge.com/article/smoking-gun-fed-controlling-gold

As usual with that site, the commentary is *interesting*

I wonder what list would be shorter today; one that includes things the Government doesn't have its hand in, or a list of things that the Government does have it's hands in?

I get the feeling that you already know the answer to that one.

US Consumer Confidence Unexpectedly Fell to 53.1 in September (9/29/2009)
U.S. Consumer Confidence Unexpectedly Fell to 53.1 in September
Share | Email | Print | A A A

By Shobhana Chandra

Sept. 29 (Bloomberg) –– Confidence among U.S. consumers unexpectedly fell in September as a rising unemployment rate weighed on households.

The Conference Board’s confidence index dropped to 53.1, from a revised 54.5 in August, a report from the New York-based group showed today. Measures of present conditions and expectations for six months from now both declined.

Unemployment is forecast to rise to 10 percent this year, even as the monthly pace of job losses slows. Today’s report corroborates the Federal Reserve’s assessment last week that sluggish income growth and tight credit are restraining household spending and slowing the pace of the economic recovery.

“Layoffs appear to have topped out but hiring has not yet begun,” John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report. “Consumer confidence and spending will likely remain constrained well into early 2010.”

Consumer confidence was projected to increase to 57 this month, from an originally reported reading of 54.1 in August, according to the median estimate in a Bloomberg News survey of 78 economists. Forecasts ranged from 54 to 70. The index averaged 58 last year.

Home Prices

A separate report today showed home values in 20 U.S. metropolitan areas declined less than forecast in the year ended in July, a sign the housing slump that led to the worst recession in seven decades is abating.

The S&P/Case-Shiller home-price index fell 13.3 percent in July from a year earlier, the smallest drop in 17 months, the group said in New York. Adjusted for seasonal variations, the gauge rose 1.2 percent from the prior month.

The Conference Board’s measure of present conditions dropped to 22.7 from 25.4 the prior month. The gauge of expectations for the next six months decreased to 73.3 from 73.8.

The share of consumers who said jobs are plentiful fell to 3.4 percent from 4.3 percent. The proportion of people who said jobs are hard to get increased to 47 percent from 44.3 percent.

The proportion of people who expect their incomes to rise over the next six months increased to 11.2 percent from 10.8 percent. The share expecting more jobs decreased to 17.9 percent from 18 percent.

Plans to buy automobiles, homes and major appliances within the next six months declined in September, the report showed.

Sentiment Report

Today’s figures follow the Reuters/University of Michigan final index of consumer sentiment, which rose this month to the highest level since January 2008.

Economists say the Conference Board’s index tends to be more influenced by attitudes about the labor market.

The pace of job losses is easing as the economy shows signs of accelerating. Payrolls fell by 216,000 in August, the smallest decline in a year, according to the Labor Department.

The economy has lost 6.9 million jobs since the recession began in December 2007, making it the biggest employment slump of any downturn in the post-World War II period. Economists surveyed by Bloomberg predict unemployment may reach 10 percent by year-end, the highest level since 1983, from 9.7 percent in August.

At the same time, steadying demand is helping some consumer-related businesses such as American Greetings Corp. The second-largest U.S. greeting-card company last week reported a gain in second-quarter profit.

‘Bit Better’

“Sales are actually a bit better than what we expected,” Zev Weiss, chief executive officer of the Cleveland-based company, said on a conference call on Sept. 24. “If you look at it from a year-over-year perspective, they’re hanging in there very nicely. And in this environment, that’s pretty good.”

Companies not faring as well include Rite Aid Corp., the third-largest U.S. drugstore chain. The Camp Hill, Pennsylvania- based business cut its full-year forecast last week, saying customers will remain focused on discounts in a “tough economy.”

Confidence may improve in future months as consumers repair their balance sheets. Net worth for households and non-profit groups climbed to $53.1 trillion from $51.1 trillion in the first quarter, marking the first gain since the third quarter of 2007, according to a Sept. 17 report from the Fed.

Fed policy makers last week said they would keep the benchmark lending rate near zero “for an extended period,” while noting that the economy and housing had strengthened. They also said they would slow the central bank’s purchases of mortgage debt and extend the program through the first quarter of 2010 in order to keep lending rates low.

To contact the reporter on this story: Shobhana Chandra in Washington at [email protected]

Last Updated: September 29, 2009 10:00 EDT

http://www.google.com/hostednews/afp/article/ALeqM5jk4b_PZjuQJ_yNqkdPmr5GIbv7CA

Not sure how the sales are going.  They're probably for Chinese nationals only at this point, or somesuch.

This is for Dave_A and others who say outsourcing our jobs was good.





(from Is It Time To Recognize Reality? by Karl Denninger)