The Decline And Fall Of The United States

Re: The Decline And Fall Of The United States

PostBy: jpete On: Tue Dec 22, 2009 9:47 am

ErikLaurence wrote:IMO the decline of the United States was started by the debt funded, conspicuous consumption of the middle class in the 1980s. That trend continued through the 1990s and has only slowed down in the last year.

Everything else follows that.

We have a congress who overspends on credit because we overspend on credit.


OR Congress spends on credit, prints money, destroys the dollar so your cash doesn't go as far, and you need credit to keep up.

This is further back than the 80's. The last limiting factor was in 1971 when Nixon decoupled us from gold.

Even though we had fractional reserve banking, you still had to at least have SOME gold backing a fraction of your money.

Gold was the last string holding the country back from explosive money creation. Now, the printing presses can run full bore, every dollar devaluing the one before it......
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Re: The Decline And Fall Of The United States

PostBy: ErikLaurence On: Tue Dec 22, 2009 10:00 am

jpete wrote:
OR Congress spends on credit, prints money, destroys the dollar so your cash doesn't go as far, and you need credit to keep up.



I'm not sure I buy that.

Homes have become huge while families are getting smaller. According to the National Association of Home Builders, the average home size in the United States was 2,330 square feet in 2004, up from 1,400 square feet in 1970. In that same time frame the average family size has dropped from 3.1 to 2.6.

Add to that 50 inch TVs, $500 video game systems, people leasing cars they can't afford to buy to project an image.


As for gold, I honestly don't know enough about the nuances of monetary policy to understand how that all interrelates.
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Re: The Decline And Fall Of The United States

PostBy: jpete On: Tue Dec 22, 2009 6:57 pm

Well, you have to understand that as a population, we've been marketed to, and as a whole, marketing WORKS.

You had GWB standing up applauding the highest rate of home ownership in history. Greenspan was out pushing adjustable rate mortgages and everyone was screaming about how if you didn't buy a house NOW, you were missing the best market in history.

Eventually, the collective push works on most people.

They do it because happy voters don't upset apple carts come election time. And what makes people happier than "stuff"?

But you can't have good old American "bigger, better, faster, more" unless you print more money every year.

Gold, even if tied to a fractional reserve system, limits how much money is in circulation.

But without a bottomless pit of money, you can't promise your constituents the moon, now can you?
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Re: The Decline And Fall Of The United States

PostBy: ErikLaurence On: Tue Dec 22, 2009 7:13 pm

jpete wrote:Well, you have to understand that as a population, we've been marketed to, and as a whole, marketing WORKS.

You had GWB standing up applauding the highest rate of home ownership in history. Greenspan was out pushing adjustable rate mortgages and everyone was screaming about how if you didn't buy a house NOW, you were missing the best market in history.

Eventually, the collective push works on most people.

They do it because happy voters don't upset apple carts come election time. And what makes people happier than "stuff"?

But you can't have good old American "bigger, better, faster, more" unless you print more money every year.

Gold, even if tied to a fractional reserve system, limits how much money is in circulation.

But without a bottomless pit of money, you can't promise your constituents the moon, now can you?



As everyone's mom used to say; "If everyone else was telling you to jump off a bridge you wouldn't do it now would you".

Ultimately we are all responsible for our own decisions. In the middle of all that craziness I upgraded my house and paid cash (move from San Francisco to Maine and you can get twice the house for one third the money). I suppose I could have gotten a low rate mortgage and played with equity in the stock market (lots of people did). But I don't like debt.

I honestly don't think it was the home ownership rate that was the problem, I think the middle class buying McMansions they could not afford was way more detrimental than poorer people buying manufactured homes they could not afford. The economic downside of defaulting on a $150K mortgage is way lower than defaulting on a $1.5M mortgage. The middle class is where people also got cute financially. How many Porsche Boxters, H2's, flat screen TV's, and fancy vacations got paid for with equity lines of credit? Taking out a mortgage to buy something that depreciates as fast as a car does is the stupidest thing one can do financially.
ErikLaurence
 
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Re: The Decline And Fall Of The United States

PostBy: jpete On: Tue Dec 22, 2009 7:49 pm

I understand your point to a limit.

First, most people, due to public schools, can't balance a checkbook if their life depended on it, much less figure out an amortization schedule or ever heard of the rule of 72.

And I know lots of people bought McMansions, but what that did was screw things up for everyone else. I had to buy a house in that market. I looked for a year and a half and kept getting outbid on house after house. I eventually bought a house that frankly, cost about twice what it was really worth but it was either pay a mortgage, or nearly as much for a apartment.

High house prices drive rents up too.

But it all boils down to the money supply. If the government didn't print it, then it wouldn't be available for people to spend on McMansions and Hummers.
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Re: The Decline And Fall Of The United States

PostBy: ErikLaurence On: Tue Dec 22, 2009 8:14 pm

jpete wrote:I understand your point to a limit.

First, most people, due to public schools, can't balance a checkbook if their life depended on it, much less figure out an amortization schedule or ever heard of the rule of 72.



That's a whole other set of problems. My personal feeling is the lack of education of our children has more to do with poor parenting than poor public schools, but that's a topic for another thread...

jpete wrote:But it all boils down to the money supply. If the government didn't print it, then it wouldn't be available for people to spend on McMansions and Hummers.


I see your point. I'm not sure which is the chicken and which is the egg. But if either party had the moral fiber to say "no" then there would not be a problem.
ErikLaurence
 
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Re: The Decline And Fall Of The United States

PostBy: jpete On: Tue Dec 22, 2009 8:33 pm

There's no chicken and no egg. Only our cooked goose.

Government prints the money. Congress is supposed to "coin money and regulate the value thereof" but they outsourced that job to the Federal Reserve.

They are supposed to protect the money supply and they've done a lousy job.

If the money didn't exist, then no one could spend it. It's as simple as that.
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Re: The Decline And Fall Of The United States

PostBy: KLook On: Tue Dec 22, 2009 11:14 pm

And the money that did exist would be more valuable.

Kevin
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Re: The Decline And Fall Of The United States

PostBy: jpete On: Wed Dec 23, 2009 12:09 am

RIGHT!

A more valuable dollar means prices are lower.

And lower prices means we don't collectively go off half cocked and try to "fix" a problem that ISN'T a problem. ;)
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Re: The Decline And Fall Of The United States

PostBy: Don_t_Say On: Wed Dec 23, 2009 1:11 am

You guys are right, we've had it. Too many people living in this country that actually hate the US. I know it sounds wierd, but that's the only conclusion that I can come up with for the way people vote. And I think everyone knows it's Washington that killing the country. It's a slow death, but death nonetheless. I'll be outta here, my grand kids will have hell. Never before, in this country, have people looked back to their childhood as "the good old days", but our grand children will. So sad! It will take a hundred years just to "toughin up" the soft people in this country, to be able to rebuild. But before that happens someone will attack us. :sick:
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Re: The Decline And Fall Of The United States

PostBy: mikeandgerry On: Wed Dec 23, 2009 6:09 am

ErikLaurence wrote:
jpete wrote:
OR Congress spends on credit, prints money, destroys the dollar so your cash doesn't go as far, and you need credit to keep up.



I'm not sure I buy that.

Homes have become huge while families are getting smaller. According to the National Association of Home Builders, the average home size in the United States was 2,330 square feet in 2004, up from 1,400 square feet in 1970. In that same time frame the average family size has dropped from 3.1 to 2.6.

Add to that 50 inch TVs, $500 video game systems, people leasing cars they can't afford to buy to project an image.


As for gold, I honestly don't know enough about the nuances of monetary policy to understand how that all interrelates.


This is too funny.

Your skepticism in your first sentence was the impetus for the monetary trickery that you say you don't understand according to your last sentence, to produce the result you described in the middle, which is the intent of the monetary trickery by the federal reserve bank and deficit spending policies.

Inflation is a bad thing. It robs the people and corrupts governments. Gold as money stops inflation and government fiscal corruption.
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Re: The Decline And Fall Of The United States

PostBy: ErikLaurence On: Wed Dec 23, 2009 7:28 am

mikeandgerry wrote:
ErikLaurence wrote:
jpete wrote:
OR Congress spends on credit, prints money, destroys the dollar so your cash doesn't go as far, and you need credit to keep up.



I'm not sure I buy that.

Homes have become huge while families are getting smaller. According to the National Association of Home Builders, the average home size in the United States was 2,330 square feet in 2004, up from 1,400 square feet in 1970. In that same time frame the average family size has dropped from 3.1 to 2.6.

Add to that 50 inch TVs, $500 video game systems, people leasing cars they can't afford to buy to project an image.


As for gold, I honestly don't know enough about the nuances of monetary policy to understand how that all interrelates.


This is too funny.

Your skepticism in your first sentence was the impetus for the monetary trickery that you say you don't understand according to your last sentence, to produce the result you described in the middle, which is the intent of the monetary trickery by the federal reserve bank and deficit spending policies.

Inflation is a bad thing. It robs the people and corrupts governments. Gold as money stops inflation and government fiscal corruption.


Try a closer reading Mike, maybe you'll understand better (but probably not).
ErikLaurence
 
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Re: The Decline And Fall Of The United States

PostBy: mikeandgerry On: Wed Dec 23, 2009 8:42 pm

It was a joke. Lighten up.

The government established the Fed to have more control over the money supply. By expanding and contracting it at will they could better manage economic demand (consumption and investment) through monetary policy. Later, during the great depression the federal government used deficit spending (fiscal policy) to stimulate economic demand (consumption and demand).

Both tools have lead us to the brink of disaster because the system is corruptible by politicians. Specie money cannot be corrupted without knowledge of the masses. The politicians can (and do) spend too much money on credit and can expand and contract the money supply to give or take away money from individuals through inflation.

All of this was feasible because of our industrial and military power and our ability to borrow. It has been possible because the foreign governments have trusted the "full faith and credit" of the US. Critical to this control in the latter half of the twentieth century was the petrodollar. Without demand for dollars to pay for oil, US financial hegemony is impossible.

Ask yourself what will happen when cap and trade, global warming initiatives and alternative energy is pushed and won by the left.

The control of the people by the people will be lost to elites and corporations.

That spells the decline of the US as our forefathers knew it.

Merry Christmas. It's the American opiate.
Last edited by mikeandgerry on Wed Dec 23, 2009 8:49 pm, edited 1 time in total.
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Re: The Decline And Fall Of The United States

PostBy: Black_And_Blue On: Wed Dec 23, 2009 8:46 pm

It won't go down without a fight, you can bank on that.
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Re: The Decline And Fall Of The United States

PostBy: mikeandgerry On: Wed Dec 23, 2009 8:50 pm

Black_And_Blue wrote:It won't go down without a fight, you can bank on that.


God, how I hope so!

But what I fear in reality is that the incremental assault on our Constitution has been so effective, and the opiate of consumption has been so intoxicating, that no one will care and no one will know the precious jewel that was lost.
mikeandgerry
 
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