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Old 02-17-2013, 17:56   #51
devildog2067
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Originally Posted by SouthernRaider View Post
Understand what?

How to cut pulpwood and bale hay? Been there and done that.

The urbanites are the ones in for a rude awakening.........
There have been urbanites for going on ten thousand years. They're still around.

Again, the fact that you don't see value in skills other than cutting wood and baling hay doesn't mean that there isn't any.

For starters--how do you bale hay? I'm guessing you use some sort of tool made out of steel, be it a tractor or a hay rake, and you lack the ability to make it from scratch. It takes a lot of specialization, both in terms of knowledge and investment, to be able to do something as simple as making steel from ore. That specialization is essentially what being an "urbanite" is--someone who chooses to specialize in a skill that becomes valuable enough they don't have to grow their own food; instead they trade their specialty with someone who doesn't have the skill. Cities are simply that writ large.
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Old 02-17-2013, 17:58   #52
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The Feds will keep printing just enough money to keep the creditors off our backs. There will be no default, but hyperinflation is possible.
We're paying essentially nothing on our Treasury bonds and people still are purchasing them. We're probably going to see bad (~10%) inflation. It's unlikely that we'll see inflation like Argentina saw at the peak, and "hyperinflation" like the Weimar Republic or Zimbabwe simply isn't going to happen.
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Old 02-17-2013, 18:01   #53
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Originally Posted by devildog2067 View Post
There have been urbanites for going on ten thousand years. They're still around.

Again, the fact that you don't see value in skills other than cutting wood and baling hay doesn't mean that there isn't any.

For starters--how do you bale hay? I'm guessing you use some sort of tool made out of steel, be it a tractor or a hay rake, and you lack the ability to make it from scratch. It takes a lot of specialization, both in terms of knowledge and investment, to be able to do something as simple as making steel from ore. That specialization is essentially what being an "urbanite" is--someone who chooses to specialize in a skill that becomes valuable enough they don't have to grow their own food; instead they trade their specialty with someone who doesn't have the skill. Cities are simply that writ large.
I thought you wanted to talk about America's vast production capacity.

When the easy money is gone that will all that is left......
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Old 02-17-2013, 18:03   #54
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Originally Posted by devildog2067 View Post
We're paying essentially nothing on our Treasury bonds and people still are purchasing them. We're probably going to see bad (~10%) inflation. It's unlikely that we'll see inflation like Argentina saw at the peak, and "hyperinflation" like the Weimar Republic or Zimbabwe simply isn't going to happen.
Current fed action is designed to cause stagflation.

Working well too.
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Old 02-17-2013, 18:20   #55
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I thought you wanted to talk about America's vast production capacity.
We make more "stuff" than anyone else in the world except China. From airplanes to trains to cars to industrial equipment to pharmaceuticals, most of the developed world's "stuff" comes from us.

We are, by any measure, the most accomplished, most effective manufacturing nation in the history of ever.
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Old 02-17-2013, 18:24   #56
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Originally Posted by devildog2067 View Post
We make more "stuff" than anyone else in the world except China. From airplanes to trains to cars to industrial equipment to pharmaceuticals, most of the developed world's "stuff" comes from us.

We are, by any measure, the most accomplished, most effective manufacturing nation in the history of ever.
That's fine.

BUT we do not make nearly enough to pay for all this war, welfare, and healthcare without the funny money.
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Old 02-17-2013, 18:28   #57
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Old 02-17-2013, 18:32   #58
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That's fine.

BUT we do not make nearly enough to pay for all this war, welfare, and healthcare without the funny money.
I don't disagree with you. Doesn't mean that we'll all be baling hay.
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Old 02-17-2013, 18:37   #59
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I don't disagree with you. Doesn't mean that we'll all be baling hay.
So you have faith in all that capacity, but think it will function as it currently does in a collapse?
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Old 02-17-2013, 18:37   #60
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You can run a country a LONG time on debt, massive social spending and low growth. The fact that we are the world's reserve currency probably gives us even more latitude.

If you doubt what I say is possible I suggest you research the Japanese Economy. They have twice the level of national debt as we do, way more social spending problems on a per-capita basis than we do, and have had extremely low growth for almost 20 years.

Lastly, we have had this level of debt in our past and we worked our way out of it. If you doubt that look at our debt relative to GDP in the years post WW-II. Yes, we have big challenges. Yes we have made mathematically impossible promises in Social Security and Medicare. Yes those programs need to be drastically pared back. No, there isn't a single politician willing to tell the truth or propose the changes necessary to fix it. Nonetheless, we have a way out of this mess. If we could eek out 3-4% growth from our economy again it would make these problems much smaller. Unfortunately our government seems to be doing everything it can to retard economic growth. Still, we have a way out.
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Old 02-17-2013, 18:40   #61
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You can run a country a LONG time on debt, massive social spending and low growth. The fact that we are the world's reserve currency probably gives us even more latitude.

If you doubt what I say is possible I suggest you research the Japanese Economy. They have twice the level of national debt as we do, way more social spending problems on a per-capita basis than we do, and have had extremely low growth for almost 20 years.

Lastly, we have had this level of debt in our past and we worked our way out of it. If you doubt that look at our debt relative to GDP in the years post WW-II. Yes, we have big challenges. Yes we have made mathematically impossible promises in Social Security and Medicare. Yes those programs need to be drastically pared back. No, there isn't a single politician willing to tell the truth or propose the changes necessary to fix it. Nonetheless, we have a way out of this mess. If we could eek out 3-4% growth from our economy again it would make these problems much smaller. Unfortunately our government seems to be doing everything it can to retard economic growth. Still, we have a way out.
Three problems:

1 demographics

2. The financial system is now a huge house of cards

3. No one is working to reverse the problem.....just more debt
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Old 02-17-2013, 18:48   #62
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Three problems:

1 demographics

2. The financial system is now a huge house of cards

3. No one is working to reverse the problem.....just more debt
Please re-read what I posted and do some research. Japan has all three of those problems x 2 compared to the US. Their economy has limped along for nearly 20 years.
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Old 02-17-2013, 18:52   #63
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So you have faith in all that capacity, but think it will function as it currently does in a collapse?
Not "as it currently does." But yes, it will continue to function. Why wouldn't it?

As Big Bird points out, there have been zombie banks limping along in Japan for nearly 20 years. Their demographic time bomb is far worse than ours. They don't have the natural resources we do. Yet Japan is still a first world country that makes first world stuff.
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Old 02-17-2013, 18:52   #64
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Please re-read what I posted and do some research. Japan has all three of those problems x 2 compared to the US. Their economy has limped along for nearly 20 years.
I understand.

But they did that in a world where the US was a super power and the financial system wasn't the mess it is today.

Plus Japan has been a nation for a long time....the US looks more like a fracturing empire every year.
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Old 02-17-2013, 18:58   #65
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But they did that in a world where the US was a super power and the financial system wasn't the mess it is today.
The financial system isn't any worse today than it was in the 90's. Remember the GKO default?

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Plus Japan has been a nation for a long time....the US looks more like a fracturing empire every year.
Japan has NOT been a "nation" for a long time. The Japanese culture is quite old, but politically they've only been truly one nation since about the time of the US civil war.
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Old 02-17-2013, 19:02   #66
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The financial system isn't any worse today than it was in the 90's. Remember the GKO default?



Japan has NOT been a "nation" for a long time. The Japanese culture is quite old, but politically they've only been truly one nation since about the time of the US civil war.
Nobody knows the impact of credit default swaps if even a modest nation goes down.

The big banks are more govt insured casinos than banks at this point
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Old 02-17-2013, 19:45   #67
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I am watching Japan very closely.

A BIG part of the Japanese government debt is held by its citizens.

They hold this debt and get less than 1% in interest.

Japan decided it needed some inflation - so it is going all in on QE unlimited -

~~50% of Japan's government revenue goes to pay interest on its massive debt. 22.2 trillion interest 44 trillion revenue.


What happens when Japan gets the inflation it says it wants?

It is targeting 2% - so in theory interest rates should move up to about 3% (actually a little higher but close enough).

If at a 1% interest rate Japan has 50% of its tax revenue going to pay interest what % of their revenue will be used if rates move up to 3%?

~~150% --

I can't see how this works to help them - unless they get a MASSIVE INCREASE IN GROWTH.

IMHO QE unlimited is a Kamikaze mission - the world financial system is a ship.

Last edited by Z71bill; 02-18-2013 at 07:50..
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Old 02-17-2013, 20:05   #68
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This article is what I believe they are doing... Devalue the dollar

http://www.forbes.com/sites/charlesk...the-dollar-33/
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Old 02-17-2013, 20:20   #69
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At a minimum Medicare and SS are unsustainable.

The unfunded liability numbers are ugly.
Brought to you by both the GOP and the DNC in equal measure.

You go to the polls and vote believing it has some effect on the governance and management of the nation..

Folks here at GT get so warped over the presidency of B.O.
He doesn't matter, not at all. He is only the middleman.

He who controls the issuance of currency is the absolute master of a nation. Nothing else really matters in the long run.
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Old 02-17-2013, 20:25   #70
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This article is what I believe they are doing... Devalue the dollar

http://www.forbes.com/sites/charlesk...the-dollar-33/
Uhh... news for you, sir. That article's "big headline" is like announcing that water is wet.

If we manage to limit inflation to 33% over the next 20 years, that'll be better than it was over the last 20 years. It's almost twice that (~61%) since 1992. 2-3% a year, compounded, adds up.

A little bit of inflation isn't unhealthy for an economy. If we manage to keep it to 2% a year we're doing better than we did in the Reagan era.

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Old 02-17-2013, 20:30   #71
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This article is what I believe they are doing... Devalue the dollar

http://www.forbes.com/sites/charlesk...the-dollar-33/
Banking cartel at work......
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Old 02-17-2013, 21:29   #72
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If some of you actually live in this bubble of fear and paranoia and aren't just doing a bit of "chain pulling" then I really feel for you. Go outside. Take in a show. Travel. There is more to life than hoarding ammo and Vienna sausage.

I wonder what the folks who spent every last penny on shelters and provisions for the inevitable 1950's global nuclear war thought as they lay dying, penniless. They may have died at the same age as their non-prepping counterparts, but I bet their life was a lot less fun.
If you spend a lot of time and money preparing for a disaster, you're going to be disappointed if a disaster doesn't happen. There are more than a few people who seem to be hoping for a disaster simply because it'll prove their world view right, forgetting that even if they're right, it's still a disaster.
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Old 02-17-2013, 21:38   #73
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Nobody knows the impact of credit default swaps if even a modest nation goes down.
That's simply not true.

We saw the impact of CDSs in the GKO debacle, and again in Argentina. What happened? Banks argued about whether the default constituted a "convertibility event" under the legal definitions of the contract. Payments, when they happened, took as long as a decade to actually get paid. Funds blew up.

The lesson is that credit default swaps, in the event of a really large default, are worth nothing. They basically don't matter. When paying out the swap would cause the institutions that underwrite the swap to blow up, they simply don't pay.
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Old 02-17-2013, 21:41   #74
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That's simply not true.

We saw the impact of CDSs in the GKO debacle, and again in Argentina. What happened? Banks argued about whether the default constituted a "convertibility event" under the legal definitions of the contract. Payments, when they happened, took as long as a decade to actually get paid. Funds blew up.

The lesson is that credit default swaps, in the event of a really large default, are worth nothing. They basically don't matter. When paying out the swap would cause the institutions that underwrite the swap to blow up, they simply don't pay.
Then why did the fed bail out AIG?

If it blows up the bankers expect YOU to pay.
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Old 02-17-2013, 21:42   #75
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If some of you actually live in this bubble of fear and paranoia and aren't just doing a bit of "chain pulling" then I really feel for you. Go outside. Take in a show. Travel. There is more to life than hoarding ammo and Vienna sausage.

I wonder what the folks who spent every last penny on shelters and provisions for the inevitable 1950's global nuclear war thought as they lay dying, penniless. They may have died at the same age as their non-prepping counterparts, but I bet their life was a lot less fun.
The thing that I find the craziest is that, when it comes to the cost-benefit analysis, there's very little that a prepper can do that makes sense. If a disaster comes, we don't really know what it will be like or how it will play out. The bunker you're building might be right where the nuke is going to blow. Your off-the-grid compound might be right in the middle of the yearly zombie migration path.

There's nothing wrong with making some preparations--I've got a go bag and a rifle and my wits, and some basic plans and some basic skills--but beyond that, I live my life. Imagine all the things you'd have to give up in this life, the real life that's happening right now, to be able to build a bunker somewhere. Then imagine that for whatever reason, all that prep was negated. How much would that suck?
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