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Volcker: U.S. Economic Collapse Imminent
By: newsmax.com on: 16.06.2005 [14:13 ] (9711 reads)
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A serious economic crisis is likely unavoidable as the U.S. economy is struggling with what Volcker sees as a hopelessly unsustainable relationship with the rest of the world.
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Temporary offline
by Econ on 16.06.2005 [17:26 ]
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This is so tragic.
This is something the stupid neocon-Jews lacking any sort of economic thought never took into account in their endless wars for a US '1000-year benevolent empire'.
One wonders how you can sustain a useless empire on enormous deficits supported by consumption debt at home and Ponzi-dollar pyramid scheme?
Since 1987 Greenscam has pumped more liquidity (debt) into the US system than the entire amount of debt that existed from the beginning of the nation.
Greenscam wrecked America with his various debt schemes: Every single US economic variable that measures prosperity has worsened under Greenscam starting with the huge consumer, government and corporate DEBT loads, skyrocketing budget and current account deficits (with a need to borrow $2-$4 billion a day), increasing poverty rates, the depreciating dollar, a regressive tax structure, loss of US manufacturing capability, a bankrupt US pension-social security system, the economy only producing low wage service jobs and a stagnant economy that has lagged since topping out in 1973.
Greenscam is a complete moron believing that the American road to prosperity can be built on consumer, corporate and government debt.
The problem for Greenscam is that he doesn't have another asset bubble to blow up when the housing bubbles implodes since Americans aren't going o permit the Social Security Private Accounts asset bubble he was hoping would replace the housing bubble.
Since the crash in 1987, all Greenscam has been doing is pumping excess debt into the systmen thinking that it would create economic growth to sustain the economy and everytime there is an initial debt boom followed by a bust requiring even larger amounts of debt, none of which can be paid.
Greenscam has compounded US economic problems with his debt schemes and is about to impoverish the entire nation.
Now Americans can no longer absorb any more debt with $ 8 trillion ($54 trillion if medicare and social security are added in) piled up so far and the US is forced to borrow $2-$4 billion a day to fund the deficits.
We can see that the 40-year low interest rates, massive tax cuts, massive deficit spending and massive liquidity (debt) policies to refloat the US economy following the latest boom and bust dot.com implosion failed and the US economy is now in an oil shock recession from the ill-fated Iraq war.
Greenspan has tried every economic policy and combinations of Monetarism and Keynesian economics policies ( all requiring mass DEBT) to refloat the American economy. Yet none of these policies have been successful in reviving the collapsed American economy.
(1) Monetarists (debt) policies include — lower interest rates (13 cuts so far) and MASSIVE increases in the money supply have all failed that produced the mortage, housing, credit and derivative asset (debt) bubbles;
(2) Keynesian (debt) policies include — tax cuts ( 2 massive tax cuts that targeted the wrong wealthy segment who saved their money rather than spend it and this resulted in NO increase in aggregate demand that would have fueled economic growth).
The US government in turn hard to borrow back the tax cut money from the rich in the form of government bonds to finance the huge deficits caused by the tax cuts and deficit spending.
The US government has in essence been paying interest ( interest on bonds) to the rich in which they provided the tax cuts worsening the deficits even more and creating even more debt problems.
This is why 'supply side' economics has been dubious from the start and was bound to fail.
Greenscam should have seen the failures of Reagan's failed supply side economics and prevented George W. Bushs from trying the same failed economic policies that produced nothing but staggering debts.
and increased DEFICIT gov't spending (war on terrorism, war in afghanistan, war in iraq) have failed;
(3) Faster depreciation/amortization schedules have also failed. US companies still have all the excess debt and excess inventory from the dot.com bubble on their balance sheets and then proceeded to add even more debt and inventory further compouding their problems.
Where is all the excess inventory from the dot.com bubble?
Greenscam has never allowed the US system to purge itself of all the excess debt and excess inventory (SOMETHING THAT MUST BE DONE) which would require a massive recession (DEPRESSION) similar to what Japan is going through from the 1990's asset bubble implosion.
Did you ever wonder why not a single US bank or insurance company with exposure to the $8 trillion dot.com implosion never went bankrupt?
Greenscam has been propping these insolvent banks using derivatives.
This is how Greenscam has wrecked America.
The only outcome of Greenspan’s policies has been the creation of devastating credit (debt) bubbles.
There is no economic theory left on how to proceed from this point as economists have never faced such a post dot.com, bond, dollar and housing bubble environment.
We are in new uncharted territory and the outcome is likely to be a total crash of the US economy.
Now America is headed into two major catastrophes, its military being defeated in Iraq and an imploding economy all caused by the nefarious Jews.
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by Syriano on 16.06.2005 [22:26 ]
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Dont you think that an American Economic Collapse would take Europe down with it?
Where should Europeans sell there Products, when the Dollar crashes?
What do you expect the outcome of a US Economical Crisis would be for the Europeans?
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by Tet on 16.06.2005 [22:49 ]
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Gold's up about 2% in the last 5 days and the d0llar has held it's own, very odd. Peace.
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by adil_nazeem on 17.06.2005 [02:01 ]
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USA Self Proclaimed "SUPER POWER " "Land of Freedom and Opportunity" keeps Borrowing and Consuming( in plain English USA is a BEGGAR) and according to Xuma China Produces UNDIES.
Right.
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by ilia25 on 17.06.2005 [03:29 ]
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I guess you will have to look at your charts again. And again — in fact, looking at "odd" charts is going to become your lifetime job at this rate ;)
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by grandpa_jack on 17.06.2005 [07:37 ]
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I'm told,
that the producers of the world, plan to continue to prop up the US economy, then slowly pull out support, as China develops into a major consuming nation.
After which,, USA will be dumped, and forgotten in the dust.
xx
Strangely enough,, the solution to the US economic problem, , is to stop outsourcing US jobs,, stabalize the dollar, and to consume domestically produced goods.
If I know that,, why do the leaders of USA not ..?
Why are the leaders of america, so hell bent for even more Free Trade,, when that is obviously what is destroying the country.. ?
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by grandpa_jack on 17.06.2005 [07:43 ]
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..is not an Arab terrorist, not a Russian, not a Chinease Communist, not a mad man man with a nuclear bomb..
America's most dangerous enemy is within. Our nation's worst enemy, is the ruling elite at the top.
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by Sten'kaRazin on 17.06.2005 [08:50 ]
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every major economic depression gold and seniour currency rose together. There could be shit load of theories why, but they did. Seniour currency was in demand 'cause debt in this currency was the driver of preceding expansion and being liquidated (defaulted). Gold - it was universal currency and limited in quantities. It was then, before fiat system. Today this scenario may not apply, but gold is going up relative to USD as well as all other major commodities. It broke the upper boundary of a triangle. Could be a false break or it could be that since Feds are printing full speed since April it does sense monetary inflation.
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by Econ on 17.06.2005 [17:36 ]
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"...Strangely enough,, the solution to the US economic problem, , is to stop outsourcing US jobs,, stabalize the dollar, and to consume domestically produced goods..."
At this point, there is nothing the US can do since the US has been completely deindustrialized with all its factories now in Japan and China.
The source of American hegemony is the US dollar. Doing away with the dollar would bring an end to the US as a superpower and means in which the US can maintain a $450 billion a year useless military.
The US is now desperate to keep the dollar as the reserve currency and is using every futile effort to do so.
The US made a strategic blunder in trading away US factories to countries like Japan and Korea in return for useless military bases.
The problem could have been easily solved had the US remained on the gold standard and avoided the costly wars in Korea, Vietnam, the Cold War, the wars in Iraq and Afghanistan and the need for an empire of useless military bases around the globe to expand its imperial footprint.
You can't have guns and butter and pay for its with consumer, corporate and government debt.
Who ever heard of sustaining an empire on mounting debt? ONLY the stupid neocons-Jews with no training in economics believe such a thing.
This is the reason why Nixon moved the US off the gold standard in which the dollar backed by gold could no longer pay for the Vietnam War without harming domestic consumption.
Replacing the gold standard with the FED printing up worthless dollars/treasury bills is/was the only way for the US to fund its bloated and inefficient US military and domestic consumption (70% of GDP) through deficit spending (debt).
The gold standard did not permit large deficits and surpluses.
Under the gold standard, central banks with surplus dollars would exchange all of the their gold-backed dollars for gold, something that France did.
The US would not have had any gold left to pay for the Korean, the Vietnam and later the Cold War as the US was already running massive deficits by 1973.
1973 was the beginning of the end of the US as an economic power. With no gold reserves, the US economy would then go into a recession until exports began to exceed imports and the economy was back to a surplus.
Now you will understand why the US went off the gold standard. It was to avoid having to shift all 8,145 tons of gold to surplus nations like France and Japan as the US war deficts skyrocketed.
Why the world accepted worthless US dollars/treasuries instead of something tangible like gold will be explored by historians as the downfall of the American empire.
In any event the world is now getting wiser. Why buy US dollar denominated instruments in which the dollar has fallen by 40% but pays only 5% percent interest?
It means the morons are losing 35%. How long did the US think this scam was going to work?
As a matter of fact the US gained all that gold when it was a surplus nation from countries like Britain, Germany and Japan during the WW1 and WW2 when these countries racked up huge deficits with the US.
This is how America became prosperous, we kept ourselves out of Europeans wars and became a safe-haven for capital and gold fleeing those war-torn countries, a lesson lost on the moronic neocon-Jews urging endless wars.
Investors are now abandoning the US for China.
A gold backed currency wouldn't allow the $700 billion a year US current account deficit
Now the that the US has become the world's largest debtor country with a fiat currency and $7 trillion in liabilities in which the US can't even afford the interest payments on this.
Hitler tried the same tactic in WW2 (by invading Poland to get to Russian oil) and failed and look what happened to HIM and Germany.
The US is now surrounding Russia hoping to get its oil resources.
With no mechanism in place to regulate the large surpluses and large deficits, the rest of world's central banks are all quietly buying gold to hedge against the rapidly declining worthless US dollar or fleeing the US dollar for the Euro.
As soon the Euro and other gold backed currencies reach critical mass, the US will start looking like Argentina. China will then step in and buy the few remaining valuable assets in the US to add to all of those abandoned state-of-the-art US factories in China.
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by dude on 17.06.2005 [17:57 ]
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gold has broken the bond with your USD..and yup, it sounds like europe could get shit kicked too if the us economy implodes.
My portfolio is 75% silver 20% gold and the rest is the .coms from 2000.
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by ilia25 on 17.06.2005 [17:59 ]
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Gold going up simply because its productions can't keep up with the demand. It has nothing to do with inflation as the prices on other goods might even be falling because of better supply.
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by ilia25 on 17.06.2005 [18:09 ]
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And it was a pretty lousy investment. Dow Jones have grown much more than the price of gold sonce then, same for the realty prices.
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by Tet on 17.06.2005 [19:15 ]
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Things are getting back to normal, d0llar down, gold up today. Peace.
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by Greekos-Έλλην on 18.06.2005 [18:08 ]
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is that most of these people do not give A DAMN about the US economy and the debt of the average household. These people are working for corporations and are serving them and only them. Besides, that's their duty. A corporation has the duty to do ANYTHING they can in order to increase their profit. It doesn't matter to them if the money comes from Chinese consumeristic victims or from american ones.
As for the problem in a more global scale and the dollar taking Europe down with it, apparently capitalism is not such a sustainable system is it? Someone has to PRODUCE and someone has to BUY. Unless you create wealth out of nothing, then always someone will be in debt and he will have to find ways to steal from someone else in order to survive.
Peace
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by Crack_Smoke_Republican on 19.06.2005 [20:38 ]
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