The New Soviet Union - Surprise, Surprise...

Quote from GTG:

The US isn't even close to bankrupt. The total debt carried by US private citizens and the government isn't even close to the size of the assets owned by US citizens and the government. The absolute numbers look bad, but like Jayford pointed out with the deficit, if you divide any of these numbers, by GDP or total assets, the US is in great shape compared to most of Europe and Japan. To say a debt is "high" you can't just look at the absolute number, you have to look at how high it is relative to the income available to service it (this is GDP), and how high it is relative to assets that could be sold to pay it off (all of the valuable tangible and intangible assets such as land, factories, intellectual property, infrastructure, natural resources, etc...)
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assests are down 20%, every dollar in GDP growth is financed with 5$ in debt, dollar is down 40% and stock market is crashing, financial system is insolvent, inflation is highest in 25 years

do you mean this by saying US is in great shape?


so please, give us a look
I would be really interested to see numbers not just empty words
 
Not saying US is in "great shape", just that we aren't even close to bankrupt, and in much better shape than most industrialized nations.
 
Quote from GTG:

Not saying US is in "great shape", just that we aren't even close to bankrupt, and in much better shape than most industrialized nations.
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As US can print money they will never become a bankrupt

Although I consider 40% dollar devaluation as a default on 40% of debt

As anyone who hold US debt - and those are mostly foreigners now - lost 40% during the last 6 years
 
Quote from kashirin:

As US can print money they will never become a bankrupt

Although I consider 40% dollar devaluation as a default on 40% of debt

As anyone who hold US debt - and those are mostly foreigners now - lost 40% during the last 6 years
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what a crock of shit.

What about the 50% increase in the US dollar from 1995 to 2000? (USD index went from 80 to 120).

So the US paid back 50% more than they should have? By your reasoning, the US should have said, "sorry guys, but the dollar is worth 50% more, so we are only paying back 50 cents on the dollar".

you can't have it both ways.

Currencies fluctuate for many reasons, and anyone purchasing US assets, or those of other countries, know this to be true. Its part of the risk in buying the asset, just as purchasing equities in one's domestic market contains certain risks.
 
Quote from Jayford:

what a crock of shit.

What about the 50% increase in the US dollar from 1995 to 2000? (USD index went from 80 to 120).

So the US paid back 50% more than they should have? By your reasoning, the US should have said, "sorry guys, but the dollar is worth 50% more, so we are only paying back 50 cents on the dollar".

you can't have it both ways.

Currencies fluctuate for many reasons, and anyone purchasing US assets, or those of other countries, know this to be true. Its part of the risk in buying the asset, just as purchasing equities in one's domestic market contains certain risks.
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US dollar is not fluctuating now - it's being devaluated

and yes from 1995 till 2000 that was a benefit for debt holders and that caused capital inflows, high economy growth, and stock market rise

current devaluation is a hidden default
 
Quote from kashirin:

US dollar is not fluctuating now - it's being devaluated
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what is the difference between currency fluctuation to downside, and devaluation?
 
Quote from Jayford:

what is the difference between currency fluctuation to downside, and devaluation?
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devaluation means government is unable to repay its debts using available resources so it prints money to close financial hole and devalues currency
 
Quote from kashirin:

devaluation means government is unable to repay its debts using available resources so it prints money to close financial hole and devalues currency
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the US has been doing that for ages, with the exception of the tech Boom surplus years. Wouldn't expect things to change anytime soon.

What I would expect is europe, australia, NZ to have even worse recessions than the US , and see the US dollar appreciate regardless of the deficit.
 
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Black diamond: I would think the judicial system and poor investor rights protections would scare away a lot of capital or at least make it expensive. There is a decent amount of academic research showing there is a strong relationship between cost of capital and a country's legal system.

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August 8, 2008

SouthAmerica: I guess your concept it does not apply to the United States.

If we had a good judicial system in the US they would have impeached George and Dick and both would be in jail.

How many people do you think are in jail in the US a place where thousands of scam artists run one scam after another in Wall Street. They had the mutual fund scandal, the hedge fund scandal, the insurance industry scandal, the sub-prime massive scam, the coming pension plan scam and so on….

The system is so screwed up today that investors from around the world don’t know what to make of it – they keep saying that the sub-prime massive meltdown still a long way to go to reach the bottom of the mess – they say banks and other financial institutions will have to write off 100’s of billions of US dollars in further loses and that many of these financial institutions will need to raise capital to prevent them from going bankrupt.

Then they turn around and ask people from around the world please we need some suckers to invest money on this money pit. And the suckers throw more good money after the bad as if they were a bunch of idiots.

The fools still are sending money and that it does not make sense to me. How much money these fools need to lose for them to realize that they are just the suckers on this game.


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Black diamond: Say what you want about Cheney and friends but there is still a wide gap between the environment in Russia and the US on things like contract enforceability, due process, and the chance of having the government nationalize your assets.


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SouthAmerica: If you want to see due process and government nationalized assets then you don’t have to look further to what the US government did when they nationalized the assets of the Iraq government. By the way, there was no due process, no transparency, no accountability and nobody knows what happened to all the billions of US dollars that the US government took from the Iraq people.

What will be the economic impact in the US economy of Foreign Assets Confiscation?
http://www.elitetrader.com/vb/showthread.php?s=&threadid=50811

Do you mean contract enforceability like in Iraq regarding the contracts given to American corporations?

Do you mean accountability as in the US$ 12 billion dollars in cash that the US government sent to Iraq and the idiots had records to account for only US$ 2 billion dollars and they had no records to account for the other US$ 10 billion dollars in cash.

I guess that is the American version of accountability and transparency – it is a modern principle of accounting in use in Washington and they even refined it even further in Iraq it is called: now you see it, now you don’t.


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Black diamond: But I don't think anything like the Yukos scandal could happen here.


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SouthAmerica: What do you think the Fannie and Freddie is?

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Black diamond: Do you think we are paying a price for this now or are you just predicting that we will someday?


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SouthAmerica: The fools still are sending the money. Just wait for the day that they stop sending the money and also start dumping their US dollar assets.


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Black diamond: On the business and consumer credit side of course things don't look so great now but I haven't seen any credible arguments that this is not just another cycle like we have been through before.


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SouthAmerica: There are a lot of things that have been happening for a while that we don’t have a historical precedent to be able to understand it and its consequences.

But when the shit hits the fan everybody is going to act surprised.


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Jayford: yes, a combo of 27 countries vs ONE. The European Union has a good possibility of crumbling in 5 years anyhow.


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SouthAmerica: Your reply tells me that you never read the book “European Dream” by Jeremy Rifkin that was published a few years back. If you had read that book you would understand how the European Union works and how their system is in better position today to fix its internal problems, it is more adaptive and flexible than the American system here in the US.

The European system has been designed to function on the 21st Century, and the US system has been designed for an age long gone.

If I were you I would take the time and read that book, since Jeremy Rifkin did a great job when he explains in detail how the new system works.


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Jayford: You can't have countries like Spain struggling with high interest rates cause Germany needs them high. Just doesn't work in the long run.


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SouthAmerica: I hate to bread the news for you, but what do you think it is going on inside the US economy?

The Fed sets the fed funds rate and they don’t care about what is happening on individual states – you can bet the fed policy not always agree with the economics of individual states in the US – many states have different priorities based on their local economy for example California has different needs than the economy in Nebraska, or the economy in Texas.

The same way all the states here in the US benefits from being under the umbrella of the US dollar, in Europe the various countries benefit from being under the euro umbrella.

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Jayford: Russia is the new epicenter of the AIDS pandemic due to extensive drug use and almost no prevention.

This is a FACT.


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August 8, 2008

SouthAmerica: If you want to compare diseases and the impact on the economy of each country then here we go:

On November 3, 2006 The New York Times published an article “The Memory Hole” and the article said:”…Nor could he have foreseen that with the significant rise in longevity over the 20th century, cases of Alzheimer’s disease would skyrocket into the millions. Paradoxically, we have created a civilization of such health and longevity that a disease that was once rare now threatens us all.

There’s no good way to die, but some are far worse – and far costlier – than others. The plodding progression of Alzheimer’s devastates not only the patient but also a wide circle of family and friends forced to witness and participate in the long decline. The disease costs a fortune in medical and nursing fees and lost wages; a conservative estimate is that the current five million cases in the United States add up to more than $ 100 billion annually.

If that sounds like a lot of money, keep in mind that the baby boomers have not started turning 65 yet……15 million Americans could have Alzheimer’s – about 100 million people worldwide – and national costs could reach $ 1 trillion, threatening to bankrupt our entire healthcare system.”

… That experience served as a reality check for me for what is happening in the United States today regarding healthcare

I just finished reading the latest book by Alvin Toffler “Revolutionary Wealth” and one of the items that called my attention on his book was what he said about Alzheimer’s – and quoting from his book: “The Panic Zone…But James R. Knickman and Emily K. Snell of the Robert Wood Johnson Foundation assert that this number "underestimates the economic resources devoted to long-term health care…because most care is delivered informally by family and friends and is not included in economic statistics…It has been estimated that the economic value of such informal care-giving in the United States, family care for Alzheimer’s patients alone had a value exceeding $ 100 billion in 2004. And none of these figures includes unpaid care giving for short-term problems.

Government and health industry officials worry that an aging population will mean more disease and debility, and therefore even higher costs.

…On top of that, a healthcare executive warns a congressional subcommittee that “the U.S. healthcare system is about to implode, and Alzheimer’s disease will be the detonator” because the baby boomer generation is reaching the age of the onset of that terrible illness.

The fact that health conditions in most other countries are worse does not change the reality. The world’s most expensive health care system is deeply dysfunctional – and getting more so….”

When I was reading Alvin Toffler’s book I also understood immediately what he was trying to say because of my current experience with my friend who has Alzheimer’s, and the other personal experience that I had in the last few years when I came in contact with other people who also had Alzheimer’s - (mostly friends or people who I used to know).

Alzheimer’s is a time bomb that is ticking all around the United States – and that is the type of bomb that explodes very slowly creating havoc in the lives of millions and millions of Americans – and no family will be immune to this devastating disease Alzheimer’s will affect Republicans in the same way that will affect Democrats and so on….

In a nutshell: we are all in the same boat regarding this terrible disease – and the high costs related to Alzheimer’s disease will affect everyone.

The United States is already in the beginning stages of this massive health care crisis, and what we are experiencing today it is just the tip of the iceberg.

There are many reasons why the Unite States needs to redesign its entire health care system ASAP – and it is time for a national health care program that will cover everyone and also will help the baby booming generation survive the Alzheimer’s epidemic that it is just ahead of all of us in the United States.

You can read about that subject at:

U.S. Healthcare in Crisis
http://www.elitetrader.com/vb/showt...2&perpage=6&highlight=healthcare&pagenumber=1


I don’t know why Jayford is so concern about the impact of aids in Russia, or herpes for that matter.

Let’s see what is going on in the United States. The United States is the largest market in the world for illegal drugs, and the other half of the population is addicted to some kind of prescription drug.

With everything that is going bad here in the United States today regarding the economy, the war, and so on, the reason that we don’t have major demonstrations going on around the country it is because the US population is completely spaced out from taking so much drugs – legal and illegal.


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Jayford: “What about the 50% increase in the US dollar from 1995 to 2000? (USD index went from 80 to 120).”


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August 8, 2008

SouthAmerica: The value of the US dollar was responding to the government policies of the Clinton administration when they were trying to put the US government finances in order and turned massive deficits into a surplus.

But since George Bush Jr. got in town the finances of the United States government went to hell.


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Jayford: trade deficits are not an issue of a bankrupt country. Yanks spend like there is no tomorrow is the problem. IF they go bankrupt, that takes care of itself. Obviously doesn't seem to be too much of an issue given the dollar's recent strength, and the great Tbond auction today.


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SouthAmerica: Very soon the only purpose we are going to have for the US dollar it will be to use it as CONFETTI in carnivals.

That kind reminds me of the Chinese and the Chinese New Year.

That is a good occasion for the Chinese to use their very large supply of CONFETTI.

You can read about the US dollar and the biggest default in history at:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=121313


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GTG: The absolute numbers look bad, but like Jayford pointed out with the deficit, if you divide any of these numbers, by GDP or total assets, the US is in great shape compared to most of Europe and Japan. To say a debt is "high" you can't just look at the absolute number, you have to look at how high it is relative to the income available to service it (this is GDP), and how high it is relative to assets that could be sold to pay it off (all of the valuable tangible and intangible assets such as land, factories, intellectual property, infrastructure, natural resources, etc...)


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SouthAmerica: You have to look forward and compare the future cash flow that the US economy is going to generate vs. the amount of liabilities that are coming due regarding the Baby Boom generation.

For all practical purposes the US economy is bankrupted and there is no two way about it.

When you take in consideration the implosion that is under way in the US economy as its industries are being destroyed (GM, Ford, Chrysler and everything else that is sinking in the US economy) and outsourced around the world - The also the poor state of the infrastructure inside the United States, and a very sick financial system - That situation reminds me of the Titanic.

The future of innovation has been exported to other countries in Asia, and other countries. For the fist time in 100 years the smart people from around the world don’t need to come to the US to do leading edge technology research and they can stay on their own country or they have some other alternatives that they did not have before.

The reality today is that the global brainpower is moving away from the US economy.

And I have not even mentioned that for the first time in US history the United States is going through an exodus of people including Americans, legal and illegal immigrants and that will have a major negative impact on the future of the US economy. ( It will take a while for the United States mainstream media to grasp about what has been going on.)

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