US=>Japan

[thesharpone]

Quote from Cutten:


The main problem right now is that house prices need to go down. That will solve the problem of oversupply and excessive credit speculation. Same with the price of mortgages (although this has already happened). The market slump will clear the supply/demand imbalance, homes will become affordable again, stupid people will lose money, and then life will go on as normal and growth will resume within a year or so.

imo, the house prices will not go as much down as you assume they will

i know places within foreign countries where you could not live, and would not live even if you could, and yet the house prices are close to or even greater than that of large cities in US (yes, in USD terms), whereby incomes in those countries are like 75% less than US incomes

majority of people in those countries can not afford a house, not even with a 100% loan, but yet the house prices do not drop, and in some countries or cities increase by 20% or more annually

one reason is; the people who are making profit from buying houses and renting them out, collecting those rents and buying new buildings to rent out, are always in business, there are so many people who will rent at crazy prices.

in case more USD is flooded into the market (which what is happening), there will be more millionaires, these millionaires will have to preserve the value of the money they 'as they have it' have earned, to do so they will buy homes and apartments and rent them out, to those whom their houses have been foreclosed

 

[clacy]

Quote from dozu888:

an empire cannot go down as long as its military still dominates everybody else.

I don't understand why people don't understand this.

There is a bully living in a small town. All his neighbors are afraid of him and have to finance his lifestyle. Sometimes the bully overextends himself and creates a lot of deficit, so he prints a lot of money to keep the lifestyle going.

The neighbors are not happy, as the money they earned from selling goods/services to the bully is going down in value, but there is nothing they can do, they all know that the bully runs the entire town. They have even seen the bully killed a resident because he failed to obey the bully's orders.

So the bully rules the town, day after day, after day.

Are we a wealthy country because of our military, or do we have the stonget military because we are the wealthiest country?

I would argue that it takes economic superiority to have and maintain military superiority.

 

[ShoeshineBoy]

Quote from dozu888:

an empire cannot go down as long as its military still dominates everybody else.

I don't understand why people don't understand this.

There is a bully living in a small town. All his neighbors are afraid of him and have to finance his lifestyle. Sometimes the bully overextends himself and creates a lot of deficit, so he prints a lot of money to keep the lifestyle going.

The neighbors are not happy, as the money they earned from selling goods/services to the bully is going down in value, but there is nothing they can do, they all know that the bully runs the entire town. They have even seen the bully killed a resident because he failed to obey the bully's orders.

So the bully rules the town, day after day, after day.

Jubak isn't arguing that the US is going to end as a superpower or even THE superpower. He's just saying that if we're not careful, we can injure ourselves economically.

 

[ShoeshineBoy]

Quote from Cutten:

He's completely overstated the picture. The president, the presidential candidates, and the reps in both houses may have no clue about economics, but people at the Treasury and Fed do. They understand that markets need to clear. The BoJ and Japanese technocrats don't.

The US is inherently a much more free market economy and society than Japan, thus any socialist efforts and attempts to prop up prices will meet with determined opposition. By contrast, almost no one in Japan opposed the government intervention and stimulus in the 1990s. It's a world of difference.

The main problem right now is that house prices need to go down. That will solve the problem of oversupply and excessive credit speculation. Same with the price of mortgages (although this has already happened). The market slump will clear the supply/demand imbalance, homes will become affordable again, stupid people will lose money, and then life will go on as normal and growth will resume within a year or so.

This is what is so stupid about Bush and the Presidential candidates - they think that propping up the housing market is a good idea. Wrong. The best thing for the housing market and homeowners long-term is to let the bust happen as fast as possible. The more they try to prop up prices and delay the inevitable, the longer the market takes to clear and the more bad loans and bad purchases at inflated prices will occur.

Sometimes it boggles the mind how utterly thick, ignorant, and moronic political leaders can be. It is the economic equivalent of a politician recommending quack medicine, leeches and blood-letting to cure cancer patients. Not a single presidential candidate deserves to hold office if this is how ignorant and wrong-headed they are. Go to f*cking school you schmucks and learn some economics - you have a responsibility to do so before presuming to run a country.

Lots of great points - good post.

 

[ShoeshineBoy]

Quote from number22:

There are big difference between Japan and US. Japan has very limited natural resources; it has been and will continue to relay on import many resource aboard; even food.
Japan can only to relay on manipulate its currency to get ahead other countries.

Thanks to mighty US military; US don't have to worry about conquer other countries' for their resources.

I don't think Japan's ten year malaise had anything to do with not having a lot of natural resources. Grossly overinflating the money supply is what killed them and then the banks faking the books just extended the "recovery"...

 

[daddyeaux]

Quote from dozu888:

an empire cannot go down as long as its military still dominates everybody else.

I don't understand why people don't understand this.

didn't seem to deter 19 Saudis with little more than box cutters and fake student visas from causing trillions in losses