Restarting Credit

Restarting Credit

The fundamental of the economy of any country is that it’s people are doing something productive, and for that they can eke out a living, whether it be a basic or a more expensive variety - the function they are being rewarded for is difference, change, something as a result of their actions.

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World Depression

World Depression

and how to avoid it

Is the world falling into some kind of recession? That is when growth starts to subside and things economically suck, but if one understands it right, then what it is seen as is the loss of confidence based on property ownership - a line of credit was generally loosened up for billions of home owners, a culture of being able to borrow against one's mortgage increased leveraging and the profits were handsome so the banks continued to go further.

The tragedies that underlie sub-prime + the oil hunger - a direct consequence of the Iraq war + lack of real progress with the nuclear question = potential for another Depression. It is not just that bills will not get paid, it is that assets will lose their value, nobody will buy things and prices will start to fall. If that fall accelerates - the potential for severe economic storms becomes more likely.

The authority carried by Security Council decree against a country, especially one of its nuclear capable members, may help guide us from disaster. The only thing that makes "nuclear weapons" necessary is other nuclear weapons. What real point is there in having nuclear weapons? To conquer any chance of threat in case of unpredictable behaviour. After all humans have their finger on the button. The USSR had Breshnev. America has Bush. Both caused recession.

Both also fought with Afghanistan. Not that fighting Afghanistan has been the problem for America - but because they did not provide their full ferocity to win the war in Afghanistan with commitment, they still are at war with malign forces.

Sorry, Osama bin Laden, it is hard to admire a person who promotes the death of innocents. It was not bin Laden that alerted the world to George Bush's America. Osama bin Laden is not doing the work of God. It is not definite that he is not working for his homeland.

Neither is the US military incursion into Iraq, although by doing that and by not wiping out the Taleban, and at the same time efforts to quell appear to be fanning the flames of nuclear trouble with Iran, well - one can only imagine the end game.

The Office of President is not being attacked by Congress because it is "at war". That is all keeping Bush and Cheney in office till February 2009.

To bring charges against Bush or Cheney would require that they depart office or end the state of war, and a pardon from their successor, whomever wins is all it takes to bury this sad chapter.

But the extraction of trillions of dollars from the US economy by chiefly OPEC countries, well. How many trillions has Saudi directly cost the US?

I think that the high oil prices are a direct result of the US uncovering its own lack of ruthlessness in war allowing a relatively degraded enemy to survive. Now the Arab nations smell nuclear technology within reach, and the confidence they now have in bargaining power seems the new reality.

Is the international recession in fact a deliberate plot to vacuum wealth out of US hands and into the hands of Arabia? The underlying economic war is far more serious because of sub-prime and the loss of confidence and money from a system growing on increasingly thin vapour.

A belief that the source of economic difficulties are "asset related" but providing free housing to the poor has been found to be an unsustainable activity of the US Government - is another way to put it.

It appears to be the problem, but it is the oil shock that will change economies the world over. Unless Bush can win his wars real soon now, and instantly restore confidence in the unassailability of the USA, the rest of the world will not start trembling has they now have been given the lever it needs to even the economic stakes.

Perhaps the only way to stop the spread of the Taleban cult or the Al Qaeda insanity is for taxes to increase for the wealthy, the US to pay its debts and stop living so ridiculously beyond its means.

Slowdown Fears Rife

Slowdown Fears Rife

Markets and Dollar Sink as Slowdown Fear Increases - New York Times

As predicted when Mr Bush lowered tax rates for the very rich - the US economy devalued itself giving it the impression of a lot of spare cash. But he had gone to war with an already crippled Iraq and has spent hundreds of billions getting American troops in Iraq killed for very little resulting improvement in world safety from terrorism.

When an economy becomes too sanguine (too much blood in it) for too long - idiots start throwing billions about. Weird ideas spring forth like crazed cults and adherents may be expected to invest in companies and ideas that have no real product or effect no real change. (I am not talking about Google - here we have an economy developing its own force from the work of a simple workable idea. Text advertising on the internet is not a new idea that Google suddenly came up with, there was text advertising already. What they did was leverage it against relevance. Effective useful advertising has value. Google did what others were stabbing in the dark trying to make work. They provided motivations for each part of their business to work with other parts of their business).

Instant public perception reveals the turkey - but sometimes not before thousands have thrown millions at it. Too much property investment capital inevitably results in sales that get reversed. Too many mortgagee sales depresses prices. Declining prices could become deflation. That would cause massive problems.

What flooding the market with low value dollars has done is cheapen the US economy. Hence the foolhardy effort to get everyone on the mortgage train we now insidiously refer to as sub-Prime. No-one is talking about how many citizens are losing their homes in the USA as a result of Bush indifference to the needs of real people. It has provided the grass roots market players with a sense of uselessness - or irrelevance.

What we hear about is how investors are losing their punts in these non-productive organs of real estate wheel greasing. How many cents in the dollar they can expect. It is a damning and sad story but not half as hard as the young couple expecting who suddenly lose their house and entire life structure. Not to mention to effect on the overall health of the USA economy. How are they going to make productive lives for themselves now?

Some one please tell me how this is a good result of the Bush tax massacre?

Go on - go to the Discussion site and lecture me on the merits of running huge deficits to fight a war that has little economic benefit but heavy costs. Where is the beef?