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  1. #11
    I am Sofa King!!! kendoiwan's Avatar
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    You seem like you'd love Addendum if you haven't already seen it.
    http://www.typologycentral.com/forum...ml#post1161526

    "They the type of cats who pollute the whole shoreline. Have it purified. Sell it for a $1.25"

  2. #12
    The elder Holmes Mycroft's Avatar
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    Reason, what do you suspect will be the outcome in the coming years? (On a subjective note, I'd really like to believe that Ayn Rand was going overboard...)
    Dost thou love Life? Then do not squander Time; for that's the Stuff Life is made of.

    -- Benjamin Franklin, Poor Richard's Almanack, June 1746 --

  3. #13
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    Quote Originally Posted by Mycroft View Post
    Reason, what do you suspect will be the outcome in the coming years?
    Worst case scenario: the government continues pouring gasoline onto this fire and turns the recession into a depression. Without the discipline of the gold standard (present during the depression of the 30s), the government will resort to printing money night and day to "stimulate", and in consequence, the hyperinflation it creates will strangle the economy. The dollar, like almost every fiat currency in history, will be turned into worthless paper--Zimbabwe style. As the government begins to default on its loans and fails to meet its commitments (such as social security, medicare, etc.), civil unrest will ensue. People will demand for "something to be done", and a strong leader will be elected. Immediate increases in government power and loss of liberty will follow, and the U.S.'s democratic process will gradually become a farce. Perhaps the north and south will divide once more, and another civil war may even occur. On the brightside, the collapse of the U.S. economy would be quite beneficial, at least in the short term, for the world economy.

    Best case scenario: A severe recession, and Barack Obama loses the next election to Ron Paul*.

    * I am just figuring this stuff out. Ron Paul was way ahead of me on this.
    A criticism that can be brought against everything ought not to be brought against anything.

  4. #14
    Senior Member aufs klo's Avatar
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    Wow, that all seems rather unprobable, and the only thing you really brought up was risk of hyperinflation. You're forgetting that inflation and curency devaluing helps to stimulate the export market (to a point) by making American goods more affordable to overseas markets.

    We're actually in one of the first deflationary periods since the '30s due to low consumer demand. All these blowout sales are a result of needing to clear space for new stock, yet people aren't even buying at these reduced prices. Stores usually pay for discounts up to 50% out of their own pocket, and anything more is split between themselves and the factory they ordered from--with new orders way down, this is gonna hurt every link in the chain. Price deflation might stick around too; with prices down, consumers might start feeling prices they had been paying in the past were much higher than the good's actual worth.

    This is a consumer-based economy. For real economic healing to begin, we need the consumer to stop waiting for new, lower prices, and putting money back into the economy.
    What's up universe?

  5. #15
    The elder Holmes Mycroft's Avatar
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    I think it's really... unsettling how many of Rand's predictions are panning out. If America's economy does go to pot, it's entirely reasonable to expect that people will welcome de facto socialism. When similar patterns occurred in the past, people fled to America.

    This time, there will be no "America" to flee to.
    Dost thou love Life? Then do not squander Time; for that's the Stuff Life is made of.

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  6. #16
    Senior Member aufs klo's Avatar
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    Quote Originally Posted by Mycroft View Post
    I think it's really... unsettling how many of Rand's predictions are panning out. If America's economy does go to pot, it's entirely reasonable to expect that people will welcome de facto socialism. When similar patterns occurred in the past, people fled to America.

    This time, there will be no "America" to flee to.
    Um, the nationalizing the banks wasn't socialist? Socialism isn't a bad thing.

    And who fled to america during the depression?
    What's up universe?

  7. #17
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    Quote Originally Posted by Mycroft View Post
    I think it's really... unsettling how many of Rand's predictions are panning out. If America's economy does go to pot, it's entirely reasonable to expect that people will welcome de facto socialism. When similar patterns occurred in the past, people fled to America.
    Millions and millions of Americans (But not just Americans) have been huge fans of everything socialism is, for decades at least. If you call it socialism or communism, they disown it, however.

  8. #18
    The elder Holmes Mycroft's Avatar
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    Quote Originally Posted by Jack Flak View Post
    Millions and millions of Americans (But not just Americans) have been huge fans of everything socialism is, for decades at least. If you call it socialism or communism, they disown it, however.
    Indeed. Hence my present state of hand-wringing.
    Dost thou love Life? Then do not squander Time; for that's the Stuff Life is made of.

    -- Benjamin Franklin, Poor Richard's Almanack, June 1746 --

  9. #19
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    Quote Originally Posted by aufs klo View Post
    Wow, that all seems rather improbable.
    It is a worst case scenario. Unfortunately, it is also becoming a more believable scenario with every passing day. Let us hope that it does not occur.

    The only thing you really brought up was risk of hyperinflation.
    I mentioned many things besides hyperinflation.

    You're forgetting that inflation and currency devaluing helps to stimulate the export market (to a point) by making American goods more affordable to overseas markets.
    Supposing that buying power is constant or increases, a fall in the price of the U.S. Dollar against another currency would make American goods more attractive to foreigners. Someone in the United Kingdom, for example, might be able to purchase more goods and services by exchanging his Pounds Sterling for U.S. Dollars and spending in America. But hyperinflation, and even ordinary inflation, debases a currency by reducing its buying power. More U.S. Dollars can be purchased, but each is exchangable for fewer goods and services. Foreigners will not want to hold U.S. Dollars under these circumstances, because they will rapidly lose their value. To the extent that exports are "stimulated" it will be in sales and not profits (adjusted for inflation), because of failure to change prices to match inflation before sale.

    We're actually in one of the first deflationary periods since the '30s due to low consumer demand. All these blowout sales are a result of needing to clear space for new stock, yet people aren't even buying at these reduced prices. Stores usually pay for discounts up to 50% out of their own pocket, and anything more is split between themselves and the factory they ordered from--with new orders way down, this is gonna hurt every link in the chain. Price deflation might stick around too; with prices down, consumers might start feeling prices they had been paying in the past were much higher than the good's actual worth.
    The recent deflation will not stick around. The Federal Reserve is flooding the economy with money. As the credit bubble burst, demand, quite rightly, contracted. Inventories, however, were prepared for the pre-burst demand and hence overstocked. Companies are shedding these inventories and not replacing them in full. That is why there has been a drop in prices--corresponding with a loss of perceived wealth. In the meantime the Federal Reserve has been pumping the economy full of new money, and after these inventories have adjusted to the lower demand that money is going to be chasing after ordinary goods like food and energy. Prices will rise, and may continue to do so if government policy does not change soon.

    This is a consumer-based economy. For real economic healing to begin, we need the consumer to stop waiting for new, lower prices, and putting money back into the economy.
    The consumer is not waiting for lower prices. That is absurd. The price of home computers, for example, have been dropping for years (despite inflation) and people have continued to buy them and in greater quantity than ever before. It is an elementary lesson of economics: people buy less at high prices and more at low prices. The notion that the entire U.S. population has taken to such speculation is nonsense.

    In any case, U.S. consumers cannot afford to keep consuming as they did before. A great deal of their consumption was paid for with debt which they cannot afford to pay back. They need to stop buying shit which they cannot afford. The money they have now does not need to be 'put back into the economy', it needs to be saved for a future economy which has been impoverished through reckless borrowing.
    A criticism that can be brought against everything ought not to be brought against anything.

  10. #20
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    The bubble created a delusion that real wealth was increasing. But it was not, instead prices were being bid up by speculation (enabled by Congress and the Fed). It was like a pyramid scheme: the returns did not represent any real wealth creation. When the bubble burst all that wealth was revealed to be pretend. Home prices began to adjust according to traditional forces and home equity evaporated. Everyone discovered they were not as wealthy as they had been led to believe, and quickly began tightening their belts. It even effected people who did not take out any reckless loans, for many of their customers did so and stopped spending.

    Meanwhile, the Fed has been pumping money into the economy to replace that which disappeared when the housing bubble burst and more. But since so much wealth created during the bubble turned out to be pretend, the new money will simply increase the ratio of dollars to real goods and services, and thus, increase prices. That is, everyone will have more dollars without an increase of stuff to buy, so each dollar loses value. It will also be used by government as a stealth tax, and a trick to avoid paying their debts (inflation destroys the real value of money and thereby reduces the real value of debt repayments).

    That is the big problem. Imagine if one person were given permission to print his own money or set his own interest rates. The government does not want to pay back its loans, so it will keep interest rates low, increase inflation, and pay back a fraction of the original loan's real worth. All the while interest rates ought to be increased and inflation contained for the sake of long run prosperity.

    Or maybe ... I am still thinking about this more.
    A criticism that can be brought against everything ought not to be brought against anything.

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