Quote:
Originally Posted by Americano
The big crash of '29 was caused by virtually unlimited margin buying of equity stocks and the Fed subsequently choking the money supply, calling for payment on those financed margins. Everyone knows that will never be repeated even if USD goes to nothing value as those markets are now regulated as to leverage.
Lay and others in the energy business recognized that the US was/is a debtor nation maintaining a standard of living based primarily on credit requiring continual monetary expansion with no sound economic basis, only a monster military force, and offered the argument that credit (and monetary expansion) could be expanded to a scope unhindered by any conventional reasoning if a high-demand commodity like oil was used as the basis for speculation. The catch was there could be no US regulation of trading that commodity by the US, the world's largest consumer, for that speculation to succeed. We now have every financial institution in the US including pension funds and homemakers supporting the financing of oil futures at a ratio of 16-1. We're again riding the tiger and guaranteed to be eaten if we get off and the margins are called through regulation. This one has the potential to make the housing bust bail-out look like chump change, a major reason why inventories are kept as close as possible to demand.
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Precisely stated.
Back in 1960 I said this would happen and everybody laughed at me, well a 15 year old who talked about economics was just a laughing matter then.
I warned against unbridled capitalism.
And what do we have now ?
A repeat of 29 - 80 years later.
The greed of US, Brit and dutch Oil companies has sent gas prices sky-high in Europe.
The ignorance of would-be-speculators has driven up the cost of living by 100 percent in a mere 7 years.
Yet still there are millions of know-alls stating that capitalism is the only way to go.
Mind you, it COULD be, but only with a certain amount of self restriction and a lot of responsibility by each single individual.
One of the main reasons for Bush to invade Iraq was the fact, that Saddam had just announced to base the oil prices on Euro value and the OPEC was about to follow.
Had this happened, all trading worldwide would have followed suit.
The dollar would have lost itīs standing as world trade currency and would have been reduced to itīs real value: less than 10 Euro cent. A consequence of the US-way of living on credit.
In a final desperate move the global market was invented and pushed to itīs limit in record time.
Thousands of companies and whole economies were destroyed by the greed and manipulations of hedge fonds, yet only a few profited, the vast majority of the hedge fond crowd lost their money. Suits them right.
No fear, the crash will come and very soon at that.
Oil is $ 136 today and will reach § 150 by mid July.
By christmas it will be above $200/barrel
That could well be the end for Ford, GM and Co.
And in times like these. the US have the choice between three economically incompetents for President.
( for Clinton freaks:
Hillary will only do as Bill did before :göbal marketing, expanding of speculations in foreign markets, all poison for an already dead economy and certainly not the way to keep old friends or make new ones.)
So whatīs next:
More wars to accomodate the incredibly blown up US arms industy.
( nah, get off the "We must stop the evil others - have a look in the mirror instead)
Lower wages for most working people due to mass sackings in the car industries.
The alternative would be about 40 to 50 million jobless in the US.
More alienation of americans worldwide - who wantīs to listen to someone telling all about greatness, leadership and economy when the teller is the one who butchered it all up.
Closed economies worldwide and finally an isolation of the US
Communists and leftists will rise again everywhere - the dumheads have still not realised that capitalism and communism are one and the same worm, only at different ends ( which one is head or ass the future will show. Could be the worm has two asses. )
Weīll still have "Liberals" promoting the free for all yet unable to realise, their way is what brought about the downfall of world economy.
And US citizens will still believe they are the cream of the world despite the fact, that the US were forced to import intelligence for the past fifty years for lack of homegrown intelligence.
It would perhaps be better to TEACH children at school instead of brainwashing them.
Finally: No, Iīm not a commie nor a welfare socialist.
If you got to put a tag on me call me a social conservative.
For only if everyone is cared for troubles will cease.