It’s Official: The Crash of the U.S. Economy has begun

[donsu]

http://www.globalresearch.ca/index.php?context=va&aid=5964


It’s official. Mark your calendars. The crash of the U.S. economy has begun. It was announced the morning of Wednesday, June 13, 2007, by economic writers Steven Pearlstein and Robert Samuelson in the pages of the Washington Post, one of the foremost house organs of the U.S. monetary elite.

-snip-

Among those poised to profit from the crash is the Carlyle Group, the equity fund that includes the Bush family and other high-profile investors with insider government connections. A January 2007 memorandum to company managers from founding partner William E. Conway, Jr., recently appeared which stated that, when the current “liquidity environment”—i.e., cheap credit—ends, “the buying opportunity will be a once in a lifetime chance.”

The fact that the crash is now being announced by the Post shows that it is a done deal. The Bilderbergers, or whomever it is that the Post reports to, have decided. It lets everyone know loud and clear that it’s time to batten down the hatches, run for cover, lay in two years of canned food, shield your assets, whatever.

-snip-

So what is really happening? Actually, it’s simple. The difference today is that China and other large investors from abroad, including Middle Eastern oil magnates, are telling the U.S. that if interest rates come down, thereby devaluing their already-sliding dollar portfolios further, they will no longer support with their investments the bloated U.S. trade and fiscal deficits.

-snip-

What is likely to happen? I’d suggest four possible scenarios:
-snip-
----------------------------


the 3rd scenario is Revolution

[havocmom]

1. Plant veggies

Lock & load

[donsu]

4. yes, stay prepared for a cat. 6 event - weather or man-made

nt

[seemslikeadream]

2. Forget about a revolution from the left.

They wouldn’t want to make anyone mad at them for being too radical

:thumbsup:

[Jim Warren]

50. LOL, now that's funny

but on second thought it's not funny at all...more like the sad fucking truth.

[napi21]

3. Hmmm, it looks like the folks on wall street aren't listening to this guy.

Market is up 100+ points today.

[Double T]

21. Last HURRAH runup...........before THEY pull the plug!

[Nederland]

5. I'll bookmark and mark my calender

That way I can laugh at you in 12 months when we see that all that has happened is more of the same.

[seemslikeadream]

10. Do you happen to be in the construction business?

[Nederland]

12. No (nt)

[seemslikeadream]

17. Well I have been for 28 years

and have seen alot, I live in a very "stable" part of the country. Builders have been sitting on $300,000 houses for over a year now and there are people being thrown out of their homes in the middle of the night.

[Nederland]

18. Don't get me wrong

Things are going to suck for certain people in certain sectors. However, the notion of a widespread crash is unsupported by the facts.

[seemslikeadream]

22. There are so many people that bought "up"

meaning they bought huge houses that they will NOT be able to afford to heat let alone pay the taxes or morgages. No health insurance, gas prices


Interview conducted by Saul Landau in 2005 for Cal Poly Pomona's "Hot Talk" interview program.

The full interview is well worth watching, covering 9/11 and its aftermath as well as the OKC bombing, and is interspersed with Vidal's poignant observations about our current state of affairs, informed by his masterful knowledge of American lore.


"Hot Talk" archive;
http://video.csupomona.edu/streaming/inc/ht_index.html

Full interview is streaming at Cal Poly Pomona;

Low Bandwidth
http://video.csupomona.edu/HotTalk/GoreVidal-035.asx

Mid Bandwidth
http://video.csupomona.edu/HotTalk/GoreVidal-245.asx

[Nederland]

24. Believe what you want to

However, like I said, in 12 months time all we will see is more of the same. A dip in the economy yes, but not a crash.

I have no interest in arguing with you--the future will prove me right. I'll PM you in twelve months and ask for an explanation as to why you were wrong...

[seemslikeadream]

26. It's a date

:hi:

on edit:

If I still have electricity :)

[acmavm]

29. How do you explain the erosion of the dollar? How do you think

it possible to maintain any type of economy, strong or poor, with a dollar that's dropping like a rock compared to the Euro and the Yuan?

[ProdigalJunkMail]

33. the dollar is currently stronger today than it was in JAN05

against the Euro. I am not saying it's current position is good thing...but it isn't plummeting as you think...

sP

http://moneycentral.msn.com/investor/charts/chartdl.aspx?D4=1&ViewType=0&Symbol=%2fEURUS&ShowChtBt=Refresh+Chart&DateRangeForm=1&CE=0&C9=0&DisplayForm=1&ComparisonsForm=1&CP=0&PT=9&D2=0&D5=0

[Morgana LaFey]

37. Oh, well, if your standard is a full-on CRASH within 12 months,

you may be right. :shrug:

It might take 13 months, or 15-3/4. Or maybe it'll only be a BIG "recession" and not a crash.

Sheesh.

[Morgana LaFey]

36. I dunno, Nederland

Did you see this?

Guess what? New Business Week article saz, our GDP numbers are PHONEY!
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x1097816

This "economy" is on stilts, at best. Or a foundation of sand, which has been silently eroding for at least as long as Bush has been in office. We can't go on sending ALL our jobs overseas. Eventually, there has to be an accounting.

1.8 Million U.S. Jobs Lost Due to China Trade
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x3252159

Plus, you KNOW things are bad when WalMart has one of its worst quarters in 28 years!!!!!

Wal-Mart Sales Are Worst in 28 Years
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2841554

And look here:
U.S. Mortgage Foreclosure Filings Rise 90% in May
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2878621


You got reason to be optimistic, I'd love to see some back up.

[Odin2005]

41. That's what economic orthodoxy thought in October 1929, too.

[pitohui]

45. well get thee to a less stable part of the country where fortunes are still being made

get into hurricane rebuilding where they will not be able to keep up with the demand for new/repaired housing for another decade or so

there are lots of places where new homes are actually needed and being sought out by buyers

it is wrong and environmentally destructive to instead keep building them in the same places that are already hideous and over built (southern california to my mind and eye springs immediately to mind)

find a need and fill it is not a sign of a crashing economy, it is just the way it should work for any industry

there is incredible demand for construction in my area

[gravity]

43. I wish all the alarmists would just short the market

put their money where their mouth is for once.

If someone could predict what the market will do in the future, up or down, they will be rich.

[pitohui]

46. ah but that would imply they really meant what they were scribbling

these guys don't make money from investing, they make money from writing about/selling scams that don't work

as you say, the person who can predict the direction of the market becomes fabulously wealthy, like ed thorp or warren buffet

[Javaman]

6. It took them this long to figure it out? nt

[Spazito]

7. That's the key. Foreign investors have only to stop investing

to have the reality hit home, the US economy has been artificially propped up by lies and the continuation of foreign investment that covers the INTEREST on the ever increasing debt. I have seen some posters say not to worry because they cannot pull out their current investments until the bonds, etc, mature but that is very misleading, imo. Simply stopping further investment will cause a major collapse because of the absolute need for continued investment to, again, artificially prop up the US economy.

[melody]

8. Oh, god, it's the end of the world again

I've lived through this thirty times in my near half century on this planet.

My father had the attic stuffed with canned goods and ammo for when the economy tanked
("which was imminent"). The reality is, it gets bad, but we pull through and survive.

This "apocalypse preferred" economy thing is just the "thou shalt smite the demons" stuff
from the left. Everyone wants the US to die.

[donsu]

13. you and your father never had to deal with the neo cons

now we do

[madrchsod]

20. the "left " has always had to deal with these people

they change their name and morph to fit the times....

[melody]

54. Like hell they/we didn't

For a whole lot of reasons. As I said to the other poster ...

Most people project fear out of their own feelings of lack of control. If you have your ducks in a row, there's
nothing to be afraid of. Our world has already come through the worst things imaginable. We'll come through
some more.

It's not that I don't think the worst can happen, science and reason assure me that the worst usually does NOT
happen. We terrorize ourselves with these self-made apocalyptic fantasies, just as the RW tries to terrify us
with war-based Armageddon. It has the same root. Someone trying to convince themselves by scaring everybody
else.

[madrchsod]

16. you too? ----the sky is falling!!!

[RaleighNCDUer]

27. Your father's attic was the product of the world wide collapse

that he had lived through - the collapse that brought on fascism in Italy and Germany, famine in the Ukraine, 25% unemployment in the US.

My folks also remained prepared for upheavals that never happened, because of memories from their childhoods. Today, with the safety nets that prevented those upheavals shredded, we could see it again. 50% of all workers in this country are only two paychecks away from the street. If the government doesn't have the money to cover unemployment, what are they going to do? Just print more money? Then you have runaway inflation.

Don't think it CAN'T happen just because it hasn't happened recently.

[murray hill farm]

30. So often that is the reaction, these days!

saying "oh yeah, the world is ending again...yeah, yeah" when that is not at all what is being said. What is being said is that it will not hurt you to prepare for difficult times..and yeah, dont think it cant happen just because it has not happened recently. "yeah, Yeah...the sky is falling and the world is ending" is just form of extreme catagorization of a realistic warning so that one's denial of what is happening seems more reasonable.

[lyonn]

47. So many of my friends crashed and burned during the 80's

Some of it was due to them thinking the good times would not end.

I believe they called it Reaganomics. They were printing dollars to cover the spending and the interest rates went sky high. Banks failed. This scenerio sounds familiar. What is different now seems to be the amount of people with jobs that pay pitiful wages. They don't have much to lose.

[melody]

56. You're not reading what I said, but what you wanted me to be saying

I'd suggest re-reading my comments, but it's useless to plead against recreational terrorism
on the left as it is on the right. I give up.

[melody]

53. Not really

My father was more a product of "None Dare Call it Treason" and right-wing fantasies about the Rockefellers
taking over the world. He told us that, when Rockefeller became President, he'd suspend the Constitution and
generally take everything away from white, Christian men. This happened, but only under Bush's watch.

I don't find one dire prophecy any more compelling than another.

Most people project fear out of their own feelings of lack of control. If you have your ducks in a row, there's
nothing to be afraid of. Our world has already come through the worst things imaginable. We'll come through
some more.

It's not that I don't think the worst can happen, science and reason assure me that the worst usually does NOT
happen. We terrorize ourselves with these self-made apocalyptic fantasies, just as the RW tries to terrify us
with war-based Armageddon. It has the same root. Someone trying to convince themselves by scaring everybody
else.

Fear makes us stupid. It stops complex thought. It never helps, which is why terrorism doesn't work, whether
international or home grown.

[radfringe]

9. the bush factor

I have a couple of computer games Civilization and others which are similar.

Every so often, I get a bit bored with the game, it's at a point where it's obvious I'm going to win but I don't feel like starting a new game.

I have a "brazillion bucks" in the treasury, control 80-90% of the territories, sufficient resources, a happy population, no war on the horizon, making scientific and cultural advances - everything is running nice and smooth. Just basically have to hit a button or click on something for a few turns to "officially" win the game.

One day I decided to try something different - I applied the bush factor. Cut taxes, strangled the science/cultural budgets, started a war, and borrowed money like crazy -- I managed to totally destroy my "country" within an hour of play

[lutefisk]

32. That's why he was placed in the Presidency - to work his magic

The only thing Bush does "well" is to fuck things up. The powers that placed him in the Presidency are probably a bit surprised there is anything left of the USA after six+ years of Junior in charge. But they're patient. I think the whole thing will come tumbling down just after Bush leaves office. That way the Right-wing crazies can blame Democrats, not that it will matter much at that point.

[LSK]

11. how many times have I seen this stuff posted here?

Still no crash yet. There wont be one, its a slow bleed this time.

[donsu]

15. and a bloodless body crashes

nt

[madrchsod]

14. well i guess we will have to call in our loans

"the biggest holder of Treasury debt was the U.S. government itself, with about 52 percent of the total $8.5"

"Other big holders of Treasury debt include state and local governments ($467 billion); individual investors, including brokers ($423 billion); public and private pension funds (319 billion); mutual funds ($243 billion); holders of US savings bonds ($206 billion); insurance companies ($166 billion) and banks and credit unions ($117 billion.)"


foreign governments?

Japan $644 billion

China $350 billion

United Kingdom $239 billion

oil exporting countries 100 billion


maybe the sky is`t falling...

[tridim]

19. Guess who will be blamed in 2009?

I know it's an easy question.

[SpiralHawk]

25. The Clenis !!!!

What do I win? I hope it's enough to help me buy a can of beans for dinner

The corrupt cabal of republicon cronies done screwed me and every other working stiff

[tridim]

31. Actually I was looking for "Clenis II"..

Whomever that may be (not necessarily Hillary).

But you're probably right, they'll blame Bill Clinton and then the Democrats in general.

That's why they're fudging the economic numbers now, so they'll have a baseline to use when blaming the Democrats for the problems that will be exposed when the real economic numbers are released. It'll probably work too.

[fortyfeetunder]

23. K&R

this has been brewing for years....

:kickK

[Warpy]

28. I'm afraid the fourth solution (the real one) only gets tried

when the other three have failed. The fourth one depends on critical thinking, historical perspective, and the application of real knowledge to real world solutions. The other ones are nice, simple solutions for nice simpletons.

I've been telling people for years to get out of debt any way they can. A mortgage issued 10 years ago probably isn't going to be a big problem unless it's on a McMansion in the exurbs with a miserably long commute to work, but that credit card debt and those student loans that inflation has minimized have really got to go. Unsecured consumer debt is really going to sink a lot of good people in this one.

If you ever want to know where depressions come from, follow the debt. As soon as that debt exceeds assets to the point that people start getting scared and stop spending, the consumer market collapses and that, kiddies, is the definition of depression since a collapsed marketplace turns into a vicious cycle of reduced (or absent) demand leading to reduced (or absent) employment leading to even less demand. Even the rich get socked because there's no longer any place to throw around all the wealth they stripped from the working class.

If there's enough of a world left to apply the fourth solution in the OP, let's hope the people who do it manage to make it permanent by including a mechanism to prevent the accumulation of the type of vast wealth that has bought and corrupted any other reformed system.

[truedelphi]

34. The big problem for the middle class

Is that the tax rates guarantee, absolutely guarantee, indebtedness.

The tax code of the late forties, early fifties has never been adjusted for inflation of income needed.

In my dad's era, he never had less than $ 1,000 in a bank account.

So you have a CPA who makes 4500 to 5500 a year (we are talking early 1950's) and you look at the tax rate for that income in that era and he is paying les than 600 bucks on his income.

His apartment on a nice tree lined street in a quiet safe neighborhood cost him $ 90 a month.

He paid cash for his new cars. His wife stayed home doing as she pleased.

A two week vacation every single year.

Nowadays an accountant (just starting out) makes 42,000 in a big urban area.But one third of his income goes off to FICA and Soc Security. His wife may work (or the situation could be vice versa!)
but they still are barely making it.

Why? Partly because renters are paying often one third to fifty per cent of income to rent, then the taxes.

So you are buying your clothes and your car on credit, your food even.

Forget keeping 20% of your income in a bank account.

[Warpy]

35. Right, any future progressive tax has to be indexed to inflation

probably by indexing it to the median wage. I've certainly said that often enough in these forums. The thing that killed the progressive income tax was allowing inflation to boost everybody's tax rate year to year. The runaway inflation of the 1970s hammered the middle class and put an unconscionable burden on the working class. That allowed the people at the top to discredit it since so many of those folks just couldn't do the math.

Now our taxes are regressive and getting worse every year the GOP is in power and the DLC looks the other way.

[krispos42]

38. What about a flat tax?

My idea: single, 75% over $75,000 of taxable income
married, 75% over $125,000 of taxable income.

Indexed for inflation, of course.

The actual dollar amounts are just numbers I put in there to go with percentage, but I think it's the right idea. Most people would not pay any income taxes at all, just FICA and SSA, plus the usual sales, property, and vehicle taxes.

A single person making $150,000 net (not gross) would pay $56,250 in taxes, or about 37.5%. That, IIRC, is on par with the current maximum tax bracket.

It seems to me that it would restrict future earnings for the top couple of percentage points of income earners and let the enonomic growth and expansion flow almost exclusively to the poor and middle class.

If we did something similar for corporations as well, where giving bonuses and raises to line workers, R&D, infrastructure investment, and benefits was a tax credit/deduction, but not for executive compensation, I think it would strangle the ridiculous salaries the white-collar corporate types made. Especially if THEY had to pay a 75% income tax on that fat bonus.

I was thinking the flat corporate tax could somehow be based on the revenues of the corporation and their profitability. Investments in line workers, R&D, and infrastruture lower the profitablity and thus the tax rate, while throwing money at lobbyists and corporate types wouldn't.



Or, I could just be full of shit :-)

[Warpy]

40. Uh, that's NUTS

$125,000/year for a couple with children might seem like a fortune to a young guy without, but that is bare subsistence in some parts of the country. Oh, it might afford a very comfortable life in Mississippi, but it's starvation on Manhattan and in quite a few other places. Plus, 75% is a ridiculously high amount of tax to pay on incomes that are barely middle class in nearly all parts of the country. You will find very few people who would take such a Draconian tax seriously. Plus that 37.5% may be near the top tax bracket now, but don't forget that a couple making $250,000 a year, with or without children, pays nowhere near that amount after deductions are figured in. You'd be handing them a tax increase.

The main objective of a progressive tax system is to recirculate money from the hoarders back in through the economy as a whole. The progressive tax system before Kennedy had 90% as the top rate on the very highest wealth earners. Taxes did not fall heavily on labor and they were certainly tolerable on the middle class. There seemed to be enough money for everything back then, from livable wages to fighting a losing war to even trying to end poverty.

The progressive tax system provides a disincentive to greed by brackets that increase with every increase in income, steep increases at the top. It also keeps taxes on labor low but keeps them in the system in the name of fairness. Deductions even out the different costs of living in various parts of the country, the most variable of which is housing.

You can take it for granted that your scheme would never pass without hefty deductions for the rich and the middle class. They would simply never permit a 75% tax rate on any part of their incomes.

A flat tax can never be a fair tax as it will always fall most heavily on the class that works for a living. Remember, the system we have now is Reagan's "flatter, fairer tax, you can send it in on a postcard." Once Congress gets done with it after a few years, you can bet you'll be handing the rich a tax cut while shifting the entire burden onto the middle income worker.

[krispos42]

42. I mentioned keep the deductions in there

Morgages, health care expenses, retirement, etc.

I do not know of any other way to quickly move money out of the hands of the wealthy.

From what I have heard, the tax system from Kennedy to Carter was pretty fair, but there is no chance of that coming back, either. The highest tax rate, I understand, was also 75%.

The progressive tax system provides a disincentive to greed by brackets that increase with every increase in income, steep increases at the top. It also keeps taxes on labor low but keeps them in the system in the name of fairness. Deductions even out the different costs of living in various parts of the country, the most variable of which is housing.

I don't see why this doesn't do that.

It would actually probably cause housing prices to drop as fewer people were able to buy multiple homes for investment, part of the reason housing prices are so ridiculous in the first place.

[WilliamPitt]

39. Again?

[nadinbrzezinski]

48. The indicators for a crash are there

and are eerily similar to both the 1980s (which was a soft recession) and 1929... and for the same systemic reasons

but reporting to the Bilderberger's? I had a chuckle over THAT one.

Oh the other two recessions and depressions that had similar systemic reasons were the 1880s, and 1870s...

Now if you can tell me what these four had in common (Yep you guessed it, trickle down economics is as old as Grant, with the same results)

They are right in saying that a world war is possible, but that was not the result in the 1880s and the central American Fiasco (and taliban) were hardly good enough to be called a world war. (at least hot one)

As to civil war... again I fear I agree with the conclusion, but not for the reason he's stating... and it has all to do with the last oh 10 years.... and a party interested in divsion...

So I would not laugh that hard... even if the bilderbergers made me laugh

[depakid]

44. It's in the Post! LOL

Anyone who believes what's written in the Post is A SERIOUS SUCKER.

I think I'll wait for a credible source, rather than what amounts to tabloid "journalism."

[bonito]

49. I need a twinkey

:think: wish I were in the market, damn

[defendandprotect]

51. What about the Drug War $ . . .

I don't want to take any of this lightly because I agree that one way to break democracy is to bankrupt the Treasury --

Also understand, without doubt, that Capitalism is criminal --
unregulated Capitalism is simply organized crime.

However, presumably drug war profits are used to shore up markets --
and are a huge part of our economy.

Needless to say, the drug traffickling couldn't exist without the cooperation and control of high officials -- and police enforcement.

[rasputin1952]

52. The only thing holding up not just our economy, but the ...

economies of the world, are those purchased US bonds etc.

Once they threaten us w/demands for payment etc, the whole thing falls apart and everyone goes into a depression unheard of in history.

A very few will profit from this, but the worldwide calamity will be incredibly devasating for everyone else.

[barb162]

55. This sentence and everything else on the economy applies

"It is truly staggering that none of the “mainstream” political candidates from either party has attacked this subject on the campaign trail."

Neither party talks up the truly rotten debt and deficit situation this country is in. Both parties like to sweep things under the rug when it comes to this economy.

[rec_report]

57. Let's all start praying for scenario #3!

n/t