HEY DU -- THIS IS IMPORTANT - I HIGHLY SUGGEST YOU READ THIS & PREPARE FOR THE WORST.

[BigBearJohn]

Call me "Chicken Little" -- go ahead. This time, the sky IS falling.

http://www.dissidentvoice.org/2008/01/the-deflation-time-bomb/

http://www.democraticunderground.com/discuss/duboard.php?az=post&forum=114&topic_id=32538&mesg_id=32538

[donheld]

1. It's not chicken little this time.

I'm afraid you're more of a prophet.

[gateley]

2. Thank you -- I think many of us missed this. Recommend. nt

[Political Heretic]

3. We are heading toward a true depression.

And soon.

[slipslidingaway]

4. Gave it a K&R and added some links

[BigBearJohn]

5. I think it would be a GREAT idea if DUers get together and brainstorm ideas on how to survive this.

[RuleOfNah]

7. Communes?

I brought up communes right after registering at DU (um, in 2008, which isn't even a month ago). It was in a discussion about homeless youth, I think.

Will communes come back into fashion? The Boomers will need to live somewhere, get health care, etc. I keep hearing that their savings aren't large, that retirement itself became obsolete, and that the economy is running on vapors. Some of the Boomers are familiar with how to set up refugee camps too, so bootstrapping might be less painful this time around.

Meanwhile, there are already soup kitchens out there...

http://www.foodnotbombs.net/

[w8liftinglady]

14. we have actually been talking a lot about this,too

setting up communes for all us old folks who can't afford to go it alone.

[RuleOfNah]

53. Communetalk?

Is there a forum?

[Viva_La_Revolution]

66. There needs to be!

I've been looking around here in the northwest, but the few I've found are run by little dictators... I want a REAL commune. :)

[RuleOfNah]

69. If you find a good one please let me know! (nt)

[Patchuli]

67. This Boomer hippie chick says

thank you for your thoughtfulness! :grouphug: I was just thinking that if we all pulled together, we'd stand a chance!

[RuleOfNah]

71. You are welcome! On to the W's...

Now we need more detailed definitions of pulled together and stand. Water, food, sewage, weather that doesn't kill. Once things are survivable the rest is a matter of taste. Where is probably the biggest issue. Lakota land? :)

[Patchuli]

75. I imagine there will be collectives

here in the Northwest as well...

[Angela Shelley]

12. Hi BigBearJohn, I admire your creativity and optimism

:-)

[BigBearJohn]

35. Hugs to you!

:pals:

[liberalla]

18. I've been interested in this subject since 2003/2004 or so...

There is a DU Group/forum here that is useful and interesting:

Frugal and Energy Efficient Living

[Chimichurri]

46. clear out your debt, live below your means and eat healthy

buy locally grown (organic if possible) food. If you need to unload your house, don't wait. Put it on the market tomorrow. It's the difference of taking a small hit now or a huge hit later. Everyday the prices are going down. We won't see these price levels in our lifetime again. Think I'm kidding? Just look at the price to earnings ratio of owning real estate. They are unprecedented.

For those supporting Hillary, here's a little factoid. The enormity of fraud being perpetrated by banks and stock brokers is because Bill Clinton dismantled the Glass-Stiegel Act while in office. This Act was signed into law after a long string of bank failures during the depression. It prevented banks from doing stock brokerage business, or stock brokers from doing most forms of banking business.

The unholy alliance between banks and stock brokers Bill allowed paved the way to exotic "products" of all kinds being hurled into the ether. Now that the party is over, who pays? We the tax payers do in the form of bailouts to the Bank of Americas of the world. He also brought us NAFTA that put the final nail in the manufacturing coffin. Let's not forget the dismantling of media regulations he allowed in the Telecommunications Act of 1996 that allowed companies to gobble up all the media they wanted, making them huge conglomerates. We bitch about biased news all day every day here and elsewhere and it's because of Clinton, Reagan and Bush. If anyone believes Hillary will be any different then her husband (who I think is a nice guy despite all the damage he's done) just look at the cabal she surrounds herself with. It's the same characters from before. Don't get mad at me for saying these things, it's really all just something to think about.

[scarletwoman]

54. Excellent post! Nicely concise and trenchant summary of B. Clinton's true legacy.

I have NO intention of voting for another Clinton. A candidate who gets support from Rupert Murdoch is NOT a candidate on OUR side.

sw

[BeHereNow]

59. mmmmmmm-wah SW, as in big old BHN kiss to you.

I couldn't have said it better myself.
BHN

[scarletwoman]

70. Whoaa! I felt that! LOL

:blush:

:hug:
sw

[LynzM]

55. DU has a Frugal Living Group

Join us over there, to start stockpiling ideas and learning how to live with less.

It's coming, and it's going to be... well, it's going to be. Hopefully not as awful as we are all envisioning, but it could be.

[KillCapitalism]

6. I already know, but thanks for posting, K&R.

It's not a matter of if, but when it will all come crashing down. They are working hard to make sure it doesn't happen on Bush's watch, but I'm not sure they can stave it off for that long.

I have a feeling this one's gonna be WAY worse than the 1930's.

[FlyingSquirrel]

8. Mike Whitney IS chicken little.

Seriously, he is the most outspoken voice talking about the end of the world (at least in financial terms).

Doesn't mean he's wrong... just that I'd be more inclined to believe it if I heard more than his voice all the time talking about it. (I know he's not the only one. But it doesn't make much sense to post two links which both relate back to the same article by the same person and say "that tears it.")

I'm not surprised to see gold continuing to rise, but I would caution against getting into the gold market at this point because there's a good chance that we're close to hitting the peak. Sure, maybe it'll be another year or two but really the best time to get into it would've been right after 9-11 or within another year or so. Now you take the chance of coming in near the peak and not recognizing till it's too late that it's gonna go sharply downward, and ending up losing money.

But I'm not a financial analyst.

Personally, if I had the money, I'd invest in FOOD. Long-term survival food.

http://www.survivormall.com/index.asp?PageAction=VIEWCATS&Category=20

Now there's some good insurance. Make ya feel nice and secure.

[BigBearJohn]

9. Funny you should mention that. I was just thinking I should stock up on food while it's still cheap.

[BeHereNow]

61. Just had that conversation today- stock up while you can.

It's fairly easy to purchase those 5 gallon containers-
I'm going to fill mine with rice and beans; also
canned fish, salmon, sardines etc. are good to have on hand
for protein.
I've also started stock piling fire wood.
It's gonna get worse before it gets worse.
Anyone who has been paying even slight
attention should know this by now.

BHN

[DemReadingDU]

23. Nouriel Roubini: serious and painful recession - already here

1/15/08 Europe Will Be Hard Hit by the Recessionary Storm Now Sweeping the U.S. by Nouriel Roubini

The United States has now effectively entered into a serious and painful recession. The debate is not anymore on whether the economy will experience a soft landing or a hard landing; it is rather on how hard the hard landing recession will be. The factors that make the recession inevitable include the nation's worst-ever housing recession, which is still getting worse; a severe liquidity and credit crunch in financial markets that is getting worse than when it started last summer; high oil and gasoline prices; falling capital spending by the corporate sector; a slackening labor market where few jobs are being created and the unemployment rate is sharply up; and shopped-out, savings-less and debt-burdened American consumers who — thanks to falling home prices — can no longer use their homes as ATM machines to allow them to spend more than their income. Indeed holiday sales in the US were much lower in real terms than in 2006. As private consumption in the US is over 70% of GDP the US consumer now retrenching and cutting spending ensures that a recession is now underway.

Let us discuss next why, the detailed channels of transmission from the US to Europe and the other internal vulnerabilities of the European economies...

lots more...
http://www.rgemonitor.com/blog/roubini/237855

note: Roubini, like Whitney, has also been writing about the economy for some months. Check out the topics in his blog
http://www.rgemonitor.com/blog/roubini


edit: You might need to register to read the entire postings.

[NewJeffCT]

27. A recession in any of the world's major economies

- the US, Japan, China, Germany - will tend to have a worldwide impact. And, with the US still having the biggest economy (by far) - it will have the biggest economic impact.

If Americans can't buy cars, it will have an effect on Toyota & Honda, as we're their biggest market. The same with Mercedes & BMW for Germany.

If we can't afford to buy as many toys for Christmas, it will hurt China's economy, too, in addition to places like Sony, Panasonic & Hitachi

[txaslftist]

36. If gold peaks where it peaked last time, adjusted, that's $2200 an ounce.

We're at less than half of that. I'm buying gold now, for sure. Look for a further devaluation of the dollar with all of Wall Street screaming at Ben to "do something". That means gold goes up.

[radfringe]

10. best analogy for taxcuts to corps and wealthy-fare that I've heard

think of the economy as a huge swimming pool.

take a bucket, dip it into the deep end of the pool, now walk to the shallow end of the pool and dump it in. did the water level get deeper?

the economy should be flowing like a river, instead there's a huge reservoir and a teeny tiny faucet just barely dripping.

tax cuts to corporations does not create jobs. Jobs are created when a corporation needs more workers to keep up with the demand for a product. If there is no demand, no products will be made and therefore no need to hire more workers.

If workers do not have money to spend on products, no products will be sold no matter how well stocked and stuffed the shelves.

the wealthy won't invest in corporations or businesses because consumers aren't spending money - therefore the investment won't grow to create more money for the investor. Who in their right mind would invest in something that is stagnant or failing?

the model the republics keep pushing is one of a funnel with the wealthy at the top, the rest of us at the bottom. Pour enough money into the top and it trickles down onto the rest of us. the problem is there is not enough trickle to accumulate a sufficient amount to pour back into the top.

an economy is circular - money flows from point A to Point B to Point C to Point A.

sending each of us a check or giving us a token tax cut doesn't work either. Checks are either used to pay a bill, or are saved. Token tax cuts amount to less than the cost of 1 gallon of gas per week. (the bush tax cut I received amount to $2.50 per week - less than a gallon of gas today)

there is are no quick fix stimuli - what's needed is a long term steady growth plan. If the government want's to "inject" money into the economy - then start by investing in projects which help all of us - alternate fuel technology, infrastructure repairs/improvement. Put people to work at a good wage and they will spend money.

to coin another analogy - what we have are paramedics following the economy around with a defibrillator zapping the economy when it falters instead of investing in a pacemaker to keep things going at a steady rate.

[radfringe]

11. let me add this regarding a quick-fix stimulus

the only thing a quick-fix fixes is a politician's approval rating.

[rodeodance]

13. This sounds like an FDR works plan:

there is are no quick fix stimuli - what's needed is a long term steady growth plan. If the government want's to "inject" money into the economy - then start by investing in projects which help all of us - alternate fuel technology, infrastructure repairs/improvement. Put people to work at a good wage and they will spend money.

[radfringe]

15. you got it...

along the lines of teaching a man to fish as opposed to giving him a fish...

have to look at the long term as opposed to short term. wrapping a leaky pipe with a piece of rubber and securing it with a hose clamp be a quick and inexpensive fix, but in the long run - the pipe has to be replaced.

gee...how many more analogies can I come up with??? :crazy:

[DemReadingDU]

25. those tax cuts to corporations didn't work because

The corporations used the tax cuts to send our jobs overseas. As someone pointed out a few weeks ago, the money didn't trickle down to the rest of us, it trickled overseas and up to the CEOs.

[hootinholler]

16. Your link to the DU thread is to post a reply.

Is there time to fix it?

-Hoot

[Ghost Dog]

60. Should be this link:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=114&topic_id=32538&mesg_id=32538

[Rosemary2205]

17. the price of gas today is attributable to war,

Great article and interesting thread. Thanks.

Recommended and sent to quite a few people email....... Thanks.

[leftchick]

19. two important points never on TV

among many in this article. Thank you BBJ. I think? This is the scariest thing I have read in months...

That’s right; the price of gas today is attributable to war, tax cuts and the relentless expansion of credit by the Federal Reserve — NOT OIL SHORTAGES!

and....

These problems will be further aggravated by the lack of personal savings and the huge debt-load which will push increasing numbers of homeowners, credit card customers, even student loan recipients into default. By 2009, bankruptcy will be the fastest growing fad in American pop culture.

:(

[Usrename]

41. Hey, I was going to post two important point, too...

the first was:

"The price of gold has risen 239% since 2001, while the price of oil has risen 267%. That means if the dollar had remained as ‘good as gold’ since 2001, oil today would be selling at about $30 a barrel, not $99.” (WSJ, 1/4/08)... That’s right; the price of gas today is attributable to war, tax cuts and the relentless expansion of credit by the Federal Reserve — NOT OIL SHORTAGES!"

and the second was:

"(Imagine owing $400,000 on a home that is currently worth $325,000!) 40% of all homeowners in the US will be upside-down by the end of next year... Experts already know that when mortgage holders have “negative equity” they are much more inclined to put their keys in the mailbox and skip town. Hence, the name for this increasingly common practice — “jingle mail.”"

This is not a pretty picture of what lies ahead. I keep thinking about when the Soviet Union collapsed, and how some folks made a whole bunch of money..

[Pale Blue Dot]

20. This passage is the key:

Whether one chooses to call it a recession or not is irrelevant. When the two behemoth asset-classes — real estate and securities — begin to cave in, there’s bound to be some ugly fallout. Housing stayed strong during the dot.com bust. Not this time. No way. The whole system is keeling over and it could take the bond market along with it. As the two gigantic equity bubbles lose gas, consumer spending will stall, business activity will slow, more workers will get laid off, and prices will tumble. Equities and commodities will be hit hard (even gold) and housing prices will dive to new lows as the pool of potential buyers grows smaller and smaller.

These problems will be further aggravated by the lack of personal savings and the huge debt-load which will push increasing numbers of homeowners, credit card customers, even student loan recipients into default. By 2009, bankruptcy will be the fastest growing fad in American pop culture.

[Ganja Ninja]

21. Economic stimulus will only temporarily stave off the inevitable.

This country is bleeding cash. We've been bleeding cash for a long time by importing oil, importing goods and outsourcing jobs. The war in Iraq only made things worse. Unless and until we fix these problems stimulating the economy will only make things worse in the long run.

[Pale Blue Dot]

22. I don't see it doing anything but making a bad situation worse.

The scary thing is that there really are no good options. It's the perfect storm.

[Rockholm]

24. They will make the situation worse.

The * administration has fucked everything up for the past 7 years. This will be his legacy...a ruined economy.

[Virginia Dare]

30. That's why I'm for Edwards..

I think he's the closest thing to an FDR that we've got. Obama is more of a JFK, and that's not who we need right now.

[lonestarnot]

31. Edwards yes!

:toast:

[fooj]

40. My hope and support is 100% with Edwards!

[Digit]

52. This is JE's focus and has been all along!

John, we need you!

[radfringe]

26. what we have

what we have are paramedics following the economy around with a defibrillator zapping the economy when it falters instead of investing in a pacemaker to keep things going at a steady rate.

[distantearlywarning]

28. Kicked and Recommended.

This is one of those occasions where I believe the total gloom and doomers on DU are actually right.

Anybody who hasn't noticed something wrong yet should take a look at one of the *daily* grocery price threads that have been popping up here in recent weeks. Or read some of the posts written by Michganders about their economy. Or heck, just take a look at the price of gold and the relation of the dollar to other currencies over the past year.

[Virginia Dare]

29. The Democratic candidates are already talking about jobs programs..

even McCain has broached the subject. We're in for a rough ride folks.

[jannyk]

32. K&R

[lisainmilo]

33. K&R....."trickle" down doesn't work!

The greedy bastards at the top never let the never let more than pennies drop from their pockets! The very foundation, the cornerstone, of our economic ladder is the AMERICAN WORKER! Bush has kicked out the foundation and robbed us of our jobs, tax money, our media, our lives! Never before have we needed strong leadership like they had with FDR. This is the deciding election for our destiny!

[Canuckistanian]

58. Didn't work the FIRST time it was tried

You're right. By empowering the middle class, as was done in the 50s and 60s, EVERYONE prospers (although LESS OF A SHARE to the rich, but they still get some benefit).

Unless this "paradigm" of unlimited corporate power continues, the economy in general and the poor especially will suffer like they did in the depression of the 30s.

[Faux pas]

34. Since the minute he stole the election, bush 's plan has been to

destroy this country. Now he can truly say 'mission accomplished'. They're aren't enough negative words in the dictionary to describe how I feel.

[jhain]

49. Does this help?:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=2702289&mesg_id=2702289

[Faux pas]

73. That is fantastic! Thanks for pointing it out to me. Passing it on

for sure. :)

[WinkyDink]

50. He's his Grandfather's grandson. Bush uber alles.

[Faux pas]

74. I have a sneaking suspicion that all the bush kids were

indoctrinated at grampa's knee from a very early age. I also believe that being a sociopath is genetic.

[ThoughtCriminal]

37. What will we call it?

Infaltion + Recession = Stagflation

What will we call Depression + Hyperinflation?

Consequences.

[Whisp]

38. the Mother of All Shock Doctrines coming up?

I watched Noami Kein's 6 part speech on youtube yesterday (sorry don't have link but it's easy to find) and this is what it is sounding like to me. After a disaster, the vultures come in and pick at the bones of a shocked and immobile, mostly defenceless public. There are many examples of this - Katrina aftermath, Tiennaman Square (which btw was a real eye opener - Klein's explanation of what was really going down), many other examples available.

so I'm thinking these episodes are just practice for the vultures who lay in wait for The Big One. the purposeful Big One. I find it hard to believe some of these terrible and dangerous decisions of late are 'mistakes' but a deliberate plan to further weaken what social amenities we have left.

[Ghost Dog]

62. Naomi Klein 'The Shock Doctrine' Parts 1-6 at YouTube: Link:

http://youtube.com/watch?v=Ka3Pb_StJn4

[snappyturtle]

39. I was scared enough before I read this! Time to go over to the

frugal whatever group!

[Chimichurri]

42. The most comprehensive, easily understood assessment about

the current state of our economy I've come across! Thanks for sharing this.
No Chicken Littles here. What that post explains is exactly what's going on.


Even Cramer has gone from perma-bull to where's the SEC? http://www.cnbc.com/id/15840232?video=624755222

We never fully recovered from the tech bubble bursting in '01. Greenspan just prolonged the inevitable by pumping up the housing bubble. Just before it all imploded, he jumped ship. My question is, what kind of a bubble will save us this time around?

[Ghost Dog]

63. This is a must watch

- especially if he hasn't said all this before now...

[Roland99]

43. Medicare and SS will soon be gutted. You watch.

[bvar22]

44. This is what we are doing:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=246x5729

[Joe Chi Minh]

45. It's them Commie pinko lefties what done it! Traitors to their country, that's what they are!

Up to their old tricks again, eh? Don't take no notice of them Mr Greenspan. They're *ing Pied Pipers, what you don't have no choice but to foller. But you can sort it out for us, carntcha?

[AllyCat]

47. We bought below our means and still are feeling the hit

I'm at a job where I can work extra and am trying to do what I can now to save money and pay down the debt. We are planning a large garden this year. For awhile, my job will be safe. My husband's will not. We'll see what happens.

What on earth did everyone think was going to happen when this criminal band took control?

[debbierlus]

48. Worth reading - a good explanation in understandable language

Thank you. This helped me understand the real world implications of what we ARE going through as a nation.

Reading this, I don't know why ANYONE would want to step into this mess as POTUS.

Bless em!

[Maat]

51. Kick (n/t)!

[KoKo]

56. Any Mike Whitney read is GOOD...but a TWO-fer...is GREAT! K&R...

[roamer65]

57. Get ready for an INFLATIONARY depression, folks.

Since we have no gold standard limiting the creation of money this time around, the Federal Reserve is going to open the floodgates of fresh dollars. We are not far away from a very nasty currency crisis and the Second Great Depression.

[7 of 11]

65. Normally I would laugh at you

Now it's not so funny anymore. The possibility of a depression is very very real. An fortunately being the biggest customer of everything from everyone we can only bring the world down with us.

Bush is scared to death right now he knows all to well what we are heading into and that he is also to blame for it all. This is why he's begging Uncle King Abduhlla for some oil relief.

I wish my Grandama was alive today. She was a depression era teen and knew how to survive in hard times. Man I could use her advise today.

[applegrove]

64. Bush is already a keynsian. He has spent billions on war to keep the

American economy going.

[panader0]

68. The cost of extending the tax cuts for the rich until 2017?: 2.3 TRILLION

Reinstate the taxes for the rich that were in place before bush. That'll help.

[snot]

72. Somebody help me out here. I don't see anything in current conditions

that would result in deflation, nor do I see anything in the article referred to that explains how deflation might result. Inflation, absolutely; recession, absolutely -- we'll be lucky to escape worse; DEflation, HUH??? I need some details. We seem to be a long ways away from an overly strong dollar and falling dollar prices.