Geez, This One's Scary!

yes, anytime the government and lobbyists get involved, they only make things worse.

There are very few things the government (democrat or republican) have not screwed up

Good- start sobering up to the reality of the situation.

As I've been telling people here over and over, the current 'crisis' is but just the appetizer. It's most definitely NOT the main course.

The entree will arrive with the loss of confidence in the US$- which is both #1 AND #30 on Farrell's list. That is the REAL problem. Whitehead knows it. Farrell knows it. Other astute people like Jim Rogers and Marc Faber also know it. Start preparing- you have the advantage still over millions of Americans who don't understand what's coming to them yet.

How does one prepare?

What a bunch of BS:

"We pinpointed the dot-com crash at its peak, in a March 20, 2000 column: "Next crash? Sorry, you won't see it coming.""

So he didn't predict the crash that happened that he knew would happen but didn't foresee. That's my definition of "pinpointed" if any.

Then he does it again: "We reported on warnings of another crash coming as early as 2004, wrote a sequel, also titled "Next crash? Sorry, you won't see it coming.""

So there's a second crash that came that he predicted would come but didn't know it would.

Wow. Credibility on the rise.

I assume this is going to be the third crash he's predicting that he knows is coming but he doesn't what what it is: ""We also detailed the broader, accelerating macroeconomic sweep of cycles last summer in columns like "20 reasons new megabubble pops in 2011.""

I don't deny that things have been mishandled, but even I new there was a housing bubble in 2004, and called it such. I knew there was a dot.com bubble, too, with infinite p/e ratios.

The guy who wrote that article doesn't know what he's not talking about.

Stevejhx, you are focusing too much on certain elements (which I agree are 'superfluous') in that article and missing the main message as a result.

Here is a better synthesis not from a mainstream media outlet that better describes the issue at hand without the commentary/fluff:

http://www.leap2020.eu/GEAB-N-29-is-available!-Phase-IV-of-the-Global-Systemic-crisis-Breakdown-of-the-Global-Monetary-System-by-summer-2009_a2435.html

(it is a translation to English, but a decent one)

MMAfia, I have no doubt that the global financial system has broken down. Alas, the gold standard is not the answer. It, too, breaks down in times of stress - the Depression, the 1970's. There is no financial system that will withstand certain catastrophic events, if we allow them to occur. The problem is not the events per se as in learning how to control them. We have gotten better at it, but lost our discipline when the foxes were guarding the hen house (Paulson, Cox, Cheney).

It is not too late to un-lose confidence in the US. 53% of American learned that. It would be very dangerous (and stupid) to make such a prediction; we're too good at reinventing ourselves. Will it take political courage? Yes. Will Sacred Cows get slaughtered (Social Security indexed to wages, "free market" health care, a never-ending defense budget)? Yes. Are the Republicans entirely wrong? No. The cure for what ails is is living within our budgets on reasonable taxation terms. It may take a Margaret Thatcher attitude to take on vested interests. Now, mostly government, bloated bureaucracies, overpaid functionaries (teachers, cops) with never-ending benefits.

Unfortunately, Bloomberg, whose recent idea is to increase taxes while holding the city's staff cuts to 3,500 people, and talking about pensions and benefits as "untouchables," signals the wrong direction. He is going to need to do the opposite to fix what ails us, as Wall Street will never again be the engine of government growth as it has been for the past 20 years.

I love articles like this, and everyone agreeing that we're only in the beginning. Its only when everybody has lost all confidence and thinks there's nowhere to go but down, that the bull market begins.

Just like when everybody thinks everything is perfect and there's nowhere to go but up, that's when the bear market begins.

Steve, time will tell.

I re-iterate my analysis and opinion that the US$ Hegemony's days are numbered.

We shall see where we are at in 2009/2010.

That the US$'s hegemony days are over I have no doubt. Part of it is our own fault - we seem to like to spend a lot more than we earn - but a larger part of it was a natural development of global growth. It's not 1946 anymore. Nor is it 1964. It is healthier this way.

Then you understand that the demise of the US$ Hegemony will have serious and dire consequences to the US economy as the ability to 'borrow' from ourselves, the single most important trump card that the US has that no other country in the world has, goes away.

It is at that point in time that the long end of the yield curve will explode and the value of the US$ collapses (or the US defaults on its own debt).

And that, is the main course. As such, prepare accordingly.

"The guy who wrote that article doesn't know what he's not talking about."

That's really funny and I agree with it. He takes a lot of liberties with his list of 30 that have not happened or very likely won't happen and just puts them down as certainties. Yeah, I can do that too about any topic I want, but it doesn;t make it any more factual or prescient.

"as the ability to 'borrow' from ourselves, the single most important trump card that the US has that no other country in the world has, goes away."

That is a stretch, mmaf. You are extrapolating past trends to the future. IF we continue to borrow like this then yes, you are correct. However right now we are left with no choice but to reflate. The time to deal with the underlying problems is tomorrow.

Look, I didn't support Obama for president (though I voted for him) but I am exceedingly impressed and I think he will establish perhaps the most competent administration since FDR, having, simultaneously, learned from FDR's mistakes. The problem that you are discussing is the "have my cake and eat it too" problem, sold by Ronald Reagan at a time when it did make sense to lower taxes and break a few unions, but extrapolated to a time when it makes no sense.

There is no doubt that the deficit needs to be tamed. Bill Clinton started it, then along came the most incompetent administration in the history of the country. Here are a few very simple though politically difficult ideas to get us moving:

a) Nationalize health care like every other industrialized nation has.
b) Peg social security increases to inflation, not wages.
c) Increase legal immigration (we need young people who reproduce a lot - sorry for the racist overtones!)
d) Trim the defense budget 30% and get out of Iraq
e) Regulate the financial sector and outlaw "financial engineering"
f) Legalize most drugs.

That is actually all that needs to be fixed right now. Nationalizing health care would halve the cost of health care in the medium-term. Pegging social security increases to inflation will trim to long-term obligations significantly. Increasing legal immigration will increase the tax base. Trimming the defense budget is a no-brainer (full of waste), as is reregulating the financial sector. Legalizing most drugs will cut down on crime (by redefining it), cut down on enforcement costs, and make the world a more laid-back place.

That's my solution for the country. Do it - and we'll have paid off the debt in 10 years.