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Desmo
01-12-2012, 08:27 AM
What the fuck is a fiscal cliff?

*Sheldon*
01-12-2012, 08:32 AM
http://www.google.com.au/url?sa=t&rct=j&q=fiscal%20cliff&source=web&cd=4&cad=rja&ved=0CEIQFjAD&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FUnited_ States_fiscal_cliff&ei=ok-5UL_hJajQmAXes4GoAQ&usg=AFQjCNFzlPR3tk0DGEb6KVTkh9CcZVMtQQ

Weird stuff....

Morgs
01-12-2012, 08:39 AM
Its a kind of Millenium Bug or Mayan Calendar prediction.

There are a number of American government financial policies that are due to be implemented next year, mainly aimed at trying to reduce the enormous government debt. Some economists (well most of them it would seem) are predicting that if all the policies are implemented at the same time that the American economy would go into a freefall depression, bringing the rest of the world down with it, again!

But as some people interpret the Mayan calendar to predict the world will end before then, it won't really matter anyway:lol:

EDIT: Yeah, as above - Wikipedia is probably the best source of info on it.

strawman
01-12-2012, 09:08 AM
the Ashkenazis have a cunning plan...
The Protocols of the Learned Elders of Zion (http://www.iamthewitness.com/Protocols-of-Zion.htm#protocol20)

Sammi
01-12-2012, 09:20 AM
http://www.youtube.com/watch?v=lV3LBiivTxw

truewheel
01-12-2012, 10:00 AM
From the top of the Fiscal Cliff you have a lovely view of Greece, Spain & Ireland...

agrid
04-01-2013, 10:25 PM
What the fuck is a fiscal cliff?

Received this today;

These figures are a little dated (the situation is now worse) but gives you some idea...

Lesson #1

US tax revenue: $2,170,000,000,000
Fed budget: $3,820,000,000,000
New Debt: $1,650,000,000,000
National Debt: $14,271,000,000,000
Recent budget cuts: $38,500,000,000


Now lets remove 8 zeroes and pretend its a household budget.

Annual Family income: $21,700
Money the family spent: $38,200
New debt of the credit card: $16,500
Outstanding balance of the credit card: $142,710
Total budget cuts so far: $38.50


Got it??...... OK, now,



Lesson #2

Here's another way to look at the debt ceiling:

Lets say you come back home from work and find there has been a sewer backup in your neighbourhood....and your home has sewage all the way up to your ceilings.

What do you think you should do....

Raise the ceilings, or remove the sewage?

Crobbo
04-01-2013, 10:34 PM
Received this today;

These figures are a little dated (the situation is now worse) but gives you some idea...

Lesson #1

US tax revenue: $2,170,000,000,000
Fed budget: $3,820,000,000,000
New Debt: $1,650,000,000,000
National Debt: $14,271,000,000,000
Recent budget cuts: $38,500,000,000


Now lets remove 8 zeroes and pretend its a household budget.

Annual Family income: $21,700
Money the family spent: $38,200
New debt of the credit card: $16,500
Outstanding balance of the credit card: $142,710
Total budget cuts so far: $38.50


Got it??...... OK, now,



Lesson #2

Here's another way to look at the debt ceiling:

Lets say you come back home from work and find there has been a sewer backup in your neighbourhood....and your home has sewage all the way up to your ceilings.

What do you think you should do....

Raise the ceilings, or remove the sewage?

So they're fucked?

filbert
04-01-2013, 10:49 PM
So they're fucked?

Only until the civil war starts in about 6 weeks time, then they'll have more important things to worry about.

shan
04-01-2013, 10:54 PM
When the family budget is so fucked
The family has domestics
Red neck familys might go out and pinch stuff of others to make up the short fall
Some might even get a little short temperd when out in the world trying to pinch stuff and get into a blue here and there.

Skut
04-01-2013, 11:05 PM
The problem is when people start comparing managing a nation (I chose the word 'nation' rather than 'economy' deliberately) to a business, or worse, a household. Honestly, those kind of comparisons are populist, smart-arse bullshit.

Not defending ANY government or party, but that kind of simplistic comparison shits me.

shan
04-01-2013, 11:07 PM
true
but its seriously way out of my leage
so why not have a little fun rather than implode my little happy mind

Skut
04-01-2013, 11:10 PM
so why not have a little fun rather than implode my little happy mind

Shall we have a hi-fi shoot-out for that? ;)

Morgs
05-01-2013, 07:46 AM
And the really stupid thing about the family budget example above, is that the family spent about $10,000 of their expenditure going round the neighbourhood blowing other people's shit up.

Disclaimer: the amount above is just a round figure for example purposes and is not an accurate reflection of US 'defence' spending.

gordonleslie
05-01-2013, 08:35 AM
They can either default or inflate their way out of the mess ..... and they wont default.

I would not go anywhere near anything denominated in $US

mute
05-01-2013, 11:11 AM
we might be buying our cheap fairings and billet from the US soon.

thro
05-01-2013, 05:32 PM
They can either default or inflate their way out of the mess ..... and they wont default.

I would not go anywhere near anything denominated in $US

Eventually though, the other economies will say enough is enough.

Most of their debt is owned by the saudis and the chinese.

While the US is inflating the value of the bonds that are held by the chinese and saudis currently hold is going down in terms of real purchasing power.

So they will demand higher rates before they buy. Which the US will need to issue more bonds to pay with.



We're not far off the implosion of the US dollar and the introduction of the amero (http://en.wikipedia.org/wiki/North_American_currency_union) as a replacement, it seems.

Halo_2
05-01-2013, 05:47 PM
Does changing to amero solve all their problems?

mute
05-01-2013, 06:05 PM
Well considering how well the euro is going, I doubt anyone is going to want the amero (first I've heard of it) especially Canada.

Manyak
05-01-2013, 07:04 PM
Wasn't the American dollar going to be dropped as the oil buying currency not to long ago?? Would they be looking at that again?

Anyhoo, how about those cheap fairings! :D

agrid
05-01-2013, 07:10 PM
Fuck the fairings, I'm buy a condo.

thro
05-01-2013, 07:16 PM
Does changing to amero solve all their problems?


It would involve writing off teh current debt or re-denominating it, so potentially - yes it would alleviate them.

Of course the core issue of the US spending more than they produce is the core of the problem and changing currency will only reset them back to square one so they can rack up debt again, unless they change the way the country works :D

agrid
05-01-2013, 08:38 PM
Fuck the fairings, I'm buy a condo.

I'm looking into this one as we speak.

8152 Mainsail Drive Unit 202, Huntington Beach CA 92646 | First Team Real Estate (http://www.firstteam.com/ca/huntington-beach/8152-mainsail-drive/4545852/?) sorigin=fs

Rich...
05-01-2013, 09:11 PM
I'm looking into this one as we speak.

8152 Mainsail Drive Unit 202, Huntington Beach CA 92646 | First Team Real Estate (http://www.firstteam.com/ca/huntington-beach/8152-mainsail-drive/4545852/?) sorigin=fs
Nice...

Pity about the bit where it's in America...

agrid
05-01-2013, 09:27 PM
Nice...

Pity about the bit where it's in America...

You don't like California or Huntington Beach?

Edit: I get it its the whole America thing. I can live with that, I'm not looking for an investment, just a place to stay when I'm over there.

Rich...
05-01-2013, 09:46 PM
Ok...

Close to the beach, quite a nice beach...

But it has Americans all over it...

jules_1972
05-01-2013, 09:54 PM
Nice...

Pity about the bit where it's in America...

Exactly.

They can eat the Corporations they promoted/pushed by themselves

agrid
05-01-2013, 09:55 PM
Ok...
Close to the beach, quite a nice beach...
But it has Americans all over it...

This is the bad part...

http://honestintrospection.files.wordpress.com/2012/05/fat1.jpg

This is the good part...

http://www.lateralg.org/roads/orange/yerba3.gif

Dr. Venkman
05-01-2013, 10:15 PM
Ok...

Close to the beach, quite a nice beach...

But it has Americans all over it...

There wont be that many after the civil war/famine/zombie apocolypse

The question that I have is this :

If they've turned are they still Americans?

Skut
05-01-2013, 11:03 PM
There wont be that many after the civil war/famine/zombie apocolypse

The question that I have is this :

If they've turned are they still Americans?

Zombies? For sure, just a few rungs down from redneck ;)

Rich...
05-01-2013, 11:05 PM
Zombies? For sure, just a few rungs down from redneck ;)
I wonder if they'd invent a better Motorsport than just driving around in circles...

Skut
05-01-2013, 11:16 PM
I wonder if they'd invent a better Motorsport than just driving around in circles...

Well, they wouldn't care so much about rain...

Rich...
05-01-2013, 11:19 PM
I think we might be off topic...

We were talking about Americans not knowing how to run their country...

Now we're talking about brain dead people going around in circles...

No wait...we're still on topic...

andymac
05-01-2013, 11:58 PM
Wasn't the American dollar going to be dropped as the oil buying currency not to long ago?? :D

shhhh. I wouldn't mention that again unless you want a fully stocked USS Nimitz turning up on your doostep

SPman
06-01-2013, 08:25 AM
we might be buying our cheap fairings and billet from the US soon.
I thought we already were..............

gordonleslie
07-01-2013, 09:08 AM
Eventually though, the other economies will say enough is enough.

Most of their debt is owned by the saudis and the chinese.

While the US is inflating the value of the bonds that are held by the chinese and saudis currently hold is going down in terms of real purchasing power.

So they will demand higher rates before they buy. Which the US will need to issue more bonds to pay with.



We're not far off the implosion of the US dollar and the introduction of the amero (http://en.wikipedia.org/wiki/North_American_currency_union) as a replacement, it seems.

After the American dollar crashes I hope they see the light and go back to some kind of gold standard. To be honest it doesnt even have to be gold - the main thing is that no-one can just create it out of thin air because their balance of trade isnt working out but they want to continue buying off their people through wealthfare programs they cant afford.

The problem is predicting when the american dollar will crash - people have been guessing pretty much as soon as Nixon took it off the gold standard but its still here.

mute
07-01-2013, 09:39 AM
I bet everyone here 100USD that the US dollar doesn't crash in the next 5 years (I'd do it til the day I die but you've gotta have a time limit).

That's the problem with economics even a stopped clock is right twice a day, so if you bang on about something long enough you'll be right eventually. Gives a good soapbox to fringe loonies and naive people that don't have the education.

Bukefal
07-01-2013, 09:56 AM
obligatory onion:
U.S. Treasury Cowboy Claims Something Done Spooked Economy | The Onion - America's Finest News Source (http://www.theonion.com/articles/us-treasury-cowboy-claims-something-done-spooked-e,29850/)

chew
07-01-2013, 10:05 AM
You only have a debt problem when you cannot service the debt. To date the U.S. has been servicing that debt.
They need to get out of the middle east, which will then bump our oil prices up dramatically.
We have built a very nice catch-22 fiscal system around the world and if it does go down (unlikely) it will be ugly.

thro
07-01-2013, 07:04 PM
You only have a debt problem when you cannot service the debt. To date the U.S. has been servicing that debt.
They need to get out of the middle east, which will then bump our oil prices up dramatically.
We have built a very nice catch-22 fiscal system around the world and if it does go down (unlikely) it will be ugly.


No they haven't been servicing the debt (i.e., reducing it, or even keeping it static).

They've been devaluing their currency by issuing more, which is eroding the purchasing power of anyone who buys the debt.


Just because the US federal reserve CAN print infinite money to bail out the government (and they can, in theory - as long as someone will buy the treasury bills) it doesn't mean that they should do so. It will kill their economy eventually. And due to the way exponential functions work, the crash, when it comes will be sudden and dramatic.



To the guy who said it won't crash in 5 years if not his life time - you're on mate. I'll take you up on that bet for shits and giggles. I'm not sure it will be within 5 years, but it WILL happen. It is inevitable - unless they get a politician who isn't a puppet of the fed and/or is willing to actually make a change rather than further the status quo - which benefits the elite who couldn't give a fuck about the plebs who are being disenfranchised by these monetary games. They own assets.

Every empire comes to an end. Even the romans... even the US. And the Romans crashed and burned in exactly the same way.

filbert
07-01-2013, 07:16 PM
the bet was in US$ thro so if you win it might be worth $1

thro
07-01-2013, 07:28 PM
Seriously... all it takes is china to say "actually, we have enough US treasuries, we don't need/want any more" and the US currency will collapse.

And what is the US gonna do? Invade? Lol. China is a nuclear power.


There is a view out there that the chinese need the US to buy their shit. But they don't. It is ALL ON CREDIT. Not paid for!

There are plenty of others either within their own country (or elsewhere) who can consume what they produce. The only reason their people are currently so poor is because their yuan is artificially pegged in value to the US dollar.

Rich...
07-01-2013, 07:32 PM
Seriously... all it takes is china to say "actually, we have enough US treasuries, we don't need/want any more" and the US currency will collapse.

And what is the US gonna do? Invade? Lol. China is a nuclear power.
No they just default on the bonds...

What's China going to do? Invade? Lol. USA is a nuclear power...

thro
07-01-2013, 07:33 PM
No they just default on the bonds...

What's China going to do? Invade? Lol. USA is a nuclear power...


Cut their losses and carry on?

If the US default in that manner, who do you think will ever issue them credit again?

They will need to actually cut their spending. China is a net exporter, they will not be the losers in that scenario.

Rich...
07-01-2013, 07:34 PM
Cut their losses and carry on?

If the US default in that manner, who do you think will ever issue them credit again?

They will need to actually cut their spending. China is a net exporter, they will not be the losers in that scenario.

Iceland did and they have credit again...

thro
07-01-2013, 07:36 PM
Iceland's debt was somewhat less than the US :lol:


Either way. China don't need the US to buy their shit. They have billions of their own people who could do so.

Rich...
07-01-2013, 07:36 PM
:lol: and the Roman empire is not the US...

Y8SEE
07-01-2013, 07:37 PM
This helped me get my head around it


http://youtu.be/OJk6vcztEds

filbert
07-01-2013, 07:40 PM
Iceland also jailed their bankers to prevent it happening again, which is why they have credit again.

mute
07-01-2013, 07:43 PM
i totally understand that it (hyperinflation) could happen, I just think it is unlikely . If for example a country rich in gold were to flood the market then gold would also topple in value (also unlikely).

As for exponential models etc, these all assume that markets act rationally. This is not true and has been proven as much, how they move is a "random walk". "All models are wrong, butsome are useful"

thro
07-01-2013, 07:43 PM
The big thing with the above video is that most companies have moved production out of the US to china.

So.... when they need to stop borrowing and start selling... they've got no one there producing to sell shit...


If the US taxed everyone in the country at 100% (and they didn't have everyone fuck off out of the country as a result) - they still can't bring in enough tax to pay their debt.

mute
07-01-2013, 07:47 PM
that's not true US has huge manufacturing.

and companies (including apple) are moving back in a response to China being too expensive.
Multinational manufacturers: Moving back to America | The Economist (http://www.economist.com/node/18682182)

thro
07-01-2013, 07:49 PM
that's not true US has huge manufacturing.

Such as?

GM: bailed out because they don't make money
Ford: bailed out because they don't make money
etc...

Intel, apple and most of the other tech companies who are "US companies" produce all their shit in China...

mute
07-01-2013, 07:50 PM
made an edit ^^

chew
07-01-2013, 07:52 PM
No they haven't been servicing the debt (i.e., reducing it, or even keeping it static).


So, they are in default then?

mute
07-01-2013, 07:55 PM
Economy of the United States - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Economy_of_the_United_States)

"As of 2010, the country remains the world's largest manufacturer, representing a fifth of the global manufacturing output.[24] Of the world's 500 largest companies, 133 are headquartered in the United States."

Just cos the labour isn't there doesnt mean it is not huge, they automate shit, the jobs lost were lost to robots.

they build huge ships there and a lot of stuff China can't even do.

mute
07-01-2013, 08:18 PM
a pertinent quote

"If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem."
J. Paul Getty

Halo_2
07-01-2013, 08:21 PM
all started with nixon

ReCon
07-01-2013, 08:30 PM
I bet everyone here 100USD that the US dollar doesn't crash in the next 5 years (I'd do it til the day I die but you've gotta have a time limit).

That's the problem with economics even a stopped clock is right twice a day, so if you bang on about something long enough you'll be right eventually. Gives a good soapbox to fringe loonies and naive people that don't have the education.

A delightful inflationary release might be the result. At the moment the banks are not letting the currency flow , so there is no velocity of currency. Once they had dumped much of their internal debt for free , then maybe they will start dispersing it through the economy.

As much as I hat to say it , gold will probably go nuts again , but it sure as hell will crash just as hard as well. The trusty Posty bike might just be the worlds greatest asset to own when inflation overruns the worlds economies.. :wub:

Desmo
07-01-2013, 08:47 PM
Economy of the United States - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Economy_of_the_United_States)

"As of 2010, the country remains the world's largest manufacturer, representing a fifth of the global manufacturing output.[24] Of the world's 500 largest companies, 133 are headquartered in the United States."


The largest manufacturer of what?
Just because they have headquarters in the US does not mean they are manufacturers.
The US doesn't make shit, most of their "manufacturing" is offshore made in non-US factories by non-US nationals.

Ryven
07-01-2013, 08:56 PM
The US doesn't make shit

I always knew you'd be a big supporter of quality American products.

The real question is... How is that different from the rest of the western world?

agrid
07-01-2013, 08:57 PM
No Desmo, shit is made in China, quality is made in the US.

Desmo
07-01-2013, 09:00 PM
I always new you'd be a big supporter of quality American products.

The real question is... How is that different from the rest of the western world?

Knew.

Edit: and for what it's worth, the gear that I dive is made by a US company, from a factory in China.
Granted, they own the factory, but it's still made in China.

mute
07-01-2013, 09:01 PM
probably aeroplane, ships, big iron, CPUs (not all intels are made in china)

here

Top US Exports (http://www.worldsrichestcountries.com/top_us_exports.html)

Desmo
07-01-2013, 09:03 PM
So what you're saying is the stuff they make is an artifact of the continual wars they wage to prop up their economy?

mute
07-01-2013, 09:04 PM
you know boeing and intel are there right? they're pretty big.

always thought that the whole China is going to take over was really just an undercurrent of anti americanism. when you look at the facts i doubt it will happen, despite shitty news outlets repeatedly claiming China will be larger in a few years time.

When you are the one holding all the power, China is merely an employee of American companies. If China is to become bigger than the US they will have to produce or innovate something that is better than the US, simply copying is not enough as you will stagnate (see Japan).

agrid
07-01-2013, 09:07 PM
Try using a real Leatherman and then a Chinese knock off.

Desmo
07-01-2013, 09:10 PM
I doubt that sales of Leatherman tools are going to save their economy.
Look, I don't doubt that the US makes some fantastic stuff (especially tooling, they undoubtedly produce the best of this on the face of the planet, I know, I have some and wouldn't swap them for anything else), but the fact remains that they are consumers and the outs certainly don't match the ins.

Desmo
07-01-2013, 09:11 PM
(see Japan).

This has nothing to do with innovation or economies but is a function of Japanese policy.

Ryven
07-01-2013, 09:11 PM
Knew.

Edit: and for what it's worth, the gear that I dive is made by a US company, from a factory in China.
Granted, they own the factory, but it's still made in China.

Freaking cat was on the keyboard, missed it when I corrected his "work", which also involved opening new tabs and the webpage source...

But what I'm saying is that's the same for a lot of companies these days. Apple products, for instance. Along with a lot of cars that are built in India, China and South Africa.

If I had to go out on a limb, I'd say the products that are actually made in the USA greatly outnumber those actually made in Australia, even with scaling the economies to population.

Desmo
07-01-2013, 09:15 PM
But Australia has a shit mentality. We dig our dirt out of the ground, send it overseas to be processed and then buy it back at an inflated price.
Our workers have an entitlement issue that makes it unrealistic to manufacture over here and out government thinks it better to sell for a quick buck than to sell the product to the local market at a reduced rate.

Edit: and I always knew you would be a cat person.

mute
07-01-2013, 09:17 PM
I doubt that sales of Leatherman tools are going to save their economy.
Look, I don't doubt that the US makes some fantastic stuff (especially tooling, they undoubtedly produce the best of this on the face of the planet, I know, I have some and wouldn't swap them for anything else), but the fact remains that they are consumers and the outs certainly don't match the ins.

This does not mean they don't have outstanding manufacturing (and as I said they are the worlds largest). Do you think US companies are going to continue to employ Chinese workers when they have a labour force in their back yard who speak their language (this is important) and will work for the same price. PS Inflation = cheaper US labour .

Desmo
07-01-2013, 09:19 PM
For a mute, you sure talk a lot.

mute
07-01-2013, 09:25 PM
*type

Ryven
07-01-2013, 09:31 PM
Edit: and I always knew you would be a cat person.

:lol:

Skut
07-01-2013, 11:10 PM
As to the China = low quality manufacturing argument; look at high-end hi-fi at the moment. Some of the best affordable audiophile gear is coming from China or Eastern Europe (a product of cheap skilled labour and an unceasingly aspirational market internally, and currency friendly export returns)

Chinese manufacturing seems to run on a few tiers of quality. To be honest, most American manufactured products I have bought looked like they where knocked up in a High-School workshop (I am talking photographic equipment here to be specific...)

Desmo
07-01-2013, 11:45 PM
China builds thing to a price point.
Just name that price point and they'll build it, some quality stuff comes out of China.

mute
08-01-2013, 07:15 AM
Manufacturing is not just consumer products. US export large things like cranes, oil tankers, agricultural machinery.

filbert
08-01-2013, 09:03 AM
my Jeep was made in the USA, it says so on all the advertising.

my side steps were made in Canada, window glass made in Mexico, engine made in Italy, transmission made in Germany, body panels made in Brazil, i always thought the only US states that weren't connected to the others were Alaska and Hawaii but i guess they have bases in other countries and call them their own.

gordonleslie
08-01-2013, 11:01 AM
I bet everyone here 100USD that the US dollar doesn't crash in the next 5 years (I'd do it til the day I die but you've gotta have a time limit).

That's the problem with economics even a stopped clock is right twice a day, so if you bang on about something long enough you'll be right eventually. Gives a good soapbox to fringe loonies and naive people that don't have the education.

Ill take that bet - so long as we can define 'crash' as inflation at a certain level? currently at 1.8ish% (average inflation since 1914 has been 3.4%)

RB 2 11
08-01-2013, 11:32 AM
I know this is a repost, but it's good for a refresher: US Debt Clock (http://www.usdebtclock.org/)

Taylor
08-01-2013, 12:13 PM
Ill take that bet - so long as we can define 'crash' as inflation at a certain level? currently at 1.8ish% (average inflation since 1914 has been 3.4%)

That would be a frivolous bet, wouldn't it? If payment is $100US and the $US is worth nothing, what do you win?

gordonleslie
08-01-2013, 12:20 PM
That would be a frivolous bet, wouldn't it? If payment is $100US and the $US is worth nothing, what do you win?

Haha sneaky bastard - i didnt see it was US dollars. AU$ only!

mute
08-01-2013, 12:30 PM
haha, yeah it was all a bit tongue in cheek. I guess you can say the gold bugs don't look too closely into things :) . The last time there was a crisis the USD shot up as it's considered a "safe" currency, another thing is the Asian financial crisis was started because the Thai Baht was no longer backed by the USD.

You can try and predict things with common sense and the maths but there is no predicting psychology!

thro
08-01-2013, 12:42 PM
It's all good people, we have a solution

The $5 Trillion Coin: Gimmicks the government could use to resolve the debt-ceiling debacle. - Slate Magazine (http://www.slate.com/articles/business/moneybox/2011/07/the_5_trillion_coin.html)



edit:
LOL at US inflation figures.

They are 1.8%, so long as you take out energy costs. Oh and food costs. And anything that looks bad that we can perhaps call "seasonal" or an "outlier", never mind what percentage of the average citizen's paycheck they make up :D

It's like their unemployment figures. They do this wonderful thing, where if you are unemployed for more than 6 months, your benefits cease and then you are no longer recorded as unemployed - whether or not you actually have a job or not. :)


also
Chew: printing your way "out of trouble" and into hyperinflation is as good as defaulting on the debt, yes. It just isn't as quick.

Who cares if you get paid back when the dollars you are paid back with are worth some minimal percentage of the value they were when you issued the credit?

This is the problem they are starting to face with regards to borrowing more from other countries - eventually, the rate demanded on US treasury bonds will become so high due to the expected devaluation that the interest payments will skyrocket. Adding 10% to the deficit every year already is well on the way towards this.

Unless they can raise revenue by 500% (IIRC, figures are 400bn revenue, 2tn in spending = 1.6tn in new debt increase) to pay for the debt or at least stem the flow, default/hyperinflation is inevitable. Alternatively they need to cut spending to under 25%, or a mix of both...


Achieving that as the baby boomers all retire is going to be quite difficult.

gordonleslie
08-01-2013, 12:48 PM
haha, yeah it was all a bit tongue in cheek. I guess you can say the gold bugs don't look too closely into things :) . The last time there was a crisis the USD shot up as it's considered a "safe" currency, another thing is the Asian financial crisis was started because the Thai Baht was no longer backed by the USD.

You can try and predict things with common sense and the maths but there is no predicting psychology!

In all seriousness why are you so upbeat on the $US? The asian financial crisis was partly started due to Thailand not being able to support its $US peg due to its huge debt, real estate bubble collapsing and the flight from its currency (sounds familar to the US! except no-one is running from the currency yet)

mute
08-01-2013, 01:00 PM
In all seriousness why are you so upbeat on the $US?


I'm not really, it's all in the spirit of healthy debate. I just think that people underestimate them from confirmation bias. They are still the biggest and have the bombs. They're definitely not as fucked as the EU as well. "Fiscal Cliff" is just buzzword for their debt (from war) and aging population and other stuff, some of which will affect us post mining boom.

PS. Screw gold, keep AUD.

mute
08-01-2013, 01:04 PM
I know this is a repost, but it's good for a refresher: US Debt Clock (http://www.usdebtclock.org/)

Nice one,

According to that one our debt to gdp ratio is worse than the US



World Debt Clocks (http://www.usdebtclock.org/world-debt-clock.html)

Edit: sorry misread it, there are at least a few countries worse off than the US though.

thro
08-01-2013, 01:27 PM
No Way Out | Euro Pacific Capital (http://www.europac.net/commentaries/no_way_out)

and the debt is accelerating....


edit:
how the US fed deals with higher than desired inflation stats:



A similarly loose criterion exists for the Fed's other goalpost - inflation. Bernanke stated that he will look past current inflation statistics and look primarily at "core inflation expectations." In other words, he is not interested in data that can be demonstrably shown but on much more amorphous forecasts of other economists who have drunk the Fed's Kool-Aid. He also made clear that rising food or energy prices will never fall into the Fed's radar screen of inflation dangers. For as long as I can remember (and I can remember for quite some time) the Fed has stripped out "volatile" increases in food and energy, preferring the "core" inflation readings. But in the overwhelming majority of cases, the headline numbers are significantly higher than the core. In other words, Bernanke simply prefers to look at lower numbers. In his press conference, he made it clear that the Fed will avoid looking at price changes in "globally traded commodities," that are all highly influenced by inflation.
These subjective and attenuated criteria give Fed officials far too much leeway to ignore the guidelines that they are putting into place. If the Fed will not react to what inflation is, but rather to what it expects it to be, what will happen if their expectations turn out to be wrong? After all, their track record in forecasting the events of the last decade has been anything but stellar.



and... failing to service debt...
Doing Away with Debt Ceiling Drama | Euro Pacific Capital (http://www.europac.net/commentaries/doing_away_debt_ceiling_drama)

gordonleslie
08-01-2013, 04:29 PM
Here is a stupid question:

Who is all the debt owed too?

For example if Joe owes Bob a debt of $50 and Bob owes Tom a debt of $50 then:

Joe -$50
Bob $0
Tom +$50

Is the debt a case of 'borrowing' from yourself or something? Has always puzzled me!

*EDIT - refering to the world debt clock site.

chew
08-01-2013, 04:40 PM
Here is a stupid question:

Who is all the debt owed too?

For example if Joe owes Bob a debt of $50 and Bob owes Tom a debt of $50 then:

Joe -$50
Bob $0
Tom +$50

Is the debt a case of 'borrowing' from yourself or something? Has always puzzled me!

*EDIT - refering to the world debt clock site.

IMF, Saudi and China I suspect.

Personally I cant wait for the financial collapse as then we can clean out middle management and other industries of all the dead wood and reboot the whole planet. It will be messy but should solve the population problem also.

gordonleslie
08-01-2013, 06:31 PM
IMF, Saudi and China I suspect.

Personally I cant wait for the financial collapse as then we can clean out middle management and other industries of all the dead wood and reboot the whole planet. It will be messy but should solve the population problem also.

Thats the thing with the debt clock - it should be a zero sum game. You just dont see who has the credit!

mute
08-01-2013, 07:39 PM
well if you add to the money supply (inflation) then that screws up the zero sum thing. Also economic growth and competition are not zero sum, you have just hit upon why fiat currencies work. It's the same game theory that nash character in a beautiful mind came up with.

Desmo
08-01-2013, 07:45 PM
Are you a seppo?

agrid
08-01-2013, 07:47 PM
I'm looking into this one as we speak.

8152 Mainsail Drive Unit 202, Huntington Beach CA 92646 | First Team Real Estate (http://www.firstteam.com/ca/huntington-beach/8152-mainsail-drive/4545852/?) sorigin=fs

Condo fees are $500 a month, if the US$ craps out then I guess they will only be $400 a month but the property will be worth less ... but then I'm not looking for an investment, just a place for my son to stay in if he goes to play college ball, me to stay while I'm over blasting through the canyons, rent to mates and through VRBO the rest of the time. I'm trying to find out how many other hidden fees there may be. I reckon I've had crazier schemes than this one but I can't think of any right now.

mute
08-01-2013, 07:53 PM
Are you a seppo?

No.. Lived in Perth all my life. I am not a lover nor a hater. Why?

Desmo
08-01-2013, 07:57 PM
You seem to have a slightly warped viewpoint on the US economy, that's all.

mute
08-01-2013, 08:00 PM
They're doing better than most of Europe, it's there in black and white. Did you look at the debt clock, take a look at Ireland haha.

Of the developed countries there are only about 10 that are doing better than them (others are small), Canada and Australia are on top. Go read the economist rather than ACA and what your mates tell you down at the pub.

thro
08-01-2013, 09:12 PM
IMF, Saudi and China I suspect.

Personally I cant wait for the financial collapse as then we can clean out middle management and other industries of all the dead wood and reboot the whole planet. It will be messy but should solve the population problem also.

Yeah the Saudis and Chinese own most of it.

China is in the precarious situation at the moment where they are trying to get out of US treasuries at a slow enough rate that they don't crash the market and lose their value too much before they get out.


I suspect this is the only reason they haven't simply said "no more" and let the chips fall where they may.


As to the eurozone. They're bad, but nowhere near as fucked as the states on the whole. Yes some countries are doing poorly, but germany is an economic powerhouse and will keep the eurozone afloat. They don't have reserve currency status (yet) which is skewing things slightly the way of the US. Until people wake up, the dollar tanks properly and it loses reserve currency status.

The US dollar is dead. Done. It's only a matter of time. No politician is going to have the balls to do what is required (a decade or more of pain) as their terms are only 4 years.

mute
08-01-2013, 09:58 PM
did you look at this? World Debt Clocks (http://www.usdebtclock.org/world-debt-clock.html),

is it wrong or something?

thro
08-01-2013, 10:34 PM
Look at which way the numbers are spinning.

edit:
but yeah, not sure i'd trust those numbers as representative of the problem.

mute
08-01-2013, 10:50 PM
here ya go, a nice article from a reputable source.

2012 in charts: The long road to recovery | The Economist (http://www.economist.com/news/finance-and-economics/21568742-long-road-recovery)

thro
09-01-2013, 06:28 AM
here ya go, a nice article from a reputable source.

2012 in charts: The long road to recovery | The Economist (http://www.economist.com/news/finance-and-economics/21568742-long-road-recovery)

Of course if you measure GDP as dollars spent (which is how they measure us gdp) and add 10% plus to dollar circulation you will record an increase in GDP.

That's like getting another credit card, maxing it and claiming to be doing better because you bought more shit.

gordonleslie
09-01-2013, 08:57 AM
snip ... you have just hit upon why fiat currencies work. ...

Name me a pure fiat currency older than 50 years that hasnt failed. Seriously - the $US is an experiment and the laboratory is the world we are living in.

mute
09-01-2013, 09:46 AM
fair enough, it's new but the reason for change (every currency in the world is now fiat) is because of such fun times as "the great depression". Metal backed standards are deflationary and cause worse problems.

gordonleslie
09-01-2013, 09:53 AM
here ya go, a nice article from a reputable source.

2012 in charts: The long road to recovery | The Economist (http://www.economist.com/news/finance-and-economics/21568742-long-road-recovery)

You are quoting the economist!

Finance: When markets rotate | The Economist (http://www.economist.com.hk/node/8131522) - predictions in Nov 2006 episode for the year of 2007 - the start of the crisis.

The world economy is clearly slowing. For many investors, the natural response to any economic slowdown is to sell equities and buy bonds. In 2007, however, this reflex is likely to prove exactly the wrong response. To understand the financial prospects for 2007, we must first see why most assets will continue to be driven upwards by the interaction of five great structural forces—free trade, vanishing communication costs, financial deregulation, expansionary demand management and the rise of Asia.

mute
09-01-2013, 09:56 AM
2012 in charts shows what did happen, not what is going to happen.

gordonleslie
09-01-2013, 10:15 AM
2012 in charts shows what did happen, not what is going to happen.

We are talking about the future, the article you linked was talking about the future - by linking last years charts you are implying what about the future?

mute
09-01-2013, 10:25 AM
Man one article hardly takes away the validity and reputation of the magazine. it's pretty easy to google for youtube clips how many times peter schiff (Ron Paul advisor, owns a lot of gold, good for him to keep pumping it up) has been wrong...

And for that one I was just trying to show how the US were doing better than the Euro zone in 2012.

gordonleslie
09-01-2013, 10:42 AM
all good - im not bashing the economist, 99.9% of people missed the financial crisis.

The US only 'looks' like it is doing better than the Euro zone because it has been able to print money (something the euro zone is desperatly trying to be able to do too). Even if it is doing better - being the 2nd worst as opposed to the worst isnt exactly a thing to be bragging about.

agrid
09-01-2013, 11:00 AM
Taleb predicted it in "The Black Swan"

thro
09-01-2013, 01:31 PM
For an example someone who actually predicted the current shitstorm, read/watch peter schiff.

he wrote the book "crash proof - how to survive the coming economic collapse" that was published in 2006. before then he had been down on US propsects for some time.

he has a way of explaining the current situation in terms that the layman can understand.


Most of the world's mainstream economists are the same fuckwits responsible for the current situation. :)

mute
09-01-2013, 01:38 PM
ok got a plane to catch but..

Debunking The "Peter Schiff Was Right" 2006 Housing Collapse Prediction Claim - YouTube (http://www.youtube.com/watch?v=HAgDyB02Vm4&list=UUxCFwx5fVfOzrzklTL3JeSA&index=10)

thro
09-01-2013, 03:28 PM
What the fuck is a fiscal cliff?

What Is the 'Fiscal Cliff'? (http://www.cnbc.com/id/49464221)

Good description of it...

Deano
11-01-2013, 05:10 AM
Most of the world's mainstream economists are the same fuckwits responsible for the current situation.
Agreed but aren't those same fuckwits also relatively protected in terms of investments & loose change lying about? They'll never know first hand the damage they've done, or am I flat out wrong and they'll actually be made to take responsibility for the devastation they've caused? Hey thro, I know an economist who would love to discuss this with you :D (jokes!)

thro
15-01-2013, 06:57 AM
Agreed but aren't those same fuckwits also relatively protected in terms of investments & loose change lying about? They'll never know first hand the damage they've done, or am I flat out wrong and they'll actually be made to take responsibility for the devastation they've caused? Hey thro, I know an economist who would love to discuss this with you :D (jokes!)

Yes. Many have made a killing out of it. Doesn't mean they have any ability or inclination to fix the mess.