[underdose]

[quote=DWCAP]
So there is plenty of money out there that has to go somewhere. And these states will contuinue to play the game if only because there are no other games in town. China cant sell cheap crap at wall mart in a depression. We wont need Russia’s or SA’s oil if we dont have jobs to drive to. They will loose Trillions as our debt becomes worthless and their stored dollars become toilet paper with a neat logo. Or they can send a few billion more along witht the Trillions they already have and around and around we go.
[/quote]

Let’s say you run a furniture store. You offer your customers seller financing. Business is booming. You’ve got one particular customer who buys an awful lot of furnature. Of course, this customer buys everything on credit. You pay for the raw materials, you work your butt off building furniture, and you accept IOU’s in exchange for your furniture. The IOU’s are profit in the accounting sense, but they are only valuable if they get payed back. When it looks like this customer is broke, you have two choices. You can say, “Oh, he’s my best customer. I hate to lose my best customer. I’ll extend him a bigger line of credit.” Or, you can say, shoot, these IOU’s are worthless. I need to cut my losses. I’ve given this guy an awful lot of furniture for basically free. I’d rather give my furniture to my family than accept more bogus IOU’s from this bankrupt con artist. Which would you do?

I’m not saying I agree with the analysis that the US will default in specifically the summer of 2009. Who can really guess what wacky things human beings will do? But just as home prices couldn’t go to infinity, our debt to China and the rest of the world can not go to infinity. At some point, inevitibly, they must become less willing to accept our worthless IOU’s. So what if they can employ their people giving us stuff for essentially free? They can better employ their people making things for their people, and while the dollar is still the medium for exchange on commodity markets, they can buy the raw materials they need to provide for their people with the dollars they are holding until the dollar collapses. Bernanke and Paulson are turning more and more aggressively to the printing press as a solution. We are already “defaulting” by paying our debts with monopoly money. This WILL reach a breaking point at some point. It has to. It behooves us to be aware of this and be prepared, just as it behooved us to be prepared for the housing downturn.

[underdose]

[quote=DWCAP]
So there is plenty of money out there that has to go somewhere. And these states will contuinue to play the game if only because there are no other games in town. China cant sell cheap crap at wall mart in a depression. We wont need Russia’s or SA’s oil if we dont have jobs to drive to. They will loose Trillions as our debt becomes worthless and their stored dollars become toilet paper with a neat logo. Or they can send a few billion more along witht the Trillions they already have and around and around we go.
[/quote]

Let’s say you run a furniture store. You offer your customers seller financing. Business is booming. You’ve got one particular customer who buys an awful lot of furnature. Of course, this customer buys everything on credit. You pay for the raw materials, you work your butt off building furniture, and you accept IOU’s in exchange for your furniture. The IOU’s are profit in the accounting sense, but they are only valuable if they get payed back. When it looks like this customer is broke, you have two choices. You can say, “Oh, he’s my best customer. I hate to lose my best customer. I’ll extend him a bigger line of credit.” Or, you can say, shoot, these IOU’s are worthless. I need to cut my losses. I’ve given this guy an awful lot of furniture for basically free. I’d rather give my furniture to my family than accept more bogus IOU’s from this bankrupt con artist. Which would you do?

I’m not saying I agree with the analysis that the US will default in specifically the summer of 2009. Who can really guess what wacky things human beings will do? But just as home prices couldn’t go to infinity, our debt to China and the rest of the world can not go to infinity. At some point, inevitibly, they must become less willing to accept our worthless IOU’s. So what if they can employ their people giving us stuff for essentially free? They can better employ their people making things for their people, and while the dollar is still the medium for exchange on commodity markets, they can buy the raw materials they need to provide for their people with the dollars they are holding until the dollar collapses. Bernanke and Paulson are turning more and more aggressively to the printing press as a solution. We are already “defaulting” by paying our debts with monopoly money. This WILL reach a breaking point at some point. It has to. It behooves us to be aware of this and be prepared, just as it behooved us to be prepared for the housing downturn.

[underdose]

[quote=DWCAP]
So there is plenty of money out there that has to go somewhere. And these states will contuinue to play the game if only because there are no other games in town. China cant sell cheap crap at wall mart in a depression. We wont need Russia’s or SA’s oil if we dont have jobs to drive to. They will loose Trillions as our debt becomes worthless and their stored dollars become toilet paper with a neat logo. Or they can send a few billion more along witht the Trillions they already have and around and around we go.
[/quote]

Let’s say you run a furniture store. You offer your customers seller financing. Business is booming. You’ve got one particular customer who buys an awful lot of furnature. Of course, this customer buys everything on credit. You pay for the raw materials, you work your butt off building furniture, and you accept IOU’s in exchange for your furniture. The IOU’s are profit in the accounting sense, but they are only valuable if they get payed back. When it looks like this customer is broke, you have two choices. You can say, “Oh, he’s my best customer. I hate to lose my best customer. I’ll extend him a bigger line of credit.” Or, you can say, shoot, these IOU’s are worthless. I need to cut my losses. I’ve given this guy an awful lot of furniture for basically free. I’d rather give my furniture to my family than accept more bogus IOU’s from this bankrupt con artist. Which would you do?

I’m not saying I agree with the analysis that the US will default in specifically the summer of 2009. Who can really guess what wacky things human beings will do? But just as home prices couldn’t go to infinity, our debt to China and the rest of the world can not go to infinity. At some point, inevitibly, they must become less willing to accept our worthless IOU’s. So what if they can employ their people giving us stuff for essentially free? They can better employ their people making things for their people, and while the dollar is still the medium for exchange on commodity markets, they can buy the raw materials they need to provide for their people with the dollars they are holding until the dollar collapses. Bernanke and Paulson are turning more and more aggressively to the printing press as a solution. We are already “defaulting” by paying our debts with monopoly money. This WILL reach a breaking point at some point. It has to. It behooves us to be aware of this and be prepared, just as it behooved us to be prepared for the housing downturn.

[underdose]

[quote=DWCAP]
So there is plenty of money out there that has to go somewhere. And these states will contuinue to play the game if only because there are no other games in town. China cant sell cheap crap at wall mart in a depression. We wont need Russia’s or SA’s oil if we dont have jobs to drive to. They will loose Trillions as our debt becomes worthless and their stored dollars become toilet paper with a neat logo. Or they can send a few billion more along witht the Trillions they already have and around and around we go.
[/quote]

Let’s say you run a furniture store. You offer your customers seller financing. Business is booming. You’ve got one particular customer who buys an awful lot of furnature. Of course, this customer buys everything on credit. You pay for the raw materials, you work your butt off building furniture, and you accept IOU’s in exchange for your furniture. The IOU’s are profit in the accounting sense, but they are only valuable if they get payed back. When it looks like this customer is broke, you have two choices. You can say, “Oh, he’s my best customer. I hate to lose my best customer. I’ll extend him a bigger line of credit.” Or, you can say, shoot, these IOU’s are worthless. I need to cut my losses. I’ve given this guy an awful lot of furniture for basically free. I’d rather give my furniture to my family than accept more bogus IOU’s from this bankrupt con artist. Which would you do?

I’m not saying I agree with the analysis that the US will default in specifically the summer of 2009. Who can really guess what wacky things human beings will do? But just as home prices couldn’t go to infinity, our debt to China and the rest of the world can not go to infinity. At some point, inevitibly, they must become less willing to accept our worthless IOU’s. So what if they can employ their people giving us stuff for essentially free? They can better employ their people making things for their people, and while the dollar is still the medium for exchange on commodity markets, they can buy the raw materials they need to provide for their people with the dollars they are holding until the dollar collapses. Bernanke and Paulson are turning more and more aggressively to the printing press as a solution. We are already “defaulting” by paying our debts with monopoly money. This WILL reach a breaking point at some point. It has to. It behooves us to be aware of this and be prepared, just as it behooved us to be prepared for the housing downturn.

[underdose]

[quote=DWCAP]
So there is plenty of money out there that has to go somewhere. And these states will contuinue to play the game if only because there are no other games in town. China cant sell cheap crap at wall mart in a depression. We wont need Russia’s or SA’s oil if we dont have jobs to drive to. They will loose Trillions as our debt becomes worthless and their stored dollars become toilet paper with a neat logo. Or they can send a few billion more along witht the Trillions they already have and around and around we go.
[/quote]

Let’s say you run a furniture store. You offer your customers seller financing. Business is booming. You’ve got one particular customer who buys an awful lot of furnature. Of course, this customer buys everything on credit. You pay for the raw materials, you work your butt off building furniture, and you accept IOU’s in exchange for your furniture. The IOU’s are profit in the accounting sense, but they are only valuable if they get payed back. When it looks like this customer is broke, you have two choices. You can say, “Oh, he’s my best customer. I hate to lose my best customer. I’ll extend him a bigger line of credit.” Or, you can say, shoot, these IOU’s are worthless. I need to cut my losses. I’ve given this guy an awful lot of furniture for basically free. I’d rather give my furniture to my family than accept more bogus IOU’s from this bankrupt con artist. Which would you do?

I’m not saying I agree with the analysis that the US will default in specifically the summer of 2009. Who can really guess what wacky things human beings will do? But just as home prices couldn’t go to infinity, our debt to China and the rest of the world can not go to infinity. At some point, inevitibly, they must become less willing to accept our worthless IOU’s. So what if they can employ their people giving us stuff for essentially free? They can better employ their people making things for their people, and while the dollar is still the medium for exchange on commodity markets, they can buy the raw materials they need to provide for their people with the dollars they are holding until the dollar collapses. Bernanke and Paulson are turning more and more aggressively to the printing press as a solution. We are already “defaulting” by paying our debts with monopoly money. This WILL reach a breaking point at some point. It has to. It behooves us to be aware of this and be prepared, just as it behooved us to be prepared for the housing downturn.

[underdose]

[quote=kewp]
Everything is collapsing in price; from housing to soybeans. Even oil is dropping like a rock.

BS +2[/quote]

Yesterday the new CPI data was released. The overall CPI was flat for the month of September, with oil dropping and everything else, particularly food and health care, rising. More acurately, only oil has been falling like a rock, but today OPEC declared a cut in production and oil surged back upward. There has been an “irrationally exuberant” technical pullback in commodities. As Bernanke keeps printing like mad, that “reverse bubble” will have to pop. The deflation expectations are based on what happened in the early 1930’s when we still had the gold standard. It’s a new game now, with no restraint on printing, and much more government debt pre-crash. We need to base our expectations on today’s facts.

[underdose]

[quote=kewp]
Everything is collapsing in price; from housing to soybeans. Even oil is dropping like a rock.

BS +2[/quote]

Yesterday the new CPI data was released. The overall CPI was flat for the month of September, with oil dropping and everything else, particularly food and health care, rising. More acurately, only oil has been falling like a rock, but today OPEC declared a cut in production and oil surged back upward. There has been an “irrationally exuberant” technical pullback in commodities. As Bernanke keeps printing like mad, that “reverse bubble” will have to pop. The deflation expectations are based on what happened in the early 1930’s when we still had the gold standard. It’s a new game now, with no restraint on printing, and much more government debt pre-crash. We need to base our expectations on today’s facts.

[underdose]

[quote=kewp]
Everything is collapsing in price; from housing to soybeans. Even oil is dropping like a rock.

BS +2[/quote]

Yesterday the new CPI data was released. The overall CPI was flat for the month of September, with oil dropping and everything else, particularly food and health care, rising. More acurately, only oil has been falling like a rock, but today OPEC declared a cut in production and oil surged back upward. There has been an “irrationally exuberant” technical pullback in commodities. As Bernanke keeps printing like mad, that “reverse bubble” will have to pop. The deflation expectations are based on what happened in the early 1930’s when we still had the gold standard. It’s a new game now, with no restraint on printing, and much more government debt pre-crash. We need to base our expectations on today’s facts.

[underdose]

[quote=kewp]
Everything is collapsing in price; from housing to soybeans. Even oil is dropping like a rock.

BS +2[/quote]

Yesterday the new CPI data was released. The overall CPI was flat for the month of September, with oil dropping and everything else, particularly food and health care, rising. More acurately, only oil has been falling like a rock, but today OPEC declared a cut in production and oil surged back upward. There has been an “irrationally exuberant” technical pullback in commodities. As Bernanke keeps printing like mad, that “reverse bubble” will have to pop. The deflation expectations are based on what happened in the early 1930’s when we still had the gold standard. It’s a new game now, with no restraint on printing, and much more government debt pre-crash. We need to base our expectations on today’s facts.

[underdose]

[quote=kewp]
Everything is collapsing in price; from housing to soybeans. Even oil is dropping like a rock.

BS +2[/quote]

Yesterday the new CPI data was released. The overall CPI was flat for the month of September, with oil dropping and everything else, particularly food and health care, rising. More acurately, only oil has been falling like a rock, but today OPEC declared a cut in production and oil surged back upward. There has been an “irrationally exuberant” technical pullback in commodities. As Bernanke keeps printing like mad, that “reverse bubble” will have to pop. The deflation expectations are based on what happened in the early 1930’s when we still had the gold standard. It’s a new game now, with no restraint on printing, and much more government debt pre-crash. We need to base our expectations on today’s facts.

[underdose]

I certainly do not get the impression that Peter Schiff is endorsing or encouraging non-payment, he is merely pointing out how strong the incentive for non-payment is. He is saying, “Here are the unintended consequences, plan as day.” There is no refuting his logic that there will be blowback for this bailout. Incidentally, Rich has been making the same arguments. I hold these truths (that the bailout will not work as advertised) to be self-evident. What never ceases to astonish me is how almost no members of congress are able to grasp these truths, even after they have been spelled out so clearly.

[underdose]

I certainly do not get the impression that Peter Schiff is endorsing or encouraging non-payment, he is merely pointing out how strong the incentive for non-payment is. He is saying, “Here are the unintended consequences, plan as day.” There is no refuting his logic that there will be blowback for this bailout. Incidentally, Rich has been making the same arguments. I hold these truths (that the bailout will not work as advertised) to be self-evident. What never ceases to astonish me is how almost no members of congress are able to grasp these truths, even after they have been spelled out so clearly.

[underdose]

I certainly do not get the impression that Peter Schiff is endorsing or encouraging non-payment, he is merely pointing out how strong the incentive for non-payment is. He is saying, “Here are the unintended consequences, plan as day.” There is no refuting his logic that there will be blowback for this bailout. Incidentally, Rich has been making the same arguments. I hold these truths (that the bailout will not work as advertised) to be self-evident. What never ceases to astonish me is how almost no members of congress are able to grasp these truths, even after they have been spelled out so clearly.

[underdose]

I certainly do not get the impression that Peter Schiff is endorsing or encouraging non-payment, he is merely pointing out how strong the incentive for non-payment is. He is saying, “Here are the unintended consequences, plan as day.” There is no refuting his logic that there will be blowback for this bailout. Incidentally, Rich has been making the same arguments. I hold these truths (that the bailout will not work as advertised) to be self-evident. What never ceases to astonish me is how almost no members of congress are able to grasp these truths, even after they have been spelled out so clearly.

[underdose]

I certainly do not get the impression that Peter Schiff is endorsing or encouraging non-payment, he is merely pointing out how strong the incentive for non-payment is. He is saying, “Here are the unintended consequences, plan as day.” There is no refuting his logic that there will be blowback for this bailout. Incidentally, Rich has been making the same arguments. I hold these truths (that the bailout will not work as advertised) to be self-evident. What never ceases to astonish me is how almost no members of congress are able to grasp these truths, even after they have been spelled out so clearly.

[Author]

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