Financial Collapse? Second Depression?

[cfdavid]

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I think it's much simpler.

"In its 2009 Investment Returns Yearbook, Credit Suisse noted that from 1900-2008, "the best performing markets tended to be resource-rich, New World countries." ......
According to the Credit Suisse report the top performing markets over that 108-year period were Australia, Sweden, South Africa, the U.S., and Canada. Other than Sweden, all of these countries were former colonies, had vast natural resources, open trade policies, and managed to avoid the destruction war brings to industrial developments."

http://www.fool.com/investing/international/2011/02/07/why-you-should-bet-on-australia.aspx

Hence, that is the formula for long term success.
1) Development of real resources (oil, gold, minerals, lumber etc)- think Texas and North Dakota (two bright spots in America), Dubai, etc around the world

2) Trading and Not Fighting Wars

3) Sane Fiscal Policy / Stable Banking and Finance Structure - this does require some degree of regulation and government involvement.

We can try and trade tulip bulbs, beanie babies, or other falsely valued things, but its not sustainable in the long term. Ultimately, those countries linked with real resources industries (oil, minerals, etc..) will do much better and will do really well if they have a "sane" fiscal / legal structure / political structure.

PS Blade, the future of this country is a one party system for quite some time. The demographics are in favor of the Democratic party. Regardless of your views on politics and immigration, when citizenship rights are extended to everyone here, there will be a Democratic supermajority, perhaps even in states like Texas.

This seems true but what is your point, exactly?

 

[BLADEMDA]

Yes, I was arguing that the runup in gold prices is just as irrational as the runup in real estate prices was. Two years, up 80%? Five years, up 300%?

With the exception of other precious metals, essentially nothing else has tracked the price of gold, so this argument that "gold's value is constant, it's your dollars that are worth less" is demonstrably false.

Inflation isn't really the official/manipulated/understated almost-0%, but it's not 40-60% either.

People buying gold at $1900 may be predicting that in 5 years, that's what its fair value will be, and they may be right. But they are by definition speculating, and speculators are sometimes wrong. Especially when they're convinced that "this time is different" ...[/QUOTE]

This last statement is what makes me extremely cautious about taking on long positions and then letting the market do what it would. Again, dudes, I think this is a time to be cautious, even when making bold moves (i.e. don't hold positions for too long because the news flashes that are driving markets can change too rapidly).

Ultimately, you are correct. In the mean time Gold is likely to surpass $2250. I'm going along for the ride.
At $2250 OR Obama losses re-election then its time for me to scale back and play with the house's money.

 

[sevoflurane]

What happens to gold when Bernanke anounces QE3?

 

[BLADEMDA]

What happens to gold when Bernanke anounces QE3?

Gold is going up. QE3 is highly likely this month. Only if and when the Republicans gain control of Congress and the Presidency will expectations and market sentiment change. Until then Gold is going up

 

[BLADEMDA]

This seems true but what is your point, exactly?

Quirk makes a valid point. But, if Republicans can gain control of Congress and the Presidency they can make history. I don't agree that democrats will gain a supermajority in Congress.

1. Balance the budget over ten years
2. Cut entitlements.
3. Change Medicare
4. Balanced Budget Amendent to the Constitution
5. Repeal Obama Care
6. Cut govt red tape for business
7. Tax system overhaul
8. National sales tax (I doubt this passes)
9. Cut Spending
10. Bring the troops home

 

[BLADEMDA]

Damn. This stock market Is painful. I'm so glad I own Gold, Silver and bonds.
If I didn't have a diversified portfolio the market decline would be even more painful.

The market has priced in a recession. Suing the banks and raising taxes wont help the economy.

 

[Narcotized]

Quirk makes a valid point. But, if Republicans can gain control of Congress and the Presidency they can make history. I don't agree that democrats will gain a supermajority in Congress.

1. Balance the budget over ten years
2. Cut entitlements.
3. Change Medicare
4. Balanced Budget Amendent to the Constitution
5. Repeal Obama Care
6. Cut govt red tape for business
7. Tax system overhaul
8. National sales tax (I doubt this passes)
9. Cut Spending
10. Bring the troops home

Yup, just like last time when the Republicans had the Presidency and both Houses. 🙄 Nothing the Republicans have proposed comes REMOTELY close to what you are saying. On a scale of 0-100 (0 being treason and 100 being perfectly responsible government), Democrats are about a 2.5 and Republicans are about a 4.5.... out of 100.

In other words, arguing who is better, Republicans or Democrats, is like arguing who should be Sheriff, Dahmer or Manson??

 

[BLADEMDA]

Yup, just like last time when the Republicans had the Presidency and both Houses. 🙄 Nothing the Republicans have proposed comes REMOTELY close to what you are saying. On a scale of 0-100 (0 being treason and 100 being perfectly responsible government), Democrats are about a 2.5 and Republicans are about a 4.5.... out of 100.

In other words, arguing who is better, Republicans or Democrats, is like arguing who should be Sheriff, Dahmer or Manson??

TEA PARTY. That's what is different this time.

 

[Narcotized]

TEA PARTY. That's what is different this time.

The Tea Party is a minimal improvement, moving up to about 6.5 out of a 0-100 scale. They are the Ted Bundy running for Sheriff. All of their plans are hoaxes so far. Decreasing revenues with massive tax cuts while barely skimming the most minimal of spending cuts. Not only do they not realize it will put us further in debt, they are dumb enough to think it will actually get us out of a debt. So far they have been a joke (with a few exceptions).

The Ryan Plan for example is a complete bullcrap. $1.3 trillion dollars of deficit reductions are to come from the wars assumed endings. Wow, what a brave political fiscal reformer. How did he have the balls to do that? That alone gives him zero credibility, so who knows if any of the spending cuts are real, and basically all are offset with tax cuts. Blade, you are too smart to be one of these guy's monkeys.

 

[CambieMD]

Many Washington politicians and particularly Socialists live in a dream world. These Socialists, including President Obama, do not understand free market capitalism or Economics 101. Obama and his Socialist pals in Congress actually think they can just continue trillions in deficit spending each year with no consequences. It is important to note that the highest amount ever added to the National Debt, in any given year by President George W Bush, was $400 billion, which was thought to be alot at the time. A certain Senator Barack Obama said of President Bush that he was completely irresponsible for adding to the National Debt. We see now that this was chump change. Obama has added $5 trillion to the National Debt in less than 3 years in office. It is as though Obama is intentionally out to bankrupt our country to "transform" it into a Socialist nation more quickly. We just can't let this happen because it will mean a lower standard of living for all Americans.

I do not think that what Obama is trying to do to improve the US economy will work. We cannot simply spend our way out of this.

Referring to Obama as a socialist is the of the useless rhetoric that you hear in Washington. How much has Iraq cost this country. How much did Chaneys(sp?) friends make off of that war.

This country did not get to where it is overnight. Saving and investing is what made America strong. We now have a country of spenders and borrowers. Look at the reality TV shows. The stars of these shows never go to work and yet they live in big houses. The truth is that they are house poor at best and bankrupt at worse.

I am trying to stay away from debt. I just finished paying off my med school loan.When my car eventually dies I will purchase a used one with cash.

Things will get worse before it better.

I am hoping that we can have real heatlcare reform. The fat in healthcare needs to be taken out. End of life issues need to be appropriately addressed before a million dollars of useless care is rendered. As physicians we have to realize that things cannot continue as they have. The waste on all ends must be addressed. Obamacare does not represent health care reform to me.

Cambie

 

[BLADEMDA]

1. Obama is a Socialist. This isn't rhetoric it's fact.

2. The Tea Party will ensure the Republicans address the debt and long term entitlements. I am optimistic that the Newly elected Republicans in 2012 will be compelled to address our long term problems.

3. I am optimistic Obama will be defeated in 2012 and ObamaCare will be repealed.

4. I hope I'm wrong about Gold. If 2 and 3 happen I plan on selling Gold as the Fed will begin mopping up those excess dollars.

5. I am optimistic the new republicans will address tax reform in 2013. This means slightly lower taxes for elimination of deductions. This will raise more revenue and eliminate loopholes.

 

[Narcotized]

4. I hope I'm wrong about Gold. If 2 and 3 happen I plan on selling Gold as the Fed will begin mopping up those excess dollars.

As you point out gold would probably face a few hundred dollar correction back to its more sustainable upward trend. The FED will still print massive amounts of dollars to avoid interest rates that our debt could never afford. Long term the gold arrow it pointing upward regardless of who is in power.

We had this kind of debt after WW2 and only got out of it because the war ending was a massive spending cut of greater than 50%. No way politicians can or will cut spending 50% across the board, and be subject to massive social upheaval.

http://www.google.com/imgres?q=fede...tart=0&ndsp=16&ved=1t:429,r:9,s:0&tx=89&ty=40

 

[wannabeskibum]

With regards to selling gold if/when Obama is out of office is not the right question. The train is in motion and it does not matter who is President, well almost. It was the same with Bush as it is for Obama. The game is to spend more and more and cover the previous debt load. That's how the system runs and the cogwheels are oiled and primed.

To slow it down or stop it would take some serious action that no one wants to take. The alternative is to print or spend our way out of it. This is how most American's want it as they do not see it as "my money" but its works out all the same in the end, with a devaluation of the dollar. (that's only part of the story)
I hope as more and more people become aware of what is happening we will accept the truth and and face it head on or well all be derailed.

 

[Quirk11]

Blade:

Some of your changes sound good to me. However, I return to my basic point regarding the fundamentals of a "sound" or "successful economy" as demonstrated by the 5 best performing markets in the last 100 years (minus Sweden): mainly resources and resource production. What is our plan there ?

America used to be the world's largest oil producer, in those days it was doing extremely well. How much longer can we ride the coat tails of that era?

We have to start making or exporting real stuff. While service industries are important, they can be exported especially in this day and age. They also only get you so far.

We are one of the world leaders in natural gas for instance. Were we to drill and sell it, we would again find ourselves in a good long term position. State X could develop it and use it to pay off Debt Y. Pick your resource, and we should develop it (within reason). There would be many more North Dakota or Texas phenomenon around the country. While one day it would run out, as did the US supply of oil, that is just how capitalism works. Until it ran out however, we would continue to do well.

That is our best shot to do well in the next 10 - 20 years.

1. Obama is a Socialist. This isn't rhetoric it's fact.

2. The Tea Party will ensure the Republicans address the debt and long term entitlements. I am optimistic that the Newly elected Republicans in 2012 will be compelled to address our long term problems.

3. I am optimistic Obama will be defeated in 2012 and ObamaCare will be repealed.

4. I hope I'm wrong about Gold. If 2 and 3 happen I plan on selling Gold as the Fed will begin mopping up those excess dollars.

5. I am optimistic the new republicans will address tax reform in 2013. This means slightly lower taxes for elimination of deductions. This will raise more revenue and eliminate loopholes.

 

[pgg]

Blade:

Some of your changes sound good to me. However, I return to my basic point regarding the fundamentals of a "sound" or "successful economy" as demonstrated by the 5 best performing markets in the last 100 years (minus Sweden): mainly resources and resource production. What is our plan there ?

America used to be the world's largest oil producer, in those days it was doing extremely well. How much longer can we ride the coat tails of that era?

We have to start making or exporting real stuff. While service industries are important, they can be exported especially in this day and age. They also only get you so far.

We are one of the world leaders in natural gas for instance. Were we to drill and sell it, we would again find ourselves in a good long term position.

Natural gas is hard/expensive to export across oceans.


On a macro scale, what's killing us is our trade deficit. Every year we export close to $1 trillion of American wealth to the rest of the world. Much of that is buying oil.

For the United States to become sustainably wealthy, energy independence has to be one of the highest priorities. To that end, increased production of domestic natural gas should be part of the strategy - not to sell, but to allow us to buy less oil from foreign countries that hate us.

Frack away. It can't possibly be any worse for the environment than continuing to rely on foreign oil until our trade deficit irreversibly cripples our economy. Poor countries are dirty and polluted. Rich countries are clean.

 

[BLADEMDA]

Natural gas is hard/expensive to export across oceans.


On a macro scale, what's killing us is our trade deficit. Every year we export close to $1 trillion of American wealth to the rest of the world. Much of that is buying oil.

For the United States to become sustainably wealthy, energy independence has to be one of the highest priorities. To that end, increased production of domestic natural gas should be part of the strategy - not to sell, but to allow us to buy less oil from foreign countries that hate us.

Frack away. It can't possibly be any worse for the environment than continuing to rely on foreign oil until our trade deficit irreversibly cripples our economy. Poor countries are dirty and polluted. Rich countries are clean.

Natural Gas is the answer. Cheap, abundant and made (found) in the USA. Our imports can be eliminated if we convert our cars and trucks to LNG (liquified Natural Gas). I wish Obama had spent part of the stimulus on Natural Gas. That's the type of GREEN $$$$ energy we need today.

 

[cfdavid]

I think the solutions are multifactorial, but a revival of our manufacturing sector is critical for long term sustainability.

So much for "lasse faire" policies w/r/t the manufacturing policies of our competitors.....

http://www.nytimes.com/2011/09/11/b...-falling-off-the-us-radar-screen.html?_r=1&hp

 

[Narcotized]

I do not think that what Obama is trying to do to improve the US economy will work. We cannot simply spend our way out of this.

This country did not get to where it is overnight. Saving and investing is what made America strong. We now have a country of spenders and borrowers.

Things will get worse before it better.

Cambie

When you run for office you have my vote.

 

[Narcotized]

The present economic down turn will be with us for years. The attempts at quick fixes willl only make things worse.

Both political parties are out to lunch. We cannot spend our way out of this. Decreasing revenue will not help either.

It took the USA decades to get into this mess. It may take a decade for the country to get out of it. Our standard of living has been reset lower.

Beware of those who promise miracle cures.

The politicians all say that the hate Washington ,D.C politics but they are all want to stay in office.

I expect things to get worse.

Cambie

When you run for office you definitely have my vote.

 

[NRAI2001]

If the economy continues to go south (hopefully it doesnt) and never makes a recovery, what fields of medicine do you guys believe will suffer the most?

I did a summer internship in Prague after my MS1 and over there doctors basically make what is considered average for their country, making less than hairdressers and mechanics in Prague... I ve read that in many European countries primary care (fp) is the most sought after residency and make more money than specialists and surgeons.. Is this what the future holds for the US healthcare system?

 

[dhb]

I ve read that in many European countries primary care (fp) is the most sought after residency and make more money than specialists and surgeons

Certainly not in western europe...

 

[cfdavid]

If the economy continues to go south (hopefully it doesnt) and never makes a recovery, what fields of medicine do you guys believe will suffer the most?

I did a summer internship in Prague after my MS1 and over there doctors basically make what is considered average for their country, making less than hairdressers and mechanics in Prague... I ve read that in many European countries primary care (fp) is the most sought after residency and make more money than specialists and surgeons.. Is this what the future holds for the US healthcare system?

A dire scenario would be just a few more (I think we have 5 years more of borrowing from Peter to pay Paul, but it could last a bit longer, just a hunch) years of "high" incomes. Then, as our economic conditions continue to deteriorate, physicians will still be in demand, but the landscape could be much much different.

Provided new attendings can sock some cash away, pay of debt etc. during the few "good" years we have remaining, then the salaries (much lower but who knows and I won't speculate) which we could see will still sustain you at a decent standard of living RELATIVE to the rest of the population.

I just hope we can see some sort of national initiative to bring back our industrial sector. Even if it's subsidized (since that's the name of the game of our major competitors) at first, until these companies become solvent (if we're targeting and then breaking into new sectors).

Then, we'd see REAL ECONOMY wealth creation. Exports. Higher wages. Engineers, electricians, welders, pipefitters, finance dudes with MBA's even, sales people. Building/making things. This is what makes countries wealthy.

The key here is that a real economy can't ONLY sustain itself on MBA's, salespeople, doctors, lawyers, and then a bunch of low wage, low skilled folks living the dream in the "service economy"......

 

[BLADEMDA]

"The bond market is clear and unequivocal in its message—this is a depression, not just a period of slower growth," he said, adding that a different approach was needed by developed economies to get out of the current mess."History shows that what we need are small government, low taxes, and low regulation, but what we have is big government, big taxes, and big regulation, which is not going to work this time," Griffiths said.

 

[BLADEMDA]

http://blogs.ajc.com/jamie-dupree-washington-insider/2011/09/20/more-obama-fine-print

Obama's Plan.😱


http://www.thefiscaltimes.com/Artic...cks-It-to-the-Health-Care-Industry.aspx#page1