Posted on 12/20/2008 10:31:53 AM PST by SeekAndFind
[FC, maybe you can answer this question for me. The Fed is pumping money into the system like crazy. Where is the money going? The banks don’t seem to be lending it. Are they sitting on it? Or, are they buying T-bills? Is the Fed shoveling it out one door and shoveling it in the back door? ]
I think it’s sitting in the banks, but they are all scared to lend, so they are sitting on the capital. We are in a huge credit contraction, thus deflation right now. But we still have a couple trillion about to be pump out there, so at some point the game of musical chairs begins.
Wrong, it's in the banks in china,there is just some people you cannot refuse to pay.
The lock against hiring for the year has only just begun. How long will it last—through February, March, April? The “depression” will be more apparent in the late spring and early summer. Some developers with rather large companies told me that there are no loans for their next projects.
I didn’t read the article, but I will as soon as someone can tell me that the author, Donald Luskin:
1) anticipated the collapse of the housing bubble
2) anticipated the collapse of the financial sector
3) predicted the scope and scale of the stock market crash
4) predicted that this mess would impact the real economy drastically
You see, any asshat can shoot his mouth off about what he thinks, but at this point, I’m only listening to those who have credibility, who saw all of this coming and screamed about it.
So, can anybody point me to some of his articles where he predicts the above, the way I did. If he didn’t, then he lacks even my limited, pathetic forsight and I have no reason to listen to him now.
That is not to say I disagree with his article. I don’t know. I won’t read it until somebody tells me he is credible and was out in front with his predictions of what has occured.
OK. You answered my question. Luskin has no credibility. Good thing I didn’t waste my time reading the article.
I didn’t bother to read it either. The depression is coming, the question is how bad? Luskin is an idiot, I could post 25 articles from people that KNOW what they are talking about, unlike that clown.
In the meantime, the entire financial chattering class will forecast that it ends in hyperinflation and dollar collapse, and they will all be spectacularly wrong, 180 degrees, and in every detail.
You heard it here first.
Politics is one thing, economics another, and finance a third. Ideologues are always trying to substitute their spin for the organic realities of the second and third, and they are always wrong. Always.
Um...the rather large company my husband works for just cut capital investments (projects) for 2009 by one-half.....and froze salaries.....we’ll see....
Your not the first I’ve seen say this. I’ve read a few articles that this crisis is VERY similar to the panic of 1873. IIRC, the best one was on iTulip.
Yes, here it is...
http://www.itulip.com/forums/showthread.php?p=52465
FWIW, Eric Janzen is NOT saying the outcome of this episode will mirror the lengthy depression following the panic of 1873. Eric is very firmly in the camp that the government will succeed in reflating. He remains convinced that the final outcome of the current crisis will be high inflation, NOT deflation.
I’m still struggling to decide if the government can prevent deflation. With trillions committed and with the Fed beginning to print and print hard, I am beginning to agree with Eric that the Fed will succeed, they will snap us from deflation into double-digit inflation. But seriously, my opinion matters little as I really have no clue how it goes. My point is, that Janzsen is still sticking to his guns that the gubmint will beat deflation with double-digit inflation and it will work.
You have it all wrong. Hedge funds aren’t pouring gasoline on the fire. They are flat liquidating. The hedge fund model is imploding before your very eyes. You imply that the hedge funds are temporarily dumping and will pick up later. Nope. They are finished. Done. The model has failed. Hedge funds are liquidating.
“This is like the Dotcom bust and will just take some time to recover.”
I’m trying to remember what some guy (”financial expert”) had said about these “busts”. Talking about booms and busts, and the economy recovering. Something like: After the Saving & Loans busted the economy recovered because the Dotcom Boom came along. The Dotcom Bust economy recovered when the housing market boomed. The housing market bust (and the banks, credit, etc.) will recover when the Dollar Boom arrives. But nothing will be along to pick up the pieces after the dollar bust.
I guess he was saying that these booms and bust were short and shallow but money found its way to other things. (Each one seeming even more shallow to me - no real worth or value). So we may be out of this recession by the end of next year or two, but when the next boom (the Dollar) fails - then it will be bad.
I have no idea if all of that makes sense or not. But, to a layman like myself it seems to. Throwing money at something to fix the problem seems REAL shallow to me.
And - if we think it is bad now - give Obama’s policies a couple of years time and see how it goes.
Can you please post what your advisor said in 2006 about the current recession and stock market crash? Did he see all this coming? Did he save you from any loss, the way I saved myself form any stock market loss by moving all of my investments from equities to cash in December of 2006? I saw all this coming. Did your advisor see this as well?
As far as T-bills goes, other nations are snatching those up as fast as they can, though the return is so low it is essentially a loss after administrative costs. Yep, other nations see nothing better to invest in in their own countries, so are buying T-bills at a loss. That is what they see as the safest bet.
Bush is like Hoover and Obammie the Commie is like FDR, who ridiculed Hoover's economic policies in order to get elected, then adopted those same policies and put them on steroids, thus causing the Depression.
The money they've been printing for the past year and a half (and the fact that the Dems in congress decided to stop publishing how much new money is being printed — the end result being we have no idea how much fiat currency has been pumped into the economy for the last year and a half), will bring the combination of 1920’s American socialism and the 1930’s Weimar Republic into a high-speed merge where neither gets out of the way of the other. Think massive, flaming wreckage cartwheeling down the highway at a hundred miles an hour.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.