American Reality Check

benjamen

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Thoughtful article on the progression of our society:
http://pjmedia.com/victordavishanson/thin-strand-of-civilization/?singlepage=true

"Over 90 million Americans who could work are not working (the “non-institutionalized” over 16). What we take for granted — our electrical power, fuel, building materials, food, health care, and communications — all hinge on just 144 million getting up in the morning to produce what about 160-170 million others (the sick, the young, and the retired who need assistance along with the 90 million idle) consume."
 

ancona

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Those are a few very scary sentences Benjamen, because that number is shrinking on a daily basis. The USA is bleeding out and the flow will not be stopped by this or any follow on administration. The Free Shit Army will make sure they have the loudest voice in any discussion about cutting back on freebie, and the top five percent or so will be doubly sure that their factories in Asia inherit the remainder of American jobs that have yet to be mechanized.
 

mmerlinn

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and the top five percent or so will be doubly sure that their factories in Asia inherit the remainder of American jobs that have yet to be mechanized.
I just read today somewhere that Mexico's wages are now 20% lower than China's wages. Add in the difference in time and money for shipping and you might see the remainder head south instead of west. Even if the wages are comparable, Mexico stands a good chance of snagging what is left of American industry.
 

benjamen

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I am seeing ideas such as these crop up more and more...
http://m.rollingstone.com/politics/...s-millennials-should-be-fighting-for-20140103

All they want is the following items:
1) Everyone is guaranteed a job if they want it
2) Everyone should get "a sum sufficient for subsistence" for free
3) Get rid of that pesky land ownership
4) While your at it, get rid of owning anything
5) Some random idea about public banks

:flushed:
 

pmbug

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Communism can work for small groups, but fails spectacularly on a national scale. Has Rolling Stone always had such a blatant with the Communist viewpoint?
 

pmbug

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Haha... Free XBOX Ones, PS4s or a pair of Nike Jordans for everyone!
 

bushi

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Just read five platforms of communist manifesto, check how many were implemented in the supposedly "capitalist" West societies, and have a bitter laugh...

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pmbug

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At a store after you get your free $500 savings account from Senator Wyden's proposed legislation (if it ever comes to pass). See link in post #187. My comment was pointing out how silly the idea was. That money is as good as spent the moment it's given away. Of course, this likely doesn't apply to you since you are in Indonesia.
 

DoChenRollingBearing

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...

Even Neo-Communism™ seems to be working out very poorly (Venezuela, Argentina and perhaps soon Brazil), hey not just in the USA!
 

bushi

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...

Even Neo-Communism™ seems to be working out very poorly (Venezuela, Argentina and perhaps soon Brazil), hey not just in the USA!
Communism can work for small groups, but fails spectacularly on a national scale
There is one crucial thing missing from the above: ANY system that relies on voluntary participation, can and WILL work. There's why communism works on a "small" scale; because nobody forces anyone to be a part of their commune. Size& scale doesn't matter a squat here, only voluntary participation.

Logically follows, that any system that relies on violence as it's basic core (be it state-wide communism, or fascism, or any other -ism), WILL fail. That includes capitalism. Basically, that includes ANY form of state.

Now, the timeframe in which it happens, and the interim prosperity of the People within any of the particular -ism, depends directly on the amounts of freedom, that individuals have there.

Systems other than free market cannot progress, their theoretical best scenario (never achieved in practice, because of second law of thermodynamics -i.e., there ALWAYS are some imperfections in practice), is to metastasize into perpetual static "being". Reason for that is the price calculation, or rather the lack of thereof, and resulting lack of input for any economic calculation. Von Mises had formulated that paradox, it had never been rebutted, but just shrugged off as "well that's kinda interesting, we cannot really address your points, but so what, let's have more& more central planning and academic& rhetoric influence on free market actions"


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rblong2us

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regarding the US and Russian play for Ukraine -

By Staff Writer, Intellihub – March 7, 2013
http://tinyurl.com/py6tz85



WASHINGTON - Tuesday evening while speaking to Fox News host Bill O’Reilly, Presidential candidate Dennis Kucinich dropped information on the situation that is rarely heard in the mainstream media.
In the interview, Kucinich revealed that the United States government was guilty of funding some of the violent rebel groups who have overrun the country.
When asked how he would handle the crisis if he were president, Kucinich replied by saying that:
“What I’d do is not have USAID and the National Endowment for Democracy working with U.S. taxpayers’ money to knock off an elected government in Ukraine, which is what they did. I wouldn’t try to force the people of Ukraine into a deal with NATO against their interest or into a deal with the European Union, which is against their economic interest.”
So, it’s the USA’s fault that Putin rolled in? We made them do it?” O’Reilly replied.
“Bill O’Reilly, if you don’t believe in cause and effect, I don’t know what I can do for you,” Kucinich said.
Kucinich is known to be staunchly anti-war, he has also been an outspoken critic of trade agreements like NAFTA and organizations like the EU.
Kucinich is the only congressional representative to vote against the “9/11 Commemoration” resolution. In a press statement he defended his vote by saying that the bill did not make reference to “the lies that took us into Iraq, the lies that keep us there, the lies that are being used to set the stage for war against Iran and the lies that have undermined our basic civil liberties here at home.”
Like all politicians, Kucinich certainly isn’t perfect, despite his views against war and drug prohibition, Kucinich is in favor of heavy taxation and regulation, including strict gun control regulations.
Kucinich drafted legislation that included a ban on the purchase, sale, transfer, or possession of handguns by civilians.
Kucinich pushed for gun control, in the U.S. Congress as well as during his time as a city councilman. He kept a pistol in his house for a period in 1978 (under the recommendation of the police) when he was the target of a Mafia plot. He reportedly no longer keeps the pistol, but you can be certain that his body guards have heavy fire power.
 

benjamen

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Too big to fail...
http://etfdailynews.com/2014/03/10/too-big-to-fail-is-now-bigger-than-ever/

"...the six largest banks in the United States (JPMorgan Chase, Bank of America, Citigroup (NYSE:C), Wells Fargo, Goldman Sachs and Morgan Stanley)have collectively gotten 37 percent larger since the last financial crisis"

"The six largest banks now account for 67 percent of those assets and all of the other banks account for only 33 percent of those assets."

"Goldman Sachs has total assets worth approximately 111 billion dollars (billion with a little “b”), but they have more than 47 trillion dollars of total exposure to derivatives.

That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 427 times greater than their total assets"
:flushed:
 

ancona

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I read that yesterday and was blown away when I saw the ratio of derivatives to actual deposits. These guys are skating on very, very thin ice. I don't imagine it would take too much to start the derivatives default cascade at this point.

If those derivatives go boom, the fallout will take generations to clear. In fact, I further believe that if the financial centers blow themselves up, and world confidence in banks is erased, that will be when it goes all to hell and we revert back to a barter system and eating grass soup.
 

rblong2us

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I dont reckon the derivative market will be allowed to fail

the bets either net out to zero, or it wasnt a 'credit event' so no payout necessary

If they do decide to allow an event that would trigger the derivatives cascade, we can be confident it will only effect those they choose to effect.
 

ancona

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Rblong2us,
The problem is that the derivatives market is too big to rescue. Period. We're talking about a system of "financial instruments" that is estimated to be between 700 trillion and 1.25 quadrillion dollars in size. If that thing collapses, and we all know that it ultimately will, there can be no saving the current system. That my friend, is why gold and silver are being hoarded away in quantities never before seen in human history. The amount of gold secreted away by sovereign governments alone is staggering. When you look at the amount of gold and silver sold to the public, and I am talking about bullion coins, sovereign coins, junk silver and ingots, that number is mind boggling as well. Harvey organ did a write-up some time ago that showed worldwide private, individual purchases of precious metals for the last thirteen years exceeded total private demand for the prior fifty years if 1979-80 and 81 were removed from the equation.

That's crazy time!

If derivatives go up in flames, we are fucked. It will be Lord of the Flies time my friend, so govern yourself accordingly.
 
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rblong2us

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Ok its big numbers Ancona but its all just paper contracts.
A quick rule change and poof, its all gone.

I think it needs to be something unforseen that will destabilise the mighty US$
And the $ is backed by real assets as well as the worlds largest army so it could yet remain king of the heap.
 

ancona

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"A quick rule change and *poof* it's all gone".

With all due respect Rblong2us, while that sounds good on paper, the problem with that is those "assets" are backed with collateral, and when the value of those derivatives falls, collateral calls must and will be made, requiring the holders of said contracts to pony up more "real" collateral such as gold, silver, cash, fungible securities, etc. That is exactly what took the system down in the first place. Now, rather than putting a cold, hard stop to the insanity, banks have become even too bigger to fail, they have doubled down on derivatives and swaps to the point where the numbers are absolutely fantastical. While the derivatives are "just paper" the underlying promises and collateral backing them is real. When that collateral has been hypothecated, and then re-hypothecated so that there are multiple claims on the same collateral pool, you have a recipe for total financial obliteration.

I would personally love to see these abominations to be outlawed, but it will never, ever happen. remember, it only takes one domino to fall and the rest come down through sheer inertia. When the first derivative gets defaulted that is when the rubber meets the road my friend. That's why Warren Buffet called them instruments of financial massz destruction, because that is precisely what they are.

At the very least, we should outlaw any bank from making any new agreements [derivatives that is] and require all existing contracts to be phased out, terminated if possible or at the very most, allow them to expire but not permit them to renew. If we had no need for these things 25 years ago, then the system should do just fine now without them.

In addition, I want to see banking returned to its roots. A bank should be nothing more than a bank. Investing, insurance, Forex, speculation of any kind should operate as any other business and do so with zero government guarantees either explicit or implicit. The same goes for Fannie Mae, Freddie Mac and Sallie Mae. We need to end government subsidization of private risk.

Period.
 
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