Issachar....

[cbressler1976]

You seem so knowledgeable....
Please, could you explain in really, really simple terms...I mean...like you are talking to a kid....how bad a shape our economy really is in...thanks!

[Issachar]

wow ... I'm humbled and a bit embarrassed.

I'm not sure where to start. Let me ask this ...

What has more value, a pound of sand or a pound of gold? The gold of course .. Why? Because sand is everywhere, lying around ... anyone can get sand if they want some. Gold on the other hand is relatively rare. It certainly isn't just lying around. The point is, the more common something is, the less value it has to people as a means of trade. I specify "as a means of trade" because sand, for example, isn't without value for anything. It happens to be a major component in construction. Take away sand from buildings, bridges, roads, sewer tile, etc. and the value of sand in that way becomes quite apparent. Take a handful or boxful to a store to see what you can get in exchange for it. I think all one would get is an instruction to take it outside. :)

Now, think US dollars. The more there are, the less value they have; the more common they become. A so called "fiat" economy, in simple form, is one where the government, usually working with a central bank (Federal Reserve in the US) can create "money" on a whim. Because there are complex mathematical formulas that go into that money creation, many would say that it is not "on a whim". But the bottom line is, it is on a whim. Raising interest rates tends towards reducing the supply of dollars and thereby increases their buying power. Lowering rates tends towards more folks borrowing ... going into debt, and that is followed by the creation of more dollars out of thin air to lend. More dollars = less value per dollar. Less value per dollar = more of them needed to purchase the same amount of goods as when there were less dollars. This is why it is not accurate for officials to talk about increased prices as inflation. Increased prices is the result of inflation. Real inflation is the increase in the money supply.

Article I; Sec.8 of the US Constitution:
Section. 8.

The Congress shall have Power ...
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

Note Congress has this power. Congress = "We the people".

In 1913 the Federal Reserve Act was passed. The history of that is worth reading and is readily available online and in many books. It basically transferred Congress' "power to coin money ..." into the hands of a small group of private bankers and away from the American people. They have their self interests in mind. Their decisions to raise interest rates or to lower them are to achieve their agenda. Though I don't believe anyone will disagree with what I've said so far, some might disagree with this; that is, I believe these bankers, being part of the international bankers, are at or near the heading up of a NWO. That's another whole matter though.

I'll let you digest this so far and hopefully others will contribute, especially where international trade is concerned.

Issachar

[can4christ]

wow ... I'm humbled and a bit embarrassed.

I'm not sure where to start. Let me ask this ...

What has more value, a pound of sand or a pound of gold? The gold of course .. Why? Because sand is everywhere, lying around ... anyone can get sand if they want some. Gold on the other hand is relatively rare. It certainly isn't just lying around. The point is, the more common something is, the less value it has to people as a means of trade. I specify "as a means of trade" because sand, for example, isn't without value for anything. It happens to be a major component in construction. Take away sand from buildings, bridges, roads, sewer tile, etc. and the value of sand in that way becomes quite apparent. Take a handful or boxful to a store to see what you can get in exchange for it. I think all one would get is an instruction to take it outside. :)

Now, think US dollars. The more there are, the less value they have; the more common they become. A so called "fiat" economy, in simple form, is one where the government, usually working with a central bank (Federal Reserve in the US) can create "money" on a whim. Because there are complex mathematical formulas that go into that money creation, many would say that it is not "on a whim". But the bottom line is, it is on a whim. Raising interest rates tends towards reducing the supply of dollars and thereby increases their buying power. Lowering rates tends towards more folks borrowing ... going into debt, and that is followed by the creation of more dollars out of thin air to lend. More dollars = less value per dollar. Less value per dollar = more of them needed to purchase the same amount of goods as when there were less dollars. This is why it is not accurate for officials to talk about increased prices as inflation. Increased prices is the result of inflation. Real inflation is the increase in the money supply.

Article I; Sec.8 of the US Constitution:
Section. 8.

The Congress shall have Power ...
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

Note Congress has this power. Congress = "We the people".

In 1913 the Federal Reserve Act was passed. The history of that is worth reading and is readily available online and in many books. It basically transferred Congress' "power to coin money ..." into the hands of a small group of private bankers and away from the American people. They have their self interests in mind. Their decisions to raise interest rates or to lower them are to achieve their agenda. Though I don't believe anyone will disagree with what I've said so far, some might disagree with this; that is, I believe these bankers, being part of the international bankers, are at or near the heading up of a NWO. That's another whole matter though.

I'll let you digest this so far and hopefully others will contribute, especially where international trade is concerned.

Issachar



Very well said :hat

[tygerkittn]

This might help, it's an inflation calculator. According to this, my DH, who has been promoted and gotten raises regularly, is making less than he did when we met. He also makes less than my Dad did in the 70's, according to this calculator. DH is a professional, a senior engineer who designs circuit boards and works for a company that just got a huge gov't contract. My Dad was a blue collar welder.
My sister, who is doing very well at her job, makes less now than a few decades ago when she started working according to this.
Our "prosperity" is a debt driven illusion. We're just using visa to lie to ourselves and keep the rose colored glasses on.
Here's the link:
http://www.westegg.com/inflation/

[cbressler1976]

wow ... I'm humbled and a bit embarrassed.

I'm not sure where to start. Let me ask this ...

What has more value, a pound of sand or a pound of gold? The gold of course .. Why? Because sand is everywhere, lying around ... anyone can get sand if they want some. Gold on the other hand is relatively rare. It certainly isn't just lying around. The point is, the more common something is, the less value it has to people as a means of trade. I specify "as a means of trade" because sand, for example, isn't without value for anything. It happens to be a major component in construction. Take away sand from buildings, bridges, roads, sewer tile, etc. and the value of sand in that way becomes quite apparent. Take a handful or boxful to a store to see what you can get in exchange for it. I think all one would get is an instruction to take it outside. :)

Now, think US dollars. The more there are, the less value they have; the more common they become. A so called "fiat" economy, in simple form, is one where the government, usually working with a central bank (Federal Reserve in the US) can create "money" on a whim. Because there are complex mathematical formulas that go into that money creation, many would say that it is not "on a whim". But the bottom line is, it is on a whim. Raising interest rates tends towards reducing the supply of dollars and thereby increases their buying power. Lowering rates tends towards more folks borrowing ... going into debt, and that is followed by the creation of more dollars out of thin air to lend. More dollars = less value per dollar. Less value per dollar = more of them needed to purchase the same amount of goods as when there were less dollars. This is why it is not accurate for officials to talk about increased prices as inflation. Increased prices is the result of inflation. Real inflation is the increase in the money supply.

Article I; Sec.8 of the US Constitution:
Section. 8.

The Congress shall have Power ...
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

Note Congress has this power. Congress = "We the people".

In 1913 the Federal Reserve Act was passed. The history of that is worth reading and is readily available online and in many books. It basically transferred Congress' "power to coin money ..." into the hands of a small group of private bankers and away from the American people. They have their self interests in mind. Their decisions to raise interest rates or to lower them are to achieve their agenda. Though I don't believe anyone will disagree with what I've said so far, some might disagree with this; that is, I believe these bankers, being part of the international bankers, are at or near the heading up of a NWO. That's another whole matter though.

I'll let you digest this so far and hopefully others will contribute, especially where international trade is concerned.

Issachar

Thank you! :hug ....and sorry...I didn't mean to embarras ya~ I just knew you could explain some things to me....so that I can understand...

[cbressler1976]

Issachar's statement is good but It still doesn't answer this question.
I'd like to help out and put some things into perspective because I'm sure that you are concerned about all the talk of recession and such. lets keep in mind I'm a BSc and not some expert in economics.

I theorize that the US ecomony has been in recession since around late 2000. It has been very slowly going on so no one is noticing and it's not very badly effecting the living conditions of Americans. Since there is inflation (the increase of prices), it looks like to stock market is worth more now than in 2000 but when you adjust for inflation it really isn't. So the point here is that your economy is not as good as they are making it out to be. Do you follow me here?

Right Now the question to ask might be: how bad is this going to get? If things are brought under control* right now it might be ok. If however we are still not being responsible in the future it could be pretty bad. I'd like to say I have all the answers but right now I'm still looking into it so I'm not sure how bad it is. I'm sorry sometimes I just don't know.

* What I mean by brining things under control is this:
I think the US needs to get spending under control (both presonal and government) and that means no more taking loans and start paying down debt. This will cause the econmy to recess and correct itself over time. There is a possible up side to this in the future.

Somebody please fill in the rest of the blanks for me.

Bush said that he has a plan....and that plan is to give people money again....remember when we got money that extra 100 dollars? he said that he is going to do that again....think that will help?

[cbressler1976]

This might help, it's an inflation calculator. According to this, my DH, who has been promoted and gotten raises regularly, is making less than he did when we met. He also makes less than my Dad did in the 70's, according to this calculator. DH is a professional, a senior engineer who designs circuit boards and works for a company that just got a huge gov't contract. My Dad was a blue collar welder.
My sister, who is doing very well at her job, makes less now than a few decades ago when she started working according to this.
Our "prosperity" is a debt driven illusion. We're just using visa to lie to ourselves and keep the rose colored glasses on.
Here's the link:
http://www.westegg.com/inflation/

what made me ask this question was.....I went to the grocery store on Friday and I noticed that the price of some meat went up....and a couple of other things....with all this talk of the economy...it kind of scared me...

[Issachar]

We will see prices go up. I think we may be on the verge of some serious price increases. It is the way of all fiat economies. They all eventually burn themselves out. There is a law in the universe that says "you don't get anything for nothing". Fiat money is a way to get stuff for nothing. That is why they come into being. As soon as a gov't has the ability to print up money (it doesn't have to actually be printed ... just on the books) it will any time it wants some.

So much has been created out of nothing, especially in the past 10-12 years. The reason it didn't show up as higher prices much is because so much was "soaked up" by foreign countries. The extra dollars had a home so to speak. However, what we are seeing now, because so many dollars have been made, is their value going down. This is resulting in foreign countries being nervous and many have begun to trade in their US dollars for other currencies, especially the euro. Who wouldn't? If one has an investment that is losing value, it would be silly to not invest in something else. This of course floods the market with more US dollars which drives down their value which causes more to get out of the dollar which drives down it's value, ad nauseam. As I stated in my first post, as the value of the dollar goes down, we need more of them to buy the same amount of stuff.

So, where does this leave us now? It leaves our economy on the verge of going very sour. Any time you hear of the gov't infusing money into the economy, it means that they are creating more money out of nothing. The US already borrows many billions of dollars every year just to pay the interest on the national debt. Of course, that borrowed money is simply added onto the national debt. It is like you having a credit card with a lot of debt on it and you cannot make a monthly payment so you use the card to get a cash advance and make the payment. Of course, now that cash advance is on the card and so the next month the payment is higher and of course, you cannot afford that so you get another cash advance which is added to the debt ... a never ending spiral until they cut you off. The US is doing the same thing only there is no one to cut them off except the natural laws of economics. That takes longer to stop the madness, but when it does, it's a very serious stop.

With a standard based economy, a healthy economy will go through times of growth and naturally cool off a bit and come back .... it goes through natural cycles. With a fiat economy (President Nixon took us all the way off of the gold standard August 15, 1971), whenever the economy would try to go down in it's natural cycle of things, the central bankers pump more fiat dollars into the economy to keep the down cycle from happening as it should. Over the last few decades it has mostly gone up and up and up .... based on what? paper. Debt can only grow so much before something breaks. I think what we are seeing these days is like the rope in the movies that they focus on during a rescue .... you know, the one that is getting more and more frayed? Only most of the time in the movies the good guy gets to safety just before it snaps.

When we are born into and grow up in, a prosperous period of time, we have a natural tendency to believe that is how it will always be.

Issachar

[jds6958]

We will see prices go up. I think we may be on the verge of some serious price increases. It is the way of all fiat economies. They all eventually burn themselves out. There is a law in the universe that says "you don't get anything for nothing". Fiat money is a way to get stuff for nothing. That is why they come into being. As soon as a gov't has the ability to print up money (it doesn't have to actually be printed ... just on the books) it will any time it wants some.

So much has been created out of nothing, especially in the past 10-12 years. The reason it didn't show up as higher prices much is because so much was "soaked up" by foreign countries. The extra dollars had a home so to speak. However, what we are seeing now, because so many dollars have been made, is their value going down. This is resulting in foreign countries being nervous and many have begun to trade in their US dollars for other currencies, especially the euro. Who wouldn't? If one has an investment that is losing value, it would be silly to not invest in something else. This of course floods the market with more US dollars which drives down their value which causes more to get out of the dollar which drives down it's value, ad nauseam. As I stated in my first post, as the value of the dollar goes down, we need more of them to buy the same amount of stuff.

So, where does this leave us now? It leaves our economy on the verge of going very sour. Any time you hear of the gov't infusing money into the economy, it means that they are creating more money out of nothing. The US already borrows many billions of dollars every year just to pay the interest on the national debt. Of course, that borrowed money is simply added onto the national debt. It is like you having a credit card with a lot of debt on it and you cannot make a monthly payment so you use the card to get a cash advance and make the payment. Of course, now that cash advance is on the card and so the next month the payment is higher and of course, you cannot afford that so you get another cash advance which is added to the debt ... a never ending spiral until they cut you off. The US is doing the same thing only there is no one to cut them off except the natural laws of economics. That takes longer to stop the madness, but when it does, it's a very serious stop.

With a standard based economy, a healthy economy will go through times of growth and naturally cool off a bit and come back .... it goes through natural cycles. With a fiat economy (President Nixon took us all the way off of the gold standard August 15, 1971), whenever the economy would try to go down in it's natural cycle of things, the central bankers pump more fiat dollars into the economy to keep the down cycle from happening as it should. Over the last few decades it has mostly gone up and up and up .... based on what? paper. Debt can only grow so much before something breaks. I think what we are seeing these days is like the rope in the movies that they focus on during a rescue .... you know, the one that is getting more and more frayed? Only most of the time in the movies the good guy gets to safety just before it snaps.

When we are born into and grow up in, a prosperous period of time, we have a natural tendency to believe that is how it will always be.

Issachar

You have an amazing talant of explaining the situation in simpler terms.

[cbressler1976]

Thank you so much for helping me understand!!! :hug:hug:hug