Comments on: The Depression of 2008 – ? http://dailyreckoning.com/the-depression-of-2008/ Covering the economy, global markets and world politics. Sun, 22 Nov 2009 00:00:42 -0600 http://wordpress.org/?v=2.8.4 hourly 1 By: SforH http://dailyreckoning.com/the-depression-of-2008/#comment-259 SforH Sat, 07 Feb 2009 23:36:08 +0000 http://dailyreckoning.com/?p=11048#comment-259 Ok, I read. I've been following the crisis since late 2007. What I've gleaned here is that Bill Bonner hates inflation as much as he rails about deficits. So the extrapolation here is that any government spending to save the day will of course lead to high inflation. Which is really all Bill and his bondholding buds are really concerned about. The degradation of sitting, useless piles of personal wealth. This is classic bondholder tripe we've seen time and again throughout history whenever gov't action goes against the saver and investor. They scream the loudest about inflation. They love Volker and truly adore unbearable interest rates. And they use any crisis to their advantage to the point of wearing sheep's clothing among those truly concerned about the bailouts of the zombie banks. Nice try Bill. Same old prescription = High interest rates and maybe a return to gold. ugh. Ok, I read. I’ve been following the crisis since late 2007.
What I’ve gleaned here is that Bill Bonner hates inflation as much as he rails about deficits. So the extrapolation here is that any government spending to save the day will of course lead to high inflation. Which is really all Bill and his bondholding buds are really concerned about. The degradation of sitting, useless piles of personal wealth.
This is classic bondholder tripe we’ve seen time and again throughout history whenever gov’t action goes against the saver and investor.
They scream the loudest about inflation. They love Volker and truly adore unbearable interest rates. And they use any crisis to their advantage to the point of wearing sheep’s clothing among those truly concerned about the bailouts of the zombie banks.
Nice try Bill. Same old prescription = High interest rates and maybe a return to gold. ugh.

]]> By: Uncle Mikie http://dailyreckoning.com/the-depression-of-2008/#comment-257 Uncle Mikie Sat, 07 Feb 2009 20:22:18 +0000 http://dailyreckoning.com/?p=11048#comment-257 Your preferred approach is also shared by a handful of others. It's the only one that even has a chance of working. The miasma must be cleared before rationality can gain a foot hold. Your preferred approach is also shared by a handful of others. It’s the only one that even has a chance of working. The miasma must be cleared before rationality can gain a foot hold.

]]> By: Richo http://dailyreckoning.com/the-depression-of-2008/#comment-192 Richo Thu, 05 Feb 2009 22:33:48 +0000 http://dailyreckoning.com/?p=11048#comment-192 1. Actually there “is” a definition of both a recession and a depression. A recession is classically defined as 2 consecutive quarters of negative GDP (which we have just experienced as of Q4 08). A depression is classically defined as 5 continuous quarters of negative GDP. So by the end of the year we will know. 2. Ways to attack the debt. Actually, your estimate of the total outstanding debt is probably way too low. I have seen figures that, worldwide, between personal, corporate, state, federal, and overseas debt, the total outstanding debt world-wide is over 55 trillion dollars. This debt needs to be extinguished somehow. It is quite obvious that there is not enough after-tax profits available from global GDP to pay down this debt that has been accumulating since WWII. A. Liquidation. Granted, this would be one way to go. Everyone who owes debt does not owe debt any more. Good thing for them. However, this means that probably all the banks in the world, all the retirement accounts, all the funds of cities, towns schools everywhere who own debt owed to them are also bankrupt. The fallout from this would lead to a great deal of unintended consequences. B. Inflation. Version 1 The nations of the world print enough money to pay this debt, and somehow distribute it, either to the debtors or the creditors. If they distribute it to the creditors, then the debt still remains, and thus the problem still remains. The only way that this version of inflation would work is if the new money were somehow distributed to the debtors so that the debt could be extinguished. C. Inflation. Version 2 (your “boondogglization) The nations of the world print enough money to pay this debt and spend it, hopefully on things that have been long neglected and are necessary for the infrastructure going forward. (I realize this will be controversial, one persons necessary infrastructure upgrade is another’s pork barrel project). The result? The required amount of money is put into circulation, which results in needed upgrades, and also wends its way through the economy which results in earned income being earned, which in turn results in the ability to pay off the debt. For those who fear this would result in inflation, let me remind you that the governments of the world also possess many means of taking money out of the economy such as taxes, increased bank reserve requirements, etc. You pays your money and you takes your choice. 1. Actually there “is” a definition of both a recession and a depression. A recession is classically defined as 2 consecutive quarters of negative GDP (which we have just experienced as of Q4 08). A depression is classically defined as 5 continuous quarters of negative GDP. So by the end of the year we will know.

2. Ways to attack the debt.

Actually, your estimate of the total outstanding debt is probably way too low. I have seen figures that, worldwide, between personal, corporate, state, federal, and overseas debt, the total outstanding debt world-wide is over 55 trillion dollars. This debt needs to be extinguished somehow.

It is quite obvious that there is not enough after-tax profits available from global GDP to pay down this debt that has been accumulating since WWII.

A. Liquidation.

Granted, this would be one way to go. Everyone who owes debt does not owe debt any more. Good thing for them. However, this means that probably all the banks in the world, all the retirement accounts, all the funds of cities, towns schools everywhere who own debt owed to them are also bankrupt. The fallout from this would lead to a great deal of unintended consequences.

B. Inflation. Version 1

The nations of the world print enough money to pay this debt, and somehow distribute it, either to the debtors or the creditors. If they distribute it to the creditors, then the debt still remains, and thus the problem still remains. The only way that this version of inflation would work is if the new money were somehow distributed to the debtors so that the debt could be extinguished.

C. Inflation. Version 2 (your “boondogglization)

The nations of the world print enough money to pay this debt and spend it, hopefully on things that have been long neglected and are necessary for the infrastructure going forward. (I realize this will be controversial, one persons necessary infrastructure upgrade is another’s pork barrel project). The result? The required amount of money is put into circulation, which results in needed upgrades, and also wends its way through the economy which results in earned income being earned, which in turn results in the ability to pay off the debt.

For those who fear this would result in inflation, let me remind you that the governments of the world also possess many means of taking money out of the economy such as taxes, increased bank reserve requirements, etc.

You pays your money and you takes your choice.

]]> By: Bob Lince http://dailyreckoning.com/the-depression-of-2008/#comment-151 Bob Lince Wed, 04 Feb 2009 21:16:30 +0000 http://dailyreckoning.com/?p=11048#comment-151 Me, too. Me, too.

]]> By: Rob http://dailyreckoning.com/the-depression-of-2008/#comment-115 Rob Tue, 03 Feb 2009 19:14:07 +0000 http://dailyreckoning.com/?p=11048#comment-115 Sir, Nice (in a mathematical sense) but it doesn't go far enough. Google 'PEAK OIL COLLAPSE' and make up your own mind. It's not a depression, it's a collapse. All empires eventually collapse. Please either say the word 'collapse' or deny it and prove me wrong. I'd love to be wrong !!! Sir,

Nice (in a mathematical sense) but it doesn’t go far enough. Google ‘PEAK OIL COLLAPSE’ and make up your own mind.

It’s not a depression, it’s a collapse. All empires eventually collapse. Please either say the word ‘collapse’ or deny it and prove me wrong.

I’d love to be wrong !!!

]]> By: John foster http://dailyreckoning.com/the-depression-of-2008/#comment-114 John foster Tue, 03 Feb 2009 17:24:11 +0000 http://dailyreckoning.com/?p=11048#comment-114 Preferred the old layout. Preferred the old layout.

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