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US Financial Crisis
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vulkan02 View Drop Down
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Posts: 1835 		  Quote vulkan02 Quote  Post ReplyReply Direct Link To This Post Topic: US Financial Crisis
    Posted: 22-Jul-2008 at 02:28
Originally posted by gcle2003

Pinguin might have something to say about the utility of gold as a standard of value, especially in pre-Columbian America.
 
With regard to money supply however, consider: A deposits 1 kg of gold with banker B. Banker B gives C a promissory note for 1 Kg of gold, against C's promise to repay him 1 Kg of gold plus 100 grams interest after 1 year. He does the same thing to D and E, knowing that they can trade those promissory notes for actual goods, since everyone believes B is 'good for the money'. E may even use his promissory note to pay off what he previously owed to F. And F could deposit that promissory note back with banker B.
 
A's deposit of 1 Kg of gold has led to an increase in the money supply of at least 3 Kg of gold. All goes well as long as everyone has faith in the solidity of B's bank: if they lose it and A and F both want 'their' kilo back there's a 'run on the bank' and it collapses.
 
As long as you have credit, you have unstable monetary systems no matter what the theoretical backing of the currency is. And if you don't have credit you don't have much of an economy.
 
It's true of course that gold is no worse than anything else that is in finite supply. It's also true that the totally subjective greed for gold (in most places) has traditionally meant that people have had more faith in systems that were 'gold-backed' than others, but it's still just a matter of faith.
 
 
Nice example there, I remember reading it in the book that I mention in my previous post. The end point is that the gold standard system CAN also be rigged like any other but with enough government regulation it can work better than the current American capitalism without much real capital.
The gold standard is merely a suggestion to solve or attempt to solve this crisis we're in but the end result might be totally different.
The beginning of a revolution is in reality the end of a belief - Le Bon
Destroy first and construction will look after itself - Mao
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vulkan02 View Drop Down
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Posts: 1835 		  Quote vulkan02 Quote  Post ReplyReply Direct Link To This Post Posted: 22-Jul-2008 at 02:53
Originally posted by hugoestr


Vulkan02,

The 1930s were the right time for a revolution. Besides of the destruction of society as it was known, the crash ended the belief in the market system for most people in that generation. The U.S. counted with many active and competent communists and unions at the time. The country was more literate, and so, more thinking. People lost property and became homeless.

The U.S. didn't revolt then.

Today we have two generations that have grown under the world of the free market fundamentalists, many who still have faith in the unrestrained market even though its failures are obvious now. We have television, which slows down thinking, and our TV news channels are nothing more but right wing propaganda. Our sedition laws (I mean, terrorism, but I like the sound of the world. Call me old fashion ) are stronger than ever. We don't have the active communists who would be willing to lead a revolt and who were disciplined enough to be able to pull it out.

And the Army has really powerful weapons, and the best trained soldiers to handle it. Who would fight them? At the best, a rebellion can hope to create in the U.S. a situation like that of Iraq of constant instability. But who will provide the rebels with the needed weapons? Not Canada. Not Mexico, especially since the arms trade flows from the U.S. to Mexico, not the other way.

The only possible confrontation would be a massive nonviolent movement. I don't think it would work, but let me think through it.
 
Your analysis is good but I still believe that Ameria in the 30's was much different from America of today. People might have had lost faith in the market system (temporarily) but nationalism, religion and new idologies were alive and well both in America and around the world.These helped glue their respective populations together in times of such crisis and wars.
 
Now we live in an area of where beliefs and ideologies(especially here) are lacking becuase they have been discredited by introspection and experience. In our era of Western nihilism
people have adopted the fatalist thinking that everything has been tried and this is the best we can have so its a lost battle. No this isn't the best, there has been both better and worse long before ours and will be long after ours is gone and forgotten.
 
I also want to say my opinion on "revolution". Reference to my quote that a revolution doesn't necessarily have to be a violent one although in the history books those are the one who get the most attention because they seem the most exciting to the historians writing them. True revolutions are those of thought where a belief ends and another takes its place regardless of the credibilty of the belief (Communism anyone?). The Chinese for example have been doing the same thing for over 4000 years, overthrowing one dynasty and replacing another doing the same thing.
The beginning of a revolution is in reality the end of a belief - Le Bon
Destroy first and construction will look after itself - Mao
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Bankotsu View Drop Down
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Posts: 511 		  Quote Bankotsu Quote  Post ReplyReply Direct Link To This Post Posted: 03-Aug-2008 at 04:50
Henry Paulson has lost Control over US Finance, Economy
http://www.engdahl.oilgeopolitics.net/Financial_Tsunami/Paulson/paulson.html

State, Local and Private Pensions

The Next Big Bail Out

http://www.counterpunch.org/hudson07312008.html
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Posts: 1230 		  Quote Adalwolf Quote  Post ReplyReply Direct Link To This Post Posted: 04-Aug-2008 at 05:30
I've yet to see any major affects of this 'crisis' trickle down and affect little ol' me.

Gas is actually cheaper than it has been in months!

There's no crisis, its time for cheering!

(Though the stock market has been a bit rocky lately...but it always goes up and down, up and down, up and down...)
Concrete is heavy; iron is hard--but the grass will prevail.
     Edward Abbey
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gcle2003 View Drop Down
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Posts: 7035 		  Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 04-Aug-2008 at 11:55
Try taking a trip abroad and changing dollars. Or try selling a house.
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Leonidas View Drop Down
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Posts: 4613 		  Quote Leonidas Quote  Post ReplyReply Direct Link To This Post Posted: 05-Aug-2008 at 14:11
Originally posted by Adalwolf

I've yet to see any major affects of this 'crisis' trickle down and affect little ol' me.

Gas is actually cheaper than it has been in months!

There's no crisis, its time for cheering!

(Though the stock market has been a bit rocky lately...but it always goes up and down, up and down, up and down...)
This may have something to with your state your in, you may not own a home or have most of it paid off or you might not be in the stock market.  But mate, the liquidity squeeze is sooo tight right now i can hear the pain of the bankers from across the Pacific.

..apart from selling a house or traveling overseas. try getting a basic loan.

The ruptures across the markets is huge and we in lucky Australia are now having talk of interest rate cuts and a economy slowing too quickly. People think the mortgages rates are going down as well, they wont.

 FYI, The market over here is doing 2-3% daily moves! a bit rocky my arse.Wink Yours is doing similar numbers but the US has less financials.
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