Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

[phirang]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

Yes, I'm being intentionally provocative here, and glad I've smoked out comments from members of the community we have not heard from before.

Consider our unfortunate situation.

On the minus side:

• The FIRE Economy is collapsing
• Unemployment is rising rapidly
• We have minimal savings
• Our credit is in question

On the plus side:

• We have a surfeit of human capital, millions of well educated people who are willing to work hard
• We have strong institutions that took generations to develop, albeit under marginal management lately
• We have a strong rule of law, although poorly enforced as of late, especially for property rights, which is why so much is invented here

What to do to build for the future? How to finance it?

Plus side:

1) China and India also have plenty of human capital. Thanks to GATT/WTO, we now have slave wages for both blue(if they can even find a job) and white collar workers. Working hard is irrelevant: no one works harder than slaves in a Liberian diamond mine.

2) I really don't understand point #2. Maybe you're hoping to get a job from Obama or something. Seriously ridiculous, but wtf do I know...

3) We have a VERY strong rule of law for those who not of the $1M+ campaign contribution club: for the plebes, it's fear and intimidation as usual. For the oligarchs, well, they write the laws, and so how can they break them??? :rolleyes:

How to finance it? Infrastructure bonds? You realize that even WITH retrenching entitlements and empire, we'll need very high interest rates to pull money back in from our QE? That'll cause a SECOND recession if this current collapse doesn't swallow us whole.

So long as US workers make "too much money" for US companies to invest domestically, there's 0 incentive to upgrade infrastructure: there's already massive overcapacity in every industry globally. The only possible catalyst to saturate that capacity would be a major war.

Finally, the social engineering/trade tax using carbon credits is asinine: collapsing industry alone will sort out our CO2!

[LazyBoy]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

On the plus side:

• We have a surfeit of human capital, millions of well educated people who are willing to work hard

I worry about assumptions like this. It seems a little rah rah. I think Americans have gotten lazy. I know, I'm one of them. I'm lucky enough to have a career that pays well and involves sitting at a desk (knock wood). I'm 45, overweight and out of shape. If I had to physically work hard for a living, like my father did, I wouldn't last a week.

My mom lives in an area that's been depressed for years. There are a lot of people there that have been sitting around not working for years. Maybe actual hunger will change this, assuming there are opportunities. Maybe it will turn a large percentage to crime.

This is not the greatest generation anymore.

Everyone will be quite shocked by how quickly the US can recover once the right people with the right philosophies take charge of those institutions.

Who are the right people and how would they possibly get in charge?

[LazyBoy]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

As a small business owner I can tell you that you are wrong. Many business use lines of credit and confuse the crdit with income. But a business can only hold so much cash as a cushion. I keep a years worth of basic overhead as savings. But if I can't generate revenue then what is he point of running a business out of past profit

I've never run a business, but it seems to me that the advantages would be

• being able to run for a year without revenue if you choose to (Can you get enough credit to do that?), or
• being able to call it quits while you've still got some profit, instead of going under owing other people and jeopardizing their businesses.

[ricket]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

Lol. I can't figure out the quote system. Plus I was writing from the playground on my iphone while my kids climbed trees.

It's quite easy actually. Take the text you want to appear as quoted, and add a "[ quote ]" before-hand, and when you want to finish quoting text, add the ending tag "[ /quote ]". (Be sure to remove the spaces)

You can actually type them yourself as many times as you want.

This is a quote

And so is this one...

You can even add in your own source too!

[goadam1]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

Lol. I can't figure out the quote system. Plus I was writing from the playground on my iphone while my kids climbed trees.

[jandkmeyer]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

A common theme I am seeing in the responses is that people see the obvious crony capitalism, are repulsed by it and won't come together as a cooperative mass until they believe it is gone. I thought the new administration would identify that problem and deal with it, but it hasn't happened. If/when they fix that problem, the challenge will be keeping the not-so-obvious crony capitalism from derailing the solutions. Obvious recent examples: War on Terror, Iraq war, ethanol, "clean" coal, bailout, bailout, bailout...

I think we need to focus on things larger than a few banks or even a few economies. We need to bail out the planet - our entire life support system with planetary scale projects that work.

PS - Sorry for the sloppy work - first time poster

[jandkmeyer]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

We are going to need both capital and the profit motive of entrepreneurs to move us forward. Rather, we need a simple tool and a simple philosophy behind it to guide its use: that we're all in this together, that we need to transition from a FIRE to a Production based economy, and some of us are more able than others to help finance that transition, and at the moment there is no way anyone can help do so even if they wanted to.[/QUOTE]

[Spartacus]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

What to do to build for the future? How to finance it?

Turn the military into a strictly defensive one

that will free up enough resources to pave the US with roads 10 times over,
then bury the US in a foot of electical wire and fiber optics
then bury the US in dams and windmills and solar panels
put enough money into education to produce 10 times the number of engineers and researchers and so on (although they'd be out of work after the infrastructure push is done ...)

And that's in the first year alone ; )

Yes, I exaggerate. So sue me. God knows there's enough lawyers to sue everyone 100 times over ; (

[metalman]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

sorry to hear you will be losing your job.

enjoy your posts but have trouble figuring out who you are replying to... pls use the 'quote' button that quotes the post you are answering... else hard to follow. thx.

[goadam1]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

sorry to hear you will be losing your job.

[goadam1]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

This statement is wrong:
Agreed - also, in my opinion it is what is wrong with business as well. Instead of saving money in good times and avoiding debt as much as possible businesses have become used to leasing buildings, vehicles and even production equipment rather than paying for them - when the economy goes south their overheads end up killing them off. Governments are doing the same thing.

[metalman]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

As a small business owner I can tell you that you are wrong. Many business use lines of credit and confuse the crdit with income. But a business can only hold so much cash as a cushion. I keep a years worth of basic overhead as savings. But if I can't generate revenue then what is he point of running a business out of past profit
As far as leases go, you don't want to use all your cash on hand for every cApital improvement. Equipment generates revenue over time And you get to depreciate it. And it is the right thing for the interest to be deductable because it encourages growth. As a business you are always. Caught between recievables and expenditures. You never want to be caught without enough to cover expenses. The problem isn't debt or credit. The problem is bad judgement. I keep my business small because I don't want to grow my way to bankruptcy. But I do use leases and depreciation as part of my business.

who is wrong? i can't connect your comment with anything in the article or anything anyone has said in response to it...

[cjppjc]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

Where are the show trials?

[serge_oc]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

ONE way dude, and ONE way ONLY.

Kill the third "bank of the united states" the FED, and do direct governement debt issue as JFK with silver notes. No more PRIVATE issuance of credit. Banks still exist but the are ONLY INTERMEDIARIES between the US ISSUED (not fed issued) credit and the borrower. They become middle men, not issuers of debt.

This requires a two tiered structure for US Gov Debt, T-bills and Bonds, on the lower tier, and Gold Backed infrastructure and Green energy notes as the top tier. (Super senior debt collateralized by the US Gold reserves)

Make the transfer of PMs into currency (sale to the Government ONLY) a NON TAXABLE event for anyone (even foreigners, drag the ALL worlds gold over here in the process, not a bad idea if you ask me) , people would sell their PM's to buy things (and they would buy things, trust me, (I feel I am uniquely qualified to speak in that reguard as an ALL IN PM holder, I want to buy a house and a FARM, and an airplane factory to make these http://en.wikipedia.org/wiki/Berkut_360)

Kill the fraud that is COMEX, ban uncollateralized futures trading (if you don't own it, you can't short it, or go long, make it a true risk hedging market like it was supposed to be in the first damn place.)

Re-instate the up-tic rule.

Bail out debtors with Tier two US notes (give debtors the inflation they need to get out from under the debt burden)

Revalue the Gold reserves at 5-10x current spot prices, issues these notes collateralized by GOLD (and the infrastructure, lender's choice of terms of redeement on the notes, e.g. they can CHOOSE to be paid in dollars or gold), that's it, the only way. (this is the Tier One Super senior US debt collateralized by the US GOLD reserves)

Eventually end up at a multi-metallic currency system for the dollar exchange mechanism. Gold, Silver, Plat, Palladium are all free to fluctuate in value against each other AND the Dollar. Each is freely convertible into any other as a NON-taxable event. Purchases of things in the economy ,real or otherwise ,are ONLY allowed in DOLLARS. So savings units (multi-metallics) must be transferred into dollars before the savings that these represent can actually be used. (Banks chartered in the above manner would be PERFECT for this role).

Foreign nations would be forgiven if they think we might pull a "fast one" so the only way to guarentee the security of their principle is to collateralize the loan with gold (they can get a nominal return in dollars too, if the so choose, should the plan be wildly successful, see abovel).

Honestly,

Without Debt forgivness, increasing the social support net, and the above, we are well and truely fucked.

I hope to god someone is listening, but I'm not delusional.

I wish SOMEONE could arrange a meeting between steve keen, michael hudson and Obama.

If he LISTENED to the information that these two would provide, I would be quite enthusiactic actually about our prospects for recovery.

As you mention, I think a solution is EASY, it is the inability to FORCE all the above into being due to the political situation that is what is going to kill us.

I think there are a number of WORKABLE solutions that could all be successful. But they won't happen, just as the above won't happen, because of the lack of a mandate and action.

Don't ever kid yourself EJ, finding a workable and VIABLE, and ultimately SUCCESSFUL solution WAS and NEVER HAS BEEN the problem. (you said so yourself)

It's the impossibility of implementation due to conflicts of finacial interests that's the issue. Always has been, Maybe always will.

So for now, I'm sticking with gold and guns. ( I would change if the above were true, and I know A LOT of PMers would)

Hope that answers your question.

P.S. Don't piss off china and the ME debt holders and Japan, give them first shot and trading in their OLD treasuries for NEW NOTES (after revaluation) before any one else. Got to keep the oil suppliers happy and the Consumer products producers happy (and give them a reason to go a long.

A Win -Win is the ONLY way this works out, if we fuck people, well let's just say I don't think we will get another chance to fuck other countries after doing so so many times.

1933, 1971, Today, we've got a bad rap and we have to MAKE IT WORTH their while to help us. Otherwise, DOOM GLOOM AND BOOM would be a HAPPY FANTASY compared with what we will end up with.

V/R
JT


Added:

http://www.safehaven.com/article-12773.htm

This seems like a good idea as well.

Regardless of how it's done (gold, apples, fresh water or something), I agree in principle here.

Too much cronyism, too much paper shuffling, too much swindle.

Only something that will inescapably show that there is good faith behind recovery will work. And any grand-yet-seriously-backed-with-implied-threats promises (think Clinton in China), bonds, laws, amazing oratory from Obama won't work.

I guess this is another way to say we need to move from FIRE to production based economy. The only question is how do you stop rampant build-up of "paper men" who will take over the show before long?

I am seeing regular Joes I work with (tech solution consultants, software programmers, QA people) selling their 401K and becoming more and more suspicious of 'big men' with big mouth and lots of paper in their hands.

I see that sentiment getting louder and louder over the next year.

As Reagan said, 'Trust but verify'. There has to be something hard and fair that everyone can think of. Gold is probably the way to go, as there is no time to repeat collective 10,000 year history of human kind and come up with some other universally accepted notion of IOU. Otherwise, America or not, free spirit or not, it will all fail.

The bitch of it is, it's not that hard to do (don't ask me how, but I have a gut feeling), but there are so many hot heads incited spuriously by lobbyists of all kinds. Politics. Nero fiddling. Great.

[lenrisk]

Re: Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

It is fairly naive to think that people who are not in debt and can afford to invest would support inefficient government infrastructure programs. Especially when they will have to pay more than 50% of their income in tax (state/federal/property/social security).