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View Diary: The Great Depression Pt. III (172 comments)

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  •  I have no need of convincing when it comes to FDR (12+ / 0-)

    but I'm not sure that Obama will be able to pursue New Deal like spending. Hoover had not escalated the deficit like Bush II has. What happens when the world really stops buying treasuries? Print money? Hyper-inflation?

    I fear that the real S____ has not yet hit the fan.

    You may find yourself in a beautiful house with a beautiful wife and you may ask yourself, "How did I get here?"

    by FrankCornish on Mon Jan 05, 2009 at 04:40:54 AM PST

    •  When the world stops investing in us, they will (4+ / 0-)
      Recommended by:
      Aquarius40, Bobjack23, mofembot, wvmom

      ask for their money back and we'll be fucked.

      Then we'll be bathed in TV propaganda about how swell it would be to merge our economy with Mexico and Canada.

      •  if it comes to that (5+ / 0-)

        throwing canada and mexico in the black hole of the american economy won't really matter much. after all, mexico's oil fields are well on their way to going bust anyways.

        surf putah, your friendly neighborhood central valley samizdat

        by wu ming on Mon Jan 05, 2009 at 05:08:48 AM PST

        [ Parent ]

        •  It should probably be part of my sig (2+ / 0-)
          Recommended by:
          wu ming, DBunn

          but when I write stuff like that, it should be prefaced by "I am ever so happy to be completely wrong".

        •  That is no really the point of merger... (1+ / 0-)
          Recommended by:
          ggwoman55

          ...the old debt heavy state goes away, no America no debt. It's my opinion the Oligarchy who have stolen us blind for thirty years and put their gains in real property have had this as their solution from the get go. That is why I refer to them as thieves and TRATIORS.

          They get to keep their gains, while destroying the country along with its pesky Construction...literally. Of course all this is done under the rubric of increasing the Global community. They have real property to by a new currency with. We get screwed permanently, as do those holding dollars who have unknowingly financed the greatest robbery in history. Why do you think the Bush Administration has been negotiating a North American Union on the QT for our benefit...please?

          The young man who has not wept is a savage, and the old man who will not laugh is a fool. George Santayana

          by Bobjack23 on Mon Jan 05, 2009 at 06:25:41 AM PST

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          •  Correction "NOT really" (0+ / 0-)

            The young man who has not wept is a savage, and the old man who will not laugh is a fool. George Santayana

            by Bobjack23 on Mon Jan 05, 2009 at 06:26:39 AM PST

            [ Parent ]

          •  repudiating foreign creditors (1+ / 0-)
            Recommended by:
            3goldens

            essentially would end any likelihood of anyone ever buying a treasury bond again. to do so would be a very ballsey move, and i suspect the the new state would retaiun the bad feelings of those who had been buirned by its predecessors.

            in short, while i agree that we're getting jobbed, i have not seen much evidence that the north american union is a likely candidate for HOW we eventually get jobbed.

            at any rate, canada would be the ones most screwed in that setup. who wants the US?

            surf putah, your friendly neighborhood central valley samizdat

            by wu ming on Mon Jan 05, 2009 at 08:28:42 AM PST

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            •  Nevertheless... (0+ / 0-)

              Bush's governors have been negotiating it.

              Where did you get the idea that our greedy oligarchy...

              ...the new state would retain the bad feelings of those who had been burned by its predecessors.

              ...gives a rats arse about America or its any new amalgam it is merger into. States are just convent fictions to those bent on a Global system of multi-mega-national corporate governance and a New World Royalty(I like that...NWR is descriptively better than NWO or Globalism)based on wealth.

              The young man who has not wept is a savage, and the old man who will not laugh is a fool. George Santayana

              by Bobjack23 on Mon Jan 05, 2009 at 08:57:31 AM PST

              [ Parent ]

              •  it's not a matter of caring about america (0+ / 0-)

                it;'s the fact that any successor regime would not be able to borrow bupkis. so why the need for the new mega state fantasy scenario? why won't simple smash loot and discard suffice?

                surf putah, your friendly neighborhood central valley samizdat

                by wu ming on Mon Jan 05, 2009 at 09:03:44 AM PST

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                •  Old sport it is coming and there is a reason... (0+ / 0-)

                  ...live and learn (and if your not part of the Oligarchy’s home team suffer).

                  It is no fantasy anymore than the European Union was before it happen up on the European States. It is being negotiated out of public view at this time.

                  The young man who has not wept is a savage, and the old man who will not laugh is a fool. George Santayana

                  by Bobjack23 on Mon Jan 05, 2009 at 09:23:37 AM PST

                  [ Parent ]

            •  There are many possible bad resolutions (3+ / 0-)
              Recommended by:
              Sparhawk, bablhous, BlueOak

              ... to the preposterous financial mess that the financial boys have gotten us into. Our job is to find the good solution.

              How will we repay our huge debt? And why should the world continue to fund new US debt?

              A possible answer to the second question is, becasue it is in their interest to do so. For all our many faults, the US is still the largest single piece of the global economy. If we collapse, everything collapses.

              Keep in mind, anyone with money to buy T-bills is doing well within the current financial reality. If that system collapses or changes radically, what reason to they have to believe they will still do as well in whatever the successor state of things turns out to be?

              Here's another way to look at it: why have China etc been funding our debt up to now? Whatever their reason have been in the past, they still have those reasons. What is new is that there is now evidence that the US has not used the money wisely (to say the least-- heh). But if the Obama adminstration (and the rest of us) can convince lenders that new investment will be used wisely, then there is still reason for them to invest new money. It's too bad about the waste of the previous investment, but, outrage aside, that's water under the bridge.

              Now for the first question-- what about our existing debt. I have long argued that this is substantially uncollectable. Presumably, the holders of that debt know this. In business, situations like this are often resolved through restructuring of the debt-- lower interest, longer repayment schedule, and/or partial cancellation. The reason that creditors agree to restructuring is that some repayment is better than no repayment. So while they could demand full payment, they know we can't do it, and therefore there's no point in demanding it. It's true that they have a "gun to our head", but we also have our finger on a dead-man trigger that is wired to a bomb that blows up the entire world economy. No one wants to go there.

              I have no idea how we get out of this in the long term. But then again, in the long term we have to  overhaul the entire world economy in order to deal with the sustainability crisis. We've known that for a long time. The thing that would make me happiest would be if I thought the People In Charge knew that too, because if they don't, then nothing else we do or don't do about the economy will make any difference at all.

    •  I'd love to see NewDeal Dem (2+ / 0-)
      Recommended by:
      PsychoSavannah, Ice Blue

      answer this question.  This is one thing that is VERY different from the 1920s and early 1930s.  Is the interconnectedness of the financial system also different?

      Article 6: "...no religious test shall *ever* be required as a qualification to any office or public trust under the U.S."

      by billlaurelMD on Mon Jan 05, 2009 at 05:09:23 AM PST

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      •  Correct.. (10+ / 0-)

        In 1929 we were the world's biggest creditor.  Now we are the world's biggest debtor.

        Still in WW 2 the National Debt was up to 140% of GDP, and Japan's is about that now.  So long as interest rates on that debt stays low, it is sustainable.  If the interest rates soar, you get Latin American style inflation/debt collapse at the same time.

        I don't think we're there yet, but we are at the point where we've got to be careful imho.

        In inflationary spike by ~2010 wouldn't surprise me (especially if the bailout $$$ does start going thru the system), but although I agree with gjohnsit that Treasury rates at 0% have nowhere to go but up, I suspect that interest rates will not suddenly shoot to the moon.  Rather (and pessimistically) I expect them to begin to rise slowly and to continue to rise for the next 30 years.

        Cheers.

        "When the going gets tough, the tough get 'too big to fail'."

        by New Deal democrat on Mon Jan 05, 2009 at 05:17:33 AM PST

        [ Parent ]

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