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 The economy and our future

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LukeTHr
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PostSubject: The economy and our future   Mon Apr 18, 2011 10:01 am

I think this is a subject that needs it's own thread. I am going to copy some things I posted in another thread to get us rolling.

Here are some facts. The Saudis are cutting their oil production by 1 million barrels. Fuel costs are going up dramatically. Silver and gold are increasing in price, silver has doubled in value in one years time. The stock market is tumbling. The governemt is printing money as fast as they can which is having the effect of causing a loss of faith in the dollar. China and other countries are stocking up on silver and gold and they are getting out of the dollar as an investment currency. Interest rates are about to be raised which means that variable rate lons will take a bigger chunk of peoples paychecks. Federal, state, county, city and school budgets are under a huge strain and taxes will be going up. Food prices are rising across the board. Clothing costs ar going up. Simple fact, we are headed for an even bigger crash than before, this is going to be major.

After I posted that in the other thread, a report came out statiing that Standard & Poors has downgraded the US debt to a negative status. These ratings are not taken lightly and are not changed easily. Not good news.

Driving on Main Street in hays last night, I noticed that Meckenstocks are now promoting gold and silver... hmmmm, I wonder why..... Problem is, the time to have bought gold and silver was 5 - 10 years back when silver was 10 bucks an ounce and gold was 400 bucks. Guess thats why Warren Buffet bought millions of ounces of silver and took delivery of the metal in his private vaults. I think he bought when silver was abou 5 bucks an ounce. Talk about a profit !!!
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Bighead
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PostSubject: Re: The economy and our future   Mon Apr 18, 2011 10:59 am

The recent run-up of commodity prices so far looks like a repeat of 2008. And people have argued that high oil and food prices were what finally tipped the balance leading to the big crash in October 2008.

To me, the question is: Is that going to happen again? I don't know. But I DO know that lots of state and local governments are doing lots of lay-offs... and unemployment payments are finally running out for lots of people. Damn near three years since the initial crash, and only now are people on the government dole starting to feel the squeeze.

But on the other hand, certain segments of the economy are really coming back. Quite a few manufacturers in Wichita are hiring again. We're hiring and expanding left and right where I work (partially a function of high oil prices- since we sell to lots of big oil companies).

My personal guess is that we're not headding for another Big Crash- at least not for a few years. I think we're in a period of stagnation and restructuring that's going to continue for some time. The more vulnerable people in our economy (those with shitty mortgages, unstable jobs, etc.) have already taken a big hit- and they don't have too far to fall now. Those of us left standing are relatively stable. So I don't think this latest bout of commodity price increases (call it inflation if you want) is going to have the same effect it had in 2008... unless it gets A LOT worse. I expect to see 1970's-style StagFlation.

And in this sort of economy, folks who are skilled and mobile are in a much better position to weather the storm than folks who are unskilled and tied to a single location. But so far- as was pointed out in EP's other thread- Hays has actually benefited from high commodity prices, seeings how ya'll have quite a bit of farming and oil in your local economy. I think ya'll are in a good place to hunker down and weather the storm.
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LukeTHr
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PostSubject: Re: The economy and our future   Mon Apr 18, 2011 1:51 pm

I think we are in a little better spot to live due to the oil in the area. One thing that can even kick us in the butt here is lack of rain. If the crops don't grow and ya can't feed the cattle, it won't matter what the price is.

I do feel there was a much deeper issue in the the previous crash than that price of oil and food prices. Naked short selling in the stock market is what created the crash. I don't feel the full effects of that have come home to roost yet either. It has only been delayed by the Fed printing cash like there is no tomorrow. The fact remains that stocks that many folks think they own are really phantom stocks and it will be like a big game of musical chairs, when the music stops there won't be near enough chairs for eveyone playing. So unless you actually PHYSICALLY POSESS THE ACTUAL STOCK CERTIFICATES of the stocks you are invested in, your position is at risk no matter what you broker tells you.

What is naked shorting? It means people have sold stocks that they DO NOT OWN AND WILL NOT BE DELIVERING but they are taking the money and some will not be actually getting a stock but instead an IOU that will never be paid off.

Check out this site and look up videos about naked short selling on youtube for more in depth info


More information about Naked Short Selling
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LukeTHr
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PostSubject: Re: The economy and our future   Mon Apr 18, 2011 2:09 pm

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LukeTHr
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PostSubject: Re: The economy and our future   Mon Apr 18, 2011 2:22 pm

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Bighead
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PostSubject: Re: The economy and our future   Mon Apr 18, 2011 2:51 pm

I agree with you on several points. IMO, government policy doesn't reflect any real lessons-learned from the 2008 crash. We're plenty vulnerable to similar problems in the future.

That's a function of the fact that our government is bought and paid for by the banks and wall st. But it's pretty much always been that way... and we've always managed to get by. So while my predictions of the future aren't exactly rosy... I don't reckon the sky is falling either.

This country has seen much MUCH worse times than what we're seeing now. And while there's a real lack of transparency in the markets (naked short-selling, off-market trades, and the like)- we also have an unprecedented level of publicly available info via the internet. It's a brave new world, and it's kinda scary. But if all you're seeing is gloom and doom, then you ain't looking at the big picture IMO.

Some say that the U.S. is a financial empire- analogous to Britain's former 'real' empire. The Brits experienced a protracted decline over several decades. It was painful, but not the end of the world by a long shot. They're STILL a world financial center even though the pound is no longer the world's reserve currency. There are worse fates to suffer.
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The Other One
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PostSubject: Re: The economy and our future   Mon Apr 18, 2011 3:26 pm