Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

[icm63]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

You missed my point.

YES Euro printing, YES USD printing. Race to debase.

But the euro has a break up risk if SPAIN says 'NO'.

[Polish_Silver]

GdP from Military spending

Stupid question: but GDP figures seem particularly flimsy during large scale military (war) action and also given government spending is in included in GDP. Why should we have any faith in GDP measurement and potential GDP?

I have often wondered about this myself. Steve Keen has questioned GDP in "debunking economics" but I have not read it. You are right that a better number might be "GDP less debt incurred". That would measure the sustainable economic activity.

Ordinarily the GDP of an activity is determined by what it sells for in a "free market". But what is the "free market" value of a battleship, or a nuclear missile?
One could establish a gdp value for weapons based on a marginal cost basis, but then why not pay everyone $100/hr to dig holes in their back yard? It seems to me that "value" really is determined by what people will pay for a good or service, not what it costs to produce it. It is when production costs exceed the market determined price that the good is no longer produced profitably.

A big complication is the value of "public goods". These are things genuinely useful, which cannot be created and sold on a purely "free market" basis. This includes things like public sanitation, police protection, education, etc. The GDP value has to be computed on a cost basis. But then how to separate the "productive public sector" from the military industrial complex, etc. ?

During WW II, the standard of living was very low, due to all the rationing. One could argue that it was one big austerity plan. The inflation wiped out the domestic debts, and the war destroyed production capacity outside the US. The result was high employment after the war.

I am not sure this proves that Keynesian stimulus works. It perhaps proves that bombing the other guy's factory increases demand for your stuff.

[globaleconomicollaps]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

You missed my point.

YES Euro printing, YES USD printing. Race to debase.

But the euro has a break up risk if SPAIN says 'NO'.

So... The Euro breaks up. What does that mean? Does Germany leave? If so do the rest of the nations keep the euro? Or does Greece leave? If Greece leaves that means Euro UP dollar DOWN. If Germany leaves that means Euro DOWN dollar UP. If the entire union shatters and each nation goes back to it's national currency, what happens to Euro contracts? The Dollar?

[icm63]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

- RISK ONE: A risk is that Germany leave the Euro when and if the ECB balance sheet gets massive. This will only happen on the will of the german people.

- RISK TWO: The motivation is for the PIIGS to stay in the euro is for the FREE MONEY from ECB. For example if GREECE or SPAIN leaves they wont be able to print money ( I remind you of Zimbabwe), so if the stay with Euro printing can cover there budget needs. This is with or with out Germany

- RISK THREE: But if a leader of one the PIIGS wants to do an ICELAND and force a massive write down of SPAIN SOVERIGN bonds by those that hold their paper. (note: Of course the loss to the banks would be covered by more money printing.

- RISK FOUR: Status Quo, Euro stays together, and printing covers all funding needs.

I remember when Felix Zulauf said, he fears that the ECB and FED balance sheet will equal each of there GDP each.

FED Balance sheet to goto $14 trillion within 10 years from $3.5 trillion (current)..

The USD has no break up risk.

Gold $7000 ( and I am not a gold bug)

[Roughneck]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

As to EJ's plots on small business. I think what is often over looked in these numbers is that many small and medium sized business feed off of larger industrial business. Down here we have large oil and petrochemical plants. Many, many small business feeds off these plants. Much like the support ships for an aircraft carrier.

One thing I don't hear mentioned much is the re-election of Obama and the effect this will have on business. I know a lot of small business owners who are in the $ 250K income range. They already pay 35%, plus both sides of FICA 15%, throw in state and local taxes most are paying 55-60% of their income in taxes. These folks are scared shitless about the future. How does that bode for economic expansion? Every dollar you take from these folks is a dollar not invested or spent into the real economy.

Throw in the attitude of EPA and OSHA toward large business and you have plans for economic stagnation.

[lektrode]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

scared s___less seems to describe most of my client base.

when i was (briefly) in only the '25% bracket' the total take was appx 50 (+)

with ZIRP apparently being the number one reason why the boat biz (at least the 35-60footers) has still not 'recovered'
these people clearly are NOT benefitting from the policies since 2009.

[flintlock]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

scared s___less seems to describe most of my client base.

Same here. Now everything is minimal. Just fix what you have to, nothing more. Incredible difference from The boom times. So many things we used to do, we havent done in years. But my phone has simply stopped ringing in the last week. Hopefully thats just temporary. But people are freaked, perhaps needlessly so.

[cobben]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

The USD has no break up risk.

We the People’ Petitions Filed in Nineteen States Seeking Permission to Secede from the Union


Recall that the Federal Reserve Interdistrict Settlement Account
system is very similar to the European Target2 system.
The US saved the system by forcing bailouts of the regional FEDs in trouble during the 1933 banking crisis.
The potential for a systemic breakdown is still there, well-hidden and long forgotten.

[Slimprofits]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

jtabeb:

http://www.armytimes.com/news/2012/1...ousing-111312/

The Associated Press
Posted : Tuesday Nov 13, 2012 7:42:00 EST

ALBUQUERQUE, N.M. — Thousands of military homes in southern New Mexico and West Texas will be fitted with solar panels as part of a $1 billion plan by a California company to bring solar to military installations across the country.
SolarCity on Tuesday announced it will be installing photovoltaic panels on homes at White Sands Missile Range in New Mexico and Fort Bliss in Texas.
The company is already working with housing managers at bases in Arizona, California, Colorado and Hawaii.
In all, SolarCity aims to install photovoltaic systems on as many as 120,000 military homes over five years.
Company officials say the systems at Fort Bliss and White Sands will be capable of offsetting more than half of the electricity typically used in each community.
Army officials say Fort Bliss has a goal of being energy self-sufficient by 2018.

[icm63]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

EJ,

Wouldnt the wealth of an economy be best measured by the surplus of folks and business generate in the economy.

Income less expenses less taxation = Surplus/Deficit

Or put it another way, folks and business SAVINGS or SAVINGS RATE.

[Chris Coles]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

EJ,

Wouldnt the wealth of an economy be best measured by the surplus of folks and business generate in the economy.

Income less expenses less taxation = Surplus/Deficit

Or put it another way, folks and business SAVINGS or SAVINGS RATE.

Right on the button. Now add another thought; where does the FUTURE prosperity, right across the nation, particularly including EVERYONE, at every level of the economy, stem from? It stems from the re-investment of those savings; BACK into every level of the economy. And to achieve that, you have to invest back into every level of every community within the economy, not just into the nicest, juiciest, easy to pick, low hanging fruits; hanging from the very best trees to be bought and sold.

But then to do that, you will need a well thought out system, set of agreed rules. Particularly, that leave the nation a free nation; full of millions of free enterprise businesses.

Please, think about that.

[LazyBoy]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

We the People’ Petitions Filed in Nineteen States Seeking Permission to Secede from the Union


Recall that the Federal Reserve Interdistrict Settlement Account
system is very similar to the European Target2 system.
The US saved the system by forcing bailouts of the regional FEDs in trouble during the 1933 banking crisis.
The potential for a systemic breakdown is still there, well-hidden and long forgotten.

If you actually go look at the secession petitions, you'll see that they're mostly signed by people in other states. For example, lots of people from all over support Alabama's right to secede

http://www.leftinalabama.com/diary/1...e-nobody-cared

When I looked yesterday, Texas was "winning" by a large margin.

My take is that you have to register at that site to "sign" and probably anyone who does signs a lot of petitions.

[icm63]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

Source: http://www.zerohedge.com/news/2012-1...ruth-kyle-bass

Kyle Bass , both Greece and Germany are countries that could leave the Euro !

[jpatter666]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

Source: http://www.zerohedge.com/news/2012-1...ruth-kyle-bass

Kyle Bass , both Greece and Germany are countries that could leave the Euro !

Yeah, but he says three or four years away which I actually agree with. Because of past history, Germany is going to go to the wall trying to prove it isn't responsible for this disaster and it did everything it could. In the end they will bail to save themselves, but in the meantime watch for everyone else to try and take them for all they are (literally) worth.

[icm63]

Re: Reality Check, Election Edition – Part I: 1936 Election Recycled - Eric Janszen

Yeah, but he says three or four years away which I actually agree with. Because of past history, Germany is going to go to the wall trying to prove it isn't responsible for this disaster and it did everything it could. In the end they will bail to save themselves, but in the meantime watch for everyone else to try and take them for all they are (literally) worth.

And there you have a BID for the US dollar !

Since March 2009 central bankers have been fixing the collateral of banks, as its the collateral that has been leverage 30+ times to build the massive $700 trillion derivative market.

The once rock solid collateral sovereign bonds is no longer. Greece, Spain and Italy bonds were once classified (some maybe still) as AAA+. As each country bond diminished the central bankers are transferring these assets from banks to the central bank balance sheet to ensure confidence between bankers remain. Because if is confidence fractured then LEHMAN x10 event happens.

NOthing to do with employment...or growth, its all to do with banker survival.

Austerity is an attempt to lower bailouts for the nation doing the bailout, that it.

The LEHMAN x10 event has another name of course, and folks on the web have called it 'THE GREAT RESET' of fait currency. The great reset is the realisation that the collateral for $700 trillion of derivatives is POOP.

I am not a gold bug, however I get the feeling I should be !

DEAR EJ, time to do a paper on banks collateral, the true balance sheet risk!

REF:
http://www.zerohedge.com/news/gold-m...tal-collateral
http://www.zerohedge.com/contributed...dia-will-touch
http://www.zerohedge.com/news/2012-1...100-global-gdp