visualseep...@[EMAIL PROTECTED]
wrote:
> When it hits, it will dwarf the sub-prime mortgage fiasco by a factor
> of 100 to 1. Its the difference between a stick of dynamite and a
> nuclear weapon.
I am not a fan of tricky-cheaty financial instruments such as
derivatives and you are right that the amount of "money" somehow
"existing" within this infrastructure being on the order of 100 times
(or more) of the world's entire economy, but I think the world of
"reality" economies (i.e. the money exchange for goods/services) are
rather isolated from the "leveraged" speculations and manipulations.
Just like past recessions and depressions (going back 500 years), the
people who will be hurt the most will be those who have shakey jobs
and little or no real net worth. And, I am sorry for that no matter
where they are born. The people who have highly leveraged positions,
lots of debt, "money" that can lose most or all of its value are the
ones who will fall a great distance.
> The sub-prime mortgage crap is at best a 1 trillion dollar write off.
> By contrast, the derivative timebomb is a 500 plus trillion dollar
> super weapon waiting to go off.
>
> It will go off with a T minus 5 second warning so you won't even have
> time to run.
This is an exageration. Look at the silver/gold bubble in the early
1980s. Everyone got excited by this as gold was going up along with
silver (and platinum/paladium [and some of this is happening now]) and
mass psychology. When the bubble burst, who got hurt? The Hunt family
in Texas, mostly, and everyone who decided to get into precious metals
and when the commodities trading exchanges made a sudden move to bar
all new positions in the precious metals (i.e. no one could buy new
contracts, only sell them). The prices bombed like a lead brick. What
happened to the rest of the world economy? Nothing.
> The problem with modern capitalism is too many bankers, economists,
> lawyers and assorted bullsh*tters have put in place one scam built
> upon another scam.
This is something I will agree with but I'll suggest that this "fake"
economy on paper might be localized to those who play that game. I
think not that much of all that mountain of money is really driving
the "real world economy" and if you would like to discuss this
further, its OK with me.
1 dollar made the honest way is turned into a 1000
> dollars not by producing any useful, saleable product but by creative
> accounting.
Same story. I don't like it but there are a small number of people out
there playing this game, setting up hedge funds (many of which are now
not allowing anyone any access to their money because they are in
trouble, so who is going to be hurt? Only the depositors in those
hedge funds [and some other "private equity" entities]).
> The fake economy as I will call it is about 90% of the gdp.
Yes, that estimate you can find in a lot of writings by banker-
economists but it is held by only a small fraction of people/
entities.
The real
> economy may perhaps be anywhere from 10 to 30% of quoted GDP. The
> more an economy becomes 'developed', the more the books are cooked.
> Finally you to the point where you have the US producing little but
> claiming a 15 trillion dollar GDP.
I think, for whatever reason, you are (like BPOking) focusing only on
the USA. The fact is that Japan, UK, Europe, Canada also have a lot
of "business" tied up in these "fake" economic/finance tricks and
processes.
And, you should be paying attention to the fact that every other
developing country is trying to emulate all of this. China and India
are expanding their financial markets and following everything else
already developed in the west. Those stock markets have whipsawed
around quite a bit in the last two years, too.
> This fake accounting being promoted across the world must come to an
> end. The only way it can is if currencies are backed by precious
> metals and commodities and there are audits of these claims by the
> UN.
I have probably done more reading than you about this and I'll tell
you that the reality is not that simple. There are other people out
there that prefer metalic standards but there are disadvantages that
are serious and any kind of switchover to such a currency would be
just as dangerous and destructive of the existing economies and there
would be zero reason to switch, especially if the reason is based on
an ideology that is no better than say Cuba's communist economy.
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