Last Saturday I was a guest again on the Bernard Schaer Show on KFUN 1230 AM in Las Vegas, New Mexico. The subject was the economy.
Despite my lack of energy as a result of a temporary but very debilitating attack of the flu, Bernard did a great job of keeping things moving smoothly.
As we all look into the new year, it might be a good idea to be aware of what may be lying ahead for us. Nothing is for certain, of course, outside of death and taxes, but one scenario for the near future was discussed in detail together with the reasons for anticipating it and the possible road signs that are already out there.
This subject may have as great an impact on your personal lives, in the near future, as anything else that might have been discussed. To listen to a recording of the show, just click on the following link which should work for most media players:
http://www.buymyvoice.com/MP3/BSS/2007/BSS122207.mp3
Please feel free to comment, even if you are among the many who I'm sure may disagree.
...and a very Merry Christmas to you all.
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Comments: 33
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Merry Christmas Everyone!
Merry Christmas David
WwW.SparkleTags.Com
Hope you are feeling better, Dave.
Happy holidays to you and yours,
1) the fed isn't "injecting cash" by printing money-- they are AUTIONING the notes off and REQUIRE COLLATERAL for the bids to be accepted. In short, the 100 billion you mention is inflationary proof, as it is PAID FOR in advance.
2) you mentioned the Japanese were the "booger men" in the 80s, and the fear was they were going to "buy up America" at the time--- but then the 90s and happened and Japan went into a decade long recession while the USA thrived.
3) Consumer spending was up in November 1.1% and was a record that went back three and a half years, YET YOU suggest the fourth quarter is going to be bleak. I can't imagine why-- 1st, 2nd, and 3rd quarters all were robust.
4) you predict a recession, but you'd have to have a crystal ball to prove it.
5) subprime FACTS---
a) "A typical subprime borrower is not someone buying a house, but someone refinancing. A typical subprime borrower is someone who has a lot of credit-card debt, and is refinancing to pay some of it off."
b) Even in states with the most foreclosures ? Ohio, Michigan and Indiana ? those foreclosures still represent just 0.5 percent of all mortgages. In regions with the most subprime lending that also have struggling local economies, foreclosures may rise to 1.5 percent or 2 percent of all mortgages.
doesn't sound like much of a problem really
6) you stated that banks "took the word of the borrower" that they could repay their ARM loans--- show me a bank that doesn't check your credit history and I'll show you a blue paper tiger, come on, give me a break, they merely "took their word???"
7) you stated the banks "corraled" borrowers--- did they also hold a gun to the borrower's head to sign on the dotted line ??? PUHLEEZE
8) you mentioned the "problems" with the economy depend on where you live--- bingo... it has always been so, with pockets of depressed economies surrounded by those that aren't having any real problems, big deal
9) you stated "many people living today haven't experienced a recession" *ROFL* that would make everyone in the nation younger than 6 years old, as there was a recession just as Bush took office--- there was another that Clinton erroneously called "the worst economy in history, just as the first Bush left office
10) you stated the poor economy would also "hamstring" the government to the point they wouldn't be able to do anything about the recession--- how then did the bail out of the irresponsible ARM takers come about ???
11) the 100 billion the fed is autioning off can hardly be considered inflationary as you suggested, since 100 billion is less than 1% of a 3 TRILLION dollar budget -- not to mention a pittance in a 13 TRILLION dollar economy.
12) You stated the price of oil hit 87bux a barrel in 1987--- where it stayed, until 2006 when it hit the same price, in short, oil is the same price NOW, even adjusted for inflation as it was in 1979
13) the average household has a higher debt ratio to income, than the federal government, and the 67% debt load measured against GDP is historically moderate to low. After WWII it was over 100% of GDP (then known as GNP)
14) the host stated "in effect we are placing IOUs" with foreigners when they buy our debt-- since when are US Treasury notes "IOUs" ???
15) you stated in the EU, they warn that anything above 60% of debt, measured against GDP is "bad" -- but you failed to mention more than half of the EU member nations have debt that exceeds that amount, as well as our own 67%
16) the pharmaceutical industry has the highest R and D budget in the country-- no industry spends more on R and D than they do, including pfizer--- in addition you are assuming why they are "hoarding cash" and you give it a negative fear filled slant, as usual
17) you stated campaign financing is one of the greatest threats to our republic as it forces politicians to be co-opted by the corporations-- hey, I thought McCain Feingold was supposed to "solve" that little probem.
should have been 1979 ! ! ! ! ! sorry
Have a merry, and a happy.
\\\\ the 100 billion the fed is autioning off can hardly be considered inflationary as you suggested, since 100 billion is less than 1% of a 3 TRILLION dollar budget -- not to mention a pittance in a 13 TRILLION dollar economy.////
Remember this line the next time someone says that a raise in the minimum wage is "inflationary."
\\\\the host stated "in effect we are placing IOUs" with foreigners when they buy our debt-- since when are US Treasury notes "IOUs" ??? ////
And what do you call US Treasury notes like to ones in the Social Security fund? I've been told all my life that bonds and treasury notes are indeed "promissory notes." Explain why that is incorrect, please.
Thanks!
The question comes to mind, how long or how often has consumer debt been higher than Federal Government debt?
I'd have to do some research, but I bet not often. It is a very recent thing, this idea we do not have to save. However, we are ONLY lacking in CASH savings. Well over 50% of the nation's population is now invested in the stock market, in 401ks, IRAs, mutual funds etc. In addition, the overblown subprime silliness notwithstanding, home equity is a "new" savings many people have as well, with nearly 70% home ownership.
All of these current vehicles for savings were not available, or unreachable in the past, and CASH was the only means available for most people to save. CASH is really the only "savings" that is no longer occurring.
Remember this line the next time someone says that a raise in the minimum wage is "inflationary."
Idiotic-- a red herring used by businesses to limit wages. There is no empirical evidence to suggest a rise in the minimum wage is "inflationary" in any way.
And there is NOTHING to demonstrate such "passing" has EVER caused inflation.
And you're totalling ignoring the fact you haven't presented any EVIDENCE to PROVE your silly contention. WHY ???? because there IS NO PROOF to present, moron. You've got NOTHING but your idiotic opinion to spew, no proof, just your stupidity.
Sorry James....
Thanks for making the show available to download so we can have a listen. I've got it downloaded now all I have to do is actually listen! ...and I will, I promise! :-)
Happy New Year!