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#121114 - 07/27/09 06:57 PM Re: How will the financial crisis develop? [Re: Greger]
Jeffery J. Haas Offline


Pooh-Bah

Registered: 08/03/04
Posts: 12732
Loc: Whittier, California
 Originally Posted By: Greger
Gold and diamonds, oil and iron are dug up and added to the wealth. Crops are grown, timber and other renewables harvested. So while all the wealth in the world is finite or limited we don't seem be be reaching the limits yet of how much wealth can be created. The limit we are running into is how many Greeedybeasts it will actually support.


Basically, when you refer to gold, diamonds, iron and OIL, you're essentially referring to the same element that all of them connect to:

ENERGY.

Wealth is that which increases the quality of life, and since almost everything that increases QOL involves energy, basically ENERGY IS WEALTH. Gold and diamonds are objects of intrinsic value in that a certain amount of labor is required to make them available, but in reality they are just hard currency.
If a barrel of oil was small enough to fit in one's pocket it would do just as nicely as a lump of gold, a gold coin or a diamond, because in the end most wealth buys the energy needed to increase QOL or it buys products that take a certain amount of energy to create.

Thus energy is wealth.
_________________________
The men the American public admire most extravagantly are the most daring liars; the men they detest most violently are those who try to tell them the truth. - H. L. Mencken

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#121192 - 07/28/09 04:55 PM Re: How will the financial crisis develop? [Re: Jeffery J. Haas]
numan Offline
veteran

Registered: 08/06/08
Posts: 10853
Loc: What! Me Worry?
'

Energy is NOT wealth! At present, it is liability, not profit!

As long as the Pashas of Petroleum and the road-construction contractors are fat and satisfied (curse their worthless hides!), then the Quality of Life is lowered, not increased.

Energy could be wealth, if it were used to build and maintain high-speed rail transportation and freight, and a well thought-out mix of public and private transport, and sensible urban planning.

.
_________________________
The ultimate result of shielding men from the effects of folly is to fill the world with fools -- Herbert Spencer

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#121250 - 07/29/09 09:26 AM Re: How will the financial crisis develop? [Re: numan]
Jeffery J. Haas Offline


Pooh-Bah

Registered: 08/03/04
Posts: 12732
Loc: Whittier, California
Your argument has more to do with the type of energy currently in play, not with the concept of energy as wealth.
The fact remains that anyone who has vast quantities of cheap energy at their disposal has wealth, because energy does WORK, and work is LABOR.

Owning the means over the ability to do lots of labor cheaply is what built the US into an industrial superpower.
When muscle is replaced by machines, those who make things can make them more cheaply.

Energy is wealth.
Oil is simply an abused and overly speculated form of energy, but if you own a lot of oil, you are wealthy.
_________________________
The men the American public admire most extravagantly are the most daring liars; the men they detest most violently are those who try to tell them the truth. - H. L. Mencken

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#121264 - 07/29/09 11:47 AM Re: How will the financial crisis develop? [Re: Jeffery J. Haas]
numan Offline
veteran

Registered: 08/06/08
Posts: 10853
Loc: What! Me Worry?
 Originally Posted By: Checkerboard Strangler

The fact remains that anyone who has vast quantities of cheap energy at their disposal has wealth, because energy does WORK, and work is LABOR.

------------------

Oil is simply an abused and overly speculated form of energy, but if you own a lot of oil, you are wealthy.



Nigeria is the legal owner of the oil found there. Are the people of Nigeria wealthy?

There is more to wealth than just owning a source of energy.

.
_________________________
The ultimate result of shielding men from the effects of folly is to fill the world with fools -- Herbert Spencer

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#122913 - 08/11/09 06:45 AM Re: How will the financial crisis develop? [Re: numan]
numan Offline
veteran

Registered: 08/06/08
Posts: 10853
Loc: What! Me Worry?
VIX Signals S&P 500 Swoon as September Approaches

 Quote:

Options traders are increasing bets that the steepest rally in the Standard & Poor’s 500 Index since the 1930s won’t survive September, historically the worst month for U.S. equities....

History shows that U.S. investors lose the most in September. The benchmark index for American equities fell 1.3 percent on average since 1928 that month, data compiled by Bloomberg show.

Mark Mobius said global stocks will drop as much as 30 percent following their recovery from last year’s rout as companies take advantage of the rebound to sell more shares.

“When you have these rapid increases almost without correction, you will definitely have a correction,” Mobius, who oversees about $25 billion as executive chairman of Templeton Asset Management Ltd., said in an interview.... “We can expect a lot of volatility.”

[SNIP]

“There is a real danger this is going to be a double dip and that after six months or so we’ll have some more bad news,” Feldstein, the former head of the National Bureau of Economic Research said....

Almost half of U.S. homeowners with a mortgage are likely to owe more than their properties are worth before the housing recession ends....



And the collapse of the commercial real estate market has yet to be dealt with....

.
_________________________
The ultimate result of shielding men from the effects of folly is to fill the world with fools -- Herbert Spencer

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#123703 - 08/17/09 05:01 PM Re: How will the financial crisis develop? [Re: numan]
numan Offline
veteran

Registered: 08/06/08
Posts: 10853
Loc: What! Me Worry?
'

It takes them a while, but eventually even an economist can see the obvious:

Stocks Slide on Economy Concern; Yen, Dollar, Treasuries Gain

 Quote:

Stocks tumbled around the world, led by China, while the yen, dollar and Treasuries rose as investors speculated that a rally in riskier assets has outpaced prospects for economic growth. Energy and commodity prices also slid.

The MSCI World Index of 23 developed nations sank 2.8 percent at 4:12 p.m. in New York, the biggest retreat since April. The Standard & Poor’s 500 Index lost 2.4 percent to 979.3 after China’s Shanghai Composite Index slumped 5.8 percent, the most since November....

“The stock-market reaction overseas has woken people up to the fact that it’s not going to be a straight line up,” said Myles Zyblock, chief institutional strategist at RBC Capital Markets in Toronto. “People are starting to question the strength of the recovery.”

_________________________
The ultimate result of shielding men from the effects of folly is to fill the world with fools -- Herbert Spencer

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#124040 - 08/20/09 05:22 PM Re: How will the financial crisis develop? [Re: numan]
numan Offline
veteran

Registered: 08/06/08
Posts: 10853
Loc: What! Me Worry?
'

Even in Mordor, where the flickering shadows lie and lie and lie, glints of truth peep out here and there:

The Mclaughlin Group Library

 Quote:

Question, Mort: Is the economy leveling out?

MR. ZUCKERMAN: No, I don't believe it is. It is not falling off the end of the table. It is just rolling downhill at a slightly lesser pace in the last couple of months. But we are by no means through this recession and we are by no means through the problems created by higher unemployment. Homes where the mortgage exceeds the value of the home, which today is 25 percent of the homes -- Deutschebank predicts that in 2011, 48 percent of the homes will have mortgages that exceed the value of the homes. That is a huge, huge event in this country. It will affect everybody's sense of net worth and the consumption economy that we are relying on. So we're not out of the woods. I'm not saying it's going to be a depression, but we've still got a lot of problems ahead of us.

[SNIP]

[Cash for Clunkers] MR. BUCHANAN: It was $1 billion. That's about one-tenth of 1 percent of the stimulus program. One of the problems, John, is that the banks still have this big, cancerous tumor in their belly. All these bad toxic paper are being kept on the banks' books at 100 cents on the dollar. You're going to have commercial real estate crashing.

_________________________
The ultimate result of shielding men from the effects of folly is to fill the world with fools -- Herbert Spencer

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#130729 - 10/29/09 02:44 PM Re: How will the financial crisis develop? [Re: numan]
Ardy Offline
Pooh-Bah

Registered: 12/22/05
Posts: 12005
Loc: San Jose, Ca USA
We have not revisited the total collapse of the world economy for a while

In the mean time, the wall street journal reports "WASHINGTON (
 Quote:
MarketWatch) - The U.S. economy expanded at a 3.5% annual pace in the third quarter, as massive government stimulus helped drag the economy out of the longest and deepest recession since the 1930s, the Commerce Department estimated Thursday."
link


Edited by Ardy (10/29/09 02:45 PM)
_________________________
"It's not a lie if you believe it." -- George Costanza
The whole problem with the world is that fools and fanatics are always so certain of themselves. --Bertrand Russel

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#130759 - 10/29/09 09:40 PM Re: How will the financial crisis develop? [Re: Ardy]
itstarted Offline
old hand

Registered: 01/27/03
Posts: 6385
Loc: Florida/Illinois

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#131464 - 11/05/09 11:41 AM Re: How will the financial crisis develop? [Re: itstarted]
itstarted Offline
old hand

Registered: 01/27/03
Posts: 6385
Loc: Florida/Illinois
After reading this (from RGE Monitor) it occurred to me that there are probably very few people who truly understand what is happening with underside of the economy.

 Quote:
The Federal Open Market Committee (FOMC) decided at its November 2009 meeting to keep the Federal Funds Rate target range unchanged between 0% and 0.25% and reduced the size of the agency debt purchase program slightly to US$175 billion from the previously announced maximum of US$200 billion. The Fed will still purchase a total of US$1.25 trillion of agency mortgage-backed securities. The FOMC stated it "continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period." The FOMC made only a slight change in its statement to emphasize the importance of labor market slack to its decision.


...open for comment and explanation... \:\)

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