BS: The Economy for Dummies

Subject: BS: The Economy for Dummies
From: Donuel
Date: 06 Oct 08 - 10:20 AM

To start, I will be very fundamental (fundamental means basic - it does not mean People.



Business is the business of making profits.

The Government is like a big Cop and Court.

Business does not like to obey the law when stealing makes more profits.

Business says Government is big and bad. Business tries to buy influence to hinder the Cops and the Courts as well as take the laws off the books called deregulation. Deregulate the big Cop and Court and the crooks are free to take whatever they want because they made it legal to break the law.

Business buys think tanks, media, politicians and people to 'influence' and lobby poiticians, all to make legal any crime that makes a profit.

Subject: RE: BS: The Economy for Dummies
From: Doktor Doktor
Date: 06 Oct 08 - 11:27 AM

Harsh ........


........... but fair-ish, at least to a beer-stained folkie.

To some extent we are all owners or debtors of big business, so are we also its subjects? Are corporations the new empires? Or is it feudal?

(Discuss)

PS where did all the money go?

Subject: RE: BS: The Economy for Dummies
From: The Fooles Troupe
Date: 06 Oct 08 - 11:44 AM

Lichtenstein...

Subject: RE: BS: The Economy for Dummies
From: GUEST,heric
Date: 06 Oct 08 - 12:32 PM

"About $25 trillion in value has been erased from stocks worldwide in the past year. The MSCI World Index of 23 developed countries lost 28 percent through Oct. 3, the worst annual performance on record dating back to 1970. Investors in the U.S. face their first annual loss in six years after the S&P 500 dropped 30 percent from its October 2007 record.

The S&P 500 is still valued at 19.5 times profit from the past four quarters, according to data compiled by Bloomberg."

Subject: RE: BS: The Economy for Dummies
From: Donuel
Date: 06 Oct 08 - 12:37 PM

where did the money go?

We will show esactly where it went, riht after this message.

Hey kids its time to play scrambleizer!
Lets scramble some words or names...

John McCain's Sarah Palin =

John's a Saccharin Lip Man
or
Liar John scans China map
John Narcs Chaplains MIA
John Pans Chain Liar's Scam

what are

Conmen Hogs a Cherub Jig
A much Obscener John Gig


answer George Bush John McCain

now back to where did your money go...

Subject: RE: BS: The Economy for Dummies
From: wysiwyg
Date: 06 Oct 08 - 01:18 PM

Don, that first post-- good LORD, it was clear. More?

~S~

Subject: RE: BS: The Economy for Dummies
From: Donuel
Date: 06 Oct 08 - 01:44 PM

Business says that the market will automaticly correct any mistakes without any goverment interference of any kind.
They call this all knowing self correcting mythological God of the market,
the Invisible Hand.

The invisible hand is a helpful hand when business is growing.
It becomes a fist when business is failing.
The invisble hand then tries to grab goverment money which is completley against every idea the invisble hand stands for.

The invisible hand is not real

The invisible hand is just an alibi crooks tell the cops.
'We didn't do anything officer, the invisble hand did it.'

The Security Exchange Commission is supposed to be the cops and court of Wall Street bankers. They were staffed with crooks.
The crooks held a 55 minute meeting to declare that Casinos/investment banks no longer have to have cash in reserve to cover their bets.

When secret bets were made with bookies on certain investments to not lose money, the bookie had to have that money to pay out if the 'insured' investment ever did lose money. BUT NOT ANY MORE. the SEC said its OK to make leveraged unsecured bets. Unsecured bets are leveraged with no real money.

The bookies let themselves run up a debt of trillions.
People sometimes did not buy insurance/be on investments, sometimes they claimed to sell an insured investment. But new rules let them not to even own what they were selling.

New Rules were so absurd you might not believe it.

next the absurd new rules...

Subject: RE: BS: The Economy for Dummies
From: Donuel
Date: 06 Oct 08 - 03:07 PM

The only real factor in a market is trust.
If you pay for a hamburger and nothing is served, after a while you stop buying hamburgers. You stopped trusting the burger joint.

Right now the trust in Wall Street is lower than that of a child molester.

Where did ollost money go?

If you put it in a bank it does not go in a vault.
IT goes to go play poker or black jack or derivitive purchases.

Subject: RE: BS: The Economy for Dummies
From: heric
Date: 06 Oct 08 - 03:30 PM

If you give them public money after the fact, does it go to "deleveraging," i.e. evaporate, or does that money swirl into liquidious circulation?

Subject: RE: BS: The Economy for Dummies
From: Bobert
Date: 06 Oct 08 - 03:34 PM

Yeah, I would like to know where all the money went, also???

Subject: RE: BS: The Economy for Dummies
From: wysiwyg
Date: 06 Oct 08 - 04:04 PM

That's a lot to take in! I gotta break it down one piece at a time to follow it.

Donuel for Secretary of the Economy!

It reminds me of another money-genius I knew briefly. I think his name was Oscar-- it was awhile ago-- but I saw him break down the crazy way schools are financed, in a hugely important public meeting, once. In the same clear way. In his spare time he chomped cigars. But that man knew how money systems worked, and he could TELL you how, in a naturally relaxed way.

~Susan

Subject: RE: BS: The Economy for Dummies
From: CarolC
Date: 06 Oct 08 - 04:45 PM

It was all just theoretical money anyway. It never really existed.

Subject: RE: BS: The Economy for Dummies
From: Acorn4
Date: 06 Oct 08 - 05:25 PM

One or two bits of this thread are a bit advanced for "dummies" -I've already put this on the economics degree level thread, but these ramblings seem perhaps better placed here.

A load of people have lent a load of money they don't have to another lot of people who can't afford to pay it back.

Al Quaeda have packed up and gone home saying "Job done, chaps, Wall Street have done it all for us!"

From my basic knowledge of economics, isn't it not just to do with how much money ,but how quickly it moves about?

My step daughter lives in Sicily where, it is rumoured, the Mafia still control a lot of what goes on. It's basically the same over here, just they tend to wear pin striped suits.

Subject: RE: BS: The Economy for Dummies
From: Acorn4
Date: 06 Oct 08 - 05:26 PM

... oh, and one question. If the government is going to borrow to get us out of this, who are they going to borrow from?

Subject: RE: BS: The Economy for Dummies
From: CarolC
Date: 06 Oct 08 - 07:29 PM

Some people say they're going to borrow it from the banks and then give it back to the banks as a bailout. Other people say they're going to borrow it from us.

Subject: RE: BS: The Economy for Dummies
From: heric
Date: 06 Oct 08 - 07:44 PM

I thought they just printed it.

Subject: RE: BS: The Economy for Dummies
From: CarolC
Date: 06 Oct 08 - 07:45 PM

I don't know if they even bother to do that any more. It's all probably just numbers in a computer somewhere.

Subject: RE: BS: The Economy for Dummies
From: Donuel
Date: 06 Oct 08 - 09:24 PM

Carol is right, the money that was lost was like the money you hope to get if the roulette wheel lands on black 13 but there is also the real money that went to place the bet and gets raked into the casino.

Those chips raked into the hole in the roulette table did go to CEOs and other upstanding members of the mob.

Do these guys want to pay capital gains tax? Hell no.
Now they say it may be unpatriotic for the rich to pay any tax.

What has happend is that the Government which are the cops and courts and the gambling mob with their protection racket have become one big happy family.
Government has been effectively marginalized, broken up like FEMA and the experienced Congressional staff decimated, Evangelical graduates politically appointed to the Justice Dept and arguably the Supreme Court.

In Washington a Christian Prayer Breakfast Club meeting can have weapon manufactures, CIA, Investment Bankers, Rand Coproration and other invisible hand holders of great capitol all at the same table;
To do what? To decide what candidate they want to see represent the executive branch of the United States. Their business credo is "A competant smart politician is the most dangerous person in America".

They want the dumbest most incompetant stooges to leave the "mob" alone.

Subject: RE: BS: The Economy for Dummies
From: Donuel
Date: 06 Oct 08 - 09:36 PM

Subject: RE: Black Monday .
From: alanabit - PM
Date: 06 Oct 08 - 07:21 PM

I worked with bankers for over a decade, trying to teach them English. I learned a few things from them in return. Probably the most important single fact about money, is that the stuff does not really exist in any physical sense. It is basically the projection of the sum of a huge number of interdependent belief systems. Stocks and shares are part of it, import and export systems are another, holdings, profits and whatever other economic statistics you want to throw into the pot, are another. However, at the end of the day, whether there is any money there or not comes down to whether the bankers think there is or not. If they think there is, then the bullding projects run and the wages get paid. If they think there is not, then we are all buggered. I like to think optimistically. Nobody really wants the whole economic systems to run out of money. So at some stage, someone says, "There is money." And then there is

Subject: RE: BS: The Economy for Dummies
From: Donuel
Date: 06 Oct 08 - 09:41 PM

Its the trust thing.

Remember when W used to talk about the "vision thing"?

Subject: RE: BS: The Economy for Dummies
From: Donuel
Date: 06 Oct 08 - 09:54 PM

Hedge Funds.

A market you and I can't play.

This is where rich guys buy insurance at 2% that a certain investment bond won't lose money , with money they don't have. (hey its deregulated)

2% of a billion is 20 million.

Then later they sell insurance on an investment bond (after rumors are spread) at an even higher rate of 4% to insure the "suspicious" investment bond.

They have hedged their bet coming and going, up or down.

Selling short: Betting that a company will fail in the most pure sense of gambling.

Subject: RE: BS: The Economy for Dummies
From: Donuel
Date: 06 Oct 08 - 10:02 PM

Hedge funds play with about 2 trillion dollars.

Today a fifth of all hedge funds had a must sell order.
In other words they had to pay a client or a bookie.

the problem was...there were no buyers...so the price kept going lower. OTher holding were sold to cover some of these losses so the DOW went down 800 points at one point today, then slowly crept back up to only 500 points down.

Subject: RE: BS: The Economy for Dummies
From: Little Hawk
Date: 06 Oct 08 - 10:12 PM

Most of the money is an imaginary pipedream...magically created through lending.

Example: Bank actually has only $3 million in cash. They lend it out 10 times...it becomes $30 million lent out and $3 million in actual cash = $33 million all told, but $30 million of it is totally fictional...because the government never printed it or minted it!

Step 2 - the $30 million of fictional dollars that were lent out by the bank all get deposited into various banks and those banks lend it all out 10 more times. You now have another $300 million out there that appeared magically and was never printed or minted by the government. It doesn't exist in coins or bills...it just exists as a digital record or a total written on a balance sheet.

This generates one heck of a lot of spending by the people all that money was lent to and they get themselves into one heck of a lot of debt! But the economy grows rapidly...whoopee! Business is good.

There is now $330 million in circulation (on computer screens), but only the original $3 million is real money that the government minted or printed. (they mint or print some more every year, but all the money they mint or print equals less than 5% of the money on the books...that suffices to give people enough cash to carry around in their wallets on a daily basis)

The banks are now making one heck of a lot of profit on all the interest they are charging to people for lending them $330 million! It's like a money tree.

step 3: The banks collectively now have $330 million in assets (created through putting other people into debt and collecting interest on that debt). They lend that $330 million out ten more times! And the gravy train rolls on!!!!!!!! Plus there's all the interest charges...those create even more fictional money that appears as bank assets. Figure they've got about $400 million by now.

This is better than a money tree! It's like having the Midas Touch.

many steps later: Having created absolutely unbelievable amounts of fictional money and having encouraged millions of people to get themselves massively into debt, the banks finally drive the situation so far out of reality that a large number of their debtors are unable to pay even the interest payments, let alone pay back the principle!

Many people default on their loans. Lives are ruined. Houses are lost. Businesses fail. The banks start to go broke too because so many of the debtors have defaulted. The money ain't worth shit any more. The shit hits the fan.

It all happened for one simple reason: Since about 300 years ago, starting in England, bankers were allowed to lend out vast amounts of money that the government itself never created and which was in fact imaginary money. Money created by the stroke of a pen or a computer key, out of thin air. It resulted in an unpredented expansion in the economy, accompanied by an unpredented rise in debts, personal and national.

It was a pyramid scheme. A very big one. Like all such schemes, the bubble finally bursts one day...and there's almost nothing real there when it does.

******

And then people have to start over.

******

Governments should never have allowed banks to lend out more than they could back up with actual REAL cash on deposit...I mean REAL physical money or gold or silver that was sitting in their vaults. When governments allowed banks to create new fiat money from nothing at all, they destroyed any real control over the value of money and they gave the financial system up to crooks and gamblers.

They are now trying to bail out the biggest of those crooks and gamblers, but what about the rest of us?

****

And the hilarious thing is...there's still a real world out there in spite of it all. We still have real crops, real products, real industries, real people...all of which is being imperilled by a totally irresponsible financial system that is itself out of touch with reality.

Subject: RE: BS: The Economy for Dummies
From: Donuel
Date: 06 Oct 08 - 10:20 PM

LH, Instead of being so factual, I am looking for oversimplified themes of cops and robbers, dirty nurse and old rich guy kind of scenarieos that everyone sees in their mind with immediate clarity.

If we can do that for more economic issues, we will have something to publish so that the average American who reads newspapers that are written to the 6th grade level, will understand and as a result will become immune to the think tank "slogans" that have helped ruin America for everyone.

Subject: RE: BS: The Economy for Dummies
From: Little Hawk
Date: 06 Oct 08 - 10:47 PM

Okay... ;-)

Well, I wish you luck with that, Donuel.

I don't expect people to understand. I just expect them to survive, basically, by their own natural instincts.

I know that I don't know much. I know that most people don't know much. I know that most people think they know a hell of a lot more than they really do know...and it's always been that way, and it probably always will be.

On any given day, though, I'd rather deal with someone who has a good and loving heart than someone who figures he knows a lot about this or that...because the first is a person I can deal with on a reasonable basis.

Subject: RE: BS: The Economy for Dummies
From: GUEST,heric
Date: 06 Oct 08 - 11:44 PM

I'm glad they don't use paper anymore - They'd probably end up clearcutting Yellowstone.

Subject: RE: BS: The Economy for Dummies
From: GUEST,Guest from Sanity
Date: 07 Oct 08 - 03:52 AM

From: Little Hawk
Date: 06 Oct 08 - 10:47 PM

Okay... ;-


On any given day, though, I'd rather deal with someone who has a good and loving heart than someone who figures he knows a lot about this or that...because the first is a person I can deal with on a reasonable basis.

God Bless you, Little Hawk! This is the beginning, and end, of sanity!

Subject: RE: BS: The Economy for Dummies
From: Joseph P
Date: 07 Oct 08 - 04:26 AM

There is no mention above of the bankers taking their cut, even when the bubble bursts, even though it is their system that is screwing things up, their greed that has created this mess.

Subject: RE: BS: The Economy for Dummies
From: The Fooles Troupe
Date: 07 Oct 08 - 07:31 AM

Bank A loans money to Bank B
So B pays interest to A - Ok

So far so good. Simple! :-)

Now along comes Bank C.

Bank B loans money to Bank C
So C pays interest to B - Ok

You would expect that C would loan money to bank D, but no - it loans some to A! and so does B!!!!!

WTF?

I'm glad i don't pretend to understand Economics... :-)