As we approach a world-wide recession let us not forget that is was caused be greed. From the Chinese toys and milk producers who destroyed their industries trying to make a few more cents. To the Florida condo investors, buying to flip and not to own. From the executives of Country Wide and all the other banks who sold/bought home loans without evaluating the properties or the owners. To the millions of consumers who buy everything on credit. To the OPEC nations which allowed oil to go to $140 a barrel.
Relatively cheap energy is the foundation of the modern economy. When the OPEC nations allowed the price to skyrocket pass $80 a barrel they were setting up the world economy for a fall. Although they made money from their oil in the short run, they are now losing more in the asset values of the stocks they bought with the oil money. Like Matha Stewart, who saved a few thousand from insider-trading but lost millions, the OPEC nations are now experiencing the results of their short-term thinking.
Wednesday, October 22, 2008
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3 comments:
A sure sign of the apocalypse. Joe and I agreeing on something. LOL Now I'm worried.
Greed always kills the golden goose.
Problem is, this deflationary period will be short-lived. We're in for a long, long recession and inflation will eventually cripple us all over again.*
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*But don't expect the media to look past tomorrow's next hit piece. They're so proud of their "journalism" and "communications" degrees.
There is a lot of good information on the economic collapse out there and why it happened, the mortgage crisis may have been the trigger but the bullet that burst the debt bubble was the CDS market being unregulated, i.e., leveraged exponentially...Google "This American Life" number 365 which explains this well, also "Information Clearing House" has a lot of good articles on the subject. The dollar is getting stronger because its the reserve currency, which is also the reason why the American economy did not do an Argentina which normally it would have...if Obama wins I think the dollar will remain the reserve currency, if he loses the reserve currency could flip to the Yuan or Euro or more probably both along with the dollar, i.e., no reserve currency but several super currencies wildly fluctuating but in that case the dollar will crash...the reason is debt, Obama will control debt in America and thus the debt bubble in the World, McCain or Palin won't. The reason for the debt is military spending, nuclear proliferation and unregulated debt trading which an Obama administration with smart people will control and McCain won't be able to because he listens to people like Phil Graham who is responsible for this mess with his legislation.
Yet if Obama wins stocks are a bargain right now especially green stocks which if he wins have to go up.
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