First Greece, Portugal and Spain, next is Italy, Ireland and Belgium?

[Cheesebone]

@Cheesebone That's an example of natural monopoly. It's not the norm but, anyway, with monopolies, prices tend to rise.

The problem with speculation is that i'ts not about the good itself for your enjoyment but the profit. We're putting money before necessities again. That's what happened with the house bubble. We should talk about conscious investment and not speculation. We saw how risky is and who end up paying the mess.

Example of speculation: when someone buys 20 houses to speculate (they expect double the money in 5 years), you need to see that that is creating poverty on the other side: prices will rise and you'll have to pay insane rates if you want to buy a place right now.

They expected it to cost twice the cost now, yes, but were they smart? Recession, bubble... what are they doing with 20 empty houses now? They better keep them locked and wait for the prices to rise again. That means less houses for the rest and the prices not being able to drop consequently.

Some agents use the monopoly (see oil) to influence on governements and wars, rising the price of the product by the way.

Free market can't be free of taxes like the ones everyone pays and the market is more efficient when you have to compete.

The point I make is that the speculation would never have existed to that extent absent the government policies that preceded it. Mass-Speculation wasn't the problem - it was a side-effect.

And blaming oil price rises on speculation is a HUGE misconception largely promoted by media outlets and a lot of "liberal" talk as well. Any research into how the oil futures market actually functions will explain how these oil prices aren't a result of speculation.

And yes, earlier I was absolutely talking about a "natural" monopoly, which would only form under a legitimate free market system. That's the point. The kind of monopoly you're worried about simply wouldn't exist in a free market to begin with

As far as housing goes, I'm still convinced that housing prices have nowhere to go but down (in terms of real value at least). Holding on to these properties longer isn't going to help anyone out, unless we see massive inflation and prices for EVERYTHING start to explode and housing prices rise nominally. That will bail everyone out who acted irresponsibly and made awful speculative decisions on real estate. Of course, this comes at the expense of punishing people who actually saved their money and acted responsibly while everyone around them was gulping from the punch bowl.

 

[JeffTD]

In fact, compared to other countries, the Us is one of the most free markets nowadays.

And isn't that a shame? We have no good examples of free markets in place despite the fact that they can and do work, and work quite a bit better than any alternative.

 

[Aaron Smith]

As far as housing goes, I'm still convinced that housing prices have nowhere to go but down (in terms of real value at least). Holding on to these properties longer isn't going to help anyone out, unless we see massive inflation and prices for EVERYTHING start to explode and housing prices rise nominally. That will bail everyone out who acted irresponsibly and made awful speculative decisions on real estate. Of course, this comes at the expense of punishing people who actually saved their money and acted responsibly while everyone around them was gulping from the punch bowl.

Precisely, I couldn't agree more. The only way that housing prices will ever be able to rise in nominal terms is if they first fall to a genuine equilibrium where the average American can truly afford to buy one. If they rise before that occurs, it will be strictly a result of the loss of confidence and depreciation of the US dollar, or because of some other new unprecedented kooky inflationary government program designed to spur new buying, but it will only be temporary, and it will only make the housing market even more convoluted and ripe for a huge drop.

I'm certain that the Fed won't allow houses to fall significantly further though (no matter how much free market downward pressure there may be) because if they do, then all the banks who got bailed out in 2008 will need to be bailed out all over again. Also, the Fed has had rates at essentially zero for over two years now, which is insane, and home prices STILL continue to drift lower, which to me is a clear signal of just how overpriced the housing market still is (in most areas, at least), but if the Fed needs to raise rates to attempt to stamp out the inflation they've been creating over the last few years, or to try to instill foreign investor confidence in the dollar, the housing market will just get absolutely destroyed, as well as the rest of the economy, which is so dependent on the current low rates. It's just a total nightmare scenario for the US, but there's no way to avoid it. The US government just needs to rethink everything it does and slash spending drastically, and embrace the recession as a necessary means to real growth and prosperity, instead of acting like they can win a fight with economic laws...it's like fighting gravity. As Peter Schiff puts it, "sometimes the medicine tastes bad, but you just need to take it".

Buying gold is just an absolute no-brainer; buy, hold, sit back, and relax.

 

[Aaron Smith]

And isn't that a shame? We have no good examples of free markets in place despite the fact that they can and do work, and work quite a bit better than any alternative.

I'm actually genuinely surprised that there isn't a ton of free market capitalism hatred flying around in this thread... Makes me wonder if people are finally starting to wake up from listening to people spew nonsense about deregulation being the root of our problems.

 

[kvoid]

Was it Churchill who stated that "The greatest failing of capitalism is the unequal sharing of wealth, the greatest virtue of socialism is the equal sharing of misery".

Well we've seen the Soviet Union and Warsaw Pact countries go belly up in dire straits.

And a quarter century later we get to see the "free-market world" show us how it's gonna fail.

I say buy lotsa canned food and ammo and get ready to enjoy the global deluge from a distance.

 

[John_C]

I have nowhere near the level of knowledge of some people here, especially of US economics. However, It would be nice if someone would explain to me how a truly free market can prevent itself leading directly to oligopoly.
In that explanation one has to take into account the fact that you cannot trust consumers to go to their local grocers if the supermarket is cheaper and more convenient, even if the quality is worse and it's a poor moral decision.

 

[Trevoire520]

As far as I see it this is basically a result of mass poverty within civilization. I would happily buy local produce if I could actually afford it. But you have the vast majority of people who can barely pay the bills, and then at the other end you have those who could wipe their ass with £1000 notes and not notice a ding in the bank account.
And those who have all that money make it from all the poor people who don't have any, it's a seriously fucked up system.

Global recession is running rampant, people are losing their jobs left right and centre, struggling to put food on the table, but have prices dropped for anything? Hell no, god forbid those on the top might have their profit margins squeezed, even slightly, when faced with a world where mass starvation is looking like a real possibility in the next decade or so.

Things need to change, wealth needs to be more evenly distributed, and those who have created this global recession fuckup need to be seriously held to account. Locked up (in REAL prison) or shot. At the moment I don't see anyone responsible for this mess being punished, they're drunk in the drivers seat and they're already crashed the car once.

 

[::XeS::]

Look at Italy...we are probably the next country to fail and politicians think only to spend money on Nuclear, TAV, EXPO,etc...
I mean, there is a big crisis... and you wanna spend 17 bilion of € for a train line that will probably ready in 20 years? Or 50 bilion of € for a nuclear power station ready in 20 years (in a normal country, not in Italy) or another flood of € for a ridicolous EXPO, a concept of 2 centuries ago, where you will build lot of buildings and where the day after the 50% of them will be dismantled.
And all these things because they earn lot of money, lot of bribes, etc....

 

[kvoid]

Things need to change, wealth needs to be more evenly distributed, and those who have created this global recession fuckup need to be seriously held to account. Locked up (in REAL prison) or shot. At the moment I don't see anyone responsible for this mess being punished, they're drunk in the drivers seat and they're already crashed the car once.

Tovarish Stalin, why I didn't recognize you at first

But the worst part is, I don't entirely disagree.

Much as I believe commuJism (and all of it's myriad social experiments, including nationalization/redistribution of property) is scientifically proven to be an epic fail.

But when we're so far off the deep end that historic grave errors become the most rational solution for the bullshit of today, you know there's something seriously fucked up. Is this a cyclic phenomenon? Like some aberrant algorithm for generating random numbers that after a number of iterations starts spewing the same shit consecutively? I don't know. I haven't studied history. Granted most of this market, economy shit is high sorcery to me (to the effect that they are all based on pure unrefined horseshit)

 

[El_Gato]

And blaming oil price rises on speculation is a HUGE misconception largely promoted by media outlets and a lot of "liberal" talk as well. Any research into how the oil futures market actually functions will explain how these oil prices aren't a result of speculation.

As far as housing goes, I'm still convinced that housing prices have nowhere to go but down (in terms of real value at least).

I never said it wes oil speculation but a few monopolies.

Housing prices have to go down but, are they doing so? When they go down, is it a real drop according to the market? Don't think so.

The US government just needs to rethink everything it does and slash spending drastically, and embrace the recession as a necessary means to real growth and prosperity, instead of acting like they can win a fight with economic laws...it's like fighting gravity. As Peter Schiff puts it, "sometimes the medicine tastes bad, but you just need to take it".

Buying gold is just an absolute no-brainer; buy, hold, sit back, and relax.

Agree with the first part, but basing the economy on gold is fantasy IMO, as the total amount of gold extracted is less than the value of the money circulating in the US only. We should include energy and technology as I mentioned before.

Was it Churchill who stated that "The greatest failing of capitalism is the unequal sharing of wealth, the greatest virtue of socialism is the equal sharing of misery".

Well we've seen the Soviet Union and Warsaw Pact countries go belly up in dire straits.

And we've seen a lot of capitalist markets going down the flush, too. We may say this too:
The greatest failing of virtue of Capitalism is the equal sharing of the debts and losses, the greatest virtue of socialism is the equal sharing of losses AND wealth.

It all depends on the branch of capitalism/socialism we're talking about. There are examples running right now.

In that explanation one has to take into account the fact that you cannot trust consumers to go to their local grocers if the supermarket is cheaper and more convenient, even if the quality is worse and it's a poor moral decision.

We can't trust everysinglebody but we've seen how most people learn fast. It's just ignorance and when you talk to people, they understand perfectly. Almost all of us came to this forum buying cheap and more convenient gear. Now we talked, the decissions wouldn't have been the same in the first place.

Look at Italy...we are probably the next country to fail and politicians think only to spend money on Nuclear, TAV, EXPO,etc...
I mean, there is a big crisis... and you wanna spend 17 bilion of € for a train line that will probably ready in 20 years? Or 50 bilion of € for a nuclear power station ready in 20 years (in a normal country, not in Italy) or another flood of € for a ridicolous EXPO, a concept of 2 centuries ago, where you will build lot of buildings and where the day after the 50% of them will be dismantled.
And all these things because they earn lot of money, lot of bribes, etc....

Same here in Spain, every politician is rising their wages (yes, it's them who rise their own salary) while doing exactly the oppositte with regular people. Banks had their record profits in 2010. But we pay their wages and debts while sacrifice ourselves.

Italy is a fantastic example of direct democracy now: they had 4 referendums and said no to Berlusconi to keep being able to govern for an undefined time and, the said no to FUCKIN NUCLEAR ENERGY!

Thanks participative Democracy. Now it's time for you italians to kick that fucker out.

 

[Cheesebone]

I never said it wes oil speculation but a few monopolies.

Housing prices have to go down but, are they doing so? When they go down, is it a real drop according to the market? Don't think so.

Well, yes, but you have to ask WHY they aren't falling. They're being artificially propped up by the FED's manipulation of interest rates, keeping them on the floor at 0%, offering FHA loans that let people take out mortgages with a 3% down payment.. THAT'S why housing prices are still staying somewhat "up", because the government is doing everything they can to make these inflated prices affordable. If these ridiculous policies and incentives were removed (and they wouldn't exist in a free market), if people had to take out a mortgage at 8 or 9% interest with 10-20% down like they used to, NOBODY would be paying the kind of money we see people asking for these properties.

Agree with the first part, but basing the economy on gold is fantasy IMO, as the total amount of gold extracted is less than the value of the money circulating in the US only. We should include energy and technology as I mentioned before.

Gold would be re-evaluated and it's value adjusted to reflect the amount of gold VS the amount of US dollars in circulation. I have no idea where this valuation would be but I imagine it'd be well, WELL into the 5-figure range and maybe even beyond that.

And we've seen a lot of capitalist markets going down the flush, too. We may say this too:
The greatest failing of virtue of Capitalism is the equal sharing of the debts and losses, the greatest virtue of socialism is the equal sharing of losses AND wealth.

It all depends on the branch of capitalism/socialism we're talking about. There are examples running right now.

What truly capitalistic markets have vanished, if I might ask?

And the biggest problem with socialism outweighs the temporary benefits of it by removing incentive to improve and compete and ultimately results in running out of money to redistribute at all. The fact that some countries are seeing success with partially-socialistic government entities is merely a blip on the timeline. Econonmic fundamentals will eventually prevail, as the always do, and adjustments will have to be made to bring solvency to the system again. We're starting to see the beginnings of the unraveling of the social welfare state in Europe already, which is kinda what brought on this thread in the first place.

Same here in Spain, every politician is rising their wages (yes, it's them who rise their own salary) while doing exactly the oppositte with regular people. Banks had their record profits in 2010. But we pay their wages and debts while sacrifice ourselves.

Banks are having record profits because they are borrowing money from the FED at 0% and lending it out for profit to a populous that is being ENCOURAGED to go further into debt and keep spending money they don't have in hopes that it will "jump start economies". Of course politicians are going to increase their paychecks if they have the opportunity to. The ridiculous ting is that they have that power in the first place.

 

[Aaron Smith]

Agree with the first part, but basing the economy on gold is fantasy IMO, as the total amount of gold extracted is less than the value of the money circulating in the US only. We should include energy and technology as I mentioned before.

A couple things here...

-Although I do think that everyone would be immensely better off with gold-backed currencies, in this instance I was just talking about as a personal investment; as a way to basically "opt out" of the fiat money system with your savings.

-The fact that gold is currently priced in the market as being less than the quantity of money circulating in the US is irrelevant, and is no argument against gold backing. The government would basically just be revaluing the gold price upward by agreeing to back all dollars in existence, and they would have to choose a gold price that the gold market deems reasonable, or else it would be obvious that the new "gold backing" is not genuine. That is, gold has inherent value (that's precisely why people purchase gold), and the government can't simply step in and take that inherent value away by decreeing that gold is now worth $20 an ounce again, or something, because clearly, the market believes that there are way too many dollars around for gold to be fairly valued at $20 an ounce.

 

[Trevoire520]

Tovarish Stalin, why I didn't recognize you at first

But the worst part is, I don't entirely disagree.

I can see how you'd see it that way, lol. I just think that the difference between rich and poor is WAY too big these days. Some earn so much that they literally can't spend all the money they have, and some can't even afford food to survive. It's fucked up.

 

[kaomao]

Italy is a fantastic example of direct democracy now: they had 4 referendums and said no to Berlusconi to keep being able to govern for an undefined time and, the said no to FUCKIN NUCLEAR ENERGY!

Thanks participative Democracy. Now it's time for you italians to kick that fucker out.

Unfortunately it won't happen, it seems a lot of people over here still like him.
Fortunately most of italians realized he's just a douchebag.
I always do a huge facepalm when people praise that man.

 

[ahjteam]

 

[Genius Gone Insane]

Things need to change, wealth needs to be more evenly distributed, and those who have created this global recession fuckup need to be seriously held to account. Locked up (in REAL prison) or shot. At the moment I don't see anyone responsible for this mess being punished....

Punished for what? Most of the people who caused the recession didn't do anything illegal. They took advantage of gaps in our regulations.

 

[Cheesebone]

They took advantage of situations that never should have (or COULD have without government intervention) existed in the first place More, or tighter regulations wouldn't have helped anything.

 

[JeffTD]

They took advantage of situations that never should have (or COULD have without government intervention) existed in the first place More, or tighter regulations wouldn't have helped anything.

Regulations on how much Wall Street lobbying can affect congressional decisions would be nice .

 

[Cheesebone]

Well, that regulation is the Constitution, lol. These people are lobbying for kinds of legislation that the Constitution prevents from being written in the first place - the sad fact is that nobody in Washington is following the rules anymore.

 

[ThatGuitarGuy]

Man, knowing how terrible large companies are (see: Food Inc/the Future of Food) and learning more about the central banks and how corrupt governments are, it sure does make it hard for me as a person that would love to be a father feel comfortable bringing another life into this world...

I'll admit, I'm ignorant. I know something is up and I know everyone is screwing each other over, I just don't know the specifics of all of it. So maybe I'm not completely ignorant. Either way, forgive me if I'm off the mark.

My question for you guys is what kind of affect would having most of our US companies manufacturing/working/producing/etc in the US again? I know this is all a pipe dream, but for instance, Apple making everything in the US? Would that help out our debt and what not?

Additionally, history just points to major empires crashing after a period of time. The US is far overdue. What do you guys foresee happening in the future when things do fall down? Do you think it will? How soon?

I'm greatly disappointed that we have not learned from history. I'm even more disappointed in mankind's unbelievable lust for power and wealth. Even if our government started over and everyone in power at the start had good intentions, someone will get in there and manipulate, lie, cheat, etc., for their own gain often because of the ignorance of a well intentioned person.

We're truly living in a sad world.