**Economic APOCALYPSE**

[Melidan]

In an essay first published in 1969 and recently re-published at http://mises.org/story/3127, Murray Rothbard summarises the causes and cures of economic depressions by drawing on the Business Cycle theory developed by the great Austrian economist Ludwig von Mises. Here's an excerpt from this essay:

"Mises, then, pinpoints the blame for the cycle on inflationary bank credit expansion propelled by the intervention of government and its central bank. What does Mises say should be done, say by government, once the depression arrives? What is the governmental role in the cure of depression? In the first place, government must cease inflating as soon as possible. It is true that this will, inevitably, bring the inflationary boom abruptly to an end, and commence the inevitable recession or depression. But the longer the government waits for this, the worse the necessary readjustments will have to be. The sooner the depression-readjustment is gotten over with, the better. This means, also, that the government must never try to prop up unsound business situations; it must never bail out or lend money to business firms in trouble. Doing this will simply prolong the agony and convert a sharp and quick depression phase into a lingering and chronic disease. The government must never try to prop up wage rates or prices of producers' goods; doing so will prolong and delay indefinitely the completion of the depression-adjustment process; it will cause indefinite and prolonged depression and mass unemployment in the vital capital goods industries. The government must not try to inflate again, in order to get out of the depression. For even if this reinflation succeeds, it will only sow greater trouble later on. The government must do nothing to encourage consumption, and it must not increase its own expenditures, for this will further increase the social consumption/investment ratio. In fact, cutting the government budget will improve the ratio. What the economy needs is not more consumption spending but more saving, in order to validate some of the excessive investments of the boom.

Bold added. Good times ahead!

[Villalba]

Ahh hummm is a long read, thanks for bolding it out Mel.

[Melidan]

BIG redemption day today for hedge funds, prolly gonna be a fun day on Wall St. :signs006:

[Melidan]

Originally Posted by Melidan

BIG redemption day today for hedge funds, prolly gonna be a fun day on Wall St. :signs006:

Ohh, i'm good

http://www.bloomberg.com/apps/news?p...7N4&refer=home

[James Davis]

Huh, the bloodbath missed Turnaround Tuesday for some reason.

[Melidan]

The economy stands on the precipice... Dow, Nasdaq and S&P futures are limit down before the open.. Bad sign. It's going to be a very rough day on Wall St.

Probable winners:
FXF
FXY

Probable (big) losers:
GE
SNE
POT

[Melidan]

Bend over here it comes again.

http://www.bloomberg.com/apps/news?p....tY&refer=home

Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Remember when I said that 1 trillion would be the floor for the bailout, not 700 billion? Well now its up to 2 trillion. The Federal Reserve is an independent entity, not accountable to the President, Congress.. And certainly not to the American taxpayer.

[darkdemon1]

Right now, the worst thing a person really can do is pull investment out of the stock market.
It makes other people think "shoot I better pull out too" and it just creates a domino effect that just kills the market.
The blame should not be put on this administration as much as I want to, but on Greenspan's
easy going policy of just lowering the Federal Fund Rate so that everyone can just get a easy loan.
It created a huge bubble that just blew up and shit hit the ceiling.
As much as I hate to say it, but Americans that are just saving aren't doing much to help the economy.
People stop spending, then people start getting laid off because consumers aren't
consuming anymore and the laid off workers can't spend creating a viscous cycle that we now are witnessing.
This situation that America is so much like in the 1930's when the Great Depression hit,
a Republican leaves office and gives the next president a shit sandwich to pick apart.
I'm not blaming Bush as I have stated but it's Greenspan's fault.
The Federal Chairman has more power over the economy than the President actually does.
But w/e I'm tired and some things that I said are probably wrong to some people but I really don't care at the moment. Ramble Ramble Ramble

[Melidan]

Originally Posted by darkdemon1

Right now, the worst thing a person really can do is pull investment out of the stock market.
It makes other people think "shoot I better pull out too" and it just creates a domino effect that just kills the market.
The blame should not be put on this administration as much as I want to, but on Greenspan's
easy going policy of just lowering the Federal Fund Rate so that everyone can just get a easy loan.
It created a huge bubble that just blew up and shit hit the ceiling.
As much as I hate to say it, but Americans that are just saving aren't doing much to help the economy.
People stop spending, then people start getting laid off because consumers aren't
consuming anymore and the laid off workers can't spend creating a viscous cycle that we now are witnessing.
This situation that America is so much like in the 1930's when the Great Depression hit,
a Republican leaves office and gives the next president a shit sandwich to pick apart.
I'm not blaming Bush as I have stated but it's Greenspan's fault.
The Federal Chairman has more power over the economy than the President actually does.
But w/e I'm tired and some things that I said are probably wrong to some people but I really don't care at the moment. Ramble Ramble Ramble

Lol, dont worry, I "ramble ramble ramble" too.

Tonight my wife finally took her money out of the market in her 401k and txfd it to 75% cash, 25% bonds (which is was I did two months ago). She has lost 45% since the beginning of the year. "You only lose when you sell" is a good rule of thumb, but I disagree with you that it is bad to pull out of the market now.

With everything I have learned and read, I think we will see a slight uptick in the market towards the beginning of the year, but inflation and hyper-inflation will rear its head mid to late 2009. I think Dow 6,000 is possible. Couple that adjustable rate mortgage resets beginning in 2009, in the middle of a recession (think sub-prime crisis x10).. Ugh, its gonna be ugly. Hyper-inflation, followed by deflation (depression). This is all worst case scenario of course.

See: [media]http://www.youtube.com/watch?v=QqBosxJ0WH0[/media]

It will also be interesting to see the COMEX Gold Futures for Decemeber. Supposedly, buyers on futures contracts will try to break the COMEX by demanding delivery of all their gold (something which COMEX will not be able to do since they actually dont have enough gold to cover all the contracts they sold). The COMEX will collapse and gold will soar.

Sprott Asset Management's chief investment strategist, John Embry, went on Business News Network in Canada this morning and, interviewed by Amanda Lang, discussed, among other things, the suppression of the gold price on the New York Commodities Exchange. Embry speculated that long contract holders may call for delivery of enough December contracts as to prompt a claim of force majeure when the exchange cannot delivery enough real metal. The interview with Embry begins at the 11-minute mark and continues for about 6 1/2 minutes at the BNN Internet site here:http://watch.bnn.ca/tuesday/#clip104603

[Melidan]

US May Lose Its 'AAA' Rating

The United States may be on course to lose its 'AAA' rating due to the large amount of debt it has accumulated, according to Martin Hennecke, senior manager of private clients at Tyche.

"The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system" and the bankruptcy of the government is not out of the realm of possibility, Hennecke said.

LOL!!!!!!!!!!

* Melidan does happy dance around his pile of Gold, Silver and Palladium.

Gold is money, always has been, always will be. The dollar is paper and nothing more.