Oil's energy contribution has declined by about 12% since 1999. The world's economies have also declined by about 12%. (Using conventional metrics, which are time delayed determinations, this will only be seen in hind sight). The massive destruction of asset values now occurring testifies to it happening.
Peak is well behind us, world economies have peaked and will continue to decline.
Joined: Sep 08, 2005 Posts: 792 Location: Atlanta, GA
Posted: Fri Sep 19, 2008 2:47 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
frankthetank wrote:
Milwaukee public school system may be dead!
This can't be good...
Quote:
The completely unexpected 6-to-3 vote followed a gloomy assessment of the short- and long-term financial situation of MPS from Superintendent William Andrekopoulos and several board members.
The resolution called for the administration to examine state and federal guidelines for dissolving the school district and who would be responsible for educating children in Milwaukee if that happened.
Voting for the resolution were board members Danny Goldberg, Jennifer Morales, Jeff Spence, Bruce Thompson, Terry Falk and Tim Petersons. Voting against were Peter Blewett, Michael Bonds and Charlene Hardin.
While it is extremely far from this step to MPS going out of business — and the action might turn out to be largely a symbolic protest of the MPS financial situation — it was by far the board’s most dramatic reaction to the pressures it is under. Those pressures include wide demands for better student achievement, a tightening money vise and the strong prospect of a double-digit increase in the property tax levy to be imposed this fall.
“We have ample evidence the current model is going to move us to ruination sooner or later,” Goldberg said.
Falk said he did not want the move to be “a Trojan horse” for those who want Mayor Tom Barrett to take over running the school system — an idea being discussed in some power circles in the city.
But, he said, “Structurally, financially, we’re in an untenable situation.”
“Anybody else running it — good luck,” Falk said.
Just another sign of trouble. I know our local school district is putting a huge spending bill on the ballot this year.
We're being squeezed...like big pimples... Soon it will pop
You should see what's happened in Clayton County, GA, the southern edge of the Atlanta metro area. While the school board hasn't shut down, it's lost its accreditation for failing to meet basic educational requirements, the first school district to do so since *1969*. The Governor has already yanked 4 of the school board members and ordered a new election, but the damage has been done. At this moment, there is a massive exodus out of Clayton County as 1000's of desperate parents seek alternative schools for their children. The housing market there, already in a deep funk, is being absolutely crushed into oblivion as people just walk away from homes that have no reasonable hope of selling - at any price. Up this way, they can't build apartments fast enough, as the demand for rental housing is soaring through the roof.
Amazing times, indeed... _________________ Nowhere to run, nowhere to hide...
...and the meek shall inherit the Earth!
Posted: Fri Sep 19, 2008 3:02 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
From what I undestood, the FED is printing money to prevent banks from collapsing because they (the banks) can't pay back their debt because their main revenue, the real estate, is crashing because of inflation (people can't pay, are fired, then they sell their houses, but too many sell, so price of each house is getting down (exponential feedback), which is money lost for banks) because of oil getting too expensive.
I guess that now that the FED will print trillons of dollars, each dollar has less and less value and oil prices have to get back to their record if not more.
The economy is pretty complicated, money getting up and down, price of everything up and down and up again.
Finally, I like when it's simple :
We are more and more on this planet but there is less and less oil, gas, fresh water, fishes, phosphorus...
You can watch any facet of the problem, money is finally just paper. I'm not sure many people know that. I learnt that with peak oil in 2005.
WASHINGTON — 19 September 2008 — It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.
Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.
“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.
As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”
Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”
When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”
Joined: Mar 18, 2005 Posts: 2691 Location: Minnesota
Posted: Sat Sep 20, 2008 7:59 am Post subject: Re: Housing and Economic Collapse - In Progress #3
WOW what a week!
Lehman...AIG...Etc...Etc...
After injecting scores of billions all week, Thursday morning, Hank & Ben inject 180 billion into the global banking system & it all evaporated by the end of the day. On thursday night Hank & Ben have a little chat with congressional leaders for a "plan"...this plan hasn't even been fully formulated yet & the stock market does a moon shot.
Anybody who thinks we still have years is deluding themselves. Imagine a world where credit cards don't work & checks wont clear. In that case you had better spend any cash on hand in a hurry because without credit, the stores/gas stations will be empty in a hurry.
Even yesterdays FDIC shutdown of Ameribank in West Virginia seems trivial.
This is bad bad bad! _________________ Quis custodiet ipsos custodes.
Joined: Mar 18, 2005 Posts: 2691 Location: Minnesota
Posted: Sat Sep 20, 2008 9:00 am Post subject: Re: Housing and Economic Collapse - In Progress #3
If I can get my brain to recall all the happenings of this week, I believe Hank & Ben injected atleast $300 billion into the system this week alone...So why not just round that off to an even trillion?
Quote:
The plan would give Treasury Secretary Henry Paulson sweeping authority to buy up to 700 billion dollars of tainted mortgage-related assets to stem a grave financial crisis, US media reported.
Now the real question is...How many weeks will this plan buy us? _________________ Quis custodiet ipsos custodes.
Posted: Sat Sep 20, 2008 9:39 am Post subject: Re: Housing and Economic Collapse - In Progress #3
Gerben wrote:
RonMN wrote:
Now the real question is...How many weeks will this plan buy us?
Hmm. Perhaps we should make a poll: How many days/weeks/months till the next crisis moment (failure, bailout, ...)?
I give it a week.
If sys1 is correct, and at this point we're in an exponential positve feedback loop, it won't even be a week. In that case the time really is 23:59.59!
Joined: Mar 12, 2007 Posts: 1009 Location: As close as I can get to the beginning of the pipe.
Posted: Sat Sep 20, 2008 9:39 am Post subject: Re: Housing and Economic Collapse - In Progress #3
If history repeats, Gerben, then two weeks, maybe? (Courtesy of someone from TMF.)
Quote:
"Headline from NY Times, Feb 19, 1932 (a Friday):
"NEW EXCHANGE RULE PUTS DRASTIC CURB UPON SHORT SELLING; After April 1 Brokers Must Ob- tain Written Consent From Clients to Lend Stock. END OF BIG BEARS IS SEEN"
Two weeks later, the Dow (relatively unchanged since the ban) began a 4 month slide of over 50%, down to its ultimate low of the Great Depression."
NYT-Abstract Archives 1932 _________________ "When fascism comes to America it will be wrapped in a flag and carrying a cross." --Sinclair Lewis
Joined: May 27, 2007 Posts: 1776 Location: The Post Peak Oil Historian
Posted: Sat Sep 20, 2008 10:27 am Post subject: Re: Housing and Economic Collapse - In Progress #3
We have until the next Treasury auction. It will fail (or the Fed will buy the rest to make it appear it hasn't failed) and it will become obvious the US will no longer be able to finance it's debt.
US default on it's debt.
That's when they stop even trying to keep up the pretense of financial backing for the money creation.
A Weimar type hyperinflation will ensue as we just electronically delete the debt (equivalent to printing the amount of the debt and injecting it into the system.)
The dollar becomes worthless. The nation is bankrupt and penniless. All imports cease unless bartered for exports.
If they are smart, they will not prolong this and just do it all at once so we do not have a prolonged hyperinflation.
Maybe just skip to the end and start with the issuance of a new currency, declaring US dollars worthless as Confederate currency.
Time to hit the reset button. _________________ In a time of universal deceit, telling the truth is a revolutionary act. - George Orwell
It riles them to believe that you perceive the webs they weave. - Moody Blues
Last edited by Cid_Yama on Sat Sep 20, 2008 10:31 am; edited 2 times in total
Posted: Sat Sep 20, 2008 10:27 am Post subject: Re: Housing and Economic Collapse - In Progress #3
RonMN wrote:
Anybody who thinks we still have years is deluding themselves. Imagine a world where credit cards don't work & checks wont clear. In that case you had better spend any cash on hand in a hurry because without credit, the stores/gas stations will be empty in a hurry.
Until this week, even though I'm in the economic depression camp, I never thought of things quite this way. We're not just facing a stock market crash, or a bank run, or an economic depression, but something much worse...a complete seizure of our financial system.
Yes, other parts of the world have in the past (including the recent past) experienced such things, but we are so woefully unprepared for such a crisis in North America. I think of my relatives in the former Yugoslavia in the early 90's having to wait three months for a paycheque...but then, they've always had a well-established black market, and 30% of the population works in agriculture (mostly small, family-run farms), so pretty much everyone in the city has relatives in the countryside and thus an emergency lifeline for food.
I suspect that the only way to restart the system once it seizes is for the U.S. to default on its debt, but I have a hard time forecasting the full spectrum of consequences of such an act.
Joined: Mar 12, 2007 Posts: 1009 Location: As close as I can get to the beginning of the pipe.
Posted: Sat Sep 20, 2008 10:53 am Post subject: Re: Housing and Economic Collapse - In Progress #3
Cid_Yama wrote:
If they are smart, they will not prolong this and just do it all at once so we do not have a prolonged hyperinflation.
Maybe just skip to the end and start with the issuance of a new currency, declaring US dollars worthless as Confederate currency.
Time to hit the reset button.
That's a great post, Cid. And yes, that is what they should do, proactively. But human nature and political timing dictate that they won't.
So there is good news and bad news. The bad news is that we are going to ride this sucker to the bottom via hyperinflation. The good news is that the ride will wring out all the entire financial sector, which is full of monolithic criminal entities who have their fingers on all of the levers. _________________ "When fascism comes to America it will be wrapped in a flag and carrying a cross." --Sinclair Lewis
Joined: Dec 06, 2005 Posts: 888 Location: Stopped at the border.
Posted: Sat Sep 20, 2008 12:01 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
Cid_Yama wrote:
We have until the next Treasury auction. It will fail (or the Fed will buy the rest to make it appear it hasn't failed) and it will become obvious the US will no longer be able to finance it's debt.
US default on it's debt.
That's when they stop even trying to keep up the pretense of financial backing for the money creation.
A Weimar type hyperinflation will ensue as we just electronically delete the debt (equivalent to printing the amount of the debt and injecting it into the system.)
The dollar becomes worthless. The nation is bankrupt and penniless. All imports cease unless bartered for exports.
If they are smart, they will not prolong this and just do it all at once so we do not have a prolonged hyperinflation.
Maybe just skip to the end and start with the issuance of a new currency, declaring US dollars worthless as Confederate currency.
Time to hit the reset button.
Don't forget there is one other place where funding for the deficit can come from, taxes. Once the people get a load of how bloated Bush's mess really is, and once they are led to believe that all conscientious designs should be lumped in with that too, seeing as how they now have to actually pay for it they will balk.
Yes, this could be the fulfillment of Grover Nordquist's wet dream about shrinking the Federal Government to a size where it could be drowned in the bathtub. _________________ "Hope encourages men to take risks; men in a strong position may follow her without ruin, if not without loss. But when they stake all that they have to the last coin (for she is a spendthrift), she reveals her real self in the hour of failure."
Posted: Sat Sep 20, 2008 5:36 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
Iaato said:
Quote:
So there is good news and bad news. The bad news is that we are going to ride this sucker to the bottom via hyperinflation. The good news is that the ride will wring out all the entire financial sector, which is full of monolithic criminal entities who have their fingers on all of the levers.
There is good news and bad news. The bad news is that the federal government has irrevocably bankrupted the nation. The good news is that they may not be around that much longer!
Quote:
Peter Schiff: "The U.S. dollar will be shattered beyond repair. The government simply has no means to make good on the trillions of new liabilities. Interestingly, while both Paulson and President Bush acknowledge that the plan will put "significant amounts of taxpayer dollars on the line," they did not mention any tax increases. Given the politics, no such move is forthcoming. The printing press is their only solution."
Charles Dickens:“Credit is a system whereby a person who can't pay gets another person who can't pay to guarantee that he can pay”
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