Your concluding thoughts are correct.  I fear we are looking at another 4 years of Republican executive rule before we learn our lesson and get back on track. 

 I hope by then its not too late.

 Anyway, thank you for your work and insight.

by Bruce Allen Morris (37 articles, 0 quicklinks, 10 diaries, 55 comments) on Thursday, Nov 8, 2007 at 10:32:49 AM

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Your concluding thoughts are correct.  I fear we are looking at another 4 years of Republican executive rule before we learn our lesson and get back on track. 

 I hope by then its not too late.

 Anyway, thank you for your work and insight.

by Bruce Allen Morris (37 articles, 0 quicklinks, 10 diaries, 55 comments) on Thursday, Nov 8, 2007 at 10:33:02 AM

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It's unacceptable to merely point out the alarming news without looking for some solutions, which I will provide in my next column.  It isn't just "hope" - there is no alternative.  the American people will have to pick up the pieces of the mess we've been left and build a new economy.

by Michael Fox (62 articles, 0 quicklinks, 4 diaries, 47 comments) on Thursday, Nov 8, 2007 at 1:19:51 PM

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I suggest you all stock up on storable foods before the deisel hike is reflected at the supermarket. 2o pound bags of Casserole brand pinto beans may be bought at wal-mart and Doguets brand fancy rice also 20 lbs. both are Texas products and of the highest quality. I then put them in clean 5 gl. buckets with gasket seal lids (get em from the doughnut shop) Gallons of cooking oil,salt,sugar,spaghetti and noodles will have good shelf life. Canned goods are ok but check the expiration dates. When the caca hits the Kelvinator I will trade a pound of beans for a Kruggerand.

by john riggs (0 articles, 0 quicklinks, 0 diaries, 463 comments [24 recommended, 0 rejected]) on Thursday, Nov 8, 2007 at 5:06:55 PM

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is that it can't really be 'managed' in the sense that this administration has tried to manage it. It comes undone.

I have commented elsewhere that the Fed has made the same mistake as the Forestry Service in putting out small fires. The Fed intervened in the S&L scandal, intervened during the Dotcom burst, is intervening again in the current sub-prime disaster.

Like the national forests, these continual 'small interventions' keep the underbrush of greed and bad investment decisions from getting cleared away by small recessional fires. Thus we almost assure ourselves of a stock market inferno on the scale of Yellowstone (if not 1929). 

The Chinese, along with most of the alternative investors in our continual deficits, have tired of making 10 yr loans, paid back on the due date with dollars worth half the original investment. Who can blame them.

I live in Europe on a social security check that has been devalued by half in the past six years. Those who warn against depending upon ss for retirement might add the disclaimer that it's even tougher to live on 1/2 ss.

I have been declaring an imminent market crash for 20 yrs, but the likes of Alan Greenspan and Henry Paulson have been able to douse the small fires. Now even Paulson can't stop the Chinese from their self-interest.

I look forward to Michael Fox's next piece. 

by Jim Freeman (108 articles, 53 quicklinks, 227 diaries, 386 comments) on Thursday, Nov 8, 2007 at 7:33:27 PM

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It takes two to tangle. In this case, the US is tangling not only with China but also product exporting Asian countries and certain Arab oil exporting countries. These exporters know the US consumers will buy their stuff until they are bankrupt. It a replay of the opium being imported into China during  the 19th century, which of course uttlerly bankrupted both China and its people. That's why these exporters have steadfastly refused to float their currencies up to reflect trade gap. They know full well US currency must therefore drop in response, and they will be hurt too. But there is difference. It is the American people who are smoking opium, not the exporters.

After the crash, the US economy will be deeply downsized, inflation rampant, and the USD will no longer be the sole reserved currency. Kinda like Argentina. But the exporters will be able to salvage a large portion of their foreign reserves by moving them to other leading currencies (which is exactly what's happening now). Then the fun starts - they will use the diversified reserve to buy up a good piece of a very cheap US - real estate, promising technology companies, you name it.

Hay haven't we seen this before? You bet. After the USD was devalued 35% in the mid-1980's, along with a deep recession, Japan, who held a huge USD reserve, came in and bought up all the crashed US consumer electronics companies. Go to Best Buy now and look around - every single consumer electronics high tech is pure Japanese. An entire industry disappeared in US. Today, American kids look to Japan for technology and product guidance, confident that when they grow up there will be absolutely no career in high tech electronics.

So what will disappear this time around? Ah yes - Japan will take over the entire US auto industry. And China - no China won't come in and buy up things in US soil - that will cause great political problems. China will simply buy up all the American companies operating in China!!

by TomK (0 articles, 0 quicklinks, 0 diaries, 330 comments [22 recommended, 0 rejected]) on Friday, Nov 9, 2007 at 12:25:33 AM

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Well, it is true that the usa has been in an economic spiral for years. It has simply been kept from a big big fall for sometime by Japan, China, Oil Kingdom governments and some big banks in the USA and around the world.

The only bright side is that as the dollar falls more people will visit the states and buy up cheap businesses and stocks at some date in the future--to keep things even again.

In addition, the ability of America to sell products abroad will increase.

However, most Americans--unless they give up their homeland and move abroad to work--will not be able to afford overseas vacations for a long time....as the worth of the dollar begins to reflect the bad priorities of military and other poor spending decisions creating bad debt and bonds to be paid off. 

by ALONE (196 articles, 1 quicklinks, 7 diaries, 557 comments [5 recommended, 0 rejected]) on Friday, Nov 9, 2007 at 11:18:26 AM

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Michael Fox, thank you for this brief, interesting, and informative article. I agree that we're headed for a Great Depression even worse that the one my grandparents lived through. The banks, corporations and government have been playing lots of tricks to stave it off, but we can't avoid it forever.

by Justin Soutar (6 articles, 0 quicklinks, 1 diaries, 25 comments) on Friday, Nov 9, 2007 at 12:24:52 PM

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