By the way, I'd be interested to know why you think this downturn is any worse than the previous ones? Why are we in danger of Zimbabwe-style inflation? Why will the whole game be finished?

Because left to our greedy natural devices, none of us would wanna help out the other guy.

and now we have a US dollar bubble.

I disagree. People are evolved with the purpose of survival. If we didn't have nanny governments, we would need community and friends etc to survive. We would have to help them to help ourselves.

Everyone wonders why there is no community spirit anymore and why no one knows their neighbours in big cities. Its because of nanny governments.

All we have is our brains and our communication. We can't survive on our own.

Plutarch is a well-regarded philosopher.

Because the next bubble to burst is the US Dollar and paper money. There is no way any of this new money created out of thin air can be paid back. Remember Mugabe and his banker Gono (who signed my 100 trillion zim dollar note ) printed money out of thin air to pay off loans.



90s had the .com bubble, that burst and they inflated the housing bubble which semi-burst in 08, and now we have a US dollar bubble. When that bursts there is nothing government can do to keep it inflated, and when your money is worthless you become poor and the government ceases to function.

The banking system will freeze, no one will be able to acces their money or be paid.

The chinese have 1trn USD in reserves, they might get pissed off and start a war...who knows?

Its how all empires end.

They over extend miltarily, then debase their currency until its worthless. Romans did it, Greeks did it, Byzantines did it, Germans did it and had hyperinflation in 1920s.

Riiight.

Um, the dollar has been much less valuable really rather recently. And going further back it's been even less valuable. We have single-digit inflation, with central bankers able to raise interest rates several-fold, and rates would still be within historic averages.

I'm not really sure what the graph shows, but a large balance sheet isn't necessarily a problem if you can meet your liabilities - both the US and the UK governments can borrow at good rates. The US has paid 15% on treasury bills as recently as the 80s - we're a long way from that. Both economies are still producing, and are capable of growth.

Finally, I doubt that China has any interest in encouraging its $1trn to be worthless. It's MAD all over again.

I don’t think the Obama re-election is quite as cut and dry as it perhaps should be although that may change as and when we find out who the Republicans nominate. It’s entirely possible (if not basically guaranteed) that the Republican Party will shoot themselves in the foot come the primaries and gift a second term to Obama particularly if a candidate outside of the obvious front runners doesn’t emerge. Although having said that it seems as if Obama may have some problems getting people to turn out for him a second time around given how lacklustre his first term has been – and I think his first re-election campaign video sums up just how uninspiring his Presidency has ultimately been thus far.

I meant deserve in the sense of their merits as candidates and officeholders rather than any policy preferences...

In the 80s, the US still had a trade surplus and was a large creditor nation. Now US has a massive trade deficit and is a biggest debtor nation in the history of the world. The US today is addicted to credit.

The US's debt is 14trillion officially, if it raised rates to say 6% they would not be able to pay the interest on their debt! Its a massive ponzi scheme. They sell new debt to finance the old debt. The federal reserve is buying 70% of the debt with newly created money!

Also there is no political will from Obama etc to raise rates. If they raised rates, it would bring the whole house of cards to its knees. The banking sector relies on cheap money, everyone in the US is levereged to the max on mortgages, it would just crash the economy.

Everyone wonders why there is no community spirit anymore

Palin's merits as a candidate may not be astronomical, but they still exceed those of Obama. If nothing else she can complete a sentence without an autocue.

She can't complete a sentence with an autocue (and all politicians use them). She has to write on her hand.

Fine - you win. We're all doomed - I'm off to stock up on tinned food and bottled water.

I presume you're not being sincere with that statement. ;P

But think about this: The US gov't has been fighting over "historic" $38bn cuts this week. If Bernanke raises interest rates by just 25bp (0.25%), that will increase the interest payments on $14trn by $35bn!

The US has historically low rates, and the maturity on the debt is very short (avg 2-3y).

Just 5 years ago the avg rate on the debt was 4.5%, today its 2.5%. If the avg interest rates jumped 2pp to 4.5%, that would be an extra $280bn per year on interest payments!!

The CPI is bullshit it doesn't even include food and energy prices, I think real inflation in the USA is 4-6% and is going to increase sharply soon when all the commodity prices filter through into consumer prices.

So there is no way for the Federal reserve to fight inflation. Because if it raises rates, the country goes bankrupt. There is no way the politicians are going to cut 500bn-1trn out of the budget.

The exact same goes for the UK and its £2.2trn debt. Per capita thats even worse than USA, and no one in the world needs to hold GBP as reserves whereas people still need USD to buy commodities like oil on the world market.

Even official inflation is 5%, so if they raised rates to 5.25% they would go bankrupt. That would be an extra £111bn per year in interest payments!

The right has been trying to spin the debt after Bush, blaming everyone but themselves. No matter how they spin it, the fact remains, Clinton left the Bush and Republican controlled Congress a surplus. Now after three years of Obama and 2 years where the Democrats had control of Congress, the monetary problems are placed on them and blamed.

The truth is, Bush, his administration and the Republican control put the U.S. into a recession, possible depression, two wars and out of control spending. Most people/voters are ignorant of that fact for the simple reason, we are short-sided and remain ignorant. We only see 'today', not the past, not the future and throw the blame at what is presently happening. Politicians rely short term memories and the ignorance of the public.

Dec. 21 2005 (Bloomberg) -- President Bill Clinton left office in 2001 with a federal budget surplus of $127 billion. President George Bush ran a deficit of $319 billion in 2005. So who deserves more credit for fighting red ink?

No question, says Treasury Secretary John Snow: It's his boss, Bush. Sipping a latte at a Starbucks coffee shop with reporters in Washington two days ago, he said that ``the president's legacy will be one of having significantly reduced the deficit in his time,'' and said Clinton's budget was a ``mirage'' and ``wasn't a real surplus.''

Snow said the Clinton surplus was inflated by a stock-price bubble and that Bush will be remembered for cutting the gap from a record $412 billion in the 2004 fiscal year.

``Snow's comment would be laughable if it weren't so pathetically and obviously inaccurate,'' said Thomas Mann, a political analyst at the Brookings Institution, a policy research group in Washington. Colleague William Gale, who worked on the Council of Economic Advisers under President George H.W. Bush, said calling members of the current administration ``deficit-fighters is completely at odds with all of their policies.''

No where in my comments do I say I am on the "right". I consider myself a Libertarian.

No doubt that Bush was worse than Obama, and no doubt that all the republicans (apart from Ron Paul) are hypocrites for only now starting to critize the debt/deficit.

But that doesn't change the problem, and Obama is just making the problem worse. Now is not a time to care about petty politics.

I never stated anywhere that you were of 'the right' just stating facts, however, now that you do mention it, Libertarian is of the right. Ron Paul's son is a Tea Party member. I believe in some conservative leanings and liberal leanings, but DO NOT approve of the extremes of either. However, as long as 'the right', no matter the affilation of Republican, Libertarian, or Tea Party, condone discrimation of others, support racism, and lean towards theocracy, I will not give them my vote! I will, and have, voted for a conservative Democrat (yes, there are some) and will, for the most part, support TRUE CONSERVATIVE Democrats. Today's Republican's are NOT TRUE CONSERVATIVES! BTW I was raised in a Republican family, and have had family as Republican office holders. Former President Eisenhower banned the religious extreme known as the John Birch Society from the Republican stronghold back in the 50s, believing that they were cancerous to the party. They (John Birch Society) shunned Eisenhower, and accused him of being a Communist sympathizer. Today, they (John Birch Society) literally are the Republican party, mostly thanks to GWBush and his born-again Christian backers who are now the Republican Party.

As I understand it; you can be left-wing, right-wing or centrist-- and still be a libertarian. So if you believe that there should be an expansive welfare state, many industries should be nationalised, cannabis should be legalised and gun-laws relaxed-- that would would make you a left-wing libertarian. Indeed Norway has an expansive welfare programme (which is left-wing), combined with very liberal social policies and freedoms (libertarian).

In fact the Political Compass accounts for left-wing libertarianism:
http://www.politicalcompass.org/faq#faq17

I don't think that would ever happen. The other people who pay into the welfare would get pissed off that I constantly do stupid things and overdose and need hospitalisation which wastes their money.

They would (rightly) demand that I be excluded or that my actions were made illegal.

If the welfare system is not voluntary, it is not Libertarian.

Is Florida going to be necessary for Obama to win? I wonder how will Ryan's budget plans impact the Republican nominee among the old vote in Florida.

The real issue is whether or not any of the would be Republican nominees can actually beat Obama and right now that seems incredibly unlikely. That the Republican primary looks set to become the annual eat your young contest doesn’t help matters either.

Palin's merits as a candidate may not be astronomical, but they still exceed those of Obama. If nothing else she can complete a sentence without an autocue.

I am disillusioned with Obama so the only potential candidate I respect is Ron Paul because he doesn't seem to be a sell out like some of the others and actually has principles although of course he hasn't actually confirmed a run yet.

I don't necessarily agree with Paul on everything but on some things I agree with him. But the fact he seems to have some principles makes me respect him.

The two aren't exclusive.

Having lived in both the second city and small villages, I have found the community spirit to be somewhat stronger in the villages. Whether that is because of the less pervasive nature of "government" or just because it is easier to know and take an interest in the doings of a couple of hundred people rather than a million is another question.

The CPI is bullshit it doesn't even include food and energy prices

The right has been trying to spin the debt after Bush, blaming everyone but themselves. No matter how they spin it, the fact remains, Clinton left the Bush and Republican controlled Congress a surplus. Now after three years of Obama and 2 years where the Democrats had control of Congress, the monetary problems are placed on them and blamed.

I disagree. You can't support a welfare state and be a Libertarian, because welfare states ALWAYS reduce personal liberties.

Op-Ed Columnist
Why Trump Soars
By DAVID BROOKS
Published: April 18, 2011

Very few people have the luxury of being freely obnoxious. Most people have to watch what they say for fear of offending their bosses and colleagues. Others resist saying anything that might make them unpopular.

But, in every society, there are a few rare souls who rise above subservience, insecurity and concern. Each morning they take their own abrasive urges out for parade. They are so impressed by their achievements, so often reminded of their own obvious rightness, that every stray thought and synaptic ripple comes bursting out of their mouth fortified by impregnable certitude. When they have achieved this status they have entered the realm of Upper Blowhardia.

These supremely accomplished blowhards offend some but also arouse intense loyalty in others. Their followers enjoy the brassiness of it all. They live vicariously through their hero’s assertiveness. They delight in hearing those obnoxious things that others are only permitted to think.

Thus, there has always been a fan base for the abrasive rich man. There has always been a market for books by people like George Steinbrenner, Ross Perot, Bill O’Reilly, Rush Limbaugh, Bobby Knight, Howard Stern and George Soros. There has always been a large clump of voters who believe that America could reverse its decline if only a straight-talking, obnoxious blowhard would take control.

And today, apparently, Donald Trump is that man. Trump, currently most famous for telling people that they are fired, has surged toward the top of the presidential primary polls. In one poll, he was in (remote) striking distance in a head-to-head against President Obama. Many people regard Trump as a joke and his popularity a disgrace. But he is actually riding a deep public fantasy: The hunger for the ultimate blowhard who can lead us through dark times.

He is riding something else: The strongest and most subversive ideology in America today. Donald Trump is the living, walking personification of the Gospel of Success.

It is obligatory these days in a polite society to have a complicated attitude toward success. If you attend a prestigious college or professional school, you are supposed to struggle tirelessly for success while denying that you have much interest in it. If you do achieve it, you are expected to shroud your wealth in locally grown produce, understated luxury cars and nubby fabrics.

Trump, on the other hand, is utterly oblivious to such conventions. When it comes to success, as in so many other things, he is the perpetual boy. He is the enthusiastic adventurer thrilled to have acquired a gleaming new bike, and doubly thrilled to be showing it off.

He labors under the belief — unacceptable in polite society — that two is better than one and that four is better than two. If he can afford a car, a flashy one is better than a boring one. In private jets, lavish is better than dull. In skyscrapers, brass is better than brick, and gold is better than brass.

This boyish enthusiasm for glory has propelled him to enormous accomplishment. He has literally changed the landscape of New York City, Chicago, Las Vegas and many places in between. He has survived a ruinous crash and come back stronger than ever.

Moreover, he shares this unambivalent attitude toward success with millions around the country. Though he cannot possibly need the money, he spends his days proselytizing the Gospel of Success through Trump University, his motivational speeches, his TV shows and relentlessly flowing books.

A child of wealth, he is more at home with the immigrants and the lower-middle-class strivers, who share his straightforward belief in the Gospel of Success, than he is among members of the haute bourgeoisie, who are above it. Like many swashbuckler capitalists, he is essentially anti-elitist.

Now, I don’t mean to say that Donald Trump is going to be president or get close. There is, for example, his hyper-hyperbolism and opportunism standing in the way.

In 2009, Trump published a book with a very Trumpian title: “Think Like a Champion.” In that book, he praised Obama’s “amazing” and “phenomenal” accomplishments. “Barack Obama proved that determination combined with opportunity and intelligence can make things happen — and in an exceptional way,” Trump gushed.

Now he spouts birther nonsense and calls Obama the worst president in American history. Now he leads rallies that make Michele Bachmann events look like the League of Women Voters. Even angry American voters want some level of seriousness, prudence and self-control.

But I do insist that Trump is no joke. He emerges from deep currents in our culture, and he is tapping into powerful sections of the national fantasy life. I would never vote for him, but I would never want to live in a country without people like him.

The New York Times

Everybody has principles. Some principles are better than others. I'm not too keen on Paul's "principles".

A semi-crackpot outsider like Donald Trump could storm the gates and achieve astonishing political stature. ... But in these circumstances, rule out nothing.

Op-Ed Columnist
The Big Disconnect
By DAVID BROOKS
Published: April 25, 2011

On one level, American politics looks amazingly stable. President Obama’s approval rating is about 47 percent, and it hasn’t changed much in well over a year. Health care reform is mildly unpopular, and the public’s view hasn’t shifted much since before it was passed.

According to Pew Research Center polls, the public is evenly divided over which party can do a better job of handling foreign policy, the job situation, Social Security reform, health care reform and many other issues. It looks as if we’re back to the 50-50 stasis that has been the norm for the past few decades.

Moreover, the two parties are about to run utterly familiar political campaigns. The Democrats are going to promise to raise taxes on the rich to preserve the welfare state, just as they have since 1980. The Republicans are going to vow to cut taxes and introduce market mechanisms to reform the welfare state, just as they have since 1980.

The country is about to be offered the same two products: one from Soviet Production Facility A (the Republicans), and the other from Soviet Production Facility B (the Democrats). It will react just as it always has.

From this you could easily get the impression that American politics are trundling along as usual. But this stability is misleading. The current arrangements are stagnant but also fragile. American politics is like a boxing match atop a platform. Once you’re on the platform, everything looks normal. But when you step back, you see that the beams and pillars supporting the platform are cracking and rotting.

This cracking and rotting is originally caused by a series of structural problems that transcend any economic cycle: There are structural problems in the economy as growth slows and middle-class incomes stagnate. There are structural problems in the welfare state as baby boomers spend lavishly on themselves and impose horrendous costs on future generations. There are structural problems in energy markets as the rise of China and chronic instability in the Middle East leads to volatile gas prices. There are structural problems with immigration policy and tax policy and on and on.

As these problems have gone unaddressed, Americans have lost faith in the credibility of their political system, which is the one resource the entire regime is predicated upon. This loss of faith has contributed to a complex but dark national mood. The country is anxious, pessimistic, ashamed, helpless and defensive.

The share of Americans who say they trust government to do the right thing most of the time is scuttling along at historic lows. Approval of Congress and most other institutions has slid. Seventy percent of Americans think the country is on the wrong track, according to The New York Times/CBS News poll. Nearly two-thirds believe the nation is in decline, according to a variety of surveys.

Over the past months, we’ve seen a fascinating phenomenon. The public mood has detached from the economic cycle. In normal times, economic recoveries produce psychological recoveries. At least at the moment, that seems not to be happening.

The U.S. has experienced nine straight months of slow economic growth. The unemployment rate has fallen, and, in March, the U.S. economy added a robust 216,000 jobs. Yet the public mood is darkening, not brightening. The New York Times/CBS News poll showed a 13 percentage point increase in the number of Americans who believe things are getting worse. The Gallup Economic Confidence Index is now as low as it has been since the height of the recession.

Public opinion is not behaving the way it did after other recent recessions.

If you dive deeper into the polling, you see the country is not mobilized by this sense of crisis but immobilized by it. Raising taxes on the rich is popular, but nearly every other measure that might be taken to address the fiscal crisis is deeply unpopular. Sixty-three percent of Americans oppose raising the debt ceiling; similar majorities oppose measures to make that sort of thing unnecessary.

There is a negativity bias in the country, especially among political independents and people earning between $30,000 and $75,000 (who have become extremely gloomy). It is hard to rally majorities behind immigration, energy or tax reform.

At some point something is going to happen to topple the political platform — maybe a debt crisis, maybe when China passes the United States as the world’s largest economy, perhaps as early as 2016. At that point, we could see changes that are unimaginable today.

New political forces will emerge from the outside or the inside. A semi-crackpot outsider like Donald Trump could storm the gates and achieve astonishing political stature. Alternatively, insiders like the Simpson-Bowles commission or the Senate’s bipartisan “Gang of Six” could assert authority and recreate a strong centrist political establishment, such as the nation enjoyed in the 1950s.

Neither seems likely now. But in these circumstances, rule out nothing.

The New York Times

Hopefully the is he or isn't he an American born citizen questions over Barack Obama's birth can finally be put out into the very long grass now, The White House has at last released a copy of his longform Birth Certificate which idenfies Honolulu as the place of Birth ....

see here ……..

WWW.WHITEHOUSE.GOV/SITES
27-Apr-2011 @ 15:25

So having been born in Kansas, what was his mother doing out on Oahu? Was she studying too?