On 10/06/2013 12:35 PM, anartax...@yahoo.com wrote:
I do not think Barry is talking about the potential problem not being
serious; rather the players in this battle on each side have
delusional versions of reality running in their skulls, which keeps
the house of cards of the international financial in a state of
dynamic turmoil. Since its stability is based on /perception/ of how
secure it is, we really cannot predict when the thing will collapse,
or even if it will.
How 'bout Greece, Spain and Brazil?
My thoughts on this are politicians want to be reelected, they want to
provide for their constituents well being as well as for themselves,
and there is not really enough money, based on currencies' equivalent
value in economic production of the countries involved to do this.
Also these politicians disagree as to what benefits accrue to whom. To
provide services and provide for emergencies and security, countries
generate debt. As Alexander Hamilton pointed out, proper management of
debt can keep a country wealthy or have the appearance of wealth,
which is how the U.S. managed after the War of Independence. The
question here is, has the debt crossed some line where this system of
perception of wealth and stability comes unglued?
After the Civil War. The wealthy wanted their pet golden goose the
Transcontinental Railroad to get built. Also look up Santa Clara vs
Southern Pacific Railroad. That's really when corporations got power
they shouldn't have.
Not just for the United States but for all countries engaged in
borrowing or simply printing paper money to meet the demands that have
been put in place. As most currencies now are not based on some
physical value like gold, their value is far more in the eye of the
beholder than ever before. As other countries also have floating
currencies, no one really wants to rock the boat, but it appears to be
very fragile and we have no idea what might bring it down.
The U.S. has some $3 trillion income from taxes, and some $18 trillion
in debt. Like if you make $50,000 a year but have $300,000 in debt,
although at interest rates much lower than charge cards, countries
don't have to pay out so much as an individual as a percent of debt.
The U.S. has some $70 trillion in future obligations that are not
funded. The math is bleak. According to generally accepted accounting
principles, the U.S. is broke. But in perception it seems much
stronger because of free floating currency, a country has a certain
leeway in how much it can fudge the ledgers and still, in relation to
its neighbours, be relatively stable. If all other countries were on,
say, the gold standard, the U.S. would be sunk, but because they are
not, they have to play along, fingers crossed.
Obama got them to play along at the last G (whatever the number was)
which even appalled Paul Krugman because it puts the US in pertpertual
depression.
Politicians seem to want to avoid talking about the actual problem in
terms that correspond to reality in the sense that ideas about the
world, while at best are crude approximations of human experience, can
have practical utility in dealing with world as do mature scientific
theories. Economics has not been horribly scientific, and political
ideologies are nearly insane when it comes to economics.
Many have predicted hyperinflation, which has not come, though the
U.S. has been increasingly fudging its measures of inflation for the
last 34 years, which reduces payouts for Social Security etc. The
inflation rate is currently listed as about 2% per year, though the
way the U.S. government calculated inflation prior to 1980 shows an
inflation rate of about 9% per year which corresponds to what most
people experience these days.
To avoid raising prices they just give you less for the same price. That
2% inflation rate is bogus.
Because the world in our heads governed by our concepts determines our
reality as a kind of overlay on raw sensory perception, the practical
correspondence of those concepts to reality will determine how well we
fare here. We do not have to worry. Whatever happens, reality
/*always*/ wins. The result might not feel so good though.
