10% is Officially Here, The Darkness Has Come

Discussion in 'Opinions, Beliefs, & Points of View' started by Righteous, Nov 10, 2009.

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  1. Righteous

    Righteous Well-Known Member

    http://www.dailyfinance.com/2009/11.../#?icid=main|netscape|dl1|link7|http://www.da ilyfinance.com%2F2009%2F11%2F06%2Funemployment-rate-jumps-to-10-2-percent%2F%23

    The darkness has started. Despite the $800 billion bailout, the American unemployment rate has risen to over 10%. Even more disturbing is that the government still will not come up with a realistic plan to save the population. Due to the fact that a lot of companies are not hiring, fair welfare is the only solution. If no one is hiring, then how can a person make money. Actually, fair welfare is what this country should of had since day one. The fact of the matter is that everyone will not be able to find a job. I feel that God is letting this recession happen so people can realize the error in there ways in handling economics. If people keep living by the sick mentality of "get a job or if u can't find one, u have to suffer" then society will continue to fall. If people can come together as a true community and look out for one another, then God will show people more favor and help them out.
  2. Chargette

    Chargette Well-Known Member

    History shows that the economy goes up and down. The old saying, "The rich get richer, and the poor get poorer," is so true.

    The kicker is it was one thing that broke the camels back. Gas prices went sky high and there went everyone's spending money. That sent the whole economy in a downward spiral.

    True the housing market insanity was the set up for this mess.

    I think this is truly mankind's mess. The Bible says whatever a man is sowing, this also shall he reap. While we are experiencing Bible prophecy, I don't think we are experiencing a specific punishment from God.

    What gets me is that the rich took us for everything. Then when the economy crashed the rich pick up bargains to get more rich on when the economy gets better. It's a vicious cycle.
  3. Mikeintx

    Mikeintx Well-Known Member

    Inflation here we come.
  4. Acy

    Acy Mama Bear - TLC, Common Sense Staff Member Safety & Support

    We're not there yet? Say it isn't so! :eek:hmy: :sad:
  5. Tobes

    Tobes Well-Known Member

    I don't think that's prophecy, I think it's common sense. It's like when you say "what you put out, you will get back to you." It's karma, and the world reeks of it. America has dug itself into a hole, and the whole country has to work hard to get out of it. I don't have the answer to the unemployment problem, because my country has one too, but I think with time the problem will alleviate, as there is constantly new jobs being created. Sure, not enough to fill 10% of the population, but there has always been unemployed people and there always will be.
  6. Ordep

    Ordep Well-Known Member

    What a... since when do prophets talk about economics?

    OK... first of all, don't be paranoid. The darkness is not coming, we're going through an economic recession like so many others before in the history of capitalism. The basic principle of capitalism is that after a period of expansion (where the rich get richer as Charge says), there must be a period of recession when supply exceedes demand and thus prices fall, companies bankrupt and there you go, recession. Eventually demand and supply return to balance and another expansion. This goes on and on in economic cycles that, read this, cannot be avoied. The only thing a government can do is try to decrease the effects of such cycles as much as possible, but when the crisis is global and the triggering factors hard to fight, any government can only do so much. You guys in the USA complain about a 10% increase in unemployment? Over here (Portugal) we're way beyond that as our textiles industry, who employed many people in the past, is being obliterated by asian countries, and Iceland is pretty much bankrupt. I'd say you're not that bad.

    You want a plan to "save the population" or, by other words, give everyone a job? Well I got one right here, anyone who studied basic economics knows this: remove the minimun wage. It's as simple as that. The reason for unemployment to exist is the exact same reason that explains why a man can't sell all the apples in his fruit stand: the price is too high. If the man lowers the price, more apples will be sold, and if he lowers even more, even more apples will be sold, until every apple gets sold. People seeking employment are just like apples to the companies, who are the people who buy those apples.

    If you would let the companies employ anyone paying whatever salary they deem fit, the companies would employ everyone in the world looking for a job, believe me. The shortcomings? Everyone would be underpaid cheap labor as no employee would be cappable to force the market to establish a better price on the good (labor). So the minimun wage is obviously a good social mechanism, even if the unemployed individuals would disagree (as they would be employed and actually earn something).

    Obviously the government can't force companies to hire more employees when they don't need them, so what can the government do? Only establish the rules by which both sides will play and oversee that no one tries to cheat. Sometimes it may have some interference, but most theories point that the effects os the state messing with the supply and demand balances is most often than not, negative.

    I don't believe I'm actually going to have to explain this but OF COURSE there should be a common base mentality that one should always strive to get employed because employment and the work it produces are what satisfies the needs of a population and thus moves the community, the nation and the world foward. Think, how could you have posted that message if someone wasn't employed at a computer factory, building your computer, keyboard, mouse and screen? Oh and lets no forget about the internet server manteined by people who are employed for it. But wait, what about the people who invented all this stuff? Aren't they employed to do it? Employment, be it planting vegetables or developing nanotechnology is the basis of the human society and it's the one thing you can't take away.

    You talk about people creating a society where everyone takes care of eachother... well, first and foremost the human nature makes this impossible from the start as it's our nature to both compete and try to achieve better "results" to ourselves, thus a situation like that can only happen in very special cases (ex:some communities of jewish refugees in Eastern Europe sucessfully managed themselves by applying the principles you defend, but that was only because of the common threat of the Nazis)

    But actually, what you defend is actually pretty close to communism since you state that everyone should look after eachother or, in more economic terms: everyone would get the same benefit from the society and no one would have a bigger importance to society that anyone else-> The communist utopia.

    Now, the thing about communism is that it ALWAYS fails. We economists may not have labs to test our theories in tubes, but the world itself creates those experiments for us: Eastern Germany, Soviet Union, North Korea, Cuba and many others. None of these nations managed to achieve any sucess under a communist regime, so by experimentation one can assume that communism is impossible save for the few exceptions I already mentioned.

    Or maybe you're saying we should follow those separatists who go to live in a reclusive farm to worship some weird God, leaving everyone outside wondering what the heck is going on there. Well, should the world follow their example and adopt that lifestyle, I hope you enjoy the middle ages cause that's what we'd go back to since all the technology we created would become unavaliable since no one would be employed to mantain it.

    On a final note, if there's one realm where God has no business in, it's economy. It was created by men, for men with men principles. There might be some luck involved when analysed individually, but surelly, economy is the most unholy subject in existence.
    Last edited by a moderator: Nov 10, 2009
  7. Mikeintx

    Mikeintx Well-Known Member

    You are my new best friend :)

    Our economy can be fixed... by taking losses and rebuilding. Now we have Chris Dodd trying to pass a bill reforming the financial system when he has no idea what he is talking about. Its simple really, bring back glass-steagall ;) Unfortunately noone in our society wants to make the hard choices. Our leaders do not want to. Consumers do not want to take responsibility for their debts and lack of financial planning. The system WILL right itself, whether the dollar will be worth anything at the end is the question ;)

    In the meantime invest overseas :p
  8. Ordep

    Ordep Well-Known Member


    There is actually a very simple way for countries to recover from a crisis situation and it's what i see most developed countries trying to implement nowadays, it's called the Kayne Multiplier (or as some funnier economist like to call it, the "open hole, closed hole" model) which is an economic model formulated during the post-crash of 29' years and proved extremely acurate during a crisis.

    Here's how it work (putting it simple):

    The first step is for the government to spend money. On what? Doesn't matter, it could be building stadiums, churchers, cathedrals, weapons or even paying people to open holes and closed them right away, what's important is that they spend money.

    As the government spends money, the global income of the populations increases (as the people are getting paid to do whatever the government decidedes to waste money on) and thus they buy more goods.

    Since they buy more goods, the companies who produce those goods have better income, thus they can expand their business and hire more workers

    And since they hire more workers the global income of the population again increases, thus they buy more goods, and the income of the companies increases even more, so they hire more, etc etc.

    The challenge then comes for the government to know when to pull the plug on the multiplier before it becomes a de-multiplier as the companies become too big and the demand doesn't keep up, triggering another spiralling crisis like the one of 29'.

    A great (the best?) example of the multiplier in effect happened during the first years of Hiltler's rule of Germany. Germany was in shambles and financially bankrupt after WWI and the crisis of 29', but the huge ammount of money spent by the government to re-arm the nation for what would be the Spanish Civil War and WWII triggered the fastest economic renewal in history.

    The construction of many dams during the American New Deal also has its roots in the Kayne Multiplier and so does the urge for the portuguese government to spend millions in building 10 new stadiums when the country was facing a crisis.

    So yeah, it's always very posibble for a nation to recover from any economic crisis, if the darkness is coming, it's surelly not because of those 10% unemployment.
  9. Mikeintx

    Mikeintx Well-Known Member

    Thanks Ordep, that is really interesting. Hopefully our government will stop spending money when it needs to, but forgive me if I do not trust politicians to do what is right ;) What is your take on China buying up so much gold and getting away from the dollar?
  10. Ordep

    Ordep Well-Known Member

    Gold is always a strategic good for governemts to buy as it can be exchanged as real money and has a much more stable price than paper-money (dollars, euros, etc.). But the most common use of gold is reserve. If a nation finds itself in a bind, with lack of funds to pay off debts, they can always fall back to their gold reserves.

    That said, an increase in gold buying can mean alot of things, and what's the truth? Only the Chinese government can tell us, but I can speculate...

    The thing that most people don't realise about China is that they're not the mighty invencible bulldozer everyone thinks they are. They are currently powerfull yes, but their economic power is being built in shifting sands.

    The thing about Chinese exportation is that they seemed to have specialized in low value items crafted by cheap, unspecialized labor. We have come to be used to seeing "Made In China" in everything that's cheap and chinese goods are becoming trademarket for being low quality cheap goods. The problem with this, as my own Portugal found out on this last few years, is that cheap items are the easiest to be copied and from one moment to the next the center of production and sales can quickly change to somewhere, such as the emerging India, Indonesia, Philipines and so on. Ence the extra need for reserves.

    That said, China is struggling to become a world power and they know they can't achive that by mass producing children's toys as, like I said, their sales are volatile. Thus, they must (and are trying to) move foward to more high-quality goods made by high specialization labor, since those have much more stable sales (even if the total profit is lower). Don't be suprised when, in some years, you'll start seeing Chinese premium high-tech, designer clothes and luxury items because they're coming. Obviously, moving to another market always posses a risk, and the investment needed to enter in the high-grade goods market is much larger than the low-grade as it requires specialized factories, a bigger investment in education, technology importation and so on. And what if this plans backfire? What if the customer doesn't believe that a Chinise product can also be a premium? Big gold reserves are needed to cover bigger losses (and notice that if those losses never come to be, they can always sell it)

    Another interesting piece of imformation is that 1) The FMI announced that they're selling gold to whoever wants to buy (thus lowering the price by the rules of supply and demand) and 2)China is the biggest gold producer in the world. See the connection already? It's possible that the government is buying it's country's own gold to protect their gold industry from having to compete with the FMI's gold while keeping the price from going down as they increase demand to meet the increase of supply. Basically they're protection their own industry.

    It could be anything really, and whatever it is, the Chinese government won't tell us exactly what they're thinking. But whenever we're talking gold, we're talking strategic development, and if China's buying gold, whatever they're thinking, they're planning on developing their economy somehow.
  11. Kris.T

    Kris.T Well-Known Member

    I'm amazed at how few people are aware or that. Or do people just ignore it? Yes, Hitler did some atrocious things during his time. But he also rebuilt a country that was FUBAR.
  12. Scully

    Scully Well-Known Member

    It goes up and down. It's the whole principle that stinks. Money and chance for 0,1% of the pop. ????? When 3 billions dies of bad nutrition and its effects, that's the very problem. I think we're led to believe aww awwwww economy, we're all dead if it's down. Pfff...
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