I know it is crooked. That’s why I approach some of these discussions a little tongue in cheek. You should have seen the discussion I had with my friend who is an electrical and systems logic engineer about the meaning of the universe the other night when we were both shitfaced! LOL.

By the way, I don’t mean “they devised a plan” like the illuminati and Goldman Sachs board all got in a smoke filled room and made the decision to procede in this manner. The capitalistic system within our democratic republic and corporate structure evolved evolved as a whole to the point where they knew the average consumer was tapped out, so they had to get that 70% from a promise on the future ie credit. But those who were in power and rich, while not actively perpetrating such a scheme, nonetheless sure as hell took advantage of it while it was happening!

As I read more I learn more and as I am learning more the clearer I can see certain things, I have always shunned debt, have hated it in fact, why should I work to pay someone else? Over the past 3-5 years I found it increasingly difficult to NOT be in debt, I would always blame it on “Well we have one off to college……” or this or that, but then I read things like you posted “so they devised a plan to keep the game going a little while longer via credit.” And look back at the last few years and Hot Diggity Damn, my rate of pay did not increase much over the past 10 years, nor did my wife’s we were not even coming close to matching inflation so we could not have maintained our lifestyle without getting into debt (And here I was trying to blame the kids)

Now whether this was a scheme devised by a small group of sneaky bastards or just the evolution of how our system is setup is anybody’s guess………And BTW your tinfoil hat is on crooked.

I believe, in actuality it is a simple reflection of disequilibrium in the disparity of wealth getting out of hand and the consequences of the shenanigans created to keep up that disparity.

Free Market Capitalism is in theory based upon the market forces to over time allocate the capital to it’s best and highest purpose, but in the real world, inefficiencies prevent this from occurring at times. Add to this the human factors of greed, corruption, and myopia in political, legislative, and market systems and the whole thing gets thrown out of whack.

Our real economy has positive feedback loops inherent in the complex system that have concentrated money and power into increasingly small groups that has created a disparity which under normal circumstances would cramp the system and force a return to more equitable distribution. This time, however, those with the capital and the power set up the system to concentrate the profits at the top and not “trickle down” the money to the proletariat via wages enough to support the 70% consumer spending based GDP in the long run, so they devised a plan to keep the game going a little while longer via credit.
(add tv, and cultural consumerism, and zombifying drugs to the mix and ya got yer happy oblivious consumers spending away for years racking up the so called debt bubble!) This is what created the credit bubble. . . those with the concentrated money and power letting greed and stupidity get a hold of them to the point where they started creating ways to suck more money and power out of their oblivious consumer slave society, and in the process wrecked the whole thing.

In the long run, the way to fix this mess isn’t the deleveraging of the massive credit bubble (although that is what is immediately apparent). It is fixing the system as a whole so that we as a society and economy become more efficient in general, less concentrated on materialism and consumer spending, and more equitable and less corrupt in the aspects driving the disparity of wealth and the economy as a whole.

In reality, a system based upon the aspects of competing forces and equilibrium will always fail if the system has inherent flaws that do not allow this to occur and create feedback loops causing it to gradually skew. You can only keep up the charade going while you loot for so long until it resets, and sometimes, it resets in a catastrophic manner via war, revolutions, or civilizational collapse.

Just some tinfoil hat bs, but you might want to check out some

http://wonkroom.thinkprogress.org/2008/03/17/1928-resemblances/

http://elsa.berkeley.edu/~saez/saez-UStopincomes-2006prel.pdf

must have had a bad day at work and got hammered that night, haha!

My theory relies upon the assumption that the dollar will fall in value from the printing presses and increase in available money supply, so we have to rely on supply and demand to calculate what will continue to be stable or rise in price. In actuality, I think we will have a bifurcated economy in which things that have a somewhat constant demand or can control the supply, ie food, energy, oil, basic first produced resources (like metals, timber, etc), and perhaps medicine will result in staying up or rising with the devaluation of the dollar, and other things that do not have the constant demand, such as housing, discretionary consumer products, capital expenditures, etc. will fall. It would be good to look at the factors behind elasticity of demand in evaluating any asset you wish to hold currently, imho.

Because the US Dollar is a Fiat Currency, the government can do anything they want including the recent bailouts and “quantitative easing”. Basically, they are saying they don’t care about the current deficit they are racking up and skyrocketing national debt, because they are going to print more money to devalue the currency relative to the debt outstanding. This might work for a while until producing countries and resource rich countries have the ability to stop it and force the issue of an international reserve currency to replace the US Dollar as the world’s form of money. Therefore, what the government is trying to do is covertly tax the public and screw all creditors in the process, while keeping the whole game from crashing.

“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”
John Maynard Keynes (English economist, journalist, and financier, 1883-1946)

“Inflation is the one form of taxation that can be imposed without legislation.”
Milton Friedman quotes (American Economist, b.1912)

(Que Obligatory fall to S&P 474 beginning October reiteration)

He probably wants a dollar rally to pump up GS’s trading revenue. So many $ bears and commodities bulls to slaughter…