^ Money calls the shots in both UK and US. UK is no better than US. I am certainly not holding UK up as an ideal.

UK electioneering has been dumbed down further by TV. That nice Mr Clegg calls everybody by their first name and looks straight into the camera.

It is just that the sums of money are bigger in America.

The US and the UK are similar, in that the UK is a satellite of the US designed to fuck up the European project at the UK's expense.

Big money i.e. the banks call the shots. Its no longer the military industrial complex, rather the banking industrial complex that's successfully leached the marrow out of the world economy.

The crisis, and it is a crises of Anglo-Saxon capitalism and the trust in market forces, has now entered its next phase. The debt has been successfully transferred from the gambler bankers to nation states, now those same bankers are betting against those nation states as they trust in market forces, its the only song they know.

American money is retreating from the world stage and the US will regroup in a period of isolationism.

The UK has no money and as the standard of living continues to drop, compared to Europe, the Great British Pound, if it does not peg itself with the Euro, will be the greatest hindrance to companies from the East investing to reindustrialise due to a cheaper and more easily manipulated workforce.

Germany, that great nation of highly skilled technicians and engineers, with its inbuilt focus on productivity, operational excellence and productivity will continue to be the benchmark for great nations - an educated workforce, with disposable income, adequate savings, decent holidays and housing that doesn't cost two-thirds of your wages to rent, or six times the average wage for an ex-council house.

Its nearly last orders gentlemen, hurry-up, its time!

^I'm honestly scared Formby, I'm no longer a single guy who can pull up the roots and ride into a new town or country on the next thing that's smoking. Although, I was in touch with some ex-colleagues in Rio this week and Oil & Gas and EPC projects are positively booming overthere. Could be tempted, although the marriage would never last.

Having two little bambinos that I love has seriously messed up my work mobility. Plus a half decent staff position, I suppose. But nothing beats that true contractor spirit in being able to buy a new Rolex every month, eating in fancy restaurants and getting pissed every night.

As it happens I've got some Atlantic 'Trane on at the moment, Blues Legacy to be exact. But somehow, I think Miles Davis's fusion period is more pertinent to our times, like Miles, we are burning out on bad ass coke, dodgy sartorial decisions and running out of inspiration with all our best moves in the past.

Last edited by shamrockmonkey (2010-05-19 23:54:36)

Last edited by shamrockmonkey (2010-05-21 02:18:05)

Sitting here on the edge of the abyss of the double dip, its like that Heaven 17 song from Penthouse and Pavement - Let's All Make a Bomb.

Ignore the sirens, lets have fun.....

It will be interesting who the Banksters target next and whether ultimately they will go for the big one, the USA. In their wake they will leave devastation and destruction.

I honestly do hope they target the US, sooner rather than later, for this will be the Banksters undoing - for with soldiers dying in Iraq and Afghanistan any such attack, could only be considered an act of terrorism and war - Wall Street and the City will pay for their sins yet.

Greed is their one weakness and their obsessive belief in the market forces. These Banksters know no patriotism, not for any nation state or ideal. And yet, we saved these fuckers from destruction and now they attack the nations that bailed them out. Is it me, but shouldn't these grotesque creatures be rounded up and locked in a small dark cell where they are forced to become Mr Big's transexual soap boi?

Last edited by Big Tony (2010-05-22 07:02:52)

I don't pretend to know the answer to the question.

However, there are a lot of things to consider, such as:
The 2008 meltdown in the US was caused by 1.Fed funds rate at near 0, for two years, which led to financial institutions borrowing for near 0, and rapidly pushing money out the door to finance risky home loans, at high rates. Borrow at 0, and loan out at 11%. Guaranteed way to coin huge amounts of money for investment banks. Add on the fees charged to securitize these loans into packages.

2. Fan and Fred were under tremendous congressional pressure to make more and more, risky home loans. Sub prime and alt A (no documentation loans called "liar loans" ) that caused Fan and Fred to grow huge, highly amounts of risky assets with almost no capital as a backing.

3. US investment banks securitized the risky home loans, allowed under the Community Reinvestment Act. These had attractive interest rates, and were sold globally with top ratings with the thought that the US housing market always went up. (It turns out that the S & P, and Moody's ratings were less than useless.)

4. The errors of the above rapidly came to light in technicolor, in 2008. mid September.

Now, in the US, we have massive, massive public spending, and a huge number of public employees with legislated fringe benefits that the states and the Federal government have got to fund, somehow. Looks identical to Greece, on a larger scale, with no one, such as Germany to bail us out. We owe the Chinese a ton, but they aren't dumb, and won't continue to close their eyes to the quality of US debt that they hold.

US is gradually starting to come out of economic downturn, with rather modest GDP growth. Dow is coming off of a large recent run up, based on the hopes of economic recovery. Economies always move in cycles. If it were possible for government action to alter this, we would never have a downturn, or high levels of unemployment. Works like the law of gravity.

Dodd bill may do more harm that good, and completely ignores Fan and Fred where the big problems lie. Fan and Fred moved from private corporations to the complete responsibility of the US tax payer, since they crashed in 2008.

Finally, the US is facing: massive tax increases, and very expensive unfunded entitlement programs, recently enacted. High levels of unemployment in US seem fairly stuck at about 9%. Many jobs were lost in recent downturn, that don't seem to be coming back. High levels of federal and state employee hiring only take capital out of the job creating private sector, and increase tax payer burden, now and in the future.

All of which gets to the OP question of "how low" ? Who knows, I would guess however, that we are closer to 3800 on the Dow, than to 12,000.

Which gets to the question of how much gold should you own?  The cynical answer is "enough to bribe the border guards".

You bring up another point that puzzles me. No one, particularly the markets at the moment seems worried about inflation.

The pundits all seem to be more concerned about deflation. Primarily because unemployment is so high throughout most of the world. Their logic is that high unemployment will keep prices down.

However, inflation always seems to be a monetary problem. Print too much money, and prices go up. We are printing money as fast as we can.

The EU imposed constraints on its members that prevented them from monetizing their debt. Thus, Greece had no choice but to ask other members to bail them out.


It is still unclear why inflation isn't seen as a problem. Commodities are not rising in price, neither is oil. Gold takes a spike now and then, but only when dollar drops in value.

Wish these events were easier to comprehend.

All of this does stay on the subject of the OP, as inflation decimated the stock market in the early 70s, when the term "stagflation" was coined. Very high inflation, a grinding secular bear market in the equity markets, and flat to declining GDP.

why exactly are we suddenly worried about debt, now that its being incurred for domestic spending? these newly-minted deficit hawks never seemed to complain when reagan was running up crazy deficits for his pet cold war programs, or when bush was spending many times the cost of the bailout to fund his iraq adventure. spending loads of money on killing people=good or at least neutral, spending much less money to help your own people=totalitarian, reckless, possibly insane.

Last edited by shamrockmonkey (2010-05-22 15:56:13)