Economy on the rise.....

[CAP1]

Anyone thinks we can spend our way out of this mess doesn't understand the basics. 
Do not believe what our "leaders" tell you - uncontrolled spending (i.e. spending what you don't have or could never pay back) is what got us here. Another word for it is GREED - at all levels. Unsupported credit lines. Materialism - stupidity.

IMHO, until the "too big to fails" are allowed to fail and the markets adjust accordingly, we are pumping money into an over valued balloon that has a huge hole on the other side... A hole no one wants to admit is there. The pumping is just slowing the downward spiral, it doesn't patch the hole.
This "rise" is being created by printing money and the tax increases which have to follow (for all of us folks - not the j "rich" who make over 200k). If you think it is getting better, you have been fooled. If your little piece of the world is looking brighter right now, good for you. The problem is there isn't anything in place to perpetuate or expand on that improvement.
Pay down your debt; stop spending and start saving for worse times to come.

Have a nice day

bolded. this is is what is and will continue to make problems. people stop spending, then people get laid off, and those laid off people stop spending, so more get laid off, who also stop spending.

 i'm not saying spend money you don't have.......i just paid off my last credit card a couple of months ago, and from here on in, i'll treat it like an american express card....in as much that whatever i charge will be paid off at the end of the month.

 i'm also not saying our govt needs to keep spending. they need to stop it, and start eliminating unnecessary programs. i'm talking all levels, not just feds.

 a customer was just here telling me that cherry hill west high school has a principle for each grade. now how stupid is that?

[mensa180]

It is nothing more than addicted investors.  A correction will be along shortly to remind people why you set a sell limit to force a sale on stocks when they start the plunge.

Stop.

[Flipperk]

Have any of you ever heard of the Paradox of Thrift?


Basically in a nutshell, if we all try to save then none of us will be able to.

If everyone starts to save money then less spending follows, if no one spends any money there is no money to be saved.

Saving in a recession, oddly enough, is not the thing to do. We need to start re-investing in capital to get the economy back on track. Without investments, progress can not be made.



Also here's a little lesson for some of you. We literally have no debt, technically. If China were to come over and say, "Hey we want our money paid back." All we have to do is write them a check for the amount. Simple as that. The reason why is because we create our own currency, that's why America can not go bankrupt all we simply have to do is create more money to pay off debts.

But we do not, because of the reason of inflation and loosing our credibility as a lender/borrower.

This nation runs on credit and debt, it is what gives the incintive to invest. Take for example the bankruptcy laws in place to protect citizens and companies. These laws give the incintive to invest without worry to be ruined in a bad investment, it gives you another chance to try again.

The banks are not to be blamed, at least not entirely. They were ordered to give out loans to finance housing for "every American gets a home." Were the banks screwed up was giving out loans of $250K to finance a house for a family with an income of $30K/Year or less. Banks are as crucial to our economy as air is to live, only 10% of our nations wealth is actually in paper currency, the other 90% is debt created by loans. In otherwords, if the banking system were to fail 90% of our nations wealth will disappear over night.

Let me elabortate on the subject above, the Reserve Rate is a percentage of total deposits that must be kept in cash by all banks. IE: You deposit $1000 into your account, the Reserve Rate is at 10%, the bank has to keep $100 in cash on hand. What about the other $900? That is lend out in loans, and thus this cycle actually creates money.

Let me demonstrate: Keep in mind that the banks are, by law, to give back the funds deposited if demanded. The reserve rate is at 10%.

Bank 1                       Bank 2                 Bank 3                                
Deposit:  $1000           Deposit:  $900      Deposit:  $810           Total Deposits: $2710
Reserve:  $100            Reserve:   $90      Reserve:   $81           Total Reserves: $271
Loan:      $900            Loan:       $810     Loan:      $729          Total Loans:     $2439

This person just deposited $1000 into his account, the bank lent out $900 to a guy to pay for a chainsaw. The chainsaw merchant takes the $900 and deposits it into his account at Bank 2. Bank 2 then lends out $810 to a guy who wants to buy a new Go-Kart, the Go-Kart merchant takes that $810 and deposits it into his account at Bank 3.

If all three account holders were to go to the bank and withdrawl all of their deposits at once, then only $271 will be avaliable. The bank is liable to give back $2710 upon demand, but only 10% was kept on hand by law.

Of the $2710 deposits $2439 of that was created through loans not income. If the banking system were to be regualted or were to fail then our nations wealth will vanish, fast. The only reason why this system of trust exists is because of the FDIC.




Saving is not the way to end a recession it will only prolong it, we need to start re-investing if we want to end this recession.


Heres a quote that I came to know and love:

"It is a recession when my neighbor looses his job, it's a depression when I loose mine"

[Dadsguns]

Flipperk, It sounds good on paper and using your explanation is a simple one no doubt, but how are you going to explain the billions the banks made in profit to pay for their CEO's and CFO's, and the numerous bonuses to the rest of the hordlings? 

[Flipperk]

Flipperk, It sounds good on paper and using your explanation is a simple one no doubt, but how are you going to explain the billions the banks made in profit to pay for their CEO's and CFO's, and the numerous bonuses to the rest of the hordlings? 

It's simple actually, it is a incintive to work.

CEO's and CFO's are not your average employees, they are the bread and butter of the company. They are in a position of high importance, their decisions either make the company millions or looses it millions. The high pay and bonuses are an incinitive to keep working 100 hours a week, on call for 24/7, many sleepless nights and stress.

If you worked for a multi-billion dollar company, you were the CEO. You personally put in 80-100 hours a week to make sure everything is running smoothly, you deal with legal and financial turmoil.  Would a 100K/ Year keep you happy? Maybe for the first year, but sooner or later you find your self making the company millions, if not billions a year because of your decisions. Your worth is $500 million a year, yet you are paid 100K/Year.

The whole reason for bonuses is to keep the high powered money makers in the office and not at their houses.

Now wether or not it is wrong, it's the companies decision to give out bonuses...not the governments or us.

[Rino]

     Having seen alot of CEO types in my former line of work, your assertion that they are the bread and butter
of the company is absolutely ludicrous.  They are easily replaced and there seems to be very few whose company
lives or dies by their decisions.

     

[bj229r]

The endless tripe about bank ceo's is the equivalent to whizzing in the Atlantic ocean, it makes NO difference whatsoever, unless your end goal is to incite class-envy. If the ceo of B.O.A. is whacked down to $250k from 20 million, will it make any of us any richer? Aside from making certain people feel a little vindicated, it has ZERO affect on our lives, other than perhaps to thin the talent pool for future ceo vacancies, and make it politically palatable to pass more draconian laws

[oTRALFZo]

The banks are not to be blamed, at least not entirely. They were ordered to give out loans to finance housing for "every American gets a home." Were the banks screwed up was giving out loans of $250K to finance a house for a family with an income of $30K/Year or less.

Thats what cracked me up years ago when it was a real estate agent's wet dream.
Guy from Mcdonalds has a $400, 000 home. When he then gets knee deep in trouble..he then cashes in his equity. Rinse/repeat. Soon that equity is not there anymore, tons of people just hand in their keys and say Im done. Now theres over 400-500 gs in this house and its only worth 250gs.

I predicted that his would happen soon just seing how my freinds got suckered in. They said "dont worry, see how fast these houses sell?" I heard one say " In the 2-3 years the payments go up on your mortgage, you will get a raise/promotion, so it wont be so bad"
"