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LesNessman

The Obama Depression, Caused by the Obama War on The Middle Class

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fed oil price.jpgqe oil fed.pngMake no mistake about it, the Obama depression we are experiencing right now is a direct result of the Obama War on the Middle Class.



 



The first shot in Obama's War on the Middle Class was Obamacare. Who composes the middle class? People with jobs who pay taxes do. Obamacare disproportionally affects these taxpayers the most who will now be forced to pay 2 Trillion dollars for it over ten years.  That's alost twice the number Obama said (lied about).



 



Obama is waging war on middle class taxpayers so his non-taxpaying, community organizing, welfare receiving brethern can get free healthcare on the backs of the middle class workers. It's just not enough that these parasites already get free food, free care at the emergency room, free cell phones, a free place to live, free transportation, etc etc ad infinitum, no, Obama's war on the middle class demands more!



 



Now who here believes that we are on our third recovery summer in a row? IF the bad Obama economy really is producing a miraculous number of new jobs right now, where is the increase in revenue to the treasury?????



 



And I have news for many of you. This economy will not recover, because Obama's Fed QE1 and QE2 caused the price of oil to skyrocket before the economy could recover? Now we have record monthly high prices while demand has shrunken drastically. Low oil prices are normally the engine of economic recovery!



 



It's a real shame that an ordinary fisherman like me has a far greater knowlege of economics than our Community-Organizer-In-Chief.  Why did people think a man who never had a job other than community organizer would be able to understand macroeconomics?



 



 



Once again, the graphs do not lie.



 



 



 



 


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If you are late to class, you can't expect the professor to repeat the lecture just for you.

 

 

This economy will not recover,

 

That's "class?"

 

This is the worse thread that I have read this week!

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So...on one hand he has masterminded a diabolical plan to screw the missle class, yet on the othe rhand he is clueless about economics...hmmmn.. seems a bit contradictory to me.

 

Which is it? Is he an evil genius or an idiot?

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If this is the depression, I can't friggin wait for the recovery!!!!!

 

didnt you hear? the economy is going great now........it could be greater, but its great none theless......or so I heard on MSNBC, CNN, CBS etc........they wouldnt lie would they?

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So...on one hand he has masterminded a diabolical plan to screw the missle class, yet on the othe rhand he is clueless about economics...hmmmn.. seems a bit contradictory to me.

Which is it? Is he an evil genius or an idiot?

 

whichever of the 2, he is wrong for America and should be one of the unemployed come November.

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While the OP is laced with hyperbole, it is true that O's energy policy has created a destructive and unfair "tax" on middle and lower class," the very thing he is campaigning against. The cost of gasoline does not slide based upon your income and middle and lower income citizens pay a much greater percentage of their income than do the wealthy. So, Dems, when will he end "giving all this money to the rich" (those are your terms)?

 

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The current price of gasoline is based on Obama's policy, but the prices in 2008 were just the free market at work.

 

This is why you cannot have reasonable discussions about ideas with most of you. High prices of gas in 2008 sucked just as much as high prices do now. It doesn't make it okay or justify it. "My President sucks as much as the last one" is the lamest argument. How about, "let's fix the issues." I just cannot comprehend this train of thought. Unbelievable.

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Quote:

Originally Posted by The Mad Deckhand View Post

 

What is this crap?????

 

commodities

 

Thanks for your thoughtful reply, thoroughly refuting the facts I have laid out for all to see. LMAO

 

 

 

 Saul Alinsky would be proud of many of you. Shooting the messanger for bringing bad news about Democrat incompetence and lying is one of the old tricks in Saul Alinsky's Handbook.

 

 

 

I suppose one of you truth haters would like to explain how printing trillions of extra dollars has not massively devalued our dollar, causing commodities to skyrocket. It's apparent than many of you are unable to read the graphs. Should I try different colors?What massive  ignorance of the law of supply and demand. 

 

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commodities

Thanks for your thoughtful reply, thoroughly refuting the facts I have laid out for all to see. LMAO

 

 Saul Alinsky would be proud of many of you. Shooting the messanger for bringing bad news about Democrat incompetence and lying is one of the old tricks in Saul Alinsky's Handbook.

 

I suppose one of you truth haters would like to explain how printing trillions of extra dollars has not massively devalued our dollar, causing commodities to skyrocket. It's apparent than many of you are unable to read the graphs. Should I try different colors?What massive  ignorance of the law of supply and demand. 

 

^^^^ Wow! You got me. :(

 

Now, if I could just figure out what the hell you're talking about.....

 

369

 

The Myth That The Fed Is Printing Money

 

QE2 comes to a formal end this month, and just in the nick of time too, since it’s been flooding the markets with newly printed money, making hyper inflation and a collapse of the dollar inevitable. But, wait a minute! What’s that 5 percent all about?

 

Five percent is the latest estimate of the growth of the M2 money supply from May 2010 through May 2011. The annualized M2 growth rate for the six months ending in May 2011 was 4.9 percent. The rate for the three months ending in May 2011 was also 4.9 percent. Five percent money growth with 9.1 percent unemployment is going to cause hyperinflation?

 

Rarely has a myth been so impervious to simple facts. Pundits have been talking nonstop about the avalanche of money without bothering to actually look it up and discover that it just isn’t happening.

 

For the umpteenth time, the Fed’s purchases of Treasuries under the so-called QE2 program have increased bank reserves, but banks have added to their excess reserves rather than creating large amounts of money through lending and investing. The money multiplier—the ratio of the money supply to bank reserves—has remained close to one. There has been no multiple expansion.

 

If you add those bank reserves to cash outside the banking system, you get a measure usually called the monetary base. That measure has grown rapidly, but that is a measure of the potential money supply, not the actual money supply. In the normal past, the monetary base moved along with other “monetary aggregates” and probably had a reasonably good correlation with economic activity. But not now, or recently, since actual money is not keeping up with potential money.

 

I suspect that a few critics of explosive money growth may have taken a peak at the actual numbers recently since the vague and undefined word “liquidity” is used more and more rather than money. The Fed is pumping out liquidity, whatever that means.

 

Last week the fiction was taken a step further by a couple of writers. They had the Fed providing money and/or liquidity to banks directly at near zero interest rates. Not true either, in any substantial volume.

 

Bank reserves are a liability of the Fed and an asset for the banks. When the Fed lends to banks, the banks owe the Fed. There has been no recent increase in bank borrowing from the Fed. The opposite is the case.

 

Very short-term money may be borrowed at very low interest rates because of the Fed’s interest rate policy. The Federal Funds rate has been close to zero. But there is a huge difference between borrowing from the Fed at near zero interest rates and borrowing at that rate in the Federal Funds market. The difference is that borrowing from the Fed creates new reserves for the banking system. Borrowing from other participants in the Federal Funds market merely redistributes existing reserves. There has been no burst of Fed lending at the discount window that would expand “liquidity.” The liquidity is just being moved around.

 

 

 

Next time - do your homework before you start carping at me about hating the truth!

 

 

 

 

 

 

 

 

 

 

.

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^^^^ Wow! You got me. :(

Now, if I could just figure out what the hell you're talking about.....

369

Can the Fed Really Just Print Money?

October 30, 2008

Yesterday, the Fed reduced the overnight federal funds rate to 1% and the discount rate to 1.25%. There’s not much more room for rate reductions before the Fed needs to take more drastic actions to make credit available.

The Fed and the Treasury are determined and they will do whatever necessary to avoid deflation, short of paying people’s mortgages for them. Bernanke made this clear in his now famous speech from 2002:

I am confident that the Fed would take whatever means necessary to prevent significant deflation in the United States and, moreover, that the U.S. central bank, in cooperation with other parts of the government as needed, has sufficient policy instruments to ensure that any deflation that might occur would be both mild and brief. …

The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

But is creating more dollars the same thing as creating more money, thus avoiding deflation? Will the Fed actually be able to generate higher spending and positive inflation as Bernanke says?

To answer this, we need to understand what money actually is. Modern money is credit, meaning a promise to pay a certain value as denominated in a currency. So how do we measure the amount of money in circulation? Should we determine the amount of credit money based on the nominal amount of currency, or based on the value of goods and services promised? A real measure of money would have to use the latter. In this case, if creating more dollars does not result in an increase in the amount of credit as determined by value in goods and services, then more money has not actually been created.

So it is possible that printing more dollars will not have the desired effect of creating more money and thus reflating the economy. It will just create more dollars which will be hoarded or used to pay off debt.

Real inflation is caused not only by the amount of money in existence, but also by its velocity, which is how quickly it moves from one person to the next. To get inflation, you need to get people to spend the new money and then to borrow more. You also need people willing to produce and sell things in exchange for this money.

In hyperinflation, nobody wants to hold onto money because they fear that it will be worth less tomorrow so they spend what they have as soon as they get it. This feeds on itself with increasing price rises causing increasing inflation expectations causing increasing velocity which causes prices to increase again, and so on. In deflation this works in the opposite way, and both cycles can be difficult to stop once they get going.

In the present economy people are less able and less willing to borrow and spend money into existence. So, to cause inflation, the Fed needs to replace the borrowing and spending “efforts” of hundreds of millions of people.

It’s not clear that Ben Bernanke’s printing press will be able to accomplish this before it destroys the value of the dollar. If the dollar stops having value as money, then it doesn’t matter how many trillion dollars you print into existence.

We live in a global economy where the dollar isn’t the only meaningful measure of value. We need to import from other countries and we need to pay the value of the goods we import, not a set nominal number of dollars. If people around the world feel that they will not be able to get something for dollars, they will eventually stop accepting them for their own goods, regardless of all the political reasons to take dollars.

The Fed can’t print money, it can only print dollars. For now this is essentially the same thing, but it doesn’t need to be.

How should we invest in this kind of environment? We are in uncharted waters, so there is no tried and true solution for how to profit from all this, but protecting your capital is the most important thing. You need to be able to preserve the value of your savings before you can make them grow. In the present environment it’s hard to see how to do either, but here are some defensive investments that make sense now:

Government issued inflation linked bonds such as TIPS in the U.S or the equivalent in other countries. We hope that the interest makes up for the amount the government understates inflation, so we at least break even. There is an ETF with the symbol TIP that invests in these, or you can buy them directly from the U.S. Treasury here.

Gold and silver have been a good store of value over the long term, though they can be very volatile in the short term. They can’t be printed and they can’t default, so they will always be worth something. GLD and SLV are ETFs that invest in gold and silver bullion respectively, though there are many other ways to invest in precious metals.

Basic consumer products that will be consumed in any economic environment. Food is the most obvious of these. Here we want companies with recognized brands that give them some pricing power. Look for shares with dividends because they help support the share price and provide some income. Heinz (HNZ), General Mills (GIS) and Kraft (KFT) are some examples.

When the dust settles there will clearly be some excellent investment opportunities in many sectors, but you need to preserve your capital in order to take advantage of them.

 

Quoting from the trough of pig swill above^^;

 

 

"To answer this, we need to understand what money actually is. Modern money is credit, meaning a promise to pay a certain value as denominated in a currency. So how do we measure the amount of money in circulation? Should we determine the amount of credit money based on the nominal amount of currency, or based on the value of goods and services promised? A real measure of money would have to use the latter. In this case, if creating more dollars does not result in an increase in the amount of credit as determined by value in goods and services, then more money has not actually been created."

 

"So it is possible that printing more dollars will not have the desired effect of creating more money and thus reflating the economy. It will just create more dollars which will be hoarded or used to pay off debt"

 

 

Since there is no source cited, I will have to guess that it is a work of fiction, or used bull food.

 

Modern money is credit, my ass. Money is what you promise to pay back when someone extends you credit.

 

I sure hope there are enough of us left to stop this re-defining down of society.

 

What I find "modern money means;

From WIKI; http://en.wikipedia.org/wiki/Chartalism

Chartalism

From Wikipedia, the free encyclopedia

Chartalism is a descriptive economic theory that details the procedures and consequences of using government-issued tokens as the unit of money, i.e. fiat money. The name derives from the Latin charta, in the sense of a token or ticket.[1] The modern theoretical body of work on chartalism is known as Modern Monetary Theory (MMT).

 

"

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