Sustainable?

[beat90tsi]

Personally, I think we’re riding on the Titanic and the alarm is sounding. Unfortunately, I don’t know if there are ANY boats to jump into right now.

"For the 11th straight year, the federal government failed its financial audit, GAO announced Monday, in a widely anticipated finding that Comptroller General David Walker used to underscore the government’s troubled fiscal health.

“If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company’s management and directors needed a major shake-up” Walker said this afternoon in a speech at the National Press Club."

“The federal government’s total liabilities and unfunded commitments for future payments related to Social Security and Medicare are now estimated at $53 trillion, in current dollar terms, up from $20 trillion in 2000, Walker said.”

GAO says government failed yet another financial audit

[whitey]

argh… The sad part is, nothing will change. We will continue to dig deeper and deeper in debt and the country will forever have financial problems

[beat90tsi]

@whitey

argh… The sad part is, nothing will change. We will continue to dig deeper and deeper in debt and the country will forever have financial problems

I can’t say I disagree with you. When change does occur, it will probably just be a major collapse.

[JackdUp]

I’m starting to think the Treasury contacted Milton Bradly recently and needed to consult with someone who could crank out money like they do for Monopoly board games.

A few years ago, when Gold reached $390 USD/oz I was thinking “man that’s expensive”. Now it’s reached over $900 USD/oz and quite frankly it signals one thing with it outpacing inflation by leaps and bounds: The so called “smart money” thinks there is going to be recession, depression, a USD cash crunch or a significant world problem where cash could not be king any more.

The US currency has been removed from the Silver/Gold Standard for a while and it’s been a nice ride, but I think because of the recent years’ devaluation of the USD against all major world currencies combined with the non-asset backed USD (only the “full faith and backing of the United States Treasury”) means we’re dead as a super-power if we don’t correct this problem and someone starts picking our legs off.

You can bet people world-wide are trading their once highly sought after USD for Canadian, Australian, GBR pounds, Chinese Yuan and Euros. This is just the beginning. We need leaders that understand what has happened and what needs to happen to fix this problem.

[obi-1]

@JackdUp

The US currency has been removed from the Silver/Gold Standard for a while and it’s been a nice ride, but I think because of the recent years’ devaluation of the USD against all major world currencies combined with the non-asset backed USD (only the “full faith and backing of the United States Treasury”) means we’re dead as a super-power if we don’t correct this problem and someone starts picking our legs off.

Did the gold standard even mean anything? I was watching the history of Ft. Knox the other day. The US didn’t even have the gold standard until some time in the 30’s.

The really messed up thing is that it was illegal to own gold. At the time you had to exchange your gold for US currency.

[JackdUp]

Asset backed currency = the lack of the ability for any Treasury department to print money until they get more Assets.

Asset backed currency = strong currency, because there is a real, tangible asset to leverage the printed note representing the value therein.

I feel that it’s one reason why they did away with it: it was hampering their ability to spend/print more money.

Our current economics are a sham: faith backed funny money…tweak a point here, print a trillion there, invade a country here, negotiate trade deals there. What a shell game.

[xlogic]

I really don’t pay attention to much of whats going on with this country anymore because everytime you turn on the tv it’s something bad, but honestly it just seems like this country is failing financially, and there is nothing that can be done about it. Money is the root of all evil and no matter how much you love money…you know this. If the problem can be fixed…find someone smart enough to do so.

[8Grand]

@whitey

argh… The sad part is, nothing will change. We will continue to dig deeper and deeper in debt and the country will forever have financial problems

:doh: Money corrupts I am sure there are 1000s of overpaid workers who litterly do nothing but sit around in an office barking orders to their secretary.

[obi-1]

@JackdUp

Asset backed currency = the lack of the ability for any Treasury department to print money until they get more Assets.

Asset backed currency = strong currency, because there is a real, tangible asset to leverage the printed note representing the value therein.

I feel that it’s one reason why they did away with it: it was hampering their ability to spend/print more money.

Our current economics are a sham: faith backed funny money…tweak a point here, print a trillion there, invade a country here, negotiate trade deals there. What a shell game.

I don’t know, man. There’s a couple of things I don’t like about it. First, the economy can only grow as fast as the Treasury Department obtains assets. Second, by definition, the Treasury Department owns 1/2 of the nation’s assets.

If the only asset is gold, then the value of the nation’s economy is tied directly to the value of gold. And if the treasury dept can’t get enough gold, it has to acquire other tangible assets?? Land, perhaps?

Just playing devil’s advocate here.

[whitey]

I was thinking about something today… With all the people that are over extended in the world today. Is it the people taking cues from the govt not being responsible? Or is the govt just flowing with the people? It just baffles me that so many people are dead broke out there and driving nicer cars then most!

[beat90tsi]

@obi-1

I don’t know, man. There’s a couple of things I don’t like about it. First, the economy can only grow as fast as the Treasury Department obtains assets. Second, by definition, the Treasury Department owns 1/2 of the nation’s assets.

If the only asset is gold, then the value of the nation’s economy is tied directly to the value of gold. And if the treasury dept can’t get enough gold, it has to acquire other tangible assets?? Land, perhaps?

Just playing devil’s advocate here.

I don’t agree. The economy grows when money changes hands faster. The money supply does not have to grow. This is clear when you see how we are paid hourly or on salary, either way, it’s a measure of money over time.

The gold ensures that the money supply is not diluted. This becomes a problem when you or I make $XXXX per year or hour. When our servant government decides to print more money, as it enters circulation, it dilutes the value of our money, but we don’t get a raise, thus our same dollars are now worth less.

The Gold standard serves to ensure that the value of currency cannot be diluted.

[JackdUp]

Exactly, but the entire world would have to go on an Asset based currency standard at that point. Not just Gold.

e.g. You have, say, a car payment and a mortgage. There’s a tangible asset behind both loans.

If you or I walked into a VC’s office and said “I have a business idea”, eventually there’s an asset (an idea, patent, building, whatever) behind that as well where a VC would take risk versus reward and appropriate funds to you for development and a piece of the profits.

But if you or I walked into the GAO and asked for a loan simply because “I need it for general appropriations for the good of the country, and I’m good for it, trust me” they’d laugh you out of the office.

However, Congress can, and the Treasury will be asked to print money if they can’t find a source in the GAO budgeting.

So the USD you and I have in our hand can be devalued at a moment’s notice by the Government due to non-linking to an asset-backed security. It would be much harder for them to play this game if everyone goes to an asset-backed currency, because, quite frankly, I don’t trust everyone’s cash. It’s a piece of paper with no tangible backing.

The only problem with this, of course, is the first country to break ranks and start printing money like Monopoly again would likely catch the rest off gaurd and then we’d slide back into a non-asset backed currency once again.

People kill other people over a piece of paper with no real value other than other people believing that it has value. Killing for oil, diamonds, iron, etc. yeah that’s no better…but at least it’s an asset and not some nearly worthless piece of paper.

[beat90tsi]

@whitey

It just baffles me that so many people are dead broke out there and driving nicer cars then most!

That always gets me too. Partly because I’d love to rock sweet ride everyday, and I know I make more money than most of these people. I guess if you’re willing to live in debt, you can do that sort of thing.

[beat90tsi]

@whitey

It just baffles me that so many people are dead broke out there and driving nicer cars then most!

That always gets me too.

[dyingwish]

It is certainly not sustainable at the rate we’re going now. I don’t think it’s so much the general poulation following what the government is doing, or vice versa. It is our culture, sadly. We want things no matter what the sacrifice (both as a country and as people), but the problem lies in how we go about it.

THE EASY (read quick) WAY.

Just like the gov’t can print out some bills to alleviate an immediate issue, while ignoring what it does to our financial strength in the future, we run out and buy things we can’t actually afford to own…solely on the reasoning that we can afford the “payment”. You don’t actually own shit, the lender owns you. It has reached epidemic proportions in this country, and it is evident in the way other countries view us, terrorists included. Our “superiority” in terms of financial solidarity, internaltion respect, world stage position and it’s assiciated leverage has peaked. We have some serious internal issues that need sorted out or else the decline of US =#1 will only be hastened.

[obi-1]

@beat90tsi

I don’t agree. The economy grows when money changes hands faster. The money supply does not have to grow. This is clear when you see how we are paid hourly or on salary, either way, it’s a measure of money over time.

The gold ensures that the money supply is not diluted. This becomes a problem when you or I make $XXXX per year or hour. When our servant government decides to print more money, as it enters circulation, it dilutes the value of our money, but we don’t get a raise, thus our same dollars are now worth less.

The Gold standard serves to ensure that the value of currency cannot be diluted.

Intuitively, this still doesn’t feel right to me. You are right that the dollar will become more powerful. On the flip side, if we keep the amount of money constant, the value of everything we own will decrease proportionally.

For example, with a constant money supply: If we double the number of houses in the country, then each house necessarily has to be worth half of when it was purchased.

[beat90tsi]

@obi-1

For example, with a constant money supply: If we double the number of houses in the country, then each house necessarily has to be worth half of when it was purchased.

No, not at all. If that were true, Ipods, Mustangs and Imprezas would be free.

Supply and demand will continue to be market forces, and the speed of transactions can always increase. If you’ll notice, the housing slowdown (sales) and the credit crunch keeping people from buying has hurt prices despite the massive increases in the money supply.

You’re oversimplifying it…which should be a good thing, but our monetary system has become pretty complex.

[obi-1]

So, you are suggesting that money is only required for transactions? And the economy can continue to grow without creating more, since the amount of money in circulation does not define the value of the economy?

[4doors5gears]

Hmm, cliffs for being ignorant to the economics of this thread’s topic?

[obi-1]

@4doors5gears"

Hmm, cliffs for being ignorant to the economics of this thread’s topic?

:dunno: I don’t know either. I’m talking out of my ass.