[financeguy]

https://www.zerohedge.com/article/meltup-beginning-us-currency-crisis-and-hyperinflation-viral-video

I’m not meaning to spam…

This is a free documentary. Not selling anything, not trying to sucker anyone. Simply to educate. It is mostly about inflation and the USA. It will take 1 hour of your time. Please send the link to your friends and family.

As hard as you all work to become CPA’s and as much time as you put in studying and working, you should really take 1 hour out of your day to watch this.

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[NJCPA2B]

History is scary……I hope you guys are not like the ones before that started believing lies:

“Make the lie big, make it simple, keep saying it, and eventually they will believe it”

Adolf Hitler quote

BEC=77, FAR=78, REG=73,74,80, AUD=70,69, 84 DONE!

[financeguy]

Irony at its finest…I'm pretty sure I have read you highly praising obama and what he has done so far

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[Anonymous]

This is a very amusing blog.

I don't know whether to be impressed or frightened that a fascist quote just appeared in this post. Good use of resources either way…lol

What would Hitler do in these circumstances? Just joking and trying to ease the tension.

[NJCPA2B]

LOL, thinking like financeguy started in Arizona….needs to be stopped before it morphs ……….

BEC=77, FAR=78, REG=73,74,80, AUD=70,69, 84 DONE!

[jeff]

You don't know how hard it has been for me to bite my tongue during this discussion 🙂

[financeguy]

Feel free to chime in Jeff. No reason there cannot be a civilized debate. It is always good to see different viewpoints. This type of stuff is my favorite thing to discuss…and I like to hear what people have to say…most people really don't have anything to say at all, so it is always good when people do have something to say, even if I don't agree with it.

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[financeguy]

S&P down over 3% to 1079…BOOYAH!

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[jeff]

Without getting too much into politics (I am a very political person, btw), I simply want the government to take as little of my money as possible because I can do better things with it than they can.

I also want them staying out of my health care and my childrens' education. I can make better decisions for my family than they can as well.

That's it…pretty simple. Let me pay a FAIR amount of taxes and get out of my way.

My job is to provide for my family and better those around me if possible.

The Government's job is to keep the keep the roads in good working order, defend our borders, and that's pretty much it.

-Jeff

[financeguy]

That is smart thinking Jeff. I'm concerned that taxes are inevitably going to the sky, unless we can get someone like Ron Paul as President.

I think by 2012 things will be so incredibly bad here that Obama will have no shot at a re-election, and there just might be enough supporters to rally up and elect some real competent government officials. Some people think the game can be dragged out until 2012…I don't think so. I think we are seeing things spiral out of control right now as evidenced by the currency, commodities, bond, and stock markets. A $1T bailout for the EU and its effects lasted only 1 day. The markets called the bluff and they won.

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[jeff]

I agree – I'm staring at Ron Paul's book “The Republic” right now.

Everything out of that dude's mouth just seems to make sense.

[ToewsKaneNiemiandCompany]

I've been a long time reader of this blog, and I can't thank Jeff and the other posters on this site for, if nothing else, providing a place for all of us demented CPA candidates to vent while we go thorugh this grueling process. This specific topic however, for some reason compelled me to create a profile and respond. Here's my two cents on the issue: Every person's opinion on the state of the economy are as different as the people who say them. If you were to follow all the predictions made on this blog, you should move to Canada while also investing in American infrastructure. Needless to say, it can get quite confusing. I have to go ahead and agree with most of what Jeff said earlier. I consider myself a moderate independent; I hate conflict. But, the reason I give myself this title is because I am socially liberal while being fiscally conservative. Some people might consider that a contradiction but I don't. To respond to other ideas given on this topic, I don't believe the American economy is going to collapse. Pulling up negative figures on the housing markets I believe is no longer a good representation of the state of Wall Street; it's a better representation of how things are on Main Street. Wall Street has already devalued any asset that is connected to real property. Wall Street has learned from the past two years and have already reflected the grim housing news into market prices. AND FINALLY, THE AMERICAN ECONOMY WILL NOT COLLAPSE BECAUSE THE DEVELOPED WORLD CANNOT ALLOW IT. DURING THE PAST YEAR, WE HAVE SEEN THAT WHILE AMERICA'S ECONOMY IS QUITE WEAK COMPARED TO ITSELF SEVERAL YEARS AGO, IT IS STILL THE STRONGEST ECONOMY IN THE WORLD. AS THE US DOLLAR CONTINUES TO DEPRECIATE, OTHER COUNTRIES WILL STRUGGLE EVEN GREATER. COMMODITIES, PRICED IN USD, WOULD SKYROCKET AND OTHER ECONOMIES WOULDN'T HAVE THE CAPITAL TO CONITNUE TO GROW. EVEN STRONG ECONOMIES LIKE CHINA, RUSSIA, AND BRAZIL STILL WILL LOSE IF AMERICA FALLS BECAUSE THEY HAVE INVESTED SO MUCH INTO OUR ECONOMY. Finally, I just want to say that if America's economy were to fail, the conscequences would be unavoidable whether you were in Canada or Antarctica. The world's economy has leveraged itself in a way that it will succeed if America succeeds and it will fail if America fails. Everyone else is confidently putting their money on us, so why don't we do the same?

[Anonymous]

I agree that the rest of the world is tied to the US' sucess. As a British ex-pat, I don't agree with the policies of the man in charge (Obama, not God) or Reid or Pelosi. I think the Republicans made a huge mistake in the Spring of 2008 by choosing John McCain as the presidential candidate.

I'm not saying that all would be fine if someone with a track record in private business would have been selected, but it's hard to think that someone like Mitt Romney or Ron Paul would have made such a mess as the Obama administration. They wouldn't have passed a healthcare bill, that is for sure. While the economy may still have continued to tank, I don't think either of those candidates would have set us up for so much future taxation, continual saddling of debt, and generally, a welfare state.

As I noted above, I come from Britain. There are millions of people there that live on government welfare programs. They are proponents of “entitlement.” One of the reasons I moved here was because I could see Britain going down the tubes. We have people who make a living off unemployment, government housing, free healthcare etc. I believe in helping people, but I don't think help needs to be mandated by an overreaching government, eager to appear as the champion of the poor.

Rant over.

[financeguy]

To respond above:

1. Wall Street HAS NOT devalued assets connected to real property. FASB changed the mark to market rules last year. MBS, along w/ non performing HELOC's. These things are still valued at 90 to 100 cents on the dollar. If you know anything about the mortgage industry you will know that when a house is foreclosed on, the 1st lien holder gets paid off completely before any money goes to the 2nd lien holder. In the case of all these houses bought in the bubble, with 2nd lien helocs, now no payment made in 1+ year…the value of the home has dropped and will never recover…if they foreclose on these houses they will never recover the entire 1st lien, and therefore they will get ZERO for the HELOC. WFC is said to have $1.7T in off balance sheet accounting for this type of thing. Don't even get me started on CRE.

2. How do you believe the American economy is the strongest in the world? If it were not for the $ being the worlds reserve currency, the US would be screwed. Do you look at data such as deficits, exports, imports, bond auctions, debt rollover, debt to gdp?

3. Of course every country in the world will feel the effects of the American economy collapsing. It is a global economy. Every country feels the effects of every other country. That is why this economic fraud has continued for the past year…the powers that be are trying everything they can to keep it going, yet they are only kicking the can down the road. There is mathematical evidence that it will not continue, and those facts simply cannot logically be disputed.

4. Where do you come up with “Everyone else is putting their money on us, why don't we?” Who exactly is everyone? It is certainly not China – have you followed the action w/ their treasury holdings for the past 6 months? Its certainly not India or Japan. Do you understand the intrinsic value of gold? Do you understand people flock to gold because throughout thousands of years it is the safest store of value of wealth in bad times? Have you followed gold and its buyers over the last year? Do you follow USA bond auctions? Clearly you do not, as you would not make the above statement if you did.

I don't know how you come to your conclusions. I have reached my conclusion from thousands of hours analyzing, learning, reading, daily market watching, etc of the mortgage industry, stock market, currency market, oil, PM's, economics, and just about anything else.

If you are a true believer, then go long US treasuries, dow jones, and S&P 500. Let me know how that works out for you.

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[Anonymous]

someone get the jello shots and mud pit, this “debate” can be settled the old fashioned way! Although I dont know how you all would look in string bikini's…. but the possibilities are interesting! I think is one topic where we all agree to disagree.

How bout that cpa exam

[ToewsKaneNiemiandCompany]

financeguy,

What I meant by Wall Street devaluing assets that have anything to do with real property was not talking about book value, I was talking about market value. Any company that had risky assets tied to real property have already seen a drop in their stock price or credit rating to reflect that. There isn't going to be a second slide because of this. I've never heard of a bubble bursting twice.

When I mean that America is the strongest economy in the world, what I really mean is that it has the largest economy in the world. I don't care who's providing the capital to keep up the production, but the USA still has the largest GDP in the world. Why do you think the USD is used as the anchor currency around the world? Because it is considered the most stable and also the most accepted. This isn't by accident; this is a direct by-product of having the strongest economy in the world.

Thirdly, I do agree that our trade defecit (imports-exports) is the lowest it has ever been, but that's better explained by the fact that the USA has become more and more of a service economy than a manufacturing economy rather than the recession. Those numbers were negative before the recession too. There is no hiding the fact that it is cheaper to make things abroad, and also as the dollar appreciates in value compared to other world currencies, you can only expect for net exports to drop.

And when I say that everyone else is putting money on us, why don't we, that's exactly what I mean. If you look at our investment defecit (how much Americans invest in foreign entities compared to how much foreigners invest in American entities), we have a negative defecit (which is a good thing) with every other developed country in the world. You say that gold has intrinsic value (which I completely agree with) and the price of gold has continued to rise, however the way foreigners keeps on investing in America, it seems like the American economy is a good gold substiute for foreigners. While I know that investment is just starting to pick up now (as can be expected with a recession), China, Japan, Hong Kong, UK, and Brazil are still highly invested in the future of America (so we can pay them back). If America were to default on paying back these countries, China, Japan, Hong Kong, UK, and Brazil would have to close up shop that same day.

Financeguy, I believe you are emphasizing too much with the short-term numbers; you should rather consider the long-term relationships America has built with the rest of the world.

And clairdelune, I am so down for those jello shots!

[Author]

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