Global Financial Crisis scenarios

[tee-rex]

tee-rex : savings are good, consuming on credit is bad

What about savings versus direct consumption? Which one is better? You won't get away with this question so easily.

Correct but you cannot have a healthy economy with increasing salaries (in real terms!) and increasing standard of living if you consume on credit but your industry is stable or decreasing, your taxes are going up, your trade&public deficit are going up, your unfunded liabilities is going up, the number of employed people compared to the total of the population is going down and the quality of the jobs is going way down (look at the last jobs reports : mostly part time jobs and full time jobs are destroyed at an alarming rate!)

You didn't answer my question...

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

[hashman]

The world absolutely can survive without the Dollar as the reserve currency.  China and many other countries would eventually be fine without it.  The US would eventually recover, too (although probably not to where we are today).  The problem is that the transition would be very very painful.

I think the transition from everybody being continually robbed to everyone not being continually robbed will not be as painful as you think. 

[tee-rex]

The world absolutely can survive without the Dollar as the reserve currency.  China and many other countries would eventually be fine without it.  The US would eventually recover, too (although probably not to where we are today).  The problem is that the transition would be very very painful.

The world will survive ultimately (no doubt about it), but the standard of living will fall down dramatically, at least temporarily. And the more developed a country is, the more it is intertwined into the global economy, the stronger will the impact be on it.

[boumalo]

The world absolutely can survive without the Dollar as the reserve currency.  China and many other countries would eventually be fine without it.  The US would eventually recover, too (although probably not to where we are today).  The problem is that the transition would be very very painful.

I think the transition from everybody being continually robbed to everyone not being continually robbed will not be as painful as you think. 

Good point

tee-rex : savings are good, consuming on credit is bad

What about savings versus direct consumption? Which one is better? You won't get away with this question so easily.

Correct but you cannot have a healthy economy with increasing salaries (in real terms!) and increasing standard of living if you consume on credit but your industry is stable or decreasing, your taxes are going up, your trade&public deficit are going up, your unfunded liabilities is going up, the number of employed people compared to the total of the population is going down and the quality of the jobs is going way down (look at the last jobs reports : mostly part time jobs and full time jobs are destroyed at an alarming rate!)

You didn't answer my question...

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

[tee-rex]

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

You might have noticed that I didn't mean consumption financed by debt. Producers would have to take losses or see profits diminishing even if the decreasing consumption is directly financed by household earnings, right?

[boumalo]

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

You might have noticed that I didn't mean consumption financed by debt. Producers would have to take losses or see profits diminishing even if the decreasing consumption is directly financed by household earnings, right?

_{_______________________________________________________________________________ __________}

฿.BitBull

Exchange.the.World.at.Most.Reliable and.Technological.Bitcoin.Exchange HTTP://BBEXCH.COM.⟩

In order to be able to consume you have to produce wealth first and you have to produce

Producing come before consuming, no production no consumption; consuming is not hard, everyone can do it, being able to produce is what matters and being able to trade your time and skills for money is what able to you consume

[Gargulan]

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

You might have noticed that I didn't mean consumption financed by debt. Producers would have to take losses or see profits diminishing even if the decreasing consumption is directly financed by household earnings, right?

_{_______________________________________________________________________________ __________}

฿.BitBull

Exchange.the.World.at.Most.Reliable and.Technological.Bitcoin.Exchange HTTP://BBEXCH.COM.⟩

In order to be able to consume you have to produce wealth first and you have to produce

Producing come before consuming, no production no consumption; consuming is not hard, everyone can do it, being able to produce is what matters and being able to trade your time and skills for money is what able to you consume

The good from production also need to be priced competitively and have demand from the market.

Planing before anyone else and predicting what the market want is no easy task. The window for good profit is also small (ie: Apple and Samsung competition on smart phone)

[tee-rex]

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

You might have noticed that I didn't mean consumption financed by debt. Producers would have to take losses or see profits diminishing even if the decreasing consumption is directly financed by household earnings, right?

In order to be able to consume you have to produce wealth first and you have to produce

Producing come before consuming, no production no consumption; consuming is not hard, everyone can do it, being able to produce is what matters and being able to trade your time and skills for money is what able to you consume

Why do you shrink from answering my question? You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long run (as you previously claimed)?

[boumalo]

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

You might have noticed that I didn't mean consumption financed by debt. Producers would have to take losses or see profits diminishing even if the decreasing consumption is directly financed by household earnings, right?

In order to be able to consume you have to produce wealth first and you have to produce

Producing come before consuming, no production no consumption; consuming is not hard, everyone can do it, being able to produce is what matters and being able to trade your time and skills for money is what able to you consume

Why do you shrink from answering my question? You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long run (as you previously claimed)?

_{_______________________________________________________________________________ __________}

฿.BitBull

Exchange.the.World.at.Most.Reliable and.Technological.Bitcoin.Exchange HTTP://BBEXCH.COM.⟩

The problem is not the demand, the problem is producing; everyone wants iphones, cars, tvs or to travel...

Answered your question, consumption made by going into debt is bad for the economy because of the debt; consumption made from savings is not better than savings; if any savings would be better because they are invested and produce a profit

[tee-rex]

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

In order to be able to consume you have to produce wealth first and you have to produce

Producing come before consuming, no production no consumption; consuming is not hard, everyone can do it, being able to produce is what matters and being able to trade your time and skills for money is what able to you consume

Why do you shrink from answering my question? You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long run (as you previously claimed)?

The problem is not the demand, the problem is producing; everyone wants iphones, cars, tvs or to travel...

Answered your question, consumption made by going into debt is bad for the economy because of the debt; consumption made from savings is not better than savings; if any savings would be better because they are invested and produce a profit

You didn't answer my question. Actually, I see that you're trying to avoid answering it as much as possible. I am asking whether saving is better than consumption (I mean consumption financed from household earnings). Yes or no?

[boumalo]

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

You might have noticed that I didn't mean consumption financed by debt. Producers would have to take losses or see profits diminishing even if the decreasing consumption is directly financed by household earnings, right?

In order to be able to consume you have to produce wealth first and you have to produce

Producing come before consuming, no production no consumption; consuming is not hard, everyone can do it, being able to produce is what matters and being able to trade your time and skills for money is what able to you consume

Why do you shrink from answering my question? You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long run (as you previously claimed)?

The problem is not the demand, the problem is producing; everyone wants iphones, cars, tvs or to travel...

Answered your question, consumption made by going into debt is bad for the economy because of the debt; consumption made from savings is not better than savings; if any savings would be better because they are invested and produce a profit

You didn't answer my question. Actually, I see that you're trying to avoid answering it as much as possible. I am asking whether saving is better than consumption (I mean consumption financed from household earnings). Yes or no?

_{_______________________________________________________________________________ __________}

฿.BitBull

Exchange.the.World.at.Most.Reliable and.Technological.Bitcoin.Exchange HTTP://BBEXCH.COM.⟩

Yes it is better

[tee-rex]

You didn't answer my question. Actually, I see that you're trying to avoid answering it as much as possible. I am asking whether saving is better than consumption (I mean consumption financed from household earnings). Yes or no?

Yes it is better

Saving is contrary to spending which means that money saved doesn't return into circulation but is lost for the economy, at least temporarily. If you say that saving is better than spending, this with logical necessity means that there was surplus of money in the economy in the first place. Besides that, it is assumed that ultimately the saved money will be spent, so this also implicitly implies that there will be shortage of money in the economy at the moment of spending (since your assumption states that saving is better than consumption). Don't you think that these two assumptions (surplus of money and shortage of money) are in a downright contradiction with what I previously explained to you about human psychology and how it works in respect to saving and spending?

[Erdogan]

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

You might have noticed that I didn't mean consumption financed by debt. Producers would have to take losses or see profits diminishing even if the decreasing consumption is directly financed by household earnings, right?

In order to be able to consume you have to produce wealth first and you have to produce

Producing come before consuming, no production no consumption; consuming is not hard, everyone can do it, being able to produce is what matters and being able to trade your time and skills for money is what able to you consume

Why do you shrink from answering my question? You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long run (as you previously claimed)?

The problem is not the demand, the problem is producing; everyone wants iphones, cars, tvs or to travel...

Answered your question, consumption made by going into debt is bad for the economy because of the debt; consumption made from savings is not better than savings; if any savings would be better because they are invested and produce a profit

You didn't answer my question. Actually, I see that you're trying to avoid answering it as much as possible. I am asking whether saving is better than consumption (I mean consumption financed from household earnings). Yes or no?

"You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long"

How can it not be good? Where do you think your consumption comes from, if not someone has produced them? How can you get it, without producing something of comparable value and trade? The savings in money and investments from prudent producers is the root of increased productivity, that benefits all.

The advantages of inflation is promoted by those who want to deceive you into accepting the theft just abit longer. Speaking of word theft, I saw a definition of money as "something that looses value over time..." How is it possible for any mildly intelligent person to close their eyes to this?

[Harley997]

In order to see the price of bitcoin, gold and all commodities goes up, we need the dollar's price (or value) to go down. In other words : inflation. With QE infinity, the world is heading towards inflation !. So good news for US 

There is certainly a correlation (and sometimes a strong one) between the strength of the dollar and the price of commodities and other currencies, but it's not a perfect correlation.  If the dollar weakens, that could help the price of bitcoin rise, but not necessarily.  Ultimately, the price of bitcoin in USD is simply determined by how much USD people are willing to pay for it.  The price of bitcoin in USD will only rise as a result of USD weakness if people believe that bitcoin will hold its value better than USD.

And btw, the US is still on course to continue tapering its bond purchases, so QE infinity is (theoretically) coming to an end.  The Fed is also expected to start raising interest rates within another year or so (of course that prediction keeps getting moved back), which will remove the last of the stimulus.

This is true regarding the value of the dollar. However in times of economic (and geopolitical) crisis the dollar tends to rise as it is considered the least risky asset class.

Dollar has value because you can still buy oil with it.

In time of crisis, people and central banks usually flock to gold.

The dollar has value because it is the most widely accepted form of payment accepted throughout the world.

It doesn't mean they can create USD in any amount and it won't lose its value

Countries and companies can stop using USD

They can stop using USD but even when the Fed creates massive amounts of dollars, the dollar is still more stable then alternatives that countries have

[tee-rex]

"You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long"

How can it not be good? Where do you think your consumption comes from, if not someone has produced them? How can you get it, without producing something of comparable value and trade? The savings in money and investments from prudent producers is the root of increased productivity, that benefits all.

Sorry, but I don't understand how what you say is related to what I am talking about. Yes, someone has produced what I consume, so if I decide not to consume (but prefer to save instead), there is overproduction (as simple as that). We are not talking here about producers' investments.

[Erdogan]

"You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long"

How can it not be good? Where do you think your consumption comes from, if not someone has produced them? How can you get it, without producing something of comparable value and trade? The savings in money and investments from prudent producers is the root of increased productivity, that benefits all.

Sorry, but I don't understand how what you say is related to what I am talking about. Yes, someone has produced what I consume, so if I decide not to consume (but prefer to save instead), there is overproduction (as simple as that). We are not talking here about producers' investments.

There can never be overproduction in the free market. When one individual produces, sells his product and saves money, prices will decrease and others will be able to buy more. Saving is letting others in front of you in the consumption queue.

[efreeti]

"You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long"

How can it not be good? Where do you think your consumption comes from, if not someone has produced them? How can you get it, without producing something of comparable value and trade? The savings in money and investments from prudent producers is the root of increased productivity, that benefits all.

Sorry, but I don't understand how what you say is related to what I am talking about. Yes, someone has produced what I consume, so if I decide not to consume (but prefer to save instead), there is overproduction (as simple as that). We are not talking here about producers' investments.

There can never be overproduction in the free market. When one individual produces, sells his product and saves money, prices will decrease and others will be able to buy more. Saving is letting others in front of you in the consumption queue.

Overproduction and under supply can happen in free market.

Planning and mis-allocating capital can go horrible wrong even in the total decentralized system.

[tee-rex]

"You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long"

How can it not be good? Where do you think your consumption comes from, if not someone has produced them? How can you get it, without producing something of comparable value and trade? The savings in money and investments from prudent producers is the root of increased productivity, that benefits all.

Sorry, but I don't understand how what you say is related to what I am talking about. Yes, someone has produced what I consume, so if I decide not to consume (but prefer to save instead), there is overproduction (as simple as that). We are not talking here about producers' investments.

There can never be overproduction in the free market. When one individual produces, sells his product and saves money, prices will decrease and others will be able to buy more. Saving is letting others in front of you in the consumption queue.

So will the profits of producers, right? And here we go where we started at, that is how saving can be better for the economy than consumption?

[tee-rex]

"You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long"

How can it not be good? Where do you think your consumption comes from, if not someone has produced them? How can you get it, without producing something of comparable value and trade? The savings in money and investments from prudent producers is the root of increased productivity, that benefits all.

Sorry, but I don't understand how what you say is related to what I am talking about. Yes, someone has produced what I consume, so if I decide not to consume (but prefer to save instead), there is overproduction (as simple as that). We are not talking here about producers' investments.

There can never be overproduction in the free market. When one individual produces, sells his product and saves money, prices will decrease and others will be able to buy more. Saving is letting others in front of you in the consumption queue.

Overproduction and under supply can happen in free market.

Overproduction here obviously means the quantity of goods that a producer can't sell at a given price (that he would otherwise sell had the consumer not changed his preferences). If you set the price next to nothing, there will never be overproduction indeed.

[Erdogan]

"You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long"

How can it not be good? Where do you think your consumption comes from, if not someone has produced them? How can you get it, without producing something of comparable value and trade? The savings in money and investments from prudent producers is the root of increased productivity, that benefits all.

Sorry, but I don't understand how what you say is related to what I am talking about. Yes, someone has produced what I consume, so if I decide not to consume (but prefer to save instead), there is overproduction (as simple as that). We are not talking here about producers' investments.

There can never be overproduction in the free market. When one individual produces, sells his product and saves money, prices will decrease and others will be able to buy more. Saving is letting others in front of you in the consumption queue.

Overproduction and under supply can happen in free market.

Planning and mis-allocating capital can go horrible wrong even in the total decentralized system.

... said he without even trying to argument for it.