[BigTex]

If one expands his financial carrying capacity through debt, it only provide a temporary expansion of financial carrying capacity that will disappear once the borrowed amounts are consumed (assuming no other expansion of carrying capacity has occurred).

Anyone have thoughts on whether we are seeing a financial "die-off" unfolding right now?

If this is a financial die-off where will the financial carrying capacity be when it's over?

I am thinking both in individual terms as well as for certain governments.

[patience]

BigTex,
No doubt in my mind that as credit is destroyed, so is ability to consume. As a nation, we have come to the point that we must pay our bills, both individually and collectively, to the degree that we have maxxed out our credit limits.

As mortgage lending standards get tighter, and all credit for that matter, then we will see a lag time during debt paydown until we can continue consuming again. Recession. For those with ruined credit, or job loss, this will take a while.

The credit expansion has "hit the wall", of debt service (payments) equalling or exceeding ability to pay. A loan of $100 requires $100 PLUS INTEREST to be repaid, so unless income goes up (production), we hit a point when we have borrowed more than we can repay. Underwater homeowners are there, and others. In a contracting economy, debt expansion doesn't happen, so down we go, into a contraction that feeds on itself. With the consumer at about 70% of the economy, this is real bad news.

[mmasters]

Study fractional reserve banking, central banking and its roots. The Money Masters is a good history course on the money manipulators as is book: The Creature from Jeckyll Island. I have some posts about 6 months back where I made some diagrams breaking down the whole fractional reserve process. Those diagrams do not exist in any textbooks or publications.

Put simply the world is run by cartels - the banking cartel being one of the most powerful, and in economic terms the most powerful.

There is no financial die off. As long as there are resources and people that need them distributed there will be needed a medium of exchange. Our current private debt based money system is architected such that it can be abused and used to usurp the resources of the planet quickly through boom cycles. Furthermore these boom cycles can be manipulated to achieve technological advances in any field. It is also architected such that the wealth generated from these advances can be consolidated into the upper class by insider manipulation of the money supply and other cartel activity. Most importantly the system when abused as it currently is serves as an extreme tool to drive forth a global program of monopolization, class polarization, socialism and totalitarianism. The system is extremely well protected to insure that it is never changed at its core.

[cube]

$this->bbcode_second_pass_quote('BigTex', 'A')nyone have thoughts on whether we are seeing a financial "die-off" unfolding right now?

[patience]

mmasters,
I've heard of what you say, but have no knowledge of it, so I'll take you at your word as to how the overall works. I was speaking to the situation of an individual, and maybe our govt, as possibly being outside of, or subject to the masters you cite. It looks to me like the individual is screwed, from first inflation, then a deflationary "reset" that I've read about. Critique on that idea?

I've read some of the gist of Jekyll Island, but need to read the entire book. Kinda got the general idea. Is the Money Masters in print? I'll look.

[patience]

The whole concept of lust after power eludes me. What consummate depths of FEAR must those people live with that could engender such psychology? Have to be the most miserable beings alive!

[BigTex]

$this->bbcode_second_pass_quote('mmasters', 'T')here is no financial die off. As long as there are resources and people that need them distributed there will be needed a medium of exchange.

[eastbay]

$this->bbcode_second_pass_quote('BigTex', '')$this->bbcode_second_pass_quote('mmasters', '
')
I only mean financial die-off back to financial carrying capacity.

It's awkward to fit the carrying capacity concept into finances, but maybe what we are seeing right now is sort of carrying capacity intruding upon banksters' attempts to keep the Ponzi scheme going.

Maybe someone else can develop this concept more fully or tell me why it doesn't work when applied in this manner.

[BigTex]

$this->bbcode_second_pass_quote('eastbay', 'Y')ou are raising a very interesting point to ponder BigTex. I appreciate this. New thinking patterns rarely arise. I think we try to work around this by using the term, bubble' to describe sectorized value inflations. But on a larger scale, 'bubble' won't work and a different term should be used.

[eastbay]

Edit for rookie error.

[eastbay]

$this->bbcode_second_pass_quote('BigTex', '
')
The financial system is imaginary. That may be where my analogy breaks down. But then again the analogy may be just right once you reach a certain scale of debt coupled with scarce commodities.

[LoneSnark]

$this->bbcode_second_pass_quote('', 'A')nyone have thoughts on whether we are seeing a financial "die-off" unfolding right now?

[cube]

$this->bbcode_second_pass_quote('LoneSnark', '.')....
But, as you should know from reading history, this is not the first such "die-off" in history.
.....

[BigTex]

$this->bbcode_second_pass_quote('cube', '')$this->bbcode_second_pass_quote('LoneSnark', '.')....
But, as you should know from reading history, this is not the first such "die-off" in history.
.....

[MrBill]

$this->bbcode_second_pass_quote('BigTex', '')$this->bbcode_second_pass_quote('cube', '')$this->bbcode_second_pass_quote('LoneSnark', '.')....
But, as you should know from reading history, this is not the first such "die-off" in history.
.....

[LoneSnark]

The quantity of stuff produced at any given time is fixed and all of it must be consumed or it will build inventories.

All debt does is change who consumes, not how much is consumed. Instead of lenders consuming, borrowers consume. While debt does tend to increase the money supply, it cannot directly increase the supply of goods, so the result is higher prices in line with the higher money supply.

So, to be blunt, if no debt was ever created the same quantity of stuff would be consumed every year on average, the various product markets would adjust to keep this true because borrowers tend to have a different patern of consumption than lenders.

[patience]

Okay,
how come foreclosures exceeded home sales in California lately?


http://www.mercurynews.com/realestatene ... ck_check=1

[patience]

Sorry, LoneSnark, I don't see it that way. Money supply = cash + credit. If money supply expands and production does not, we get inflation, and vice versa. We are near the top, or beginning the implosion of, the largest credit bubble the world has ever seen. Since we haven't seen inflation on a scale to match production increases, your theory doesn't work. Thus, the crash of the real estate market as credit contracts, and money supply shrinks = deflation. I know, you don't term deflation like the Austrians. Oh well.

[cube]

$this->bbcode_second_pass_quote('patience', 'S')ince we haven't seen inflation on a scale to match production increases, your theory doesn't work.

[LoneSnark]

$this->bbcode_second_pass_quote('', 'O')kay, how come foreclosures exceeded home sales in California lately?