$this->bbcode_second_pass_quote('MicroHydro', '
')There is a huge political risk in total economic meltdown, even for the rich. Nothing is more volatile than a mass of unemployed people with nothing to lose. Ironically, the lack of a political opposition in the US makes the situation worse. Replacing the corporate republican figurehead with a corporate democratic figurehead is unlikely to reassure anyone. Recall that non-voters are a near majority. People disillusioned with the system will gravitate towards nilism and anarchy. It is far from clear that the (very non-rich) police and military will be willing to use force against the former middle and working classes. The downside risk is French Revolutionary level violence. Recall the 1992 Rodney King riots, imagine the same all over America, including people who used to have good jobs and mortgages.
PeakOil is You
THE Bilderberg Thread (merged)
by marko » Fri 27 May 2005, 11:59:25
MicroHydro, I completely agree with you that this would be a risky strategy for the superrich.
But I think that the rich underestimate the risk. I think that they have a newfound confidence in their ability to manipulate the masses into serving their interests as a result of Bush's proven ability to gain and retain power.
And while I see a fair chance of the popular revolution or anarchy that you outline, I see a greater chance of the Bushites or their successors coopting popular anger by directing it against scapegoats overseas, and to some extent at home.
An obvious response by the Bushites to domestic unrest would be to permit or even engineer another terrorist attack, perhaps on a larger scale than 9/11 or involving multiple cities, then declare martial law, suspend the Constitution, and blame the attacks on Iran or even China. The masses of unemployed would provide a large pool of recruits for an overseas war against the "enemies of freedom" who are "trying to destroy the American way of life."
Domestically, critics of the government could be rounded up and, if they are lucky, imprisoned. Immigrants and other marginalized groups could be scapegoated as internal threats to the "American way of life" and be offerred as targets for popular rage.
The Bushites have been testing each of these strategies over the last few years. What has been missing to permit a thoroughgoing fascist takeover has been the fading sense of fear after 9/11 and the lack of an economic crisis. I see a real danger that they will bring that crisis on before Bush's present term ends in an effort to solidify their hold on power.
$this->bbcode_second_pass_quote('venky', 'C')ould these people actually trigger a depression by raising interest rates? Whatever some people may think, there must be limits to the power of the Bilderbergers. There is no runaway inflation threatening the economy as in the 80's justifying such a hike. How will the Fed be able to justify such a hike?
The US economy is now completely dependent on very low interest rates because it is running on debt. The housing boom and consumer spending, which are the basis of the American economy now that the manufacturing sector has mostly moved overseas, rely on mortgage and credit card debt.
If interest rates rise significantly, even just another 1.5% or so, people will have to cut back on their spending because their debt-servicing costs will rise. Probably more importantly, banks will no longer be able to make money by borrowing short and lending long once short-term interest rates (set by the Federal Reserve) rise above long-term interest rates for things like mortgages. At this point, either mortgage interest rates have to rise, or banks will cut back on their lending. Either way, this would bring a sharp drop in demand, and therefore in prices, for housing.
At the same time, there would be extensive layoffs in the financial, construction, and retail sectors. This widespread unemployment, coupled with rising debt-service burdens and an increase in upside-down mortages (where people owe more on their mortgage than their house is now worth) would lead to a wave of bankruptcies, defaults, foreclosures, and bank failures. Within a year or so, we could be in a depression.
At this point, even if the Fed dropped interest rates, the economy would not improve because of the lack of income in the economy and the overhang of bad loans.
You ask how would the Fed justify raising interest rates further? Well, the Fed's short-term rate is now at 3%, which is slightly below the official (downwardly distorted) rate of inflation. That means that they are basically giving money away, strongly stimulating the economy. There is growing talk among economists about how this stimulative policy is creating dangerous bubbles (for example, in housing). Also, central banking theory says that this kind of stimulation is justified only when the economy is in recession or depression. Well, using official measures, the US economy has been in an expansion now for several years. Maintaining a stimulative policy under these circumstances is a violation of central banking principles. (The Fed does not admit that the economy has become dependent on constant stimulation.)
So Federal Reserve Board members have announced a goal of raising rates until they are neutral, which is the responsible thing to do according to standard financial theory. "Neutral" means at least 1.5% above the rate of inflation. So, until the economy starts to collapse, at which point it will be too late for them to fix it by lowering interest rates, they are likely to raise interest rates. This is justified by standard central banking theory.
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by threadbear » Fri 27 May 2005, 13:15:39
Marko, You're one smart dude. Your idea of a manufactured terrorist attack is reasonable, and Bushco will probably engineer an attack that maximizes the potential for plausible deniability, and one they would be "immune" to.
There is a real genuine and logical concern about viral epidemics right now. This would provide a perfect smokescreen for an engineered event, in the event of a turndown in the economy. There's no way that the bug would be unleashed in a large center. It would likely be in an easily isolated and quarantined town somewhere. Death rate? Well, pick a number. Something around 10,000? This could initiate a kind of war measures act, using quarantine to control populations, depending on how it was spun. It would also require, through the restriction of commerce and distribution networks, more govt control. Anyway, that's my take on it. May never happen, and any viral epidemic could also come about naturally, but bet it's on the list of contingency plans.
There is a real genuine and logical concern about viral epidemics right now. This would provide a perfect smokescreen for an engineered event, in the event of a turndown in the economy. There's no way that the bug would be unleashed in a large center. It would likely be in an easily isolated and quarantined town somewhere. Death rate? Well, pick a number. Something around 10,000? This could initiate a kind of war measures act, using quarantine to control populations, depending on how it was spun. It would also require, through the restriction of commerce and distribution networks, more govt control. Anyway, that's my take on it. May never happen, and any viral epidemic could also come about naturally, but bet it's on the list of contingency plans.
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by nth » Fri 27 May 2005, 13:55:59
The first posted article By Daniel Estulin has a lot of false information.
One example that is easily verifiable is Perl resigning from the Defense Board. Daniel is just a newspaper reader and not do his research. Richard Perle was asked to stay and did stay on the Defense Board despite Congressional Democrats calling for his resignation.
There are a few more things like that.
Bilderbergers conferences are not the only meetings of world's powerful and super rich. There are many more. There are also many regional ones. These people are not all unified under one person or a smaller group of oligarchs. So if they do agree on somethings, then they are very powerful, but it is not guaranteed that they will follow each others orders.
With that said, these people are looking after themselves first and foremost. They want to live forever and pass on their power to their children. So, they may be evil or good depending on how you look at it. As for democracy and power to us common folks, I don't see it. I see world's governments run by a few powerful people. Public media is under the control of these powerful people- this is no lie. Big business, big media, powerful gov't officials all go to same meetings, parties, etc. How can they not influence each other and retain the powers within themselves?
One example that is easily verifiable is Perl resigning from the Defense Board. Daniel is just a newspaper reader and not do his research. Richard Perle was asked to stay and did stay on the Defense Board despite Congressional Democrats calling for his resignation.
There are a few more things like that.
Bilderbergers conferences are not the only meetings of world's powerful and super rich. There are many more. There are also many regional ones. These people are not all unified under one person or a smaller group of oligarchs. So if they do agree on somethings, then they are very powerful, but it is not guaranteed that they will follow each others orders.
With that said, these people are looking after themselves first and foremost. They want to live forever and pass on their power to their children. So, they may be evil or good depending on how you look at it. As for democracy and power to us common folks, I don't see it. I see world's governments run by a few powerful people. Public media is under the control of these powerful people- this is no lie. Big business, big media, powerful gov't officials all go to same meetings, parties, etc. How can they not influence each other and retain the powers within themselves?
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nth - Heavy Crude
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by nth » Fri 27 May 2005, 14:40:42
marko,
you brought up an interesting issue the fed is facing in the US.
short term rates running up against long term rates.
this will cause havoc on the financial system and economy, but your mechanism has a few flaws that does not take away your idea that short term rates and long term rates will cause havoc if the difference narrows.
Bank liquidity in the US is funded by bonds/notes and not money in the bank aka bank accounts. This means that banks don't need interest differentiation between savings and loan rates as measured by federal funds rate and US treasury bonds or mortgage back securities.
Banks make their money by charging borrowers and bond buyers. The more loans they can swap through- the more they will make. Fannie Mae and Freddie Mac are governed by federal rules to keep the markets liquid regulating bank margins on money made by the interest differences.
Now with that said, in actuality, things are more complex than this. Bank fees for loans can all be converted to interest or vice versa. It depends on what numbers you are looking at. For regulation purposes, banks will convert interest margins to fees when they report as they get more favorable treatment. For selling bonds, they will convert fees to interests to simplify bond holders as fees should not be part of principle and so thus, interests includes servicing the loan.
So I am guessing you are probably confused by the bank's and bond's different terminologies, thinking banks make money the old fashion way by paying lower interests and charging higher interests.
Even if banks keep the loans in house and don't sell it, the loans are still securitized and not kept as just loans. For common folks, this is just accounting, but it does have a lot of legal ramifications that I will not burden you.
you brought up an interesting issue the fed is facing in the US.
short term rates running up against long term rates.
this will cause havoc on the financial system and economy, but your mechanism has a few flaws that does not take away your idea that short term rates and long term rates will cause havoc if the difference narrows.
Bank liquidity in the US is funded by bonds/notes and not money in the bank aka bank accounts. This means that banks don't need interest differentiation between savings and loan rates as measured by federal funds rate and US treasury bonds or mortgage back securities.
Banks make their money by charging borrowers and bond buyers. The more loans they can swap through- the more they will make. Fannie Mae and Freddie Mac are governed by federal rules to keep the markets liquid regulating bank margins on money made by the interest differences.
Now with that said, in actuality, things are more complex than this. Bank fees for loans can all be converted to interest or vice versa. It depends on what numbers you are looking at. For regulation purposes, banks will convert interest margins to fees when they report as they get more favorable treatment. For selling bonds, they will convert fees to interests to simplify bond holders as fees should not be part of principle and so thus, interests includes servicing the loan.
So I am guessing you are probably confused by the bank's and bond's different terminologies, thinking banks make money the old fashion way by paying lower interests and charging higher interests.
Even if banks keep the loans in house and don't sell it, the loans are still securitized and not kept as just loans. For common folks, this is just accounting, but it does have a lot of legal ramifications that I will not burden you.
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nth - Heavy Crude
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by nth » Fri 27 May 2005, 14:47:06
$this->bbcode_second_pass_quote('threadbear', 'M')arko, You're one smart dude. Your idea of a manufactured terrorist attack is reasonable, and Bushco will probably engineer an attack that maximizes the potential for plausible deniability, and one they would be "immune" to.
There is a real genuine and logical concern about viral epidemics right now. This would provide a perfect smokescreen for an engineered event, in the event of a turndown in the economy. There's no way that the bug would be unleashed in a large center. It would likely be in an easily isolated and quarantined town somewhere. Death rate? Well, pick a number. Something around 10,000? This could initiate a kind of war measures act, using quarantine to control populations, depending on how it was spun. It would also require, through the restriction of commerce and distribution networks, more govt control. Anyway, that's my take on it. May never happen, and any viral epidemic could also come about naturally, but bet it's on the list of contingency plans.
There is a real genuine and logical concern about viral epidemics right now. This would provide a perfect smokescreen for an engineered event, in the event of a turndown in the economy. There's no way that the bug would be unleashed in a large center. It would likely be in an easily isolated and quarantined town somewhere. Death rate? Well, pick a number. Something around 10,000? This could initiate a kind of war measures act, using quarantine to control populations, depending on how it was spun. It would also require, through the restriction of commerce and distribution networks, more govt control. Anyway, that's my take on it. May never happen, and any viral epidemic could also come about naturally, but bet it's on the list of contingency plans.
I find it easier for Bush to attack NKorea or Iran or Syria.
I am sure Bushco will be able to display a valid reason and rally Americans. They can even use your example on virus and just state Syria did it.
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nth - Heavy Crude
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by nth » Fri 27 May 2005, 14:49:44
$this->bbcode_second_pass_quote('linlithgowoil', 'w')hy on earth would inflation exclude food and energy? can someone explain this to me? aren't these the most important items to consider inflation on, given that they are essentials - rather than plasticky things from china and dvd's?
i dont get it.
i dont get it.
The prices fluctuate a lot. They are included, but just not reported by media. Inflation indexed bonds and other instruments used to calculate costs used the infation numbers that include the food and energy.
Sorry, no conspiracy here.
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nth - Heavy Crude
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