Who’s the lemming? The mainstream view that this is a temporary blip on the ever-expanding growth chart of the U.S. economy and financial markets is very well represented. Open any newspaper and watch any news program and that’s what you’ll find. If there are any lemmings, they are the millions of people who go on espousing this view even in the face of incontrovertible evidence to the contrary.
I have read and continue to read those opposing views, and for the most part I find them extremely unconvincing. They consistently ignore important data, or make unsupportable and illogical predictions such as "the rules have changed" or "we’ve conquered depression". On the other hand, when I read people like Chris M., Richard Heinberg, John Micahel Greer, etc. I am consistently impressed by the depth of their inquiry, the objectivity of their data and the intelligence and rationality of their conclusions.
You speak of the importance of a "balance of views". That’s exactly why this site and others like it exist! To balance out all of the nonsense we see in the mainstream media.
I am happy to read any proposals or ideas you or anyone else has that could lead to an outcome other than a major correction or collapse of our current system. In fact, I welcome them! But I do not have to agree with those arguments if they are poorly designed and not supported by the weight of evidence.
Hello everyone…
I’m a fairly new reader/subscriber and have not posted until now. I have enjoyed all of the comments on this site, but I have to disagree with this one.
Credit cards are a bane to the existence of anyone who does not use them properly. But when used properly, they can actually generate "income" for the user.
My family has a comfortable credit limit on our cards that we will never, ever reach. Each time my wife and I buy anything, we evaluate whether it fits into our budget. But ALL purchases are done on the credit card. The reason is this… Merchants pay huge fees to the banks for the privelege of being able to take a credit card. In turn, they pass those fees on to the consumers by increasing the price of the goods and services they offer. Some businesses, like a couple of gas stations where we live, have special prices for people who do not use a credit card, such as cash pumps. Most of the time you are paying for everyone to have the opportunity to use the card no matter if you pay cash or not.
One of the "benefits" most credit cards have are the points or miles that can be redeemed for goods and services. My feeling is that these are opportunities to recoup "money" by using the points and miles. None of this works if the card is not paid off every month. The moment you start paying interest is the moment you have overextended and the credit card becomes a liability. However, all cards have a grace period on interest fees whereby if you pay it off every month you will not pay a single penny of interest charges.
Over the years we have used the credit card, which by the way is safer than carrying around cash, whenever we possibly can. We have paid zero interest and yet have traveled numerous times using credit card miles. I see this as using the system to our advantage.
The day our bank announces it will no longer provide airline miles or other goods and services is the day we will stop using the card. And we will NEVER put ourselves in a position where we cannot pay it off every month.
I also agree with srbarbour that you should have cash on-hand for emergencies. My family historically has kept three months worth of cash to cover all of our expenses, but are now working on upping that to 6 months. We have arranged for safe storage of most of that cash outside of traditional banks as well. But we still use the credit card.
-smocom
Smocom,
I like your argument, but it lacks some fundamentals. It may be that you were not aiming to bolster fundamental ethics and/or system changes, but I have argued elsewhere that "credit" is only sustainable if and only if the system is played systematically and fairly by all persons involved in the game. Just as there are loan sharks, predatory mortgage lenders, there have always been defaults, by debtors, who do not or are unable to play the game anymore. I know this looks like a slippery slope that I’m on, but I am attempting to avoid this at all cost. To shorten my argument, I’ll just briefly mention the dire need for improved education, in almost everything, in a society that revolves around credit. Credit is not only privy to a small privileged few, but to most Americans. The portion of Americans that "need" credit to make large purchases such as a house, car, or education will most likely be required to obtain some credit so as to build their credit to establish sufficient history necessary in obtaining loans of these magnitudes. While most Americans find too much debt financially and physically straining and adversely affecting their health, they (as well as large corporations) find themselves in this situation the rest of their lives. I am generalizing here, but I invite anyone to beg to differ with new and updated information. So while most Americans aspire to gain commercial goods to gain the likes of others (likes of others-naturally good) and to impress others, this feeling (or "phenomena") has taken hold of the American psyche. While this may be natural, it may not be good, in that, this feeling ultimately destroys the very reason for aspiring to a greater good in the first place. In most ways we have been herded into systems already set up for us. For example, you may relate to this consecutive order and find out whether or not you have been "trained" by your previous system (family) and/or former system of education.
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focused; unfocused (need Ritalin)
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pharmaceuticals are the answer to non-conforming children
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nerd, jock, skater, prep (must-haves in school… cell phone, play station, t.v., car)
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t.v. (to stay "cool" with your friends aka small talk)
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t.v. (sports- gotta get in good with the boss)
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t.v. (better start learning how to golf)
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t.v. (maybe read the Times, but don’t forget the sports section)
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t.v. (now you’ve indoctrinated yourself entirely into the system of consumerism).
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t.v. (advertisements are better than shows)
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t.v. (marketing children have become better)
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t.v. (U.S. Education almost bottom of list of First World Countries)
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t.v. (how else would we agree to pay for Nike shoes that costs $70 but only $4 to make?)
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t.v. (we’re smarter because we’re Americans- National Pride in what???)
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t.v. (Baseball, Hot dogs, and Chevrolet is the American dream)
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THE ADVERTISING, PHARMACEUTICAL, AND MILITARY ARE THE LARGEST INDUSTRIES IN THE WORLD.
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keep watching t.v. because if you don’t then you’re not playing the game that is part of the system designed for you.
So with this under our belts, is it no wonder we are driven to consume? Should we blame the victim? Yes, partly. Should we blame the culprit? Yes, mostly… Because the culprit was once probably the victim and, like abuse, will most likely be passing their legacy down. The fastest way to stop the continuation of abuse and exploitation is to get rid of them immediately. If that is not an option, as I find, then the next surest way of ending the cycle is improving education which also means lessening t.v. exposure which in turn is advocating less t.v. exposure, which in turn…again… is educating… but we also have to educate the masses to advocate improving education (which ultimately starts within the home). This cycle of corrective/preventative measures starts with education and should never end there. Principles and systems of money and credit (and ethics) should be taught throughout high school and college. These lessons should be mandatory for ANYONE requesting credit! Simple monetary lessons should be taught regardless of one’s desire in obtaining credit. Is this being done? I don’t think so for the most part. High-schoolers are barely able to get through math as it it, which comes full circle back to education or the lack thereof.
So for someone to provide themselves as a example, model, or vanguard of how a person "should" manage finances does not get to root of fundamental problems that lead to blossoming problems thus creating a snowball effect. Everyone should investigate and think about these questions:
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Is the system fair?
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Is the system realistic, in that, will it falter or crash if people opt themselves out of the game?
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If some people, by their own right, opt out of the game are the players, of the game, harmed?
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DO WE KNOW THE NATURE OF THE SYSTEM WE HAVE BEEN INDOCTRINATED INTO?
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If the masses do not know about "systems", then should they be taught?
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Should we teach the masses about how vital ethics is within a system/game?
These are only some of the fundamental issues underlying the "system", of credit, we play today. Are the rules fair for both players (the creditors and borrowers)? I don’t think, today, the game is fair and I advocate rejecting it altogether until there is education being mandated to everyone involved in the system. How does one play chess properly if he doesn’t know the rules to the games and/or he attempts to cheat at the very game he desired to play?
Lovely chart but it really doesn’t establish cause and effect or relationship with the yen carry trade.
This chart shows that the DOW and Yen have a strong inverse relationship and while it suggests the yen is responsive to the DOW - that is something different again to linking it to the carry trade.
Cheers
[quote=srbarbour]
(We know it was snuck in, because the Republicans would never allow something so socialistic)
I guess it goes to show that sometimes those rules used to destroy our democracy and impoverish the people get twisted and used for the common good. 
To clarify the methods used to "sneak" that provision in to the bill you can read Prof. Nouriel Roubini’s quote from the Congressional Record here:
As you will see this point was questioned by Mr. Moran (D-VA) and verified by Mr. Frank (D-MA) as being the intent of the wording.
This exchange took place during the floor debate just before the final vote.
No one gets a free pass on this point by claiming it was ‘snuck’ into the bill.
Lost in the fog here is the fact that the Treasury Secretary was given tyrannical powers by majorities of both parties.
Even Roubini said "all is well that ends well".
In my opinion we haven’t reached the end yet so celebrations are premature.