Documentary examines possibility of US dollar collapse
Ruben says: "This is a summary of a documentary that aired recently on Dutch national television. The documentary was based on a script made by an economist who was assigned the task to make a 'what if' scenario about how the dollar could crash within 24 hours."
Americans are living beyond their means and Asia is currently financing that. But eventually the Asians/Europeans will stop financing the USA and then the bubble will burst.Euro to U.S. Dollar Exchange Rate
may I be the first to say it: *poop*
Aside from the dollar collapse...
That background music in the beginning (and continued in other parts) is swiped from The Bounty - one of the only Mel Gibson movies I really, really love with a kick ass performance from Anthony Hopkins, Liam Neeson and it was made in 1984!!
http://en.wikipedia.org/wiki/The_Bounty
I think the same guy that did the soundtrack for The Bounty also did the music for Bladerunner too.
What's with that music. I kept expecting an announcer to say, "In a world..."
If it matters to you that people give a shit about what you say, Aluxterna, I suggest you elucidate your one-word critique.
Cowicide, you are correct. Vangelis did do the music for "The Bounty"
@2
Yep, Vangelis did both soundtracks. Nice catch! I thought it sounded familiar, but couldn't place it.
As for the US dollar, the signs of impending recession have been there for years. I think we all know it's just a matter of time before we hit a crunch comparable to the gas crunch of the late 70's.
Yeah, I thought that was Vangelis. Heavy, dramatic stuff.
Hmmm ... need to see if this is up as a torrent somewhere.
Yep, yep. A whole lot of US citizens are in for a very, very big shock sometime soon.
The question is: how far will the world's greatest military power be willing to go to maintain its economic dominance?
We've been set on this course of collapse for 28 years. Ever since Reagan, as Rush Limbaugh so ironically put it once, "gave us a debt we can never repay."
Sure we righted the ship a little bit under Clinton, but that just meant that we weren't borrow just to stay afloat. We still have, as of right now, a $9 trillion debt.
Of course we're told that national debt is irrelevant, but that just doesn't make any sense. Debt is relevant. It's relevant. It's relevant because people own loan you money when they think you can pay them back, and given the sheer amount of money that we owe, our regressive fiscal policies, and the amount of debt owed at all levels of our society, it's just a matter of time before it collapses.
Of course, I'm just talking down the economy because from any objective measure I want gay muslims to swim the Rio Grande, marry, and then blow up a grade school with a suitcase nuke.
We are so fucked.
Incredibly many commentators, including this guy, who knows better, imply that America makes / exports nothing and lives off of investment dollars (or tribute if you want my leftist slant) from other nations. This is not true - we are the world's #3 exporter after China and Germany. We *do* consume far beyond our means and that is certainly financed by foreign investment. In terms of earnings per capita we should be as wealthy as western Europe and living a slightly poorer lifestyle due to our poor social safety net and mediocre infrastructure choices. But the end of the world this ain't.
The spice must flow...I mean the Oil must flow. Don't worry, for every Dooms Day forecast, there is another that predicts a healthy adjustment, then a rebound. Pay no attention to the man behind the curtain: he's a currancy trader that has lots of money riding on the falling value of the dollar.
this can only affect the forehead tattoo market positively
#3: The way things are going, the better phrase might be "20 minutes into the future..." It seems like the only people making money on this are those who are buying up the severely beaten-down (but possibly still overvalued) companies whose stock has trended towards zero.
The better question is what commodity should we buy with our declining dollars that will hopefully maintain some reasonable value during the possible upcoming collapse? My money is on, or rather in, bottle caps.
Just imagine if the wrong person says the wrong thing about China and the Olympics and China decides it doesn't really want to own quite so many dollars. The whole thing makes me wish I had threatened to move to Canada and then actually followed through.
You won't see a Germany post-WWI style crash, but you will see massive contraction, especially in the high end consumer markets (luxury cars, McMansions, less of that) with more focus on efficiency.
Look at car advertising for clues. Five years ago it was all "POWER" and "TAME THE ROAD", now the bulk of ads are talking up better gas mileage, fuel efficiency. The market acknowledging that people want more bang for their buck, that's something.
Look, the truly rich and truly poor aren't going to see alot of change. The people who credit-card financed their dreams, bouaght into the notion that 0% down on a mortgage, a leased car and 5 cards in your wallet was a good thing, the people in the great middle? That's going to be where it really stings.
The definition of wealth needs to change. Cutting up credit cards, turning away from consumer culture (over-priced hunks of plastic that need to be replaced with more expensive hunks of plastic) and focusing on building sustainable, reliable weatlh for yourself and your family. The American Dream either changes or ends.
It's hard to take a warning of impending doom seriously from someone named "Goehber X".
it's like nobody has ever been through a recession before... All this fear mongering is getting a little out of control.
This is serious. No country goes forever without a dangerous economic crisis. There's no such thing as overdue, but there's no reason on earth to believe it can't happen here. And quite honestly, I fear it could be nearly Wiemar bad.
An angry scared hungry america would put an actively Authoritarian (as opposed to dormantly so like now -- which is a big difference, nearly unlimited police rights aren't too unusual in the world, true East Berlins are -- if you were upset about the patriot act, wait until anyone not in total lockstep really does need to be checking the wiring of their home. It so so so can happen here.
Oh and we have a giant minority who have as little legal protection as blacks did in the jim crow south.
Instead of looking at fucking conspiracy theory shit, let's see what billionaire investor Jim Rogers, former partner of George Soros thinks:
http://youtube.com/watch?v=wXUU_lyb0Lc
I've said it before - I'll say it again: Teach your kids to read the Koran in Mandarin.
And move to New Zealand.
Cheers.
Not sure Operation Three Trillion Dollar War is helping too much, either...
► Link to video, transcripts of video, audio, etc.
BTW, this isn't some wackos... it's Nobel laureate and former chief World Bank economist, Joseph Stiglitz, and Linda Bilmes (Professor of public finance at Harvard’s Kennedy School of Government).
While we are at it:
Robert Kuttner on the “Most Serious Financial Crisis Since the Great Depression"
► Link to video, transcripts of video, audio, etc.
How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You with the Bill)”
► Link to video, transcripts of video, audio, etc.
Subprime Mortgage Crisis Causing African Americans to Experience Greatest Loss of Wealth in Modern U.S. History.
► Link to video, transcripts of video, audio, etc.
Yah, yep... I smell trouble... yep, I smell it.
Been smellin' it for quite a while, but it's getting stinkier and stinkier. Haven't even passed the dead skunk on the highway yet...
#6, #14, #17
I hope you're right. A 70s style recession, not so bad, a 30s style recession, that's lampshade time.
#8
There are no limits.
#12
There is no where you can go. When the dollar collapses it will take all the dollar holders (most other countries) with it.
As for timing, wouldn't it be ironic if the US decided it could afford universal health care only after the dollar collapsed?
Everyone I know is planning on divesting of USD investments - I've already sold all my USD investments...
I'm buying land in Canada instead. Hope that holds me over.
And gold...
and child labour farms producing cheap cars for China's middle class - yeah - THAT'S the new goldrush!
My goodness, so many things to explain it can't possibly fit into one comment box!
Firstly - definition of "collapse." There are *many* stages of realignment the US economy can undertake before we all become extras from "Road Warrior."
Secondly - the impact of realignments will be felt unevenly across the economy. The super-rich will, by in large, remain insulated from these changes. The highly-educated (with marketable skills) will remain the most globally competitive, and barring labor movement restrictions should compete evenly against the best anywhere in the world for any currency. If the realignments can be 'dialed in' slowly enough, skilled industrial laborers should do better in the US ... but I don't care to think what this will mean for unions and the ILO.
Thirdly - a lot of this 'realignment' need not come at extreme depredation of living standards. Fewer SUVs are not a loss of a standard of living, so long as good substitutes are enplaced (more efficient cars, non-car alternatives under relevant circumstances).
The challenge is to consider how much money it's going to cost to recapitalize the country to the new realities. This, at the very time when energy & commodities will be more expensive than a recession should "normally" warrant.
What the Bear Sterns bail-out really presents is the federal government again repeating its role of final guarantor. So much for all that 'free market' philosophy. Even Republicans act like neo-Keynesians in the crunch.
Ahh, the wheel comes around once more...
Purely too many people. Unless we come upon another Green Revolution, it will become very apparent in the near future that we are currently beyond our means, food, energy, fresh water will all become even more hugely important. Just look at the increases in the sizes of the worlds deserts while comparing it to the losses in fresh water, hell just look at the differences in the number of fish caught compared to the increases in people depending on fish for protein. We all need to stop thinking as individuals and start thinking as a global society on issues that concern us all. Things that are important to us all should be handled as if they are important to us all, not as if they should be exploited for the most profit. Not like we need to hold hands and agree with each other constantly, but the factions and greedy bastards that exist just hurt us all. All multi-cellular life exists because of symbiosis, perhaps we should take the hint and work together sometimes.
(*Recently "keep us safe" has been extended to including bailing out financiers such as Bear Stearns and soon Lehman Brothers.)
The "Three Trillion Dollar War" or whatever you want to call it was all paid with inflation, which explains why the price of gold went over $1000/oz, why oil and food prices are up, but people are still generally acting as if dollars are worth what they used to be worth before the new money was created. (Arguably his is also why the Federal Reserve ceased publishing M3 data in March of 2006, and why the Department of Labor and Statistics has redefined the Consumer Price Index (CPI) to exclude energy (i.e. oil) and agriculture from its "basket of goods" estimation of dollar purchasing power.)
The economic crisis the United States can no longer ignore is the unwinding of this inflation. However, economists who speak on television or for politicians will tie themselves in knots and circular logic to avoid ever saying the word "inflation" -- it's like a taboo. So first they pitched this problem as a "sub-prime mortgage crisis", until now the problem is obviously not contained to just that market sector. Recently I've heard people start saying "contagion" like when the Asian Tigers melted down from their inflationary bubble in the 1990s.
But the crisis is simply that the Bush-Cheney administration has spent more money than God by borrowing and printing it (i.e. creating inflation), which in the central banking system of fractional reserve multiplies several times over into even more inflation. This creates an enormous market bubble -- that so-called "economic recovery" Bush has claimed in his speeches of yore. So this bubble didn't even feel like a bubble so much because the "improvement" was marginal over the pre-existing recession from the previous dot-com bubble and housing "foam" created by Alan Greenspan. But soon all of that inflation is about to collapse.
Think of inflation like those Warner Bros. cartoons where Wile E. Coyte runs off the edge of a cliff, and he can keep running and running on the air as long as he doesn't look down and realize that there's no more dirt beneath him. But eventually he looks down and plummets until he hits real dirt. That's what a correction for inflation is like.
And we've had this inflation/recession building up for approximately a decade now. It could take at least that long to get back out of it. So I would not chalk this up to "fear mongering". Fear mongering of the phantom menace called "terrorism" is what got us into this hole.
I'm reminded of an episode of Duckman (1994):
hi. please don't come to canada.
Zuzu,
Are you an economist? By the way, I nominate your last comment, #27, for the front page.
Ah but the housing market doesn't say "inflation" does it? Price of US houses going up lately?
How about the price of information? That been going up?
Outside the US the dollar is cheaper than ever. Doesn't seem like inflation to us - US prices are way down.
Maybe the magic word is "deflation". That's what the US Thirties were, in contrast to Weimar inflation.
You would think that all that government borrowing would crowd out the private sector by causing an increase in interest rates. What's been happening? The opposite.
The Fed has been using Repo agreements, not printing money - the Banks do that by lending, something that has decreased (try to get credit lately?).
Problem is deflation isn't something that the Boomers have EVER seen. Problem is steadily falling prices don't seem like a problem, and that perception IS the problem ...
coaxial:
You're confusing the trade imbalance problem with the public debt problem. After the great depression throughly discredited the Laissez-faire Austrian school economists, Keynesian theory pointed out that issuing public debt can be a useful tool for the government to control economic growth and check inflation by being able to widen or tighten the money supply on command. Though the total public debt is quite colossal as a gross figure, much of it is purely internal debt (i.e. securities owned by American citizens) which doesn't adversely affect the economy because the money is staying in the country. External debt is much more significant economically but the U.S. is actually better off than even most so called first-world countries. Japan, Belgium, Italy, France, Germany, The Netherlands, Canada and the U.K. for instance, all have substantially more foreign debt as a percent of their GDPs than the U.S. does.
The foreign debt [i]does[/i] influence exchange rates, however the trade imbalance is probably the
biggest factor devaluing the dollar. Last year the trade imbalance was almost -800 billion dollars. That means that 800 billion dollars physically left circulation in the U.S. economy in a real way making us collectively poorer, and thus devaluing the currency. This has the slight benefit of helping (now cheaper) U.S. goods in export markets, a sort of negative feedback loop. But it also brings us that much closer to the collapse of the dollar as a major world reserve currency which could cause the U.S. Gov't for the first time in living memory to actually have to deal with real money shortages... Here's to Victory in 3008 and make those tax-cuts permanent while we're at it! *rolls eyes*
There are only two things I hate; those who are intolerant of other people's cultures.
And the Dutch.
For US-tourists in Amsterdam the weak dollar already causes some problems since smaller money exchanges try to avoid the US-Dollar because of its fluctuations in the last days
http://209.85.135.104/translate_c?hl=de&langpair=de%7Cen&u=http://www.spiegel.de/reise/aktuell/0,1518,542543,00.html
Coaxial,
This mess has almost a century in the making, going back to the coin clipping...I mean Federal Reserve Act of 1913. Although Reagan and that Congress certainly didn't help matters in that regard.
I cannot see how allowing a cabal of bankers to manipulate money (in the wider sense) at the pleasure of politicians cannot fail to lead to trouble. Compound that with a "war" that's going to wind up flushing trillions down the toilet, the USA will become as bankrupt as the USSR. Come to think of it, flushing a trillion dollars down the toilet would be a wiser move.
Ugly Cannuck,
Inflation is creating money at rate faster than goods and services are created. Deflation would occur if the amount of goods and services increased while the supply of money remained the same (or decreased).
Money, a.k.a "money in the wider sense" is more than the currency in circulation. It is also the creation of credit which can be used in lieu of physical currency or bank drafts.
The reason the dollar is doing poorly compared with other currencies is that it has been devalued through inflation. The housing bubble is a different but related phenomenon that was fueled through reckless credit expansion.
This fear mongering has to stop.
I'm starting a new commodities investment fund.
It will invest in guns, ammo, land mines etc.
Consider my stool officially loosened.
@30 Ugly Canuck
Um, until very recently there was that severe housing bubble, and arguably houses are still overpriced.Are we arguing semantics here? "Inflation" refers to the rise of prices due to the increase in supply of dollars. Some financial analysts will refer to this same phenomenon as the "deflation" of the value of each dollar, however.
The 1930s "great depression" in the USA and Weimar hyperinflation were essentially the same phenomenon. However, you're looking at two sides of each of those events. The "hyperinflation" for the USA was the expansion of money and credit by the Federal Reserve in the "roaring" 1920s by the Hoover administration. The correction was deflation, beginning with when the Fed finally stopped feeding the inflation bubble -- which is when the run on banks happened (i.e. a "liquidity crisis").
Because Ben Bernanke and the Federal Reserve are trying to artificially delay an inevitable contraction. Most of that borrowing that has already occurred was malinvested into projects with no return on investment, such as blowing things up in Iraq or pork and barrel for home state contractors. So they go back to the well for more credit.
Because all of the easy money has been spent, and people are realizing that they cannot keep this inflation game going much longer. The reluctance to issue even more inflation to follow the old inflation is what has created this "liquidity crisis".
Deflation is both necessary and not a problem, generally. Deflation is painful to borrowers, but beneficial to savers. The real problem is that an inflationary monetary policy has fueled rational action into a nation of debters. The fundamental problem of this inflation/deflation aka boom/bust aka the business cycle is that the Federal Reserve sets interest rates by centralized command (and specious "forecasting"). Distributed natural interest rates between lenders and savers would eliminate this problem.
But for now, with most people in debt because of an inflationary bubble, it's like a heroin addiction. We know we should quit, but the withdrawal symptoms are so severe that we take more smack to procrastinate. But that just makes our addiction that much more severe. The longer we wait, the harder it will be. Of course, the real lesson is that we never should have started to begin with, but no one seemed to want to listen to that in 2003 when people earnestly talked about "yellow cake" and "aluminum tubes" as if we were in some kind of danger.
Sandpiper,
How did the Great Depression discredit the Austrian school of economics? The consequences of excessive credit expansion have been detailed by their economists, especially Menger and Mises.
US prices are way down
You don't do the grocery shopping, do you?
We've sewn the seeds of unconscionable deficit spending on war and a police state; now it's time to reap its grim harvest.
#37
Had you stockpiled ammo in your basement, you would be *cleaning up* right now.
http://www.boingboing.net/2008/03/19/documentary-examines.html
The news (and bloggers) spend much time theorizing about the causes of these economic problems, but I haven't read much about what the future looks like. How can a regular Joe with a mortgage and a 401k protect his assets for the next 10 years?
#44 bonds, physical precious metals and perhaps hedged indexes like SKF or UDN. SKF tracks twice the inverse index of the Dow (so if the dow goes down two percent, skf goes up 4) and UDN tracks the inverse of the dollar-euro (a dollar shorting fund).
If things get worse, start edging out of SKF, UDN and into things like mason jars, toilet paper, ammunition and aero gardens.
Oh. And the person who chose the fund selection for your 401k was probably an HR suit. :)
I concur with Mad Prophet in disagreement with Sandpiper. If anything the 1970s stagflation discredited Keynesianism (which fundamentally confused correlation with causation), while the Austrian Theory of Money and Credit and lays a solid foundation for explaining the causes of money and the business cycle.
It sure does sound like Chicken Little to me. I'm not able to know for sure, but for everyone's sake would love to have been proven right a year or two down the road.
I have to go through the process of updating these charts, but they are enjoyable for the moment:
http://www.flickr.com/photos/11747277@N07/
It's like we've contracted a disease. We're only now starting to feel the symptoms, but the infection happened a long time ago -- that part is not in doubt. We will get sick. How badly is debatable, but it's proportional to exactly how much inflation was injected into the system. That's what's troubling about the rate cuts and "stimulus package" -- that's the hair of the dog.
When asset prices fall I call deflation. This so-called "inflation" will stop and reverse with commodity prices.
The destruction of billions perhaps trillions of Capital (the current "credit crunch", financial instruments leveraged off creted debt ie mortgage-backed securtities -more disappears than just the mortgage)) is hardly inflationary.
Lets get off the inflation/deflation bandwagon I-say-tomato, You-say-tomayto. Deflation is the contraction of credit. This is not happening?
With the collapse of the dollar from ~$1.20 - ~$0.72¢ prices will continue to advance in $US, but perhaps not globally.
Peter Schiff is a bit of a martinet, so why not take in this video short:
http://www.youtube.com/watch?v=zmyvEhU-gmw
Thank you Fran 6 for the charts.
Zuzu's Monetarist Orthodoxy is showing.
Last time we had double-digit inflation (paying for Vietnam) - the late 70s and early 80s-the interest rates were also double-digit. They blamed the inflation on unrestrained wage demands - and prices for housing were leading the way up..
Japan on the other hand has just had ten years of close to Zero percent interest rates after their real estate price boom of the eighties - commonly called a deflationary situation.
How are super-low interest rates "painful to borrowers and beneficial to savers"? Inflation benefits the borrowers hence the "inflating away" of the real value of the US's Vietnam era debts. It just isn't going to work with th Iraq/Afghan War Debt - the World has a long memory.
PS its a little iNFLATION that's both harmless and useful. Deflation is the active destruction of the Value of Capital and is always harmful.
Innovation is one way out of this mess. New technology to increase energy efficiency and harvest renewable energy would be a good start.
Any other ideas?
Seems like we've really got a handle on how we got here, now let's start planning and adapting.
Deflation increases the purchasing power of your money; inflation dilutes it. (Simple supply and demand.) With deflation, if you're a saver, having money and then getting more for it is a benefit. If you're a lender, you have to work more to pay back the same numerical debt. With inflation, the reverse is true, which is why an inflationary monetary policy encourages debters and transfers wealth from savers to whoever receives the newly created money (namely "Wall Street investors").
It's a kind of price control. Interests rates below the natural interest rate means that savers are not getting the return on investment for lending their wealth to borrowers would naturally yield, while borrowers receive loans artificially cheap, which leads to malinvestment.I am not a monetarist. More than anything I've argued that government should stop manipulating the money to benefit the politically well-connected with access to the money creation. Monetarist theory calls for government rigging the money as the sole tool of market interference. I would argue that governments must remain independently solvent to exist just like every other organization of economic action.
I like Mises and Hayek, but I also like Coase, Simon, and Williamson, as well as Kahneman and Thaler.
If other readers are interested in learning more about economics, an excellent introduction is Friedrich A. Hayek's Use of Knowledge in Society. Economics is all about how we use price signals (i.e. messages) for distributed coordination of independent actors. It's how we figure out what to do without a boss commanding us to do it (which also begs the question of how the boss knows what to do). i.e. human action.
People & Power - Rigged Markets- 20 May 07 - Part 2
This video was excellent. I think I'm in love with Max Keiser. Thanks again to Fran Six for reminding me about People & Power.
My plan to move to Japan is looking pretty good after all...
So, no ideas? Zuzu, what do the economists say about recovery? Or better yet, do you have any ideas?
My understanding of inflation is as follows:
Creating money for the purpose of paying off existing debt causes our dollar to devalue against other dollars because suddenly the same amount of goods coming overseas are being exchanged for less value from us.
---
If we want to stabilize our situation, we need to:
a) Pull out from the war (and stop spending elsewhere to stop increasing the debt)
b) Produce all basic needs locally
c) Export more to other countries than we import
After stabilization, if we want to increase the dollar in value we need to:
a) Change the world's perception of our nation for the better.
b) Leave a lasting impression of the quality that 'Made in America' items have
c) Do A and B honestly, so that that have a real impact.
Wow, so regulating the market is both fascist and communist? That's doubly un-American!
In seriousness, I simply don't understand why some people trust "the market" to solve all of our problems. This quote particularly got me:
"You can't expect bureaucrats to know better than the market itself."
This market fundamentalism in which any economic woes are blamed on attempts to regulate and interfere with the economy is as unfalsifiable a position as the that of Marxists who maintained that the Soviet Union and other Communist nations weren't _really_ Communist, because a _true_ Communist nation would be successful. As though we didn't already see the fallout of total laissez-faire in the 19th Century.
I take your point about the problems of bureaucracy and I definitely think that market processes which are response to things like supply and demand have their benefits. I don't want to see the elimination of markets by any means.
But we need to put constraints on markets, establish certain kinds of incentives that exercise a general direction for how things will go. What I really don't like about unchecked markets is the way that they destroy common goods. Self-interest is not the only viable human motive.
Now, I'll admit that I'm not an economist but a simple philosopher, so I don't understand all your technical language and I won't be able to argue on that level. But for me, the most compelling part of that video was the analogy about the Asians and the Americans on that island.
Talk all day if you like about corrections to the market and make all the predictions you care to about inflation and deflation or whatever, but the fact of the matter remains that there is something ethically _wrong_ about the way economic activity is organized in this world.
I benefit from it as much as you or the next person and don't want to live uncomfortably--and I may in fact move to Asia someday, who knows?--but isn't it insane that we have the means to address issues like poverty and inequality but we don't?
My alternative proposal is not yet feasible, but I want to see economies run by smarter-than-human artificial intelligences that can overcome many of the problems of bureaucracies while still insuring that some degree of fairness (I'm not talking enforced mediocrity or absolute equality; I'm a big fan of merit and the motivating power of being able to enhance one's status) is operative.
Right now, this plan is a fantasy and grossly oversimplifies the complexity of the problem. But a more realistic policy I think is to find a balance between free markets and other forms of social organization. Efficiency is not the only form that rationality might take.
Spinobobot: I was with you until the AIs...
Lots of armchair economists posting to this thread. The fact of the matter everything has a relative value. So the dollar tanks and we all start to learn how to barter and only accept gold dust as payment. The fact is, a car will likely always be worth more than a handful of carrots.
That said, I too am disappointed in the state of the economy. And how, amazingly, the democratic candidate that represents business as usual is sucessfully gaining traction with a win at all costs strategy.
Spinobobot: ever seen THX 1138?
I'm in favor of free choice.
Dady, please help me: "Is there an alternative to a disappearing dollar?"
Dear son, "Our new private alternative is called $euro, our new private central bank is called independency and our public debt is just becoming world fraternity."
By Duric Aljosa, Crom Alternative News
"Free choice"? Gimme a break. There are so many unquestioned presuppositions in that formulation. What is it that makes a choice possible? There are a lot of complex social relationships (many of which are not matters of "choice") that must occur for us to be able to make the kinds of decisions as consumers that we do.
Why suspect that freedom is always valuable? Isn't it possible to have so many choices that you feel disempowered? (That's how I feel whenever I try to buy toothpaste.)
Moreover, why do we want the things that we do? Those desires that constitute the basis of our choices don't come out of nowhere. The ubiquity of advertising by marketers who are guided by extensive knowledge of human psychology produces results that we are seldom directly aware of. Desires are manufactured even more extensively than shoddy consumer goods. We would probably be much better off having fewer desires with fewer possibilities of being dissatisfied if we don't obtain things that we don't actually need and which often do us little real good.
The kind of atomic individualism that so much of contemporary social science (including economics) depends upon is so fraught with difficulties because of its reductionistic oversimplification. We are not isolated beings operating in some kind of social vacuum, and the more time passes, the more we become interconnected and dependent on other people all over the world.
Freedom of choice is not real freedom. It is an illusion that perpetuates the status quo of unjust, unequal power relations.
I certainly don't have all the answers of how we might better live together in the world, but it is a mistake to view the current arrangement of society as somehow "natural" or "necessary".
(The reason I make the move to AI is because I think we need a dramatic restructuring of social relations and superhuman artificial intelligence is perhaps the only force powerful enough to effect such change, and to have any hope of doing so in a way that doesn't just make things worse. But, really, this is almost a religious view for me, and certainly one that is unrealistic now. I believe it largely for the sake of generating some hope about the future.)
@Spinobot
Read Use of Knowledge in Society. It's an epistemological problem. The "market" is just the emergent spontaneous order from individuals interacting with each other.I think you're alluding to the Paradox of Choice, which Chris Anderson refutes by citing searches and ordered lists in The Long Tail.You sound like you're ignoring anthropic bias in terms of conflating scale, and I think your argument is essentially normative. Distributed cognition is a fascinating field of study, though.Then what is "real freedom"? I think we're fast appraoching Isaiah Berlin's Two Concepts of Liberty.
#4 Mark,
I'm sorry. I should have elucidated my admittedly-ambiguous one-word review, which was not intended to be a critique of the well-produced and thoughtful short film presented here, but a critique of the dire situation most of us now face. I had intended to follow up the first posting with something slightly less childish, but got sidetracked, and at this point there is little remaining to be said that hasn't been said already. Fortunately the internet is Forever, so my comment will likely remain in infamy.
Back to the topic at hand: this crisis has been a long time coming, and maybe is a necessary "correction" as some people like to cheerily point out. That fact doesn't make it any better for the people who are going to get screwed in the process. Hence: *!*
Cheers.
just FYI:
Although this documentary was recently rebroadcast in light of the current dollar trend, it originally aired on the 20th of November 2005.
http://www.vpro.nl/programma/tegenlicht/afleveringen/24877874/
URL and it did happen.
Anyone ever read "Making Money" by Terry Pratchett? :)
I don't understand the economy except on the most basic levels, but "market fundamentalists" who insist on the market not being regulated at all, are (I suspect) just romantics. Sure, I'd love it if we could let the market run wild and free like a force of nature, but that doesn't mean it's going to work like a well-oiled machine, more like monsoon season: bigger booms and bigger busts.
Seems to me, aside from oil and gold, everything is still cheap. Inflation is (relatively) low. Assuming that's going to change soon, what should I be buying?
I wanted to buy gold and Euros over the past year, but I'm with Sharebuilder and was "forced" to buy stocks that proxy those markets instead. I bought NEM (Newmont Mining) and ADRU (Europe 100 Index Fund) - they are both down since November. I guess I needed to do more research, or just have bought gold and Euros directly. Too late? It sounds like, maybe not.
Oh wow. This is the most civil and "grown-up" comment thread I've ever seen on boing boing. And what intelligent discussion!!!
Now here comes the part where a know-nothing flake (played by myself) asks a stupid question because they struggle to understand how the economy functions and the issues at hand.
Can someone help me understand: If the problem was caused by printing too much money ... then why can't the problem be solved by removing bills from circulation?
(FYI: Nope, I'm not blonde. Just confused.)
Not to nitpick or anything, but #55 the comment about LTCM....The NY Fed did not bailout LTCM with tax-payer money...it organized a bailout of LTCM with contributions from 14 private firms... not quite the same thing....personally I think this kind of intervention is appropriate and good for the overall system.
As a side note Bear Sterns decided not to participate...read what you will into that.
Markets. . .
In the first week or two of any college-level public policy course you learn that for a market to work there must be certain conditions in place:
1. Information must be accurate and available. Well, guess what? Lately it has been neither. Fraudulent accounting practices, government rigging of established economic health indices, etc. have thrown this condition out the window.
2. Agreements and contracts must be enforced. Corporations are going bankrupt and those that aren't are being bailed-out leaving investors (many of them small investors and the soon-to-be-retired) high and dry, or bilking the taxpayer for this money.
3. Common and reliable currency. We all know this is over. We can't rely on the value of the dollar anymore and people are moving to other currencies like the euro.
The market is broken.
So what do we do? Well, we don't let a broken machine continue to operate as-is unless we're complete idiots. . . So those problems with the market *must* be fixed before it will function properly again. The market can only fix itself when the underlying assumptions about it are true. And they no longer are.
#71: "why can't the problem be solved by removing bills from circulation?"
I would be happy to dispose of any bills that bOING bOING readers would like to part with.
There's a 25% handling fee, but I will guarantee that 75% of the bills sent me will be shredded, burned, mixed into Plaster of Paris blocks and thrown at the heads of mortgage bankers.
Me, I'm good to go, on account of having made the wise decision some time back to convert all my personal wealth into giant stone Yap Island coins.
Hello,
I just wanted to repost something ZUZU posted in the Amsterdam currency exchange post:
So a big chunk of the crisis can be attributed to borrowing money to fund an unpopular war. Even worse, the return for investment in this war is less than zero. The only measurable return on the war "investment" is control. War funding sucks resources from social programs, leading to a populous that is poor, desperate and controllable. It's straight out of 1984.
I know I'm over-simplifying, but I can't help it. I was trained to be a journalist, a knowledge distiller.
Something I daydreamed while walking the dog this morning:
Every time a bill is passed for emergency war funding, each citizen is issued a bill for an equal share.
That's every citizen. Every newborn, every 90 year old in a nursing home, Bill Gates, and the crazy guy living under a bridge. No exemptions.
The bill would be payable within a month to the office of your local congress person.
134 laf points awarded. Thanks, this thread needs more posts like yours.
I suppose its part of the human condition to extrapolate short term movements into longer term trends. Afterall that's what got us into the mess to begin with, first there was the tech bubble....and then the housing bubble...both grew on the idea that recent price appreciation would continue forever. Now if only to prove that optimists don't have a monopoly on tunnel vision pessimists proudly shout from the mountain tops the demise of the dollar, the U.S. economy and in some cases civilization in general.
Yes there are problems and there will probably be some painful decisions in our future. That's how the whole thing works, some like to call it a market cycle. It's probably not the end of the world. Although note, I did say probably...