Bedtime Thoughts [1]

[mmonroe]

So, I usually have something on my mind each night while I'm laying in bed that keeps me from sleeping for awhile. Here's tonights.

Economic Recession:

Are we really in a full blown recession? Obviously someone believes we are headed that direction. We were given economic stimulus checks to spend to help boost the economy. But why? Could it be possible to the war in Iraq and the amazing amounts of money spent to fund it? What about social security? Are more people saving instead of spending in hopes that they will have a nest egg during retirement? What spurs the economic development to become an independent country once again? Thoughts?

[PennyQuilts]

We aren't in a recession.

[RabidRed]

My take is that if the USA decided to do off shore drilling for oil, the price of oil would drop over night. If that happens the economic engine of this country would kick back in and we would be off and running.

This would be a temporary fix. The final and long term fix is an energy source that doesn't rely on oil. No matter what energy source we use, we need to be more conservative about the use of that source. Bicycles, motorcycles, electric cars, and mass trans maybe the thing of the future.

Once oil is not so important, the need to "guard" the middle east becomes less important. Let those who want to stay in the dark ages be let alone to do just that.

[wsucougz]

My take is that if the USA decided to do off shore drilling for oil, the price of oil would drop over night. If that happens the economic engine of this country would kick back in and we would be off and running.

What makes you think that? It takes years to develop an asset like that. What happened to the price of oil when it was announced a few months ago that several billion barrels of oil exist in the Bakken find in North Dakota, which is already being tapped?

What about when Devon and Chevron just discovered a field in the Gulf of Mexico holding 3-15 billion barrels, the largest American find in a generation? As an aside, this is being drilled, so we must be doing some offshore drilling in U.S. waters.

Maybe part of a long term solution, I don't know enough of the facts to form an opinion right now, but I highly doubt it's THE solution to our woes. I smell politics.

[wsucougz]

We aren't in a recession.

Care to elaborate? Warren Buffett thinks otherwise:

Buffett says U.S. in recession | Reuters

I'm going to go ahead and go with the richest man in the world on this one.

[wsucougz]

What spurs the economic development to become an independent country once again? Thoughts?

High gas prices and pollution spur it and the answer, imo, is good ol American ingenuity in the field of energy. Our propeller heads are hard at work and $1/watt solar energy is quickly approaching, which would put it on par with the price of coal.

If we can be on the cutting edge of: solar, biofuels, hydrogen, engine development, nuclear, wind, geothermal, etc. etc. and control the patents we will change the world and make tons of money doing it.

[mecarr]

hate to be a bugger..but...shouldn't this be in the current events or political forum?

[Swake2]

My take is that if the USA decided to do off shore drilling for oil, the price of oil would drop over night. If that happens the economic engine of this country would kick back in and we would be off and running.

This would be a temporary fix. The final and long term fix is an energy source that doesn't rely on oil. No matter what energy source we use, we need to be more conservative about the use of that source. Bicycles, motorcycles, electric cars, and mass trans maybe the thing of the future.

Once oil is not so important, the need to "guard" the middle east becomes less important. Let those who want to stay in the dark ages be let alone to do just that.

7 to 10 years to explore and develop, resulting in a 1 to 2 percent increase in oil supply and about a $4 to $5 dollar drop in the average price of a barrel of oil or about 3%. Since oil makes up only about 25% of cost of a gallon of gas the impact on the price at the pump would be about 3 to 5 cents a gallon. Woo hoo.

[Toadrax]

There are other factors people need to consider..

When the price of oil goes up, is it because the oil is now more valuable or is it because the dollar is less valuable?

By definition a recession is the decline of the GDP. Based off how we measure the GDP we are not in a recession. Are we measuring our GDP correctly? Does government involvements in the market distort the market? What are the consequences of that?

Finally.. is a recession something the average American should even worry about?

Our government can tax us in two ways. We can face direct taxes that we see immediately, and those direct taxes are not popular. No one likes a politicion that raises taxes. The other way our government can tax us is to print more money. Inflation is a tax because it makes our money worth less.

Inflation causes people to not want to save, which lowers the capital, which puts pressure on the fed reserve to create more capital out of thin air in order to stimulate the economy, which leads to bad investments and bubbles, the market corrects itself..

Not a perfect example, but enlightening to people who do not know a lot about economics. Look at prices. The price of gold(ounce) in 2001 was around $275 and the price of oil(barrel) was about $25. Right now oil is at $134 and gold is $901.

Gold is 327% more expensive while oil is 536% more expensive. I'm not suggesting that our dollar be backed 100% by gold, but if it was... oil would currently cost $81.75 a barrel instead of $134. There is another factor causes the oil price to be artificially high right now, but I don't want to go off on that right now.. maybe later.

Bernanke said on 11-08-2007 "If somebody has their wealth in dollars and they are going to buy consumer goods in dollars than as a typical American they um the decline in the dollar, the only effect it has on their buying power is that it makes imported goods more expensive."

That man should be fired. What can you buy that is not imported or relies on something that is imported? Imagine buying locally grown eggs. The farmer is going to have to import goods to run that farm. The person who delivers the eggs to the store is going to rely on imported goods and fuel to accomplish that. The store you buy the eggs from is going to rely on imported goods to run the store. If the lightbulbs at your supermarket rely on imported goods in any way than your eggs will cost more. I hope no imported goods were used to deliver electricity to the store or the farm...

[Kerry]

I choose not to participate in an economic downturn.

[FRISKY]

I choose not to participate in an economic downturn.

I'm with you. It is my personal decision to ignore any economic or social downturns.

[windowphobe]

The one immediate advantage of ramping up domestic oil production is that if the market is indeed full of speculators, as some insist, they'll be thrown into a tizzy: since they're by definition betting on the future price of oil, the possibility of an increased supply somewhere down the road will inevitably affect their bets.

And the development process, I suspect, could be sped up a bit if the NIMBY types could be mollified and/or bought off.

[blangtang]

couple of thoughts....

there is an old saying "its a recession when you know (of) someone who has lost their job...its a depression when you lose your job."

recessions are good-they clear out the junk. seriously.

until oklahoma has a relatively high unemployment rate, meaning over 6% or 7%, we as a state should be fine. however on the flipside we seem to rely disproportionately on the boom bust cycle of oil/gas. so as long as we don't retrace the bank failures and oil bust of the 80's, oklahoma should be somewhat shielded.

the problem is, declaring a recession in the USA is a nationwide thing. there will always be states doing well, commodity producers come to mind currently. and there will be states doing terrible, manufacturing behemoths of yore, like Michigan, OH, PA, they are struggling.

Its a technicality to declare a 'nationwide' recession.

however, its probably true that nation wide we are getting close or already in one.

But back to square one, its a good thing in the long run to clear out the dead brush and retool for more productive future resource allocations.

OK is OK!

[mmonroe]

hate to be a bugger..but...shouldn't this be in the current events or political forum?

No.

[dismayed]

There are other factors people need to consider.. When the price of oil goes up, is it because the oil is now more valuable or is it because the dollar is less valuable?

Exactly. That is one of the biggest cost drivers to oil right now. The dollar is incredibly weak. There are only two ways to make the dollar stronger, raise taxes or raise core interest rates (e.g. both take money off the table, making it more scarce... causing that whole supply and demand thing to kick in).

Very rarely would I say this, but we need a tax increase right now. Increasing interest rates isn't going to happen and shouldn't because the economy is very fragile at the moment. Tax increases are more of a soft supply removal of cash from the system. It won't happen though... it runs counter to "common sense."

The other major factor is how oil is traded. People are day trading it like madmen. The oil futures market has really gotten out of hand over the last 15 years or so. I think it is time to increase regulation there. To my pleasant surprise, I see that Senator Obama is making that a cornerstone of his energy policy today.

As far as are we in a recession or not.... Yes, but it can on occasion be the result of some other things. The "two quarters of record with a declining GDP" is the general rule of thumb but not an exact rule per se. Should the average person worry about it? I'm more worried about inflation personally. But I guess it really depends on what industry you are in. For example if you are in retail sales counting on commission checks, I bet things are getting pretty rough right now.

As far as the whole gold thing... Eeeh, not buying it. The gold rush is over, expect a downward trend from this point forward. Not to mention that the price of gold literally flat-lined for 20 years throughout the 1970s and early 1980s. Not exactly a great long-term investment. I'm also not a big fan of the "lets back our reserve with gold" movement. First of all, there isn't enough gold in the world in existence today to support our economy. That means in order for gold to back the dollar we would have to seriously and significantly crash the value of the dollar, shrinking the pie enough so that a dollar could be worth some gold equivalent. This would wreak havoc on our economy. It would have to be done very, very slowly. And even if done slowly, the result would in all likelihood still be a deflationary period, which is a much, much worse position to be in. Deflation nearly killed the Japanese economy in the 1990s. "Stagflation" or flat-lining isn't nearly as bad and think of what it did to us here in the US during the 1970s.

[dismayed]

My take is that if the USA decided to do off shore drilling for oil, the price of oil would drop over night. If that happens the economic engine of this country would kick back in and we would be off and running.

I really don't think that is going to help. To date when you combine the estimated oil shelf in Alaska and elsewhere stateside if I remember correctly we are looking at something on the order of 8 million barrels. The US consumes 20 million barrels of oil A DAY. The next nearest neighbor is China consuming something like 5-8 million barrels a day. I just don't see how drilling here in the US helps us long-term.

[Toadrax]

I'm also not a big fan of the "lets back our reserve with gold" movement. First of all, there isn't enough gold in the world in existence today to support our economy. That means in order for gold to back the dollar we would have to seriously and significantly crash the value of the dollar, shrinking the pie enough so that a dollar could be worth some gold equivalent.

I totally agree.

No one is really saying we should back the reserve with gold, but a lot of people are bringing up the idea of "competing currency" and it is an idea that looks pretty good.

Statement on Competing Currencies

It is a pretty good read.. it concludes with:

"In conclusion, Madam Speaker, allowing for competing currencies will allow market participants to choose a currency that suits their needs, rather than the needs of the government. The prospect of American citizens turning away from the dollar towards alternate currencies will provide the necessary impetus to the US government to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government's ability and incentive to inflate the currency, and keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off, not just those who control the monetary system. I urge my colleagues to consider the redevelopment of a system of competing currencies."

[dismayed]

I totally agree.

No one is really saying we should back the reserve with gold, but a lot of people are bringing up the idea of "competing currency" and it is an idea that looks pretty good.

Statement on Competing Currencies

It is a pretty good read.. it concludes with:

"In conclusion, Madam Speaker, allowing for competing currencies will allow market participants to choose a currency that suits their needs, rather than the needs of the government. The prospect of American citizens turning away from the dollar towards alternate currencies will provide the necessary impetus to the US government to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government's ability and incentive to inflate the currency, and keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off, not just those who control the monetary system. I urge my colleagues to consider the redevelopment of a system of competing currencies."

Hmm, honestly the thought has never even crossed my mind. I'm not sure what I think of that. Offhand there would be so many logistics problems that would have to be overcome. And I'm not sure who would be doing the competing? States? Anybody with a press? I read through the link but it didn't really explain how exactly this would all work.

There are many countries that 'use' multiple currencies, other nations using their official currency but also doing some transactions in dollars or euros comes to mind, but I can't think of a nation that actually has multiple locally sanctioned currencies that aren't indexed from one another.

It's a curious idea. Makes me want to read more about it.

[Toadrax]

Well.. there isn't some magic plan to do it..

Competing currency can range from Hayek's "The Denationalization of Money" where currency would be handled by private businesses to simply letting us use gold and silver as currency.

The logistics are not as difficult as you would think (I have a customer that pays me in Euros) so much as the laws that prevent it. For example, right now if you wanted to trade some dollars for gold, you would have to pay sales tax on that gold that you "bought" which kind of kills the deal.

This isn't some kook thing, a lot of people like Steve Forbes are really down for making the dollar at least as good as gold(but not actually backed by it).

[soonerguru]

We're not currently in a recession, but economic growth at best is anemic. We may soon be in a recession, as the cumulative effects of tightening credit, a weakening dollar, serious inflation, and the billions of dollars in failed loans take their toll, coupled with increasing job losses.

In Oklahoma, we may be able to handle this better than most, thanks to the high oil and gas prices. The broader story, however, is that Oklahomans who aren't rolling in money are hurting, too, just like their countrymen, trying to balance the increase in food, fuel and virtually everything else in the face of stagnant income growth.

The Royal Bank of Scotland recently warned its private clients that there's going to be a major correction on Wall Street and further credit tightening.

Fasten your seat belts, it's going to get ugly.

[Prunepicker]

So, I usually have something on my mind each night while I'm laying in bed that keeps me from sleeping for awhile. Here's tonights.

Economic Recession:

Are we really in a full blown recession? Obviously someone believes we are headed that direction. We were given economic stimulus checks to spend to help boost the economy. But why? Could it be possible to the war in Iraq and the amazing amounts of money spent to fund it? What about social security? Are more people saving instead of spending in hopes that they will have a nest egg during retirement? What spurs the economic development to become an independent country once again? Thoughts?

I don't think we're in a full blown recession. The stimulus checks are nothing more than our money the government took from us and returned without interest.

Our government throws more money away on pet social programs than it's spent on the war in Iraq. Here's a link to my website that has links to where the money goes.

Whatever Comes to Mind...

As far as Socialistic Insecurity goes, it was never intended to be a retirement plan but a supplement to the plan we're supposed to have created for ourselves. However, Congress has successfully conned most people into believing it is a retirement plan. SI (socialistic insecurity) is like the minimum wage. It's not supposed to support a family because it's only an entry level wage. It's up to the individual to become proficient and marketable for more money and support themselves and/or their families.

The best thing to stimulate the economy is huge tax cuts for everybody and keep the government out of it.

[soonerguru]

The best thing to stimulate the economy is huge tax cuts for everybody and keep the government out of it.

The last thirty years have proven this to be demonstrably false. While some tax cuts do indeed stimulate the economy, many do not.

Tax cuts on business stimulate growth. Tax cuts on millionaires do not.

[Toadrax]

Technically the stimulus check was not giving our money back. That would only be true if the government made up the difference by spending less and if our government wasn't also in control of our currency.

The stimulus check was a high interest loan the government made to us that we will pay back through inflation for the rest of our lives.

It is all bad economic policy, similar to McCain talking about a gas tax holiday or wishing the interest rates were 0%(yes he said that).

[solitude]

Thoughts.....

Remember White House economic adviser Lawrence Lindsay? He estimated the cost of a war in Iraq at $100 to $200 billion. He was fired. The White House "re-estimated" the cost at - $50 to $60 billion. It's now over $500 billion - a half trillion dollars - and rising.

At least the social spending leaves something to show for it. What does the war in Iraq do for the average American?

No way can we sustain a two-front war on the Chinese Credit Card, rising oil prices, a continued mortgage crisis, consumer debt that's soaring as people are using credit cards to live on, income equality continues to widen, on and on it goes.

Warren Buffet says we're in a recession and it's going to get worse. The United States of America has never waged a war without a means to pay for it. Every penny of these wars are paid via debt (yes, with interest).

George W. Bush is the worst president in history. His ripping apart of the constitution, waging a war on a country that never fired a shot against us, allowing the legitimate war in Afghanistan to be underfunded and the real criminals of 9/11 still are free - seven years later. All the while private contracts are handed out in the billions to the friends of George Bush and Dick Cheney. What a disastrous eight years. Unbelievable.

Change is coming to America. Just hang on.



NEW AD NOW AIRING IN 18 STATES:

[Toadrax]

At least the social spending leaves something to show for it. What does the war in Iraq do for the average American?

Not much.. but wouldn't you love to be on the receiving end of that borrowed money from China? The only thing more scary than how much money we spend, is who ends up with that money.

On the Obama thing.. don't be too sure on that. Don't get me wrong, I'm voting for the guy because he is the lesser of evils, but he is still a Democrat and the Democrats have had the power to stop this thing for a long time.

Mouseland. Stop voting for cats!
(A fable by Clare Gillis, as retold by Tommy Douglas)

Mouseland was a place where all the little mice lived and played, were born and died. And they lived much the same as you and I do.

They even had a Parliament. And every four years they had an election. Used to walk to the polls. And got a ride for the next four years afterwards too. Just like you and me. And every time on election day all the little mice used to go to the ballot box and they used to elect a government. A government made up of big, fat, black cats.

Now I'm not saying anything against the cats. They were nice fellows. They conducted their government with dignity. They passed good laws - that is, laws that were good for cats. But the laws that were good for cats weren't very good for mice. One of the laws said that mouseholes had to be big enough so a cat could get his paw in. Another law said that mice could only travel at certain speeds - so that a cat could get his breakfast without too much effort.

All the laws were good laws. For cats. But oh, they were hard on mice. And life was getting harder and harder. And when the mice couldn't put up with it any more, they decided something had to be done about it. So they went en masse to the polls. They voted the black cats out. They put in the white cats.

Now the white cats had put up a terrific campaign. They said: "All Mouseland needs is more vision". They said: "The trouble with Mouseland is those round mouseholes we got. If you put us in we'll establish square mouseholes.And they did. And the square mouseholes were twice as big as the round mouseholes, and now the cat could get both his paws in. And life was tougher than ever.

And when they couldn't take any more, they voted the white cats out and put the black ones in again. Then they went back to the white cats. Then to the black cats. They even tried half black cats and half white cats. And they called that coalition. They even got one government made up of cats with spots on them: they were cats who tried to make a noise like a mouse but ate like a cat.

You see, my friends, the trouble wasn't with the colour of the cats. The trouble was that they were cats. And because they were cats, they naturally looked after cats instead of mice.

Presently there came along one little mouse who had an idea. My friends, watch out for the little fellow with an idea. And he said to the other mice, look fellows, why do we keep on electing a government made up of cats? Why don't we elect a government made up of mice? Oh, they said, he's a Bolshevik. Lock him up! So they put him in jail.

But I want to remind you: that you can lock up a mouse or a man but you can't lock up an idea.