Page 15 of 41 < 1 2 ... 13 14 15 16 17 ... 40 41 >
Topic Options
#153047 - 14/10/2008 15:35 Re: Financial Meltdown 2008/09
TranslucidusW Offline
Weatherzone Addict

Registered: 18/11/2003
Posts: 2663
Loc: Southern Adelaide
from here

Capitalism as an economic system depends on an endless expansion of material goods production at a rate that allows lenders to earn interest on money saved and invested. The only way to get potential lenders to lend rather than spending their money immediately is to reward them with a real rate of return on their savings. This is done by promising lenders that they will be rewarded with the ability to buy more material goods in the future. A reward must be offered to lenders for not buying and stockpiling bars of gold, barrels of oil, or any other desirable goods or services now as opposed to putting their money in banks or investing it in stocks or bonds or whatever else can earn them a real rate of interest as a reward for offering their savings up for investment by others.

Keynesian economics tries to maintain a mild inflation rate of a percent or two in order to encourage people to save their money in banks and other alternatives that offer a return above the rate of inflation. This is necessary to keep people from simply putting their money under a mattress. If the rate of inflation is one percent and they can earn three percent in a bank, they will bank their spare funds and will, in theory, be able to come out ahead and buy two percent more in the amount of physical goods or services than they had originally put in.

That is how those managing the economic system (like the Federal Reserve representing the banks) try to set things up. It is meant to encourage people to behave predictably and to keep them saving and investing. Under conditions in which in which it is possible to keep the material world always expanding and yielding a production of desirable goods at or above the rate of interest on money saved, this system remains viable and stable. This assumes that the financial system has been well-managed, and that there are no external limiting factors.

Enter Peak Oil

We now live in a world economy that is rapidly approaching the limiting factor of fossil fuel energy sources. The specific limiting factor that is most relevant is a looming shortage of liquid fuel based on petroleum as the total world oil production peaks and declines.

The peaking of world oil production strongly affects the investment equation that underlies the global capitalist economy and rewards investments and savings. The global economy is based on a cheap-oil-related infrastructure for its expansion of the production of real goods. Capitalism requires cheap energy to deliver the exponential expansion of material goods through investments that can pay real interest rates on loans. But this expectation is probably more than the expansion an oil-addicted global production system can really deliver. It changes the system’s economic potential by making it impossible to earn a real rate of return on the money saved by lenders, who in the case of the United States have increasingly been foreign lenders.

The underlying problem is that nobody can think of a way to keep expanding the material production of a global economy that is experiencing a shrinking supply of liquid fuels. These oil-based fuels move almost all goods in our global economy. This economy is based everywhere on the cheap transport of people, goods, and the capital goods needed to expand global production, whether it be by ship, by rail, by road, or by air. When the ability to move almost all goods declines, the expansion of the ability of capitalist investments to exploit nature for human uses must also decline.
_________________________
I don't know anything . . .
Sheidow Park Weather




Top
#153048 - 14/10/2008 15:48 Re: Financial Meltdown 2008/09
TranslucidusW Offline
Weatherzone Addict

Registered: 18/11/2003
Posts: 2663
Loc: Southern Adelaide
The international financial crisis is a sign that capitalism is also in its final throes, writes the newspaper NRC Handelsblad. "If for no other reason, the current financial crisis is a historic event because no one can maintain any longer that unlimited free trade automatically leads to a better world. And the old liberal fairy tale that the market always corrects itself has also been discredited. ... The late summer of 2008 will go down in history as the moment when the last political ideology of the 20th century experienced its demise. Almost 20 years after what looked like the definitive defeat of communism, the victor from those days is also down for the count. Both Cold War camps are now washed up. It will take a couple of years before the bankruptcy crystallises out. Then the 20th century will finally be over, just as the 19th century only ended in 1914."
_________________________
I don't know anything . . .
Sheidow Park Weather




Top
#153049 - 14/10/2008 15:56 Re: Financial Meltdown 2008/09
TranslucidusW Offline
Weatherzone Addict

Registered: 18/11/2003
Posts: 2663
Loc: Southern Adelaide
This is a Tad Interesting :doh:

". . . before 1973 the ratio of investment to speculative capital was 9:1; since 1973, these proportions have reversed. So huge have the numbers, leverage and derivative instruments become that their value now far exceeds the total economic value of the planet. For instance, in 2003 the value of all derivative trading was $85 trillion, while the size of the world economy was only $49 trillion. . . .

. . . The trouble is that nobody in power recognises this crisis for what it is – an asset insolvency crisis brought about by massive debt leverage. Neo-liberals are still reacting as if the emergency was one of liquidity. They are wrong. Governments should bail out not banks and speculators but the customers who now have every reason to fear for the future."

from here
_________________________
I don't know anything . . .
Sheidow Park Weather




Top
#153050 - 14/10/2008 17:54 Re: Financial Meltdown 2008/09
ozthunder Offline
Weatherzone Addict

Registered: 23/09/2001
Posts: 3209
Loc: Mt Warrigal, NSW, Australia
Quote:
This scheme by Rudd is a waste of taxpayers money except for the pensioners..
The injection of money is designed to boost money flow, and thus the economy. Unfortunately Samsung, LG and likes will be the main beneficiaries. I can imagine Harvey Norman and such having emergency meetings today on how to get more stock of Plasma and LCD TV's on the floor in time for the lump sums.

If Australia still had any sort of manufacturing industry left this would be a great move.
_________________________
Michael Thompson
http://ozthunder.com

Top
#153051 - 14/10/2008 18:02 Re: Financial Meltdown 2008/09
ColdFront Offline
Meteorological Motor Mouth

Registered: 29/06/2008
Posts: 18728
Loc: The Beach.
Quote:
Originally posted by RC:
Raising the home owners grant will only jack up prices even further..

This scheme by Rudd is a waste of taxpayers money except for the pensioners..
Stay off politics please. It ends in disaster. The scheme has the support of the opposition also .

Unless you have had your head in the sand your entire life, the likes of samsung and new homes are part of the economy.
_________________________
"water has c.30x the heat capacity of air. Someone drop the penny please for those fixated on the notion that the atmosphere is the driver ( preferably in 3D)".

Top
#153052 - 14/10/2008 19:29 Re: Financial Meltdown 2008/09
Rime Offline
Weatherzone Addict

Registered: 07/06/2001
Posts: 1444
Loc: Perth,WA
Though some of the elements of the $10.4 billion stimulus is very much needed, it is a short term solution that will NOT fix the problem in the longer term. The ideal behind the $10.4 billion package is to encourage a massive spending spree. This is only going to have a negative impact on inflation. Even though the RBA has cut interest rates, they have done so while inflation is still at its highest it has been for over 13 years.

If the past is any indication, when an economy goes down hill inflation goes up even higher. Cost of living goes up and therefore demand for wage increase goes up with it.

I would expect in the coming year that industrial disputes will rise significantly along with a rise in unemployment. It would have been much wiser for the government to keep their $10.4 billion, or at least half of it, and instead use this to create tax cuts. Tax cuts would have encourage the economy to kick start itself in the shorter term and it would have stopped inflation from spiraling out of control due to higher salary demands in the longer term.

It is the 1980's repeating itself. The stock market crashes, inflation goes up and up and poor government policy prolonged the meltdown even further.

Top
#153053 - 14/10/2008 19:46 Re: Financial Meltdown 2008/09
RC Offline
Weatherzone Addict

Registered: 29/09/2007
Posts: 2401
Loc: near Rockhampton, Qld
Quote:
Originally posted by ColdFront:


Unless you have had your head in the sand your entire life, the likes of samsung and new homes are part of the economy.
Actually they are economic destroyers..We constantly run a current account deficit, meaning we import more than we export..What happens when we are told to pay up???

It seems the population has been brainwashed into thinking houses and plasma TV's drive the economy..Sorry it is only the exporters that drive our economy, and they have been totally forgotten..Easier to buy votes with handouts...People are so dumb...

Top
#153054 - 14/10/2008 20:01 Re: Financial Meltdown 2008/09
Cheers Offline
Weatherzone Addict

Registered: 26/05/2007
Posts: 1109
Loc: sevenhills nsw
Quote:
Originally posted by ozthunder:
Quote:
This scheme by Rudd is a waste of taxpayers money except for the pensioners..
The injection of money is designed to boost money flow, and thus the economy. Unfortunately Samsung, LG and likes will be the main beneficiaries. I can imagine Harvey Norman and such having emergency meetings today on how to get more stock of Plasma and LCD TV's on the floor in time for the lump sums.

If Australia still had any sort of manufacturing industry left this would be a great move.
Australia can't have a manufacturing industry when third world countries have people working
for low wages.
Will you work for $10.00 a day.I know I won't.

Greed has caused this meltdown.
Most people want the best even if they can't afford it.The banks lent them the money.
The banks have become like car salesmen.
Some people can afford houses,new cars,etc.
Some people can't.
This is life.

Top
#153055 - 14/10/2008 20:09 Re: Financial Meltdown 2008/09
ColdFront Offline
Meteorological Motor Mouth

Registered: 29/06/2008
Posts: 18728
Loc: The Beach.
Quote:
Originally posted by RC:
Quote:
Originally posted by ColdFront:
[b]

Unless you have had your head in the sand your entire life, the likes of samsung and new homes are part of the economy.
Actually they are economic destroyers..We constantly run a current account deficit, meaning we import more than we export..What happens when we are told to pay up???

It seems the population has been brainwashed into thinking houses and plasma TV's drive the economy..Sorry it is only the exporters that drive our economy, and they have been totally forgotten..Easier to buy votes with handouts...People are so dumb... [/b]
These retailers employ Australians. Employment drives the economy. Given that both sides of politics agree with the current policy, I suspect votes are not the issue. The issue is to keep the economy moving forward.

If there was no housing industry and no retail sector there would be 5 million more Australians unemployed. Now, tell me they aren't part of the economy! :rolleyes:
_________________________
"water has c.30x the heat capacity of air. Someone drop the penny please for those fixated on the notion that the atmosphere is the driver ( preferably in 3D)".

Top
#153056 - 14/10/2008 20:17 Re: Financial Meltdown 2008/09
Craig Arthur Offline
Wind hazard researcher

Registered: 08/05/2001
Posts: 3549
Loc: 149.152009°E 35.187056°...
Quote:
Originally posted by Jacob:
Im spewing on that because I just got the first home buyers grant last month but the 7k version.. now it's going to be DOUBLED next financial year.. NOOOOOOOOO!!! laugh But Im happy we've a government that even offers it in the first place!
Our broker said he put our application in on Friday - don't know if we missed the cut or not. While it'd be nice to get an additional $7000 towards our first home, in reality we've got there ourselves through a bit of saving and gritting our teeth when other (less suitable) people were buying into the market. Something a lot of other people could do...

Top
#153057 - 14/10/2008 20:47 Re: Financial Meltdown 2008/09
ColdFront Offline
Meteorological Motor Mouth

Registered: 29/06/2008
Posts: 18728
Loc: The Beach.
http://www.abc.net.au/news/stories/2008/10/14/2391085.htm

Here is one of our exporters in deep doodoo due to a downturn in demand for their poduct overseas. With high oil prices the vehicle isn't doing too well here either.

Hopefully some of these employees will be able to move into the housing or retail sector rather than onto the dole.
_________________________
"water has c.30x the heat capacity of air. Someone drop the penny please for those fixated on the notion that the atmosphere is the driver ( preferably in 3D)".

Top
#153058 - 14/10/2008 21:08 Re: Financial Meltdown 2008/09
Lindsay Knowles Offline
Moderator

Registered: 18/01/2003
Posts: 3971
Loc: Bayles / Toorloo Arm
OK Lets just keep this topic on track. Keep it clean and free from politics and personal attacks.

Top
#153059 - 14/10/2008 21:34 Re: Financial Meltdown 2008/09
Arnost Offline
Weatherzone Addict

Registered: 10/02/2007
Posts: 3909
Good couple of posts back there TW...
_________________________
“No. Not even in the face of Armageddon. Never compromise” ...

And this of course applies to scientific principles. Never compromise these. Never! [Follow the science and you will be shown correct in the end...]

Top
#153060 - 14/10/2008 21:37 Re: Financial Meltdown 2008/09
ColdFront Offline
Meteorological Motor Mouth

Registered: 29/06/2008
Posts: 18728
Loc: The Beach.
Yes very informative. Interesting report on the ABC earlier. The current spending plan is to stimulate the economy and stave off a recession.

Some of the leading economists claim we are already in one.
_________________________
"water has c.30x the heat capacity of air. Someone drop the penny please for those fixated on the notion that the atmosphere is the driver ( preferably in 3D)".

Top
#153061 - 14/10/2008 22:01 Re: Financial Meltdown 2008/09
RC Offline
Weatherzone Addict

Registered: 29/09/2007
Posts: 2401
Loc: near Rockhampton, Qld
Quote:
Originally posted by Cheers:
]Australia can't have a manufacturing industry when third world countries have people working
for low wages.
Will you work for $10.00 a day.I know I won't.

Greed has caused this meltdown.
Most people want the best even if they can't afford it.The banks lent them the money.
The banks have become like car salesmen.
Some people can afford houses,new cars,etc.
Some people can't.
This is life.
I do not mean low end manufacturing I mean innovative manufacturing...We used to be an innovative country, now our best industry is the welfare industry to the tune of $92 billion a year..Now $102 billion with this latest announcement..

Yes greed causes it yet people like me who save, go without, receive no welfare and pay tax have to bail all these welfare dependant types out...I have every right to be annoyed with this welfare mentality of the current pollies...Lets buy votes to get back into power..

Top
#153062 - 14/10/2008 22:17 Re: Financial Meltdown 2008/09
Cheers Offline
Weatherzone Addict

Registered: 26/05/2007
Posts: 1109
Loc: sevenhills nsw
If you think what the Rudd gov is doing right now is about buying votes then you are very,very wrong.
This is about saving Australia's behind.
I hope you are not one of these people who thought old Joh was the best thing since sliced bread. eek

Top
#153063 - 14/10/2008 22:21 Re: Financial Meltdown 2008/09
storm_chaser500 Offline
Member

Registered: 17/02/2007
Posts: 572
Loc: darwin
he got qld thriving didnt he,or did i imagin that

Top
#153064 - 14/10/2008 22:24 Re: Financial Meltdown 2008/09
ColdFront Offline
Meteorological Motor Mouth

Registered: 29/06/2008
Posts: 18728
Loc: The Beach.
I can see this thread being locked before long (refer Loo's post).

The manufacturing sector is largely dead in this country due to the ability of other countries to produce things a lot cheaper. Cheers was right in saying people won't work for those low wages here. We have already proven that.
_________________________
"water has c.30x the heat capacity of air. Someone drop the penny please for those fixated on the notion that the atmosphere is the driver ( preferably in 3D)".

Top
#153065 - 14/10/2008 22:38 Re: Financial Meltdown 2008/09
DavidC Offline
Weather Freak

Registered: 05/02/2001
Posts: 432
Loc: Sydney
Quote:
Originally posted by Cheers:
[QUOTE]
Will you work for $10.00 a day.I know I won't.
Average annual household income in Korea (south) is over USD 40,000.

hope that helps................................

Top
#153066 - 14/10/2008 22:44 Re: Financial Meltdown 2008/09
ColdFront Offline
Meteorological Motor Mouth

Registered: 29/06/2008
Posts: 18728
Loc: The Beach.
...and China? You are right about Sth Korea David. The story I watched on 60 minutes about their ship builders was incredible.

However it is not the case in China and most of the goods we used to manufacture are now produced there.
_________________________
"water has c.30x the heat capacity of air. Someone drop the penny please for those fixated on the notion that the atmosphere is the driver ( preferably in 3D)".

Top
Page 15 of 41 < 1 2 ... 13 14 15 16 17 ... 40 41 >


Who's Online
9 registered (quietskies, marakai, Ticktock, Chookie, Squeako_88, Red Watch, Antarctic Whaler, rwj95, 1 invisible), 135 Guests and 3 Spiders online.
Key: Admin, Global Mod, Mod
Today's Birthdays
Clayton
Forum Stats
29700 Members
32 Forums
24026 Topics
1506311 Posts

Max Online: 2925 @ 02/02/2011 22:23
Satellite Image