Is the U.S. headed for financial ruin?

[Frosty]

Today, the New York Post printed a story that in November alone, top-level executives unloaded $8.4B worth of their own stock. They reportedly reinvested their money "elsewhere". The story cites Microsoft and Google as two of the companies making big stock dumps.

Story

In 2005, (and then revised in March 2006), the U.S. Federal Reserve decided it was no longer going to issue the M3 report. The Fed's official statement was: "The costs of collecting the underlying data and publishing M3 outweigh the benefits".

Along with the cease order for the M3 report, the Fed will also no longer publish data on:

-large-denomination time deposits
-repurchase agreements (RP's)
-Eurodollars

Lets take a look at the personal savings of the average
American citizen:



The average American now has a savings that is a negative number.

The US housing market is falling quickly, you can read about it here: Article

In the great depression, the U.S. Federal Reserve did three things: 1) they warned the ultra-elite of the impending crash. 2) they used their influence to crash the stock market, and 3) they reduced the money supply by 33%. Ben Bernanke, current chairman of the Fed, has said, and I quote, "We did it, and we're very sorry". (regarding the Great Depression).

When it was over, the average American could start to rebuild their lives. The elite, however, who had known of the impending conditions and moved their money out of the stock market beforehand, profited greatly from the depression. Many of the elite emerged from the depression with a net worth multiple times of what it was before the crash, buying up property, businesses, and nearly everything else that could be had for a fraction of it's previous worth.

It is commonly known that under the current U.S. financial system, it is an impossibility for the U.S. to pay off it's debt. This is because every dollar issued in the States carries interest that is owed to the Federal reserve.

Can the crash be avoided? What are your thoughts?

[old&slow]

A world economic collapse is probably coming...or at least the US and a few close economies like Canada...

It's gonna hurt like hell too!

[01RedDX]

.

[barbarian]

Well, I'd say it's not a matter of if, but when. Could be in 2 years, could be in 20, but it is inevitable.

[Weapon_R]

Originally posted by 01RedDX
So once again, the rich don't have anything to worry about.

Yet another opportunity for the rich to get richer it seems

[SinisterProbeGt]

let them burn
canada can buy ocean front property for cheep.
mabye there will take 5 million for florida

[AsianCaucasian]

Originally posted by SinisterProbeGt
let them burn
canada can buy ocean front property for cheep.
mabye there will take 5 million for florida

When the US gets a cold, Canada sneezes. If our biggest trading partner tanks, so do we.

[BerserkerCatSplat]

Originally posted by SinisterProbeGt
let them burn
canada can buy ocean front property for cheep.
mabye there will take 5 million for florida

You can't seriously believe that if the US economy collapses, the Canadian one will somehow survive.

[rc2002]

Economic booms never last forever. A lot of people are going to lose their shirts when (not if) the market crashes, and it'll serve them right for not being more responsible with their money. I won't feel bad for anyone who's living beyond their means trying to make some quick bucks especially in real estate and the stock market. If someone is too dumb to know (or just plain ignores) the risks, then they don't deserve any pity.

[Super_Geo]

Time to find some broad over in the EU to marry and hop across the pond!

I think the biggest difference between how the rich in N.A. recovered from the depression in the '30s and what will happen now is the occurance of WWII, which fist-fucked the entire European economy, leaving America in great shape post WWII to reap the benefits and become a global economic superpower.

Now if the US crashes, it will definately drag down the EU and Asian economies... but those other two (EU and Asia) will not be hit as directly or as hard, and will recover faster. I think the end result will be the emergence of a tri-polar global economic distribution: EU, Asia and North America.

[hjr]

an american crash is in NO ones interest. china and petro - countries have been supporting the us dollar for a while now and i dont see that ending in the near future. in terms of the economy itself collapsing, its hard to imagine. there will most likely be a significant downturn, but this as well will be temporary (just as the upswings are)

[Zephyr]

Originally posted by SinisterProbeGt
let them burn
canada can buy ocean front property for cheep.
mabye there will take 5 million for florida

Yea when our economy goes to hell, you're car pooling with us.

[Masked Bandit]

So here is the question. Let's assume that one has a decent amount of net worth...let's use $1,000,000 for the sake of this arguement. If one has this $1,000,000 in the stock market...and things go to shit well then your $1,000,000 is worth nothing. So to protect yourself against another depression, what do you move your $1,000,000 in to?

[AsianCaucasian]

Originally posted by Masked Bandit
So here is the question. Let's assume that one has a decent amount of net worth...let's use $1,000,000 for the sake of this arguement. If one has this $1,000,000 in the stock market...and things go to shit well then your $1,000,000 is worth nothing. So to protect yourself against another depression, what do you move your $1,000,000 in to?

Something with as low a correlation as possible to your stocks. It could be other stocks in the same market, in another country's market or a different type of investment all together.

[adam c]

u take it out and buy dirt cheap real estate and companies or invest off shore

[Whitetiger]

[Super_Steve]

your best bet to protect from losing all of your money is to make sure your portfolio is diversified. Make sure your investing in other economies as well as us/canada. Also, a portion of your portfolio should be in lower risk investments, but this is dependant on your risk tolerance, and the amount of time you have until retirement.

im no expert, just giving my 2 cents

[Xtrema]

Originally posted by AsianCaucasian


Something with as low a correlation as possible to your stocks. It could be other stocks in the same market, in another country's market or a different type of investment all together.

You almost have to get the $$$ out of the country in a safer currency. If the market crash that hard, so will the currency. Keeping cash around isn't a good idea either.

U.S., Canadians and seeming the rest of the world is now living with credits. Gone are the days where everyone buy everything with cash (for most of us anyway). As people keep spending $$$ they have not make and do not have, it'll eventually catch up with them.

[benyl]

Originally posted by Frosty

It is commonly known that under the current U.S. financial system, it is an impossibility for the U.S. to pay off it's debt. This is because every dollar issued in the States carries interest that is owed to the Federal reserve.

Who cares?

It is like borrowing money from yourself. You never actually have to pay it back. The Debt that the US owes to other countries is what is of real concern.

[Super_Geo]

Originally posted by Masked Bandit
So here is the question. Let's assume that one has a decent amount of net worth...let's use $1,000,000 for the sake of this arguement. If one has this $1,000,000 in the stock market...and things go to shit well then your $1,000,000 is worth nothing. So to protect yourself against another depression, what do you move your $1,000,000 in to?

I was wondering the same thing... I wonder how stable the Euro will be in the next decade... Chinese currency could be a safe bet as well as they are going through pretty unprecedented growth for an economy of that size.