Jobless rate hits 9.4 percent in May; layoffs slow

[david austin]

Originally Posted by name change request

enter David Austin to give us new tales of the coming apocalypse

Simple math really. We built a system that requires exponential growth to survive.

The system inherently has the fatal flaw to assume value always increases. Leverage feeds growth and as leverage and credit stalls the system collapses on itself.

Its the general public lack of this reality that is keeping the prop alive. Mostly due to disinformation and the behavioral theories of optimism.

PS. Xian... My apologizes for not making it on Sat.

[DFW303]

Big oil ruined the economy.

[david austin]

Originally Posted by DFW303

Big oil ruined the economy.

Ummm

No

[david austin]

I wanted to expand upon the post I made with the exponential growth chart

Credit is the fuel for growth in our system. Total credit stands around 59T. To sustain growth and more importantly the payments in simple interest we need to expand credit at a rate of 9-10T a year for the next two years.

Even with all of the magical numbers coming out of the banks over the past few days and all of the feds pumping... FY09 credit creation stands at a little over 1T.

Math doesnt add up and franky... the only way it would add up is if we inflated the leverage bubble that got us in this mess in the first place.

[name change request]

so what do you think? it's a bad system?

i don't see how we could continue growing at the rate of 10t a year forever

[david austin]

Originally Posted by name change request

so what do you think? it's a bad system?

The idea that growth is sustainable at 3-5% requires the creation of credit at 10-15% is. Seems reasonable for the first few decades until you have to start creating exponentially more to feed the engine and cover what you still havent paid back.

i don't see how we could continue growing at the rate of 10t a year forever

Thats precisely the point.

Really this is a socioeconomic idea that has been skewed over the past few decades. Material 'wealth' has taken massive leaps even in just the last decade. It used to be that we went into debt to buy a house, vehicle, or start a business... but we now go into debt buying tvs, computers, clothes, etc.

The issue is that most people dont even think twice about going into debt now because they believe that we will always grow and debts will always be able to be paid eventually. My home value will always increase, my job will always raise my pay, my 401k will always go up, and even if it goes down at times... it will always recover and achieve newer highs.

These are the flawed social traits we have developed that allow so many of us to feed the system which up until last year has always scratched our backs in turn.

Now the 'math' is reclaiming what (in many cases) shouldnt have necessarily existed in the first place.

[jaesun]

Originally Posted by DFW303

Big oil ruined the economy.

Please educate yourself before posting. You make yourself look like a fool.

Besides, sometimes oil is the answer....

[name change request]

Originally Posted by david austin

These are the flawed social traits we have developed that allow so many of us to feed the system which up until last year has always scratched our backs in turn.

so where do we go from here?

can you recommend some decent journals or books that discuss where we need to go in the future as pertains to this specific subject?

[Tyler Durden]

Not sure if this was mentioned here yet as I haven't read through the thread yet. But here's what I read today on this topic.


Unemployment tops 10 percent in 15 states in June

http://www.google.com/hostednews/ap/...8FY4QD99GAARG6

[david austin]

Originally Posted by name change request

so where do we go from here?

can you recommend some decent journals or books that discuss where we need to go in the future as pertains to this specific subject?

There will always be bubbles. There will always be self manufactured elements of 'too hot' or 'too cold' in global economies. Finding balance will always create winners and losers. That is just nature.

What we must find is the acceptance that we live vastly over our means as a society. De-leveraging a society will not send us back to the stone age. It will however separate the desires from true needs.

Think about this. What do we consider necessities that even just a few few years ago we thought of as luxuries? What would happen if those 'necessities' went away? How much do we kick and scream about going without things that even just a few years ago were unheard of?

Now dont get me wrong. I am a consumer just like everyone else. Consumerism is a necessary engine to growth and I am certainly not trying to be a 'back to nature' hippy. I eat out a lot. I buy stuff. I buy things I dont really need.

As a society the main difference is that somewhere along the line, instead of steady growth generationally we opted for parabolic growth within decades. Growth which cannot be sustained long term, yet under our option we have forced ourselves to continue down that road lest we give it all back and them some. Its hard to go without when you dont know a world without.

As for books. I would suggest Nassim Nicholas - 'The Black Swan' as an interesting view on history vs. future improbabilities. I have a few at home I will write down later.

[Stymi]

Originally Posted by DFW303

Big oil ruined the economy.

no black people did

[name change request]

Originally Posted by david austin

Think about this. What do we consider necessities that even just a few few years ago we thought of as luxuries? What would happen if those 'necessities' went away? How much do we kick and scream about going without things that even just a few years ago were unheard of?

hey man i'm right there with you. the #1 thing is a cell phone... everyone acts like it's absolutely necessary.

the necessities are food, shelter, and clothing.

i think it has to do with the baby boomers. the generation that is 1 or 2 gens ahead of mine all have kids now and they teach those kids bad habits. that's what i think. it's those kids that are a couple generations behind me that all HAVE to have cell phones.. they HAVE to have expensive clothes.. etc etc

but i agree that people use credit like it's cash in their pockets and mismanage their finances... i see that shit every day in my line of work. you try to help people out and teach them something and they don't even want to hear it.

i'll check that book out, been looking for something new to read.

[HomoSexualPredator]

Originally Posted by Stymi

no black people did

and the gays and all their expendable income.

[Stymi]

Originally Posted by HomoSexualPredator

and the gays and all their expendable income.

no gays actually think before spending.

[name change request]

oh and david, it's just general wasteful spending. like here at my job we have those water coolers all throughout the office. a guy comes into work and wants water so he goes to get some.. i'm thinking he's going to the water cooler... NOPE, he goes and buys a bottled water from the vending machine. wtf! he has that same water for free at the cooler, why spend at the vending machine?

i'm guilty of similar things... going out to eat on the way home when i have food at home. shit like that. i try not to do it but i also cut up all my credit cards so i'm operating only on my salary. it's easy to do when you budget properly.