Fed Res Graphs, shows total borrowing from 1910-2008, this will blow your mind!
Posted May 14th, 2008 by tamtamfreedom
output
Check out these charts-The blue bar shows the total amount borrowed from year to year- and reserves. Unbelievable!
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I'm not sure but
I think this means that all the banks are now insolvent, right?
If America had a decent GDP I would agree with you.
Ooops, this was supposed to be a reply to "Calm Down" below.
If we actually manufactured enough product to cover our tail and people did not panic, no problem. But we dont and they will. In the last dozen years we have shipped away our jobs. Housing was the last real manufacturing we had, and it was all on borrowed money. So many jobs today are either construction and support, or retail from construction profits. The sad part is if back in 2000 we stayed the course and didnt start to open the free money gates, we would have already realized that we need to start bringing our jobs back, and steadily we could have become diverse again.
In theory or on paper your right, but in todays world....Not so much
14 trillion
That's a mighty big economy...not to mention that only 1 in 20 able working adults doesn't have a job now. Just because we aren't manufactuing VCR's and widgets, doesn't mean we aren't manufacturing.
I have to give you a big I agree on the money gates from 2000...we'd be well into recovery if they hadn't tried to re-inflate the dot.com bubble.
Unemployment Stats are fiddled with just like GDP and Inflation
The Rosier The Picture The Better
There were a few posts a while back regarding the Government Sector expanding jobs as fast as it can to offset the pace of job losses nationwide although I can't find them. I recall within the text were estimates of a couple hundred thousand banking jobs to come, expectations that finance was to take cuts as well. I know there will be automotive sector jobs cut in the near term....................
Fortune Favors the
Fortune Favors the Bold
http://calculatedrisk.blo...
Be sure to read the comments, not only the article.
"first by inflation, then by deflation, the banks...will deprive the people of all property" -Thomas Jefferson
While the scale of these
While the scale of these graphs is not too large (+/- 100bn), keep in mind that this data is for only one of the twelve FED member banks. I wonder if the others look the same?
Etch-a-Sketch O' Doom
CRIMINY!!! That blue line doesn't progressively veer towards a projection, it's basically a total and completely sudden right angle turn!! Not unlike dropping right off a vertical cliff, appropriately illustrating our dire situation!
Of course, there's no shaded column there at the precipitous turn; therefore, we must not be in a depression, so at least we've got that going for us.
Very shocking. We are at a
Very shocking. We are at a net negative in money.
Calm down
Please people, do not panic. These liquidity issues are merely a consequence of the Keynes cycle and risky fractional reserve banking, but it is not a predictor of economic collapse.
Look at the numbers, the scale of the graph. We're talking about a gap in the range of billions, a little more than 100. Luckily, they have a lot of value of ours to steal to close that gap. There are somewhere around 10 trillion dollars of value, so printing in the hundreds of billions won't collapse our economy.
Very likely this means a rocky deflation/inflation cycle ahead, probably a few years of stagnant economic growth, and we'll be on the other end of the Keynes cycle.
Our recent and future problems are results of the dishonest Keynesian economic model, but they are not signs of an imminent collapse.
Keep in mind, it is pretty well documented from most of what i've read, that it was overlending and overspeculation that caused the market collapse of 1929, but the real cause of the great depression was panic and then government's attempts to fix it. If not for panic that the sky was falling, the market fall of 1929 would have precipitated 2-3 years at most of recession.
I'm for getting rid of Keynesian economics as much as anyone, but it's a delicate game you're playing when you interfere in the free market, and we must fix the system properly, not knee jerk, because it will likely take a generation or more to undo a century of bad policy.
People, the economy is driven on profit, and if you check the S&P 500 P/E historical, we are not on the edge of a collapse, since stock prices are only slightly overvalued compared to the norm. We're not going to dig out of the recession in the near future, but we are not on the edge of a depression either, unless panic takes over.
I'm sure i'll get the normal labels...troll, CIA informant, whatever, but things aren't as bleak as they're made out to be.
Not panicing but...
if you charted my families debt this past year (07), it would look much like this graph, since my husbands business took a deep nose nive. Thankfully for us, we are just now starting to break even again and may be able to start chipping away at it, but for many larger companies in his same business (ie: surveying) things aren't looking as good. Many companies that had 20 crews are know down to 1 crew. Too bad we can't print some more money and bail ourselves out.
Unfortunately
Surveying is a industry that feeds on the real estate industry, and that is one that's been hit very hard.
I feel your pain, it really sucks and is horribly unfair for the banks and lenders that put us in this mess get bailed out, and thus they don't have to learn the harsh lessons that many former homeowners are learning.
If it weren't for the FED
If it weren't for the FED deflating the money supply after the Crash of 29, there would not have been a depression.
RIGHT ON!
If memory serves me, I think it was in 1933 when the Fed hiked the interest rates dramatically.
"first by inflation, then by deflation, the banks...will deprive the people of all property" -Thomas Jefferson
IMHO
you are such a neocon!
No
No, i'm not a neo-con. I wasn't defending Keynesianism nor was I defending the fed. I'm charting our course based on what I know of the Keynes cycle.
We created this bubble in the real estate sector, now this bubble has popped. This is very much like what Japan experienced in the early 1990's, and they had more than a decade of slow economic growth, but they didn't have massive bank failure. Many economists were predicting a massive failure in the financial sector of Japan, and it didn't materialize.
A neocon would be defensive of these policies...I'm saying they are unwise and eventually destructive, but we are not on the edge of a cliff. Times are tough, no doubt, but we still have tons to be optimistic about.
We are not in as bad of shape as 1929, and we're still ahead of where we were in 1979. We may see some local banks go belly up when the commercial real estate market tanks, but the big boys are propped up by the fed and thus will weather this storm.
All economic indicators point to a complete collapse, that's what i'm hearing from you folks. Here's some distinct counterexamples...unemployment is around 5%, the PE ratio of the S&P 500 is showing stocks are only slightly overvalued...there really isn't a thing that will cause a collapse, short of mass panic.
We are taking our medicine for the excesses of 1993-2006...please read and understand the Austrian business cycle...it has predicting what we're going through.
You wrote, "unemployment is around 5%, the PE ratio of the S&P
500 is showing stocks are only slightly overvalued..."
I've heard that these numbers cannot be trusted.
You also wrote, "We are not in as bad of sshape as 1929,"
Are you sure?
http://mwhodges.home.att....
This is just my guess, but I think that the economy will collapse sometime between late 2009 and early 2010 and I think we will have a huge liquidity problem that is probably worse than the last Great Depression.
"first by inflation, then by deflation, the banks...will deprive the people of all property" -Thomas Jefferson
Yes, i'm sure
S&P P/E ratio is around 16-17. You don't get to this number by fuzzy math...you take the price of a stock and measure it against the yearly earnings...basically it tells you the value you're getting for a stock. It was more than double this number before the dot.com collapse.
Unemployment...sure, they manipulate this number, but even so, we were at 10-15% unemployment in the early 80s and we weathered that storm.
In the economic problems of the 70-80s, we had stagflation, almost triple the unemployment, much higher inflation than we're experiencing (i'll admit, that's subject to interpretation). We are not there, and hopefully, will change course before we get there again.
These problems Reagan was facing were much tougher, but he lowered taxes and the fed choked off the money supply. This fixed it in short order, and this is what we are needing today.
Unfortunately...McCain is no Reagan.
P/E ratio
I don't know about the S&P, but I recently read that the P/E ratio of the DJI is around 70!!!!! That is unprecedented.
Also, as Peter Schiff points out, the only corporate earnings figures that can be trusted are those based on dividends being paid out, since you can't fake that.
I really can't fathom how you could conclude that our economic problems today are not as tough as they were in the 70s and 80s. You could only come to that conclusion if you assume, along with Dick Cheney, that "deficits don't matter" and add to that the assumption that consumer debt doesn't matter and add to that the assumption that unfunded programmatic obligations that, according to the government's own chief accountant, cannot be covered by an possible scheme of taxation or growth don't matter and add to that the assumption that the world ditching the dollar doesn't matter etc. etc.
You read wrong
The DJI p/e is around 16-17 right now. I don't think it's ever been as high as 70.
True...you can't really trust anyone I suppose...but you can't lose faith in all bookkeeping because of a few lying execs...sometimes you have to have faith that they aren't breaking the law.
deficits do matter...and we need to balance our budget in short order. What we have to do to prevent a nightmare scenario is eliminate the deficit and start the long road of paying back...but our deficit is alarming, but not something that's going to crush us in the near future.
The unfunded obligations are what we're trying to deal with...rather than fund them...we have to win this revolution and determine that unconstitutional obligations are not obligations...they were promises made by people who had no business doing so. It's easy to fix...the only one you keep is SS, since it's only fair that the ones who paid in should see some value...but you eliminate welfare, medicare, medicaid, unemployment, along with 2/3 or more of the federal government.
All we have to do to fix these problems is win...that's what we're trying to do.
I keep saying this...but i'm not trying to defend our dumb decisions that got us to the point of having this discussion...all i'm saying is we are not standing on the edge of a cliff...keep positive and keep focused...if we don't take care of this, maybe my children will see that cliff.
So, you trust earnings numbers? Do earnings in anyway
indicate the health of businesses in modern accounting? I thought earnings were some made up bogus numbers to fool investors.
Well, you trust what you want to trust. Go ahead.
"first by inflation, then by deflation, the banks...will deprive the people of all property" -Thomas Jefferson
Yes...unless they're lying
There have been a few companies in the last decade to get caught playing games with the books and lying about earnings...but the majority of them aren't lying...you can't assume a whole nation of companies are liars because a few of them are.
You'll probably see a few more, but the effect this has on the stock price values is fairly negligible.
The collapse came swiftly ...
"The collapse came swiftly for Enron Corp. when investors and customers learned they could not trust its numbers."
http://www.washingtonpost...
"first by inflation, then by deflation, the banks...will deprive the people of all property" -Thomas Jefferson
You have
You have a few examples of accounting irregularities, but it's not indicative of the whole economy. Most companies are not playing these games.
1929
In 1929 our military budget was a "little" smaller.
In 1929 we had sound money.
In 1929 we had a manufacuring base.
So a genation or more........ first we must STOP DIGGING!!!
I bookmarked this to show
my husband. Maybe, I shouldn't it will only make him cry.
HOLY CRAP BATMAN!
OMG! OMG! OMG! OMG! OMG! OMG! OMG! OMG! OMG! OMG!!!
If I'm not mistaken, I've seen these graphs several months ago, and I thought they were terrible, but the situation has gotten MUCH WORSE!!!
In my view, the ONLY thing that is stopping the economy from going into a DEEP DEEP GREAT DEPRESSION is the Fed's willingness to keep the appearence that the economy is okay. Otherwise, the liquidity would have evaporated faster than anyone can imagine as far as I can tell.
I am further convinced that, within a couple of years, the FED will be either unwilling or unable to keep the illusion that the economy is okay.
I AM SOOOOO CONCERNED ABOUT THE LIQUIDITY SITUATION.
I am NOT worried about hyper-inflation at all.
"first by inflation, then by deflation, the banks...will deprive the people of all property" -Thomas Jefferson
Oh yeah, that's right, I forgot.
The Federal Reserve must've made a mistake on their graph, I guess.
This is deflationary
The banks have overextended themselves, this is the risk we face with fractional reserve banking.
This is why they are printing money as fast as possible...we are facing dollar deflation if they don't.
Hopefully, after this is all over...we will have learned some serious lessons. In my experience, though, we probably won't.
W Says We're Not in a
W Says We're Not in a Recession - Therefore, these graphs are lies.