the "r" word

[ClipseGST]

If we aren't in a recession yet, we are surely on our way. I recently read an article that discussed what the American economy is built on. When we moved away from building industrial and manufacturing goods, we become a FIRE Economy. The acronym stands for (Finance, Investing, and Real Estate). This effectively took any material value from the dollar being based on solid goods, and gave it more intrinsic value.

Just like the internet boom of the Late 90's, we had a boom in these sectors. Money was spent in these sectors in exorbitant amounts. Well above the actual value of the markets. That's why we saw the stock market rise so high. If I remember correctly, the real estate, and finance markets were overvalued by at least 12 Trillion dollars.

Now that the market has collapsed, the American economy suddenly lost the "make believe" value of those dollars. So now the economy is looking to make up for that money spent. The author stated that the only way to get out of this financial shortfall and recession is to have another bubble that would be in excess of 12 trillion dollars.

In my honest belief, the next bubble will be the: Alternative Power Race. In the next couple of years, you'll see many companies ramp up the production of commercially feasible ways to create power for natural resources and the sun.

Just me 2cents.... and from excessive reading.

Brian

[tony]

If we aren't in a recession yet, we are surely on our way. I recently read an article that discussed what the American economy is built on. When we moved away from building industrial and manufacturing goods, we become a FIRE Economy. The acronym stands for (Finance, Investing, and Real Estate). This effectively took any material value from the dollar being based on solid goods, and gave it more intrinsic value.

Just like the internet boom of the Late 90's, we had a boom in these sectors. Money was spent in these sectors in exorbitant amounts. Well above the actual value of the markets. That's why we saw the stock market rise so high. If I remember correctly, the real estate, and finance markets were overvalued by at least 12 Trillion dollars.

Now that the market has collapsed, the American economy suddenly lost the "make believe" value of those dollars. So now the economy is looking to make up for that money spent. The author stated that the only way to get out of this financial shortfall and recession is to have another bubble that would be in excess of 12 trillion dollars.

In my honest belief, the next bubble will be the: Alternative Power Race. In the next couple of years, you'll see many companies ramp up the production of commercially feasible ways to create power for natural resources and the sun.

Just me 2cents.... and from excessive reading.

Brian

Very good post but I do think the value of the dollar is heavily backed by oil vs finance which in theory.. could be why the U.S government isn't completely opposed to higher oil prices.

[ironchef]

Very good post but I do think the value of the dollar is heavily backed by oil vs finance which in theory.. could be why the U.S government isn't completely opposed to higher oil prices.

Yep, because its lining their pockets with profits while emptying ours.

[BanginJimmy]

Yep, because its lining their pockets with profits while emptying ours.

got anything to back this up?

Heres a better question, why dont you explain how oil prices are set. That way we can judge if its worth listening to any more of your banter.

[ironchef]

got anything to back this up?

Heres a better question, why dont you explain how oil prices are set. That way we can judge if its worth listening to any more of your banter.

Got anything to prove it wrong?

Oil prices are set by commodity traders, who are in turn influenced by current events, such as the declining value of the dollar.

LOL @ the banter comment btw. Come back when you have something real to try and insult me on.

[BanginJimmy]

Got anything to prove it wrong?

Oil prices are set by commodity traders, who are in turn influenced by current events, such as the declining value of the dollar.

LOL @ the banter comment btw. Come back when you have something real to try and insult me on.

I'm not the one making the accusations, I have nothing to back up.


You forgot one part of the equation. OPEC controls the supply, they could increase supply by something as small as .5mil barrells a day and the increased supply would drop the oil price somewhere in the area of $6.00 a barrell. That in turn would drop gas prices about $0.30 a gallon.

[ironchef]

I'm not the one making the accusations, I have nothing to back up.

http://www.roguegovernment.com/news.php?id=8694

^ Food for thought.