Monday, September 20, 2010

Economics: The Coming Disaster

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Hindsight is always easy. Everyone can tell you that we had an economic crisis that resulted in a recession unlike any other since the Great Depression. The real question is who predicted it? How could they know yet remain unheard? What did they know? More importantly, what was being said by those whom we were listening to, and what are they saying now? Wouldn't it seem like conventional wisdom to pay more attention to the people who accurately predicted the crash? It would also seem counter-intuitive to give more power to the same people that got us into this situation. At the heart of the philosophies practiced today are two diametrically opposed economic theories, Keynesian Economics versus Austrian Economics. My desire is to not only reveal what each of these philosophies hold as their pivotal differences, but to show how one of them reveals that the crisis is not over, and another much larger crisis looms ahead, and it may be far worse than you think.

To deliver a full understanding (and in the course of writing to help shore up my own understanding) I will lay the groundwork of economic basics regarding the nature of currency, recount historical events showing how governments historically have used currencies and the effects of their usage, whether good or bad. I'll cover topics such as inflation, deflation, hyperinflation, how a currency falls, how a currency gains value, what is a recession, who creates our money, who funds our government, and much more.

I have several goals. I hope that discussing this in chunks will not only help illuminate our current situation, but I dearly want discussion and to spark interest so that maybe someone does their own investigations and is inspired to discover the world that runs our world, because it's FAR easier to understand than I once thought, if you understand the philosophy then you can pick apart any discussion. This is why I have a growing resentment for our 2-headed 1-party system, because at the end of the day they are both taking part in the same underlying philosophies, yet they are so adept at keeping us focused on the bickering that either no one cares to get involved because "it seems too complicated" or it's reduced to Right vs Left.

At the end of this discussion I will reach the conclusion that you can't lay blame to one party or the other, you have to hold them both accountable for why our economy is in shambles. The Housing Bubble was/is bad, but there's also a Higher Education Bubble that's getting ready to pop, a dollar crisis is on the horizon and a global economic collapse. Obviously, this should worry you, it isn't entirely too late, but it's unlikely that we will avoid it since no one is coming to their senses. I personally think it will hit by the summer of 2012, but predicting the "when" is next to impossible since the variables are so many, much like seeing a gas station on fire you know that it's going to explode, you just don't know when.

Let's figure out economics.
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A View of Economics
Week 1: The Coming Disaster
Week 2: What is currency?
Week 3: Inflation
Week 4: Hyperinflation
Week 5: Deflation
Week 6: Money Represents Production
Week 7: Bubbles pt 1 - Housing Bubble
Week 8: Bubbles pt 2 - Pure Credit Expansion
Week 9: Bubbles pt 3 - The Bust is a Good Thing
Week 10: Productive vs Destructive

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