Bailout Bill Fails

[misombra]

bailout plan passed=collapse of the dollar.

[GrkScorp]

bailout plan passed=collapse of the dollar.

What?

No..

Bailout plan not passed = slowdown of the economy = collapse of the dollar

You can think of the dollar as a % of PxQ representing a basket of goods

The bailout is an act of fiscal policy which won't affect the money supply.. In effect.., all it's going to be doing is boosting economic activity by specifically targeting bad debt in financial institutions..

If anything.., the bailout will help prevent the dollar from falling further in the global markets..

The value of our currency relative to other currencies depends on what you can buy with one unit of our currency.., compared with what you can buy with one unit of the other currency..

You form a basket of goods.., call it P (for domestic) and P* (for foreign).. now the question you ask is how many baskets can one unit of currency translate to?

P*/P

If the foreign currency can buy more baskets of goods than the domestic currency.., then you can expect the real exchange rate to be greater than 1.., and in favor the the foreign currency..

If the domestic currency can buy more baskets of goods than the foreign currency.., then you can expect the real exchange rate to be less than 1.., and in favor of the domestic currency..

In a healthy economy.., more goods are being produced.., the economy is more productive.., and its citizens can enjoy more of the fruits of that economic activity.., they enjoy more purchasing power which allows them to enjoy a higher standard of living..

But when the economy isn't productive.., less is being produced (not just in goods.., but in services).., the citizens don't have the same amount of goods and services available to them.., their purchasing power diminishes.., which will lead them to a lower standard of living..

Just conceptually.. the power of currency holds within it information about the economic health of the underlying economy it belongs to..

By passing the bailout plan.. We're not going to be cleaning our butts with silk and using gold bars as doorstops.. But we'll prevent a serious slowdown in not just our economy.., but in the global economy.. (our three major banks are global powerhouses.., with arms that stretch far out and past the US border)..

Our dollar might not flourish.., but it will at least be saved from a collapse.. If the economy it represents is depressed.., you can expect the same to be reflected in its value.. If the economy it represents is healthy.., you can expect it to at least be stable..

[IndiReloaded]

By passing the bailout plan.. We're not going to be cleaning our butts with silk and using gold bars as doorstops..

Everyone who bought stocks earlier this week in the drop period is quite happy now, GS.

[misombra]

gskorp, your posts look like you copied and pasted them from a text book.

this thing will hold things up for a little while, but in the long run i don't think it's going to work out so well. but you're free to have your own predictions.

[Mish]

I think what the bail out targets most of all is the investor confidence, stopping the flood of selling. I think if the bail out can restore the confidence then the market (and the economy) would once again pick up. If the confidence goes south then there will be real problems.

It's funny how important factors of the economy circle around speculation of the value (But then again, so are many other things in life)

[GrkScorp]

gskorp, your posts look like you copied and pasted them from a text book.

Ugh.., I wish! This thread made me realize why authors charge so much for textbooks.., such a pain in the ass to write them.., such a pain in the ass to read them..

this thing will hold things up for a little while, but in the long run i don't think it's going to work out so well.

Interesting.. Why do you think that?

but you're free to have your own predictions.

As are you.. and I'm not implying you're wrong in any way..

It's really interesting getting to hear how people feel about the whole thing and what they think is going to happen.. Because ultimately.., it's people like you mis.., who drive the market.. Your expectations and perceptions will influence the choices you make.., be it consumption or investment.. That's why I'm actually more interested in what YOU have to say.., than I am about what the chair of the Federal Reserve Bank has to say..

[bluesummer]

Everyone who bought stocks earlier this week in the drop period is quite happy now, GS.

Yep, my fiance did, and it's lookin' pretty good.

[misombra]

Ugh.., I wish! This thread made me realize why authors charge so much for textbooks.., such a pain in the ass to write them.., such a pain in the ass to read them..



Interesting.. Why do you think that?



As are you.. and I'm not implying you're wrong in any way..

It's really interesting getting to hear how people feel about the whole thing and what they think is going to happen.. Because ultimately.., it's people like you mis.., who drive the market.. Your expectations and perceptions will influence the choices you make.., be it consumption or investment.. That's why I'm actually more interested in what YOU have to say.., than I am about what the chair of the Federal Reserve Bank has to say..

it makes me insanely distrustful of our government, big corporations, and people who are brain-dead. it makes me angry, very angry, that now that we've passed this thing we're hearing things like, "this will only work if...," and "this isn't going to work without..."

it's total bullshit. it's just like when the crooked media and government tricked us into the iraq "war."

anyway, the way i'm dealing with it is, i'm living in my means, i'm not buying anything new, i'm working to pay off my debts, i spend very little, and when i do, i make sure i'm putting it in local business (which are going down one by one, bailout or none.) and remain conscious of where my money is going.

it's like giving money to a crackhead. they lie and manipulate and **** with your mind and get whatever they can out of you and anyone else they're able to, just for more crack. then they OD, lose all their friends and don't have anybody else to lean on. and then they get bailed out by their parents and they're back at it again. i'm very sorry that this was passed. my guess is that a lot of politicians will be losing their job next month because of this.

[Junket]

Scorp is looking at this from an accountants viewpoint. In his mind a good economy is one that continues to flow and grow, regardless as to how or why.

I'm looking at this from an idealist point of view, I want the shit to crash so people learn a lesson and stay on track next time.

[bluesummer]

^ As long as you're not affected by it, right?

That's how everyone thinks, until it's money coming out of their pockets. So far, you remain relatively unaffected, so you can sit back and say "Too bad for you, suckers!". I bet if you had hundreds of thousands of dollars in investments that tanked, or you had a job at one of the big banks that are tanking, you'd be all for the bailout.

Guess it just depends on what side of the fence you're sitting on right?

[misombra]

you're joking, right?

[doppelgaenger]

^ As long as you're not affected by it, right?

That's how everyone thinks, until it's money coming out of their pockets. So far, you remain relatively unaffected, so you can sit back and say "Too bad for you, suckers!". I bet if you had hundreds of thousands of dollars in investments that tanked, or you had a job at one of the big banks that are tanking, you'd be all for the bailout.

Guess it just depends on what side of the fence you're sitting on right?

Aren't there too many of these ****ing bank jobs anyway?

Isn't the problem with our economy the fact that we have too much crap on the credit side of the ledger, adding to our debt? Isn't that because we have all these selfish people who live off of investments and making money off of the whole idea of credit and whatnot?

Humor me. I know jackshit about this bailout plan.

[DoesntMatter]

The US needs more engineers and less people working in the service sector! I just looked and could not find a chart I saw a while ago that broke down our economy compared to that of other countries. Basically, the US still had slightly more industrial jobs compared to other developed countries but less than that of Japan and Germany, although Germany and Japan had a lot more relative to other countries. Interestingly enough the only other foreign companies my dad ever works with are from Germany and Japan..

Basically service jobs are going to fucck us over as I see it... what is their product? Nothing

We NEED more engineers and people in the physical sciences working on things for production! Ahhhhhhh

[bluesummer]

you're joking, right?

No, why would I be? You think it's fine for the rest of the economy to take a hit so long as YOUR business is taken care of? Yeesh.

Let people learn their lesson. Yeah. That's great economic policy.



Unfortunately DM, they world market is growing so much when it comes to production and higher education, that it's going to be harder to create industrial and production type jobs in this economy. The competition is getting bigger and better (oh, and cheaper - overseas)

[doppelgaenger]

The 21st century
When there is no longer any significance for being human