The Current Economic Scene...Déjà vu?

[Imperator Rex]

I thought the attached image would draw some commentaries. I cannot remember where I found it (by accident), but it seems eerily familiar. Although Communism is pretty much dead, the underlying statement made by this 1934 cartoon about the Roosevelt Administration spending its way out of the Great Depression seems to apply to many people's fears today.

Here's a chance for everyone to get some posting points and share their views at the same time.

Enjoy!

Attachments:

[Sabastos]

Bringing down the soundest govt in the world...WOW, now that's the truth. What's going to happen in the future once China and India catch up with us? Communism isn't completely dead yet you know. It may not be a threat now but something else will replace it.

[Dragos]

Communism has some good point but more bad than good. Economy was stable but not very much product to buy. After communism fell out in Russia and countries that were part of soviet union, economies fell apart. Transition to capitalism was very hard. Money became worthless. Governments spent too much money making inflation a problem. Some friends say inflation will start here too if government does not stop spending.

[Sabastos]

That's what happens when a controlled economy moves to a capitalist market economy. Of course people are starting to wonder if capitalism really works. Who knows what we have in store in a couple of years or decades ahead. Economists seem to want to experiment with different theories without considering the damage they can cause.

[Basileus Romanus]

Here is another example of Keynsian economics failing miserably. Sure the govt needs to get involved, but we in the modern age have taken that to an extreme. Money doesn't grow on trees you know. The only reason we haven't gone into a Latin Amercian inflation spiral is because the dollar is a world reserve currency. Once OPEC and other big market players start moving to the Euro or some other currency, then we'll really be screwed. WOW! What a mess.

[Letor]

Inflation was a big problem in Mexico when I was younger. When I got older I understood why those big coins with big values kept buying less and less. Mexico borrowed too much money from banks in the U.S. and Europe when petroleum was expensive. The governement thought it was able to pay back loans with extra money from petroleum sales. That did not work and the government spent too much money and needed more money to pay its loans. They put more money in the country and it started to lose value because there was so much of it.

[Yávaros]

Yes I remember that when I was still in secondary school. I remember my mother getting worried and talking about the money in the bank and how it was worth less and less. I later found out that she took some of the monies my sisters sent from the U.S. and put them in investment accounts in pesos. She thought it was great that she was making 90 to 100% interest yearly. She took out the interest every month to pay bills. She did not realize that the interest was so high because inflation was about the same as the interest. People in the U.S. have difficulties understanding 100% inflation and how bad a devaluation can really cause problems for people. Those things have not happened in the U.S. and I hope they never do. Just like in Mexico a country can not keep printing money to cover bills without expecting something bad to happen later.

[Imperator Rex]

Our only saving grace is the fact that the dollar is a reserve currency, and (inspite of apparent valuation problems recently) there is no other hard currency to replace it. Maybe a year ago we could say that the Euro would replace the dollar as the more prevalent reserve currency, but that seems to be little more than a pipe dream because of all the financial problems Europe is going through right now. Based on what I have seen over the last several years, I believe that the euro was overvalued on the forex. It is very hard to say what will happen next.

[Marzano]

Yes, I remember going to the store in Mexico when I was little with a 1000 peso coin. 1000 is a big number for a little kid. It was gold color so I thought it was made of gold. WOW 1000 pesos. I thought I was going to buy the whole store until I looked on the price tags for the sweet roll I wanted to buy. It cost 900 pesos.

[Exarchos]

I am too young to remember the recessions of the 1990s...and I wasn't around in the 70's so I don't know what it was like to wait in gas lines. I guess it would be like waiting in line for a new app at the Apple stores. I just know it's getting harder for people to make a decent living. I'm still in school and working part time sucks. I've got another year to get my degree and I don't think I'll find something right away. I keep hearing about this economy being the new normal. Even though we'll probably pull out of this, things won't be the same.

[Marzano]

Things are never the same when terrible economic or social circumstances happen. But, history has a way of repeating itself in cycles. I think what happened with the housing crisis is pretty much what happened with the stock market in 1929. Too much credit and not enough money to make the payments. Stocks were overvalued and underfunded. Just like the housing values and their loans were overvalued and underfunded. We'll probably go through a couple more years of slow growth and then recovery will start. I think by then the U.S. will not be the economic power it once was and that will be hard for Americans to accept.