Recession-Plagued Nation Demands New Bubble To Invest In

[bordsilver]

An old article that I was told about today. Scarily predictive.

July 14, 2008
WASHINGTONA panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest.

"What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future," said Thomas Jenkins, CFO of the Boston-area Jenkins Financial Group, a bubble-based investment firm. "We are in a crisis, and that crisis demands an unviable short-term solution."

The current economic woes, brought on by the collapse of the so-called "housing bubble," are considered the worst to hit investors since the equally untenable dot-com bubble burst in 2001. According to investment experts, now that the option of making millions of dollars in a short time with imaginary profits from bad real-estate deals has disappeared, the need for another spontaneous make-believe source of wealth has never been more urgent.
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"The U.S. economy cannot survive on sound investments alone," Carlisle added.

Congress is currently considering an emergency economic-stimulus measure, tentatively called the Bubble Act, which would order the Federal Reserve to begin encouraging massive private investment in some fantastical financial scheme in order to get the nation's false economy back on track.
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The most support thus far has gone toward the so-called paper bubble. In this appealing scenario, various privately issued pieces of paper, backed by government tax incentives but entirely worthless, would temporarily be given grossly inflated artificial values and sold to unsuspecting stockholders by greedy and unscrupulous entrepreneurs.

"Little pieces of paper are the next big thing," speculator Joanna Nadir, of Falls Church, VA said. "Just keep telling yourself that. If enough people can be talked into thinking it's legitimate, it will become temporarily true."

Demand for a new investment bubble began months ago, when the subprime mortgage bubble burst and left the business world without a suitable source of pretend income. But as more and more time has passed with no substitute bubble forthcoming, investors have begun to fear that the worst-case scenarioan outcome known among economists as "real-world repercussions"may be inevitable.

"Every American family deserves a false sense of security," said Chris Reppto, a risk analyst for Citigroup in New York. "Once we have a bubble to provide a fragile foundation, we can begin building pyramid scheme on top of pyramid scheme, and before we know it, the financial situation will return to normal."

Despite the overwhelming support for a new bubble among investors, some in Washington are critical of the idea, calling continued reliance on bubble-based economics a mistake. Regardless of the outcome of this week's congressional hearings, however, one thing will remain certain: The calls for a new bubble are only going to get louder.

"America needs another bubble," said Chicago investor Bob Taiken. "At this point, bubbles are the only thing keeping us afloat."

Article

 

[Clawhammer]

I know...Tulips!

 

[bordsilver]

I liked the "illegal immigration futures".

 

[Auspm]

demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest

Fortunately for 'straya, we still have one of the biggest and best left in the entire industrialised world to keep our citizens happy & feeling rich!

:lol: :lol: :lol: :lol: :lol:

 

[hawkeye]

I think they went for hot air (Carbon credits).

 

[Henry Wartooth]

If enough people can be talked into thinking it's legitimate, it will become temporarily true.

Beautiful

 

[AngloSaxon]

I think they went for hot air (Carbon credits).

I was going to add that but you got in first :lol:

 

[nonrecourse]

demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest

Fortunately for 'straya, we still have one of the biggest and best left in the entire industrialised world to keep our citizens happy & feeling rich!

:lol: :lol: :lol: :lol: :lol:

Fortunately for Oz a significant number of individuals own hard assets like investment property (over 1.3 million families and individuals) that underpin their asset base as well as their PPOR. Although most have taken a heavy hit with their super being almost 100% in shares unlike the septic tanks and souffle's they have not gone down the gurgler.

Of course this FACT upsets the property naysayers to no end.

Kind Regards
non recourse

 

[GoldenEgg]

demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest

Fortunately for 'straya, we still have one of the biggest and best left in the entire industrialised world to keep our citizens happy & feeling rich!

:lol: :lol: :lol: :lol: :lol:

Fortunately for Oz a significant number of individuals own hard assets like investment property (over 1.3 million families and individuals) that underpin their asset base as well as their PPOR. Although most have taken a heavy hit with their super being almost 100% in shares unlike the septic tanks and souffle's they have not gone down the gurgler.

Of course this FACT upsets the property naysayers to no end.

Kind Regards
non recourse

Investment properties won't help much when everywhere starts looking like Detroit.
Gold & Silver = King

 

[mmm....shiney!]

Investment properties won't help much when everywhere starts looking like Detroit.
Gold & Silver = King

Ineterestingly according to yippe's link to Demographia, Detroit happens to be one the most affordable city in the US. So whatever Detroit is doing, we need to do the same.

 

[bordsilver]

Investment properties won't help much when everywhere starts looking like Detroit.
Gold & Silver = King

Ineterestingly according to yippe's link to Demographia, Detroit happens to be one the most affordable city in the US. So whatever Detroit is doing, we need to do the same.

We're on the right path that's for sure.

 

[Yippe-Ki-Ya]

Investment properties won't help much when everywhere starts looking like Detroit.
Gold & Silver = King

Ineterestingly according to yippe's link to Demographia, Detroit happens to be one the most affordable city in the US. So whatever Detroit is doing, we need to do the same.

oh okay ... so the recipe for success then is to have industry collapse, thereby losing a large proportion of the job market, thereby rendering a large portion of the population incomeless and dependant on welfare...

This then drives down RE prices and rents ...

Don't worry mate- Stralia has already gone a fair distance down this one-way street. :lol:

 

[mmm....shiney!]

Investment properties won't help much when everywhere starts looking like Detroit.
Gold & Silver = King

Ineterestingly according to yippe's link to Demographia, Detroit happens to be one the most affordable city in the US. So whatever Detroit is doing, we need to do the same.

oh okay ... so the recipe for success then is to have industry collapse, thereby losing a large proportion of the job market, thereby rendering a large portion of the population incomeless and dependant on welfare...

This then drives down RE prices and rents ...

Don't worry mate- Stralia has already gone a fair distance down this one-way street. :lol:

I don't know yippe, the Demographia link was your idea, you tell me. What do you want yippe? Housing affordability and homelessness, or a home for all and employment. Australia is highly unaffordable according to your link, Detroit is not. You were the one comparing Australia to the US, now you don't want to?

But anyway re: Detroit, surely if no one has a job then housing affordability is irrelevant?

 

[humbolt]

aint that the truth

 

[AngloSaxon]

Investment properties won't help much when everywhere starts looking like Detroit.
Gold & Silver = King

Ineterestingly according to yippe's link to Demographia, Detroit happens to be one the most affordable city in the US. So whatever Detroit is doing, we need to do the same.

Yeah but we haven't got native brown bears waiting to roam the city wasteland of Zetland and Brunswick as suburbs successively decay and are reclaimed by the bush.

Go online and read about how the few people left in some Detroit suburbs are offered new houses in populated areas as the cost of providing sewers and electricity is prohibitive. It is more cost effective to move the remaining (eg) 5 houses out of an area of 100 dilapidated wrecks and just let the city be reclaimed than to let people stay where they are and still provide services to them.

 

[ShinyStuff]

Investment properties won't help much when everywhere starts looking like Detroit.
Gold & Silver = King

Ineterestingly according to yippe's link to Demographia, Detroit happens to be one the most affordable city in the US. So whatever Detroit is doing, we need to do the same.

Sure but please without the crime and poverty.

 

[mmm....shiney!]

Investment properties won't help much when everywhere starts looking like Detroit.
Gold & Silver = King

Ineterestingly according to yippe's link to Demographia, Detroit happens to be one the most affordable city in the US. So whatever Detroit is doing, we need to do the same.

Yeah but we haven't got native brown bears waiting to roam the city wasteland of Zetland and Brunswick as suburbs successively decay and are reclaimed by the bush.

Go online and read about how the few people left in some Detroit suburbs are offered new houses in populated areas as the cost of providing sewers and electricity is prohibitive. It is more cost effective to move the remaining (eg) 5 houses out of an area of 100 dilapidated wrecks and just let the city be reclaimed than to let people stay where they are and still provide services to them.

I think you might need to do some background reading in other threads anglo

 

[Dwayne]

Investment properties won't help much when everywhere starts looking like Detroit.
Gold & Silver = King

Ineterestingly according to yippe's link to Demographia, Detroit happens to be one the most affordable city in the US. So whatever Detroit is doing, we need to do the same.

Having been there a number of times, there's a reason Detroit is so affordable. Nobody who can afford to go anywhere else would want to actually live there!

 

[AngloSaxon]

I think you might need to do some background reading in other threads anglo

Point the way and I'll read it!

In Markets & Economies or others?

 

[mmm....shiney!]

I think you might need to do some background reading in other threads anglo

Point the way and I'll read it!

In Markets & Economies or others?

"Real Estate" anglo, in particular:

http://forums.silverstackers.com/message-443215.html#p443215

My debate with yippe regarding Detroit started there.

Basically, it appears that one of the main reasons that housing affordability in the US is better than Australia is because the increase in RE in Australia was mainly because of increasingly restrictive government regulation regarding development, whilst in the US it was that AND easy credit. In other words, the US had a "bubble" and we had a "boom". Critically different in my opinion.

To cut a long story short:

Detroit = housing affordability because of little government regulation AND a social disaster. Anyone from Detroit care to share their own experiences?

Sydney = unaffordable housing because of intrusive government regulation AND a good place to live (if you like cities).

I don't want a Detroit, I was using it a point in an argument but unfortunately my antagonist has had to take a short break.

Is that as clear as mud??? :/

with yip gone for a while I may take this opportunity to get as many shots in as I can. :lol: