18-Mar-10 News - Euro sniping over finances

[John]

18-Mar-10 News - Euro sniping over finances


** 18-Mar-10 News - Euro sniping over finances
** http://www.generationaldynamics.com/cgi ... 18#e100318

Contents:
"Euro-sniping grows, as Greece financial situation flounders"
"The FBI reveals a new online scam"
"Additional Links"

[jldavid47]

The U.S. people were savers in the 1920s and 1930s

Really? Where do you find the data to support that? Fed data on savings rates only goes back to 1959. Other data indicates otherwise. Total credit as a percentage of GDP rose to 260% in 1929 - a number that would not be exceeded until the late 1990s. Anecdotal evidence from the period suggests even common folk were taking what savings they had and using it with 90% leverage in the stock market. The Great Depression and the deflation that accompanied it were the result of that massive credit expansion just as the coming deflation and likely depression is. There are no doubt generational factors that result in massive credit expansions, but deflation does not happen without a credit bubble.

[John]

The U.S. people were savers in the 1920s and 1930s

Really? Where do you find the data to support that? Fed data on savings rates only goes back to 1959. Other data indicates otherwise. Total credit as a percentage of GDP rose to 260% in 1929 - a number that would not be exceeded until the late 1990s. Anecdotal evidence from the period suggests even common folk were taking what savings they had and using it with 90% leverage in the stock market. The Great Depression and the deflation that accompanied it were the result of that massive credit expansion just as the coming deflation and likely depression is. There are no doubt generational factors that result in massive credit expansions, but deflation does not happen without a credit bubble.

Investing in the stock market, even with leverage, is considered
"savings." The opposition is consumption, where you spend the money
on new clothes or new refrigerators.

John

[jldavid47]

The U.S. people were savers in the 1920s and 1930s

Really? Where do you find the data to support that? Fed data on savings rates only goes back to 1959. Other data indicates otherwise. Total credit as a percentage of GDP rose to 260% in 1929 - a number that would not be exceeded until the late 1990s. Anecdotal evidence from the period suggests even common folk were taking what savings they had and using it with 90% leverage in the stock market. The Great Depression and the deflation that accompanied it were the result of that massive credit expansion just as the coming deflation and likely depression is. There are no doubt generational factors that result in massive credit expansions, but deflation does not happen without a credit bubble.

Investing in the stock market, even with leverage, is considered
"savings." The opposition is consumption, where you spend the money
on new clothes or new refrigerators.

John

Sorry, John, I completely disagree. Investing in the stock market without leverage can be considered "saving" in a sense, but investing with 90% leverage is nothing CLOSE to "saving" - it is pure speculation (see the real estate market of the 2000s as another example). Here's the difference. With no leverage, if your stock(s) drop by 10% you still have 90% of your "savings". With 90% leverage, if your stock(s) drop by 10% your "savings" are wiped out. In the 1920s, people were not savers - at least not in the commonly understood definition of the term. All I want to see is some data to back up such a statement. Usually you do much better than this, John.