Impending Global Economic Collapse

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Capitalists limit production to drive up prices.

[youtube]http://www.youtube.com/watch?v=1CLhqjOzoyE&hd=1[/youtube]



"You are a slave. Your chains are debt. You will probably never amount anything. You will sweat, toil, and bleed to earn scraps of paper which will decrease in value until they cease to exist.

I challenge you to make a difference. If you see a bankster, hang it. If you see a politician, hang it.

I hold here in my hand a bottle full of gasoline. I will light the rag in it's neck as a way of symbolically freeing myself, and my children, from a system of serfdom.

Behind you there are cases of bottles exactly the same as mine. I challenge you to take one and join me in lighting it and burning this place to the ground.

Let us march to NY and DC and cleanse this country of the leeches." - Some Crazy Guy on zerohedge.com

Can you give an example?

Production is of course manipulated to impact prices. That can be good or bad depending where you are when the transaction takes place. Government farm supports allow farmers to survive, yet food prices are artificially higher. OPEC adjusts production og its oil for maximum profit, yet it cannot go above a certain level because that would bring alternative energy into the competition.

OPEC.

i think that the global precariousness and instability of world market expectations is due to simple herd mentality hysteria.

the myriad of laws and rulings and political decisions and acts of god that can adversely affect global markets have surpassed the average persons ability to be confident that he knows fully what is happening.

since the advent of computers, things have been able to become more complicated because the desires of people's whims of systematic architectures that support their management visions are able to be accomplished.

many unrelated databases are not able to easily talk to each other let alone query each other, and people have generally handed all the calculations and forecast duties to computers due to unthinking reliance on that technology to perform what they think is simple tasks.

no one knows exactly what is around the corner in the situation with greece and other vulnerable countries, and no one knows because there is no one who can intelligently compile all the data from every database and make sense of it.

leading economists have very differing ideas about the near future, and so i think they are all making educated guesses provided with the data we are all provided with in the news.

if they do not agree, then who can i trust?
people in the street would also be posed with the same doubts about the future of the world. if they have money in the stock market, then i believe that the most common behavior they exhibit is to sell all their stocks in response to unreliable advise.

if there is one economist who says "people are overreacting. things are not as bad as they seem", and there is another economist that says "we are headed for a major global catastrophe (and recites numbers and things) and stock values will plummet and house prices will ....." (doom and gloom in other words), then if there is only 2 opinions and they are opposed, i think that most people would "err on the side of caution" and sell their stocks.


a global sell off of all stocks is a disaster, and it can set off an avalanche of financial collapse. people are not as informed as they were before computers arrived (i have already talked about that) and they are less trusting because they are less involved, and they panic and sell at the slightest unsavory rumor

it can not be undone.

Stop worrying B9.

Human civilization and culture have lasted for over 10,000 years through wars, plagues, famines and the collapse of empires.

Humanity will muddle along somehow.

ruveyn

In our new utopia we will get along just fine without money.

Money is the inevitable final stage of barter.

ruveyn

Heh.

The sale of Hehs is very much dependent on supply and demand.

ruveyn

OPEC is an intergovernmental organization, not free enterprise.

i am not as much interested in the prolongation of humanity as i am interested in the prolongation of myself. that may sound selfish but there one goes. i do not want to live my life "muddling along" in an environment that may have existed similarly 40,000 years ago.

i could not survive if the world went broke (what a silly concept because the earth is a closed environment and it does not trade with other planets) , and if i had to join a primitive group of hunter gatherers, i would die i suppose. i do not think the global situation will devolve to a level where people have to hunt and gather to survive, but there is rampant stupidity that is imposed upon many of us by politicians who are partial to the "cause" but ruthless in it's application.

humans are a complicated species to think about, and so i prefer not to think about them.
the unfortunate reality is that one can not ignore humans because some of them have the power to ruin one's life. animals in nature are free, but humans must abide the "rules" of life imposed on them by other humans with more "inherent" authority. all authority is granted (and not native) by the powers that be, and so some people are considered more important than others for reasons that i can not understand.

A factory will be able to produce just as much and its workers to produce just as much whether Dow Jones crashes or not. People must remember that fact. As for capitalists causing artificial scarcity, yes, this happens all the time as the system promotes oligopolies and monopolies permitting this. Power becomes concentrated.

DeBeers - stockpiles diamonds and controls the market to drive up prices

Microsoft - creates complex and exclusive deals on the sales of new PC's to give itself a monopoly. If the market was functioning as a market should, when you walk into a PC store they should be offering you a computer with no OS and then offer to sell you one of several OS's, instead you have a bundle with no choice of OS on the PC.

Think about the crash of 2008, there was a massive oversupply of cars, raw materials and shipping all of a sudden.

Did each of these markets react by slashing their prices as they should have according to free market dogma?

Nope, the cars were stockpiled until the government stepped in with a 'cash for clunkers' program, factories were closed, mines were closed, ships were cut up and sold for scrap, the market did everything in it's power to avoid discounting products and entering deflation.