Warren Buffett says....

[tw]

Originally Posted by classicman

I'm just bustin stones here and I gotta admit I didn't read your long ass bok/novel/post, but were there cites in there anywhere??

I wrote it. Isn't that enough?

Various sources are numerous and include years of published history. Limiting the question to a specific paragraph might be easier. However more important are the underlying points that numerous sources have warned about; a summary of statements from so many who warn about a future that could be severe or only recessionary. A summary of statements that say why those economic problems would exist. A summary most useful to monitor and learn from history in the following years.

What is ongoing? Financial markets have written off about $150 billion. Predictions put the eventual write-offs at about $265billion. Companies such as GM are still suffering (and trying to mask) massive losses which is why GM stock is the lowest price in 26 years (in direct contradiction to the company's spin). In the past few years, about $3trillion has transferred from the industrialized nations to oil producing nations. $3trillion is equivalent to one US economy.

As Sir Richard Branson noted, he has seen these economic crises three times in his professional lifetime. But never has he seen so much wealth get transferred so quickly. Well, if destructive, then economic spread sheets will report massive losses (followed by job losses or inflation) many years from now. Be aware of what has been happening now to learn from what results years later.

A late 1920 stockmarket crash was followed by depression much later in the 1930s. Economic damage takes years to eventually appear on the spread sheets. America is leaching massive liquidity. We already know such losses have been routinely hidden in off-balance accounting and other 'Enron' techniques. George Jr has long since spent a government surplus and then spend massively more ("Reagan proved that deficit don't matter") that included welfare to the rich. Eventually that economic outflow must result in problems.

We know those totals are large. We don't know how large or where those losses reside. A severe shortage of details and too much 'creative' accounting has everyone making informed speculation.

Most are predicting negative consequences. Today, the president of Dow Chemical was resounding negative. His feedstock (raw material) prices have risen 42%. He announced cross the board 20% price increases. From the NY Times of 29 May 2008:

The move came as little surprise to industry watchers since prices for natural gas, a key chemical industry feedstock, have jumped by 56 percent since the end of 2007, and crude oil prices have risen 32 percent to above $125 per barrel.

Meanwhile our government has been claiming no significant inflation for years (inflation numbers ignore cost increases in food and energy). Cost of living has been rising quickly everywhere except on the spread sheets. An underlying factor in that Dow Chemical statement.

BTW, the resulting recession during Nam also started this way.

During Nam, America had plentiful natural gas reserves to keep energy prices down. From the NY Times of 28 May 2008:

While natural gas prices in the United States have spiked to over $11.80 per thousand cubic feet from $7.50 at the beginning of the year, the price that gas producers can draw in many other countries in the world is several dollars higher.

America is now also an importer of natural gas. At what point does the world stop accepting so many American dollars due to so much deficit spending?

Bad economic news is everywhere with very little good news. Watch what happens so that you can quickly identify a lying mental midget 30 some years from now.