The next banking crash?

[ExpatOilWorker]

1 hour ago, Brunolem said:

It appears that you have a very limited understanding of economic and monetary affairs.

 

This is like saying Tiger Woods haven't got a clue about golf. 

[Brunolem]

4 minutes ago, ExpatOilWorker said:

This is like saying Tiger Woods haven't got a clue about golf. 

Most certainly...

[Naam]

5 hours ago, Brunolem said:

It appears that you have a very limited understanding of economic and monetary affairs. 

that's the reason why i (very) comfortably retired at age 46 (29 years ago). i could have retired a few years earlier but my limited understanding of monetary affairs prevented that.

[Brunolem]

41 minutes ago, Naam said:

that's the reason why i (very) comfortably retired at age 46 (29 years ago). i could have retired a few years earlier but my limited understanding of monetary affairs prevented that.

Not sure I see the connection between early retirement and knowledge of the monetary system???

 

Unless you made a bundle writing and selling books about the monetary system, which would be quite an achievement considering the obscurity of the subject...

 

Many people retire early: professional sportsmen, entrepreneurs selling their business, people who inherit and plenty others...without any knowledge of the monetary system...

[Naam]

12 minutes ago, Brunolem said:

Not sure I see the connection between early retirement and knowledge of the monetary system???

it is a waste of time to discuss the paint mix and the brush stroke of an old master (e.g. Rembrandt) with a blind man.

[Destiny1990]

17 minutes ago, Brunolem said:

Not sure I see the connection between early retirement and knowledge of the monetary system???

 

Unless you made a bundle writing and selling books about the monetary system, which would be quite an achievement considering the obscurity of the subject...

 

Many people retire early: professional sportsmen, entrepreneurs selling their business, people who inherit and plenty others...without any knowledge of the monetary system...

He doesn’t deny that but Naam just refers to his personal situation..

He probably selected more winners then loosers on the stock exchange market duh..

 

[Brunolem]

7 minutes ago, Destiny1990 said:

He doesn’t deny that but Naam just refers to his personal situation..

He probably selected more winners then loosers on the stock exchange market duh..

 

Maybe so, but playing the financial markets doesn't necessarily require any specific knowledge about the workings of the monetary system.

 

The latter is the domain of bankers, especially central bankers, economists and academics.

 

Someone like Bernanke is a specialist in that domain, while someone who bought Apple, Google or Facebook in their first days on the stock market certainly made a fortune, yet without any need for monetary po!icy knowledge.

 

There seems to be a confusion here between the flux of money in the economy and the financial markets, and the arcane complexities of fractional reserve banking.

 

Out of interest, there are some very good introductions to the latter on Youtube, some of them in the shape of rather short animated presentations.

 

[Naam]

57 minutes ago, Brunolem said:

There seems to be a confusion here between the flux of money in the economy and the financial markets, and the arcane complexities of fractional reserve banking.

 

Out of interest, there are some very good introductions to the latter on Youtube

[simoh1490]

1 hour ago, Brunolem said:

Maybe so, but playing the financial markets doesn't necessarily require any specific knowledge about the workings of the monetary system.

 

The latter is the domain of bankers, especially central bankers, economists and academics.

 

Someone like Bernanke is a specialist in that domain, while someone who bought Apple, Google or Facebook in their first days on the stock market certainly made a fortune, yet without any need for monetary po!icy knowledge.

 

There seems to be a confusion here between the flux of money in the economy and the financial markets, and the arcane complexities of fractional reserve banking.

 

Out of interest, there are some very good introductions to the latter on Youtube, some of them in the shape of rather short animated presentations.

 

Remind us how the forex system works, your interpretation that is, I saved the link because it was sooo good.

[Naam]

1 hour ago, Destiny1990 said:

He doesn’t deny that but Naam just refers to his personal situation..

He probably selected more winners then loosers on the stock exchange market duh..

 

neither stocks nor stock exchanges. i invest and trade exclusively OTC in HY fixed income and once in a while distressed debt as well as forex. unfortunately i can't provide any pertaining introductions on youtube.

[Naam]

8 minutes ago, simoh1490 said:

Remind us how the forex system works, your interpretation that is, I saved the link because it was sooo good.

i can't wait to see the animated presentations on youtube but i was just told that dinner is served. i wonder whether enlightening books on finance are available which i can colour with crayons?

[Brunolem]

27 minutes ago, Naam said:

It appears that neither you, nor Master Simoh, can rebuke my arguments regarding money creation and gold as hedge against currency depreciation, which is the issue here, and not trading over the counter financial instruments, or the forex markets!

 

Instead of taunting and straying off topic, why don't you provide data contradicting the one that I provided in my posts above?

 

Once again, the topic is money creation (fiat money) and the role gold...thank you...

 

 

[Naam]

12 hours ago, Brunolem said:

It appears that...

...you don't understand my comment

Quote

it is a waste of time to discuss the paint mix and the brush stroke of an old master (e.g. Rembrandt) with a blind man.

now relax and check whether the value of your gold holdings have kept pace with the inflation rate of the country you are living. if not, just blame fractional reserve banking and soothe your mind with animated youtube presentations.

[Brunolem]

1 hour ago, Naam said:

...you don't understand my comment

now relax and check whether the value of your gold holdings have kept pace with the inflation rate of the country you are living. if not, just blame fractional reserve banking and soothe your mind with animated youtube presentations.

Let's check...

 

Back in 1971 when you and I were both in this world, gold was at 35 dollars per ounce.

 

Today it averages 1,250 dollar per ounce...

 

Thus gold price has multipied by 35.7 in the last 47 years.

 

Meanwhile, the minimum wage, which is "supposed" to be more or less indexed on the cost of living has gone from 1.6 to 7.6 dollar an hour.

 

Thus the minimum wage has multiplied by only 4.7 during the same period!

 

Said differently, the USD has lost massively against gold when measured in purchasing power.

[Naam]

7 hours ago, Brunolem said:

Said differently, the USD has lost massively against gold when measured in purchasing power.

an utmost ignorant claim as only those Dollars lost purchase power which were kept by ignorants idle under their mattresses without investing them. please stop shooting your own foot. it must be hurting besides... boring seasoned investors to near death or forcing them to roll on the floor with laughter.

[My Thai Life]

23 hours ago, Brunolem said:

It appears that neither you, nor Master Simoh, can rebuke my arguments regarding money creation and gold as hedge against currency depreciation, which is the issue here, and not trading over the counter financial instruments, or the forex markets!

Of course you are absolutely correct. Gold has always been considered a safe haven in difficult times. BIG caveat, like any other tradeable item it's desirable to buy lower than you sell, unless you're buying solely for income.

 

Nothing wrong with Fixed Income, Gilts, Stocks or currency speculation either for that matter. Having worked in the Fund Management industry in my earlier days, my experience is that professional investors tend to specialise; I'd certainly recommend that amateurs do too.

 

But you know, some people like to get on their high horse ????

 

Edited November 3, 2018 by My Thai Life

[Brunolem]

1 hour ago, Naam said:

an utmost ignorant claim as only those Dollars lost purchase power which were kept by ignorants idle under their mattresses without investing them. please stop shooting your own foot. it must be hurting besides... boring seasoned investors to near death or forcing them to roll on the floor with laughter.

Believe it or not, the world is not populated only by people making a living playing on the casino/markets, not by a long shot!

 

The very large majority of people work for a living, while producing something, paying no attention to the players' bombast...

Edited November 3, 2018 by Brunolem

[Naam]

1 hour ago, Brunolem said:

The very large majority of people work for a living, while producing something, paying no attention to the players' bombast...

a fair evaluation as the very large majority of people were never winners.

[Brunolem]

13 hours ago, Naam said:

a fair evaluation as the very large majority of people were never winners.

There are two places where "winners" can be found in unusual abundance: on the internet and among the farangs living in Thailand.

 

Needless to say that when it comes to farangs living in Thailand and posting anonymously on internet, the proportion of "winners" is simply mindboggling!

 

[Naam]

5 hours ago, Brunolem said:

Needless to say that when it comes to farangs living in Thailand and posting anonymously on internet...

...those who have no shame (like you) sidestep and change the subject when their claims are repeatedly and clearly proven wrong. yawnnn...

[tingtongtourist]

On 9/19/2018 at 2:30 PM, Jimbo2014 said:

A crash soon is almost certain as most financial indicators point to this including the 'Buffet Index'.  However if you look back at past crashes and read headlines of the time, each one predicts apocalyptic end of the world each time it occurs.  The reality is that shares temporarily go down to about 50% for a while - most recover within 80% of lost value within 12 months.  Some companies with bad debts etc. go under.  Dodgy investors get called on margin loans and loose everything.

The reality is that some banks may go under.  Governments have an endless mechanism called QE by which they can print money and either loan it to banks or take share holding in banks.  In the latter case the owners of bank shares are the ones to suffer not those with bank accounts.  Governments are now so tied into banks that they truly cannot fail however small banks may go under and get brought by larger financial institutions during a crash further polarising wealth and ownership.

So before you buy the baked beans and golden shotguns, consider that when asset prices drop, cash is king.  Or as Warren Buffet says "Be fearful when others are greedy and greedy when others are fearful." ie: some great buys on good stocks when the market does eventually crash... as it inevitably will again and again... make sure you are the one left standing with some cash in your pocket for some great deals.

ok, This probably stupidly simple idea, but why they dont bail the people out?

First Government ban ALL money lending, at ALL banks, for 3 months.

Start some kind of lottery system where citizens win 100k to be paid off their mortgage.

At that time ALL the money printed by mints will go to the banks as payment for the winners loans.

keep doing this till banks balance the book.

when allowing loans again, pass a law to ban fractional reserve banking.

 

-more REAL money gets put into economy.

-no banks collapse.

- consumers then actually have money to spend to aid the economy.

-interest rates would then go up naturally, so banks dont have to cheat. 

 

[Brunolem]

3 hours ago, tingtongtourist said:

ok, This probably stupidly simple idea, but why they dont bail the people out?

 

In conjunction with the post you are referring to ("governments have an endless mechanism called QE"), your idea appears logical.

 

Why not indeed?

 

And why where we, humans, stupid enough to wait thousands of years before discovering the perpetual wealth creation machine: the money printing press?

 

The fact is that this is nothing new...debauching the currency, because this is what it is about, dates back at least from the Roman Empire, and there is a famous quote from no other than Lenin: the best way to destroy capitalism is to debauch the currency.

 

Closer to us, the Germans tried that after WWI, with the experience ending in the 1920s hyperinflation.

 

Today, the economies being much bigger and much more interdependent, the effects of massive money creation, a.k.a. QE, are long delayed.

 

Yet, the central banks themselves are well aware of the dangers, which is why they stop QE, or in the case of the Fed even go in reverse and are now destroying money, a.k.a. QT for quantitative tightening...

 

[ExpatOilWorker]

"More than 400 of the nation’s firms deemed extremely risky"

 

https://www.bloomberg.com/news/articles/2018-11-05/one-in-ten-of-china-s-banks-flunk-pboc-s-first-risk-rating-test

 

 

[Jimbo2014]

On 11/5/2018 at 9:30 AM, tingtongtourist said:

ok, This probably stupidly simple idea, but why they dont bail the people out?

First Government ban ALL money lending, at ALL banks, for 3 months.

Start some kind of lottery system where citizens win 100k to be paid off their mortgage.

At that time ALL the money printed by mints will go to the banks as payment for the winners loans.

keep doing this till banks balance the book.

when allowing loans again, pass a law to ban fractional reserve banking.

 

-more REAL money gets put into economy.

-no banks collapse.

- consumers then actually have money to spend to aid the economy.

-interest rates would then go up naturally, so banks dont have to cheat. 

 

Ah but that would defy the point of it all.  The biggest banks are deeply embedded with governments.  Each crash the biggest banks get bailed out and have an opportunity to buy up the little banks on the cheap.  This has happened each crash and the options for the consumer get less and less.  Society has become so wealth polarised that politicians only operate in the interests of the largest corporations.  Here is an interesting but also depressing article on the woes of the worlds biggest economy and its citizens.   https://www.nytimes.com/interactive/2017/08/07/opinion/leonhardt-income-inequality.html?smid=fb-share&fbclid=IwAR0fJlGWu6XHKsLBEr_ue7N8Vzzwh9xpN6PKQi2QNJ-lQl3N0R8qGlModGc

[tingtongtourist]

On 9/22/2018 at 10:28 AM, rumak said:

I have a warehouse full of beer waiting for the crash.   Should bring me a good ROI

I am bet the only ROI you will get out of that is good Rate Of Intoxication.

555

[ExpatOilWorker]

50 million empty condos in China. Eventually something is going to break the camels back.

 

https://www.bloomberg.com/news/articles/2018-11-08/a-fifth-of-china-s-homes-are-empty-that-s-50-million-apartments?srnd=premium-asia

[Brunolem]

7 minutes ago, ExpatOilWorker said:

50 million empty condos in China. Eventually something is going to break the camels back.

 

https://www.bloomberg.com/news/articles/2018-11-08/a-fifth-of-china-s-homes-are-empty-that-s-50-million-apartments?srnd=premium-asia

Which is why they are so desperate to keep on building in neighboring countries...roads, railways, airports, you name it...countries that don't need them, but China needs to use its building overcapacity somewhere!

 

It's a different kind of unbriddled growth as in the 1980s Japan, but it will end in the same way, or probably worse...

 

[Brunolem]

7 minutes ago, ExpatOilWorker said:

50 million empty condos in China. Eventually something is going to break the camels back.

 

https://www.bloomberg.com/news/articles/2018-11-08/a-fifth-of-china-s-homes-are-empty-that-s-50-million-apartments?srnd=premium-asia

Which is why they are so desperate to keep on building in neighboring countries...roads, railways, airports, you name it...countries that don't need them, but China needs to use its building overcapacity somewhere!

 

It's a different kind of unbriddled growth as in the 1980s Japan, but it will end in the same way, or probably worse...

 

[onera1961]

On 9/18/2018 at 8:17 PM, Suradit69 said:

Banks are unlikely to simply "take your money" unless there's a complete collapse of government oversight. Likewise banks couldn't simply take your salary or pension payments.

It just cracked me up. Imagine a world where banks have taken all your money, pension, social security etc. and zombies are roaming on the streets. Cheers. Nothing is going to happen. ????

[janclaes47]

15 minutes ago, ExpatOilWorker said:

50 million empty condos in China. Eventually something is going to break the camels back.

 

https://www.bloomberg.com/news/articles/2018-11-08/a-fifth-of-china-s-homes-are-empty-that-s-50-million-apartments?srnd=premium-asia

And don't overlook the completely empty cities they build in Africa

 

https://www.businessinsider.com/chinese-built-ghost-town-kilamba-angola-2012-7

 

https://www.linkedin.com/pulse/why-has-china-built-ghost-town-africa-matteo-gasparetto-mba