What are the chances of a complete financial meltdown?

[AlexRich]

1 hour ago, bartender100 said:

Maybe a solution would be a mass debt write off, worldwide. Countries, business and domestic (household). It has been talked about it before. Now might be the time

 

https://foreignpolicy.com/2012/01/03/how-to-save-the-global-economy-write-off-the-worlds-debt/

 

from 2012, and

 

https://www.ft.com/content/dd02e4a8-fda5-11e8-aebf-99e208d3e521

 

from 2018

 

With that approach the only people in the future who would get a loan would be people who don’t need one. Banks would go bankrupt and depositor “loans” (because that’s what they are) would disappear. 

[kingdong]

11 hours ago, Deli said:

 Looks like almost all of us are f*** with, no Vaseline, only sand. The rich stay rich, the middle class and below will sink

Sure they,'ll sink,then they,'ll revolt.

[kingdong]

26 minutes ago, AlexRich said:

With that approach the only people in the future who would get a loan would be people who don’ted need one.

Quote

Isn,t that the case now?that's why loan sharking,sorry,pay day loans are such big industries now.

 

[Leaver]

2 hours ago, Chopinbkk said:

1) Investors = global money, will avoid TH, a country run by the Brass and a few families, like Thais are avoiding boxing stadiums (now).

2. Investores ..... those who matter, don't care about 1 or 5 Mio TB  =  chicken poo!
 

3. Strategy: To have as much a possible, in hard currency, in quality terretories.

 

My 5 cent.

Again, did you not see the smiley faces after my post????

[Leaver]

29 minutes ago, kingdong said:

Sure they,'ll sink,then they,'ll revolt.

The last time that happened here, didn't about 90 Thai citizens get killed by their own army in Bangkok? 

[swissie]

10 hours ago, Brunolem said:

Controlling the wealth and controlling the economy are two different things.

 

In developed countries, the economy depends on consumption, up to 70% of it in the US.

 

Since the advent of globalization, consumption is financed by debt.

 

Consumers are in debt up to their eyeballs, and work for the most part to pay the interests on their debts...hence the name "debt serf".

 

Right now, the payments are frozen because the incomes are also frozen.

 

But the debts are still here, and the payments are only postponed, not cancelled.

 

So when the economy will try to restart, the creditors are going to wake up and call for their money.

 

Once the debtors/consumers will be able to get a job, they will need to keep on servicing their former debts, and to catch up with the late payments.

 

Needless to say that they won't be inclined to buy a new car on credit, or to take a cruise.

 

The rich have absolutely no control on that.

 

They cannot force the population to take on more debt, which it cannot do anyway.

 

This is what happens when the economy is built on debt rather than on savings.

IMO, this post decribes best the "current state of financial affairs". Congrats!

"Brunolem" has a way to explain "Essentials" in a nutshell.
- Of course, government "think-tanks" have reached the same conclusions by now, but those findings are not fit for "public-consumption". = Too scary, I suppose.

[ThaiWai]

On 4/10/2020 at 6:39 PM, FinickyFarang said:

Curious as to what this woman is doing to be infected twice.  Let's say we use the gov's numbers and I'll just round it to 3,000 or so infected.  

 

3,000 out of 70 million people is a pretty rare occurrence.  That's like a 0.000000428571429% infection rate.  

 

And this woman gets it twice?  She should go out and buy some lottery tickets ????

 

Is she a medical professional treating COVID-19 patients?  Gotta be some explanation as to how she got exposed twice given the above odds.  

They think the virus can reactivate itself.  Patients in South Korea had it, were cleared and then tested positive again.   https://www.reuters.com/article/us-health-coronavirus-southkorea/south-korea-reports-recovered-coronavirus-patients-testing-positive-again-idUSKCN21S15X

[SiSePuede419]

Meltdown is the wrong adjective.

 

The world economy is in a MEDICALLY INDUCED COMA.

 

When you wake up from a coma, do you immediately jump up and run the Boston Marathon? ????

 

 

[SiSePuede419]

2 hours ago, ThaiWai said:

They think the virus can reactivate itself.  Patients in South Korea had it, were cleared and then tested positive again. 

 

From the link you posted:

 

"False test results could also be at fault, other experts said"

 

Every medical test can have both false positives and false negatives.

 

In the 91 S. Korean cases, the patients may have had false negative results in-between the positive results.

 

Which are probably more likely than false positives.  ????

Edited April 12, 2020 by SiSePuede419

[RocketDog]

13 hours ago, Brunolem said:

Why the rest of the world keep on accepting this worthless paper is beyond comprehension...probably by fear of military retaliation...

Probably because they consider their own and other currencies more unstable than the dollar. 

 

The better question is why they continue to invest in paper at all as opposed to other asset classes like metals, jewelry, collectibles, and real estate. The possible answer is that they are still chasing returns; squeezing blood from a stone. 

[Brunolem]

1 hour ago, RocketDog said:

Probably because they consider their own and other currencies more unstable than the dollar. 

 

The better question is why they continue to invest in paper at all as opposed to other asset classes like metals, jewelry, collectibles, and real estate. The possible answer is that they are still chasing returns; squeezing blood from a stone. 

The rich do it, they know better...they invest massively in land, real estate and so on.

 

Those who are left with paper are the states, like Saudi Arabia or China, for example, who move their reserves from paper dollars to bonds and back, because they have not much choice, since they are not going to buy collectibles.

 

China, along with Russia, has also bought tons of gold, that will come in handy once the world will have had enough of being abused by the dollar...

 

[Enzian]

Why the dollar is holding up and still accepted is interesting. The simple answer is that money is just a medium of exchange, like seashells to aborigines. If you accept it from someone and later in the day someone accepts it from you for goods and/or services, it doesn't matter that it is backed by nothing. Also the US has never defaulted, and the reconciliation/clearing systems of the world are based on the dollar to large extent. Logically, there must be a tipping point where this all changes, but where?

[Gilltom]

On 4/10/2020 at 2:45 PM, Leaver said:

Investors from ll around the world will be flocking to Thai banks because their deposit is guaranteed up to 5 million baht.   ????????

Yes but who guarantees it?, the government !!!!what if they have no money???

[RocketDog]

1 hour ago, Enzian said:

Why the dollar is holding up and still accepted is interesting. The simple answer is that money is just a medium of exchange, like seashells to aborigines. If you accept it from someone and later in the day someone accepts it from you for goods and/or services, it doesn't matter that it is backed by nothing. Also the US has never defaulted, and the reconciliation/clearing systems of the world are based on the dollar to large extent. Logically, there must be a tipping point where this all changes, but where?

True as far as it goes.

But the clever aboriginal who uses a 3D printer to make seashells is able to outbid others for goods and services. Those who receive the extras shells do the same until everybody has more shells and the prices simply go up. Those who have acquired and saved shells over time are seriously impoverished though. Prices begin to fluctuate daily and there is no stability. At some point somebody starts making art with the cheap shells thereby adding real value thus allowing him/her(!) to become richer. In this way real wealth can be created by labor and talent. 

 

That is the entire point of metals and commodities backing currency. That currency is no longer 'fiat'. Metals cannot be printed. 

 

Otherwise the country with the ability to print can, for a short time, dominate the world economy. Eventually those who have accumulated said currency will get weary of its declining purchasing power and dump it for something better. History is replete with this scenario and it always ends the same way.  

[Brunolem]

2 hours ago, Enzian said:

Logically, there must be a tipping point where this all changes, but where?

There has been so much abuse that this tipping point is probably close. 

 

Almost everything goes against the dollar. 

 

The Federal Reserve is doing its best to debase it, by throwing trillions around like confettis. 

 

The US government is enraging the whole world with its economic sanctions, encouraging many to bypass the dollar to evade these sanctions. 

 

International organizations and think tanks would like to replace fiat currencies by cryptocurrencies, preferably the same for everyone. 

 

In the wake of the current crisis, globalization is going to take a hit, with many countries reversing their economic policies to become less dependant of foreign countries... this in turn will reduce the need for dollars. 

 

[placnx]

On 4/10/2020 at 6:55 PM, FinickyFarang said:

The whole recovery aspect is where I'm a little cautious due to what the definition of recovery actually is.  

 

Is it just the stock markets?  Personally, I think we'll probably reach pre-Corona levels in 1 - 2 years.  

 

The overall economies?  That's a harder one because, IMHO, Corona wasn't a 2008-type event where we can measure how quickly things go back to the way they were.  I think this will fundamentally change a lot of industries.  

 

I think people will get used to the social distancing.  Less face-to-face business meetings, which means less air travel, and less hotel bookings.  I think people will avoid overcrowded bars and restaurants. 

 

I was just talking to a friend and he mentioned the chill he gets thinking about going to Las Vegas when it reopens and touching chips that have seen thousands of grubby hands all over them.  

 

I was also talking to a buddy of mine that is the CFO for a small-medium sized company (150 - 200 people) and they have everyone working from home and he and the CEO and other executives are talking about operating remotely even after the virus threat is over.  They could reduce their office space, lower operating costs, etc.  

 

We may never shake that.  That may become the new norm.  

 

But in its place, we may see different industries take off.  Streaming services like Netflix.  Virtual meeting services.  Food delivery.  As more business go remote, cybersecurity will flourish.  More online purchases (Amazon, eCommerce)

 

There's already talk of some companies brining their manufacturing, or at least critical component sourcing, back to their countries rather than doing it in China.  

 

Probably a lot more automation, like Amazon, to lower headcount.  Less workers = less disruptions the next virus.  

 

So, it's interesting to see how this all settles out.  I don't think we're going back to Dec 2019.  We're heading more towards a very different model of what the economy even looks like.  

In answer to your question about someone being infected twice, it could be that she was not cured - testing reported a false negative.

 

As for this pandemic, even countries with good testing programs are finding new cases which cannot be traced. So with many countries having poor health systems, it will be contentious to go back to open borders. People as you say will become more used to social distancing, doing business remotely. Only if there is a reliable vaccine will people feel comfortable traveling to countries with dodgy healthcare.

On 4/10/2020 at 7:31 PM, Lacessit said:

IMO stock markets have further to tank. Many companies are talking about suspending dividends.

Cash is king more than ever. It will take 1 -2 years for all this to shake out financially.

Complete meltdown unlikely, those in debt are in deep doo-doo. No one wants to loan you anything.

We may experience severe deflation if confidence cannot be reset and maintained regarding the ability of governments to control this pandemic through well-designed and -implemented testing programs. If deflation got out of control, it could take longer than 2 years for the stock markets to stabilize.

 

Deflation could cause a debt spiral with cascading effects worldwide, not a good prospect for globalism! We live in such a more complex economic environment than people back in the 1920-30s, so pulling out of a debt trap could require a good deal of coordination. I don't see that easily happening. Just look at the mess in the Eurozone.

[SwissCheeseMan]

On 4/12/2020 at 1:25 PM, Gilltom said:

Yes but who guarantees it?, the government !!!!what if they have no money???

I see the Thai government is already crying poor.  

[Leaver]

On 4/12/2020 at 1:25 PM, Gilltom said:

Yes but who guarantees it?, the government !!!!what if they have no money???

Then you lose your money.  Thanks for playing "Who wants a Retirement Visa in Thailand."   ????