Financial Crisis

[Chaimai]

How about the following.

Rampant inflation strikes most developed country's, unemployed rate at 30-40%, food is scarce, ghost towns, part of towns controlled by gangs (with guns)

police and military guard sensitive area's of towns. Financial system is on the verge of total collapse, pension funds vaporised, bonds defaulted, all stockmarkets worldwide down 80% from peak.

World leaders propose 3-4 world currencies and revalue against their old. One central institute to control these currencies.

How likely do you think such scenario is?

Let's see this as a worst case scenario, maybe later we can paint a more positive picture if we can find information that points to that.

Alex, your dreams are getting wetter and your fanciful postings will soon see this topic closed down.

You are verging on troll posts to paint an unsubstantiated, and speculative scenario, and then run away whilst stating "let's paint a more positive picture if we can find information that points to that".

You can't have a hypothical opponent in the blue corner and a factual opponent in the red corner.

It's like me saying that because of the pent up demand for housing in the UK the price of houses will rise 48% in the next 5 years. I can't say that because I have no evidence for it.

(although an economist did say just that 15/18 months ago!).

You have no evidence for flagging up "raging inflation", the FTSE has fallen 49% from it's historical peak(and <deleted> use is that as a measure because it was artificially inflated by the technology bubble) and the DJI has fallen 53%. Both have dropped about 40% over both a 12 month and 24 month period.

Stagflation should be feared - however, it is often caused by a supply shock (as in the 1970's with oil prices) but then continues as central banks used excessively stimulative monetary policy to counteract the resulting recession, causing a runaway wage-price spiral.

Stimulus packages must be managed within such parameters - let's see if our respective governments can manage that.

[Naam]

March 6 (Bloomberg) -- The global recession may continue until the end of 2010 as the response by governments to rectify it is “too little, too late,” said Nouriel Roubini, the New York University professor who predicted the financial crisis.

“Governments are falling behind the curve,” Roubini said at the India Today Conclave in New Delhi today. “This recession can end up becoming even worse.”

The situation can be improved by appropriate policies, including governments taking over insolvent banks, cleaning them up and re-selling them to private investors, he said. The Group of Seven and the Group of Twenty economies “must act together to get out of this mess,” Roubini said.

Roubini said the global economy may shrink 1 percent or grow

0.5 percent in 2009, before recovering to about a 1 percent growth in 2010, effectively extending the recession until the end of next year.

Emerging market economies, including China and India, will slow down sharply, he said, adding that “we are already seeing the beginnings of a hard landing.”

China’s economy may grow 5 percent “at best” in 2009 after expanding at an average 10 percent pace each year in the past decade, Roubini said, rejecting the theory that emerging markets are decoupled from the problems in industrialized countries.

“It’s becoming a vicious cycle between demand, supply and the financial system,” said Roubini, who served as an adviser to the U.S. treasury department from 2000 to 2001.

Consumers and companies are cutting spending to survive in the current recession, “making the contraction even more severe.” Even if there are banks with sound assets, they wouldn’t lend in an economic decline, he said.

“If you don’t take the right policy action, this U-shaped recession will turn into an L-shaped recession like in Japan in the 1990s,” the professor said.

[AlexLah]

Are you going to close down this very interesting topic Chaimai, or better said do you want it to be closed down?

I am backing up a possible scenario (question) with some charts and pic's and news and just ask a question, is there something wrong with that?

A lot of those highly educated and experienced economist have made fools of themselves when they openly stated we had a sound economy days and weeks before we crashed.

Unemployment rates are artificially kept lower then they really are and CPI is also being tampered with.

Fed will not say where most of the money went and the big institutions are asking for more and more financial support (AIG 4x in 5 months).

Almost 700.000 people have lost their job in Feb in the US, Jan was about 500.000, approximatly 5 Million peeps in the US alone have lost their job as a result of the mess we are in.

Head of congress is saying that AIG is effectively bankrupt and is asking why a broke company should get more financial support and the reason why they are in this mess is because of the derivatives market and lack of control by the regulators.

I could go on and on but will not, just hope that you understand why I am asking a question, please stop criticizing people and instead try to be a bit more constructive. If you can't, then please do not respond in this thread but instead use your time to contribute in the pub and entertainment section.

[12DrinkMore]

So the money is being pulled out of the UK at a phenomenal rate. Seems like foreigners don't like the prospects of the UK.

A silent $1 trillion "Run on Britain" by foreign investors was revealed yesterday in the latest statistical releases from the Bank of England.

http://www.independent.co.uk/news/business...ty-1639413.html

I wonder when "silent" becomes "roaring"?

[AlexLah]

The good news is that there still is another 6 Trillion in the vaults......

[AlexLah]

Recommended watch!!!!!

This is a real funny one and important historically.

http://www.youtube.com/watch?v=cTAk54c8tFQ

[Naam]

can only think of one thing,and thats a war,gets theindustrial machine working again.auto industries turn to manufacturing vehicles,armaments industry,add to that food production,container ships filling up again etc.

I doubt that very much. Globalized economy now, don't you know? Who shall America go to war with? China, the low cost provider of it's products? Mexico, the ow cost provider of its labor? Europe, one of its chief trading partners and home to vast number of subsidiary compamies of American conglomerates? Actually same applies to all. Everyone has got their economic hooks deep into each other. There won't be any war. Economic warfare maybe, but that appears to have already started with traitorous elements within our own ranks.

Papua New Guinea is overdue that America goes to war with this nation! reason: heathen headhunters are in dire need to be reeducated by Pat Robertson et al (especially Al™+ © PeaceBlondie). after the [victorious] war it will be mandatory that all headhunters age 6-112 watch the "700 Club" on a daily basis.

[12DrinkMore]

The good news is that there still is another 6 Trillion in the vaults......

And the even better news is that the "up to 150,000,000,000" Quid of newly UK government created money, can be ramped up by the banks using fractional reserve banking to a whopping 1,500,000,000,000 that's 1.5 TRILLION Pounds ready to be lent & spent in propping up the sacred Gods "House Prices", "2% inflation" and "Bankers Bonuses" so that even more money can be given to the wealthy, taking the rest of us further down the pan in the process.

[AlexLah]

Come on 12, do you really think they don't know what they are doing?

Look at the US where a lot of those peeps that created this mess are now asked to solve it.

I mean if these people where really that evil and bad why have they been running/directing the system for so long?

Take for example Kissinger, they guy is still pulling strings almost his entire life has done so.

That must be good right?

We need a bit more gloom and doom

I like this picture.

Have you looked that YT clip yet?

[stumonster]

Original topic <snip> killing, advocating violence, etc out of the discussion it will stay open.

except for the sub heading

[12DrinkMore]

Here we go deeper into the mess,

http://www.telegraph.co.uk/finance/finance...r-shortage.html

European banks face a US dollar “funding gap” of almost $2 trillion as a result of aggressive expansion around the world and may have difficulties rolling over debts, according to a report by the Bank for International Settlements.

Doesn't look like we can expect a fall in the USD any time soon, so don't expect to be getting any more THBs for your GBPs.

And now a particularly negative statement from the ECB

The European Central Bank has dramatically changed its tune over the last twenty-four hours as the credit freeze worsens, acknowledging for the first time that the world faces the gravest crisis since the Great Depression.

And what are they after?

In a clear rejection of the ECB’s controversial 'go-it-alone’ policy on monetary policy, he called for joint action with the US Federal Reserve to nurse the credit markets back to life.

Well, I wonder if Obama is going to be the slightest bit interested in helping out the Spaniards, the Italians, The Brits. In his shoes I wouldn't.

Mr Quaden todday blamed the US Federal Reserve for fuelling the credit bubble by holding interest rates “too low for too long”, echoing a sentiment that is widely shared by ECB policy-makers but never voiced so openly in public.

Yeah, put the blame somewhere else. Everywhere over the last decade there has been cheap credit pushing up the asset bubbles.

And for all you Brits looking forward to your pensions

quote...

In a mere 24 hours the size of the pension deficits facing some of Britain’s biggest companies has jumped by around £100 billion to a record £390 billion - the equivalent of over £150,000 for every member of a final salary scheme.

...quote

http://www.telegraph.co.uk/finance/persona...ints-money.html

So I wonder what Brown has up his kilt to fix that one?

(looks like I'm not allowed to post more than four quoted blocks of text, strange, thought I had seen more)

[AlexLah]

TV policy, not more than 4 quotes with bad news, good news quotes can be done without limit.

You know all these talks about Millions and Billions and Trillions. Just a few years ago a 100 Million seemed like some serious amount of money.

Maybe if we are lucky one day we will also be able to pay with a Trillion dollar single banknote........

[Chaimai]

Are you going to close down this very interesting topic Chaimai, or better said do you want it to be closed down?

I am backing up a possible scenario (question) with some charts and pic's and news and just ask a question, is there something wrong with that?

A lot of those highly educated and experienced economist have made fools of themselves when they openly stated we had a sound economy days and weeks before we crashed.

Unemployment rates are artificially kept lower then they really are and CPI is also being tampered with.

Fed will not say where most of the money went and the big institutions are asking for more and more financial support (AIG 4x in 5 months).

Almost 700.000 people have lost their job in Feb in the US, Jan was about 500.000, approximatly 5 Million peeps in the US alone have lost their job as a result of the mess we are in.

Head of congress is saying that AIG is effectively bankrupt and is asking why a broke company should get more financial support and the reason why they are in this mess is because of the derivatives market and lack of control by the regulators.

I could go on and on but will not, just hope that you understand why I am asking a question, please stop criticizing people and instead try to be a bit more constructive. If you can't, then please do not respond in this thread but instead use your time to contribute in the pub and entertainment section.

Alex, I have no desire to see this topic closed - it has already been pointed out that some interesting facts have come out of it, and we have all learned many things. My criticism was against the speculative and inappropriate posting at #1012 (and some others).

"How about the following.

Rampant inflation strikes most developed country's, unemployed rate at 30-40%, food is scarce, ghost towns, part of towns controlled by gangs (with guns)

police and military guard sensitive area's of towns. Financial system is on the verge of total collapse, pension funds vaporised, bonds defaulted, all stockmarkets worldwide down 80% from peak."

Your question would have had validity in a topic "What do you think the social consequences of the recession will be" - that at least invites some of the wilder speculation about rioting, pestilence and the plague.

This was always intended to be a 'financial' topic - desite 12D's understandable desire to violently eliminate Gordon Brown.

If you are going to quote credible sources then at least use the likes of Roubini. He is qualified to comment and even he expects to see recovery next year.

IMO a question surrounding the actions of the Fed or the bankers is extremely valid, a 'could this happen' question with pictures of certain people in tents is not. Nevertheless, it is clear that some are excited by these postulations so I am happy to step away from this topic. Naam will at least ensure some balance is maintained.

I will return to the "What a word" topic and Alex, given the time you spend in there, let me know when you see

"yorcever"

Edited March 7, 2009 by Chaimai

[Naam]

So I wonder what Brown has up his kilt to fix that one?

12Singha ... when will you realize that Brown has nothing to do with whatever crimes or misdeeds you blame him? it's good to release steam but concentrating only on one person who took over the crumbling (not anymore) empire from Tony B. Liar (aka Bootlicker par excellence) is nearly as unfair as the blames of the resident youtube-educated armchair politicians cum economists cum know-it-all to blame the irish O'Bama who only two months ago became president of the Greatest Nation on Earth™

[Chaimai]

So I wonder what Brown has up his kilt to fix that one?

12Singha ... when will you realize that Brown has nothing to do with whatever crimes or misdeeds you blame him? it's good to release steam but concentrating only on one person who took over the crumbling (not anymore) empire from Tony B. Liar (aka Bootlicker par excellence) is nearly as unfair as the blames of the resident youtube-educated armchair politicians cum economists cum know-it-all to blame the irish O'Bama who only two months ago became president of the Greatest Nation on Earth™

Before I go - I should point out that should be "12Chang". 12Drinkmore did infact pen the phrase "Changover"

[Naam]

Maybe if we are lucky one day we will also be able to pay with a Trillion dollar single banknote........

millions of Germans were that "lucky" in the 1920s when one US-Dollar fetched 4 Trillion Marks (1 US Trillion = 1 continental european / german Billion).

[AlexLah]

Now that is interesting you mention that Naam.

Perhaps you could explain how Germany went from that period into their stage of incredible warmachine that must have costed millions and millions of dollars?

I mean Germany was still trying to recover from WW1 which also costed plenty right?

Where did all that money suddenly come from?

Edit: No edit

Edited March 7, 2009 by AlexLah

[Naam]

Now that is interesting you mention that Naam.

Perhaps you could explain how Germany went from that period into their stage of incredible warmachine that must have costed millions and millions of dollars?

I mean Germany was still trying to recover from WW1 which also costed plenty right? Where did all that money suddenly come from?

before and during World War I Germany did not possess an incredible warmachine. you are referring to something that was created years later by the megalomanic and crazy Emperor Adolf d'Austria. no money came suddenly from anywhere, the billions were created by printing presses and their origin was that Germany was unable to pay the reparations that the victorious allies imposed.

one of the side effects of german inflation was that a lot of german tourists stopped frequenting Soi Cowboy and Nana Plaza.

[AlexLah]

As I said Naam From that period (WW1) to the incredible warmachine years later. Germany suffered heavily from all the restrictions and repair payments it had to make. If I remember well and correct me if I am wrong when they had this hyperinflation and a dollar gave you a Trillion German dollars didn't they come up with a new currency the rentmark or something and American banks started loaning money to Germany which Germany then later had problems paying back because of the great depression?

If it is that easy to go from hyperinflation to a more stable situation by creating a new currency? I find that a bit hard to understand.

Or did it have to do that they could propp up the banks with money loaned from the US and that that stopped the inflation?

Just interested how that worked, could you explain?

[kevkev1888]

Quantitative easing

some realy intersting comments!!

http://newsforums.bbc.co.uk/nol/thread.jsp...=20090307111953

Edited March 7, 2009 by kevkev1888

[Naam]

As I said Naam From that period (WW1) to the incredible warmachine years later. Germany suffered heavily from all the restrictions and repair payments it had to make. If I remember well and correct me if I am wrong when they had this hyperinflation and a dollar gave you a Trillion German dollars didn't they come up with a new currency the rentmark or something and American banks started loaning money to Germany which Germany then later had problems paying back because of the great depression?

If it is that easy to go from hyperinflation to a more stable situation by creating a new currency? I find that a bit hard to understand.

Or did it have to do that they could propp up the banks with money loaned from the US and that that stopped the inflation?

Just interested how that worked, could you explain?

except for the american banks granting loans you are more or less right Alex. the "Renten Mark" was created and represented an underlying (although future) value by using the social insurance payments as collateral and... people had faith although it was only a promise. going from hyperinflation to a stable currency is indeed easy. Germany has done it twice (second time after WW II) by devaluing the old shitty currency to an absolute minimum and creating a new currency in which people had faith and in which those who had goods/services to sell trusted.

however i strongly doubt whether this trick will work again. even should the wish of the goldbugs come true and currencies are created wich are -according to politicians and central bankers- backed fully by gold or whatever commodity will you believe them? will you/we have the means to enter the vaults of the central banks and count the physical gold? facit: no trust, no faith = no value!

[lannarebirth]

Obama Repeats Bush's Worst Market Mistakes

MARCH 6, 2009

Bad accounting rules are the cause of the banking crisis.

By STEVE FORBES

What is most astounding about President Barack Obama's radical economic recovery program isn't its breadth, but its continuation of the most destructive policies of the Bush administration. These Bush policies were in themselves repudiations of Franklin Delano Roosevelt, Mr. Obama's hero.

The most disastrous Bush policy that Mr. Obama is perpetuating is mark-to-market or "fair value" accounting for banks, insurance companies and other financial institutions. The idea seems harmless: Financial institutions should adjust their balance sheets and their capital accounts when the market value of the financial assets they hold goes up or down.

That works when you have very liquid securities, such as Treasurys, or the common stock of IBM or GE. But when the credit crisis hit in 2007, there was no market for subprime securities and other suspect assets. Yet regulators and auditors kept pressing banks and other financial firms to knock down the book value of this paper, even in cases where these obligations were being fully serviced in the payment of principal and interest. Thus, under mark-to-market, even non-suspect assets are being artificially knocked down in value for regulatory capital (the amount of capital required by regulators for industries like banks and life insurance).

Banks and life insurance companies that have positive cash flows now find themselves in a death spiral. Of the more than $700 billion that financial institutions have written off, almost all of it has been book write-downs, not actual cash losses. When banks or insurers write down the value of their assets they have to get new capital. And the need for new capital is a signal to ratings agencies that these outfits might deserve a credit-rating reduction.

So although banks have twice the amount of cash on hand that they did a year ago, they lend only under duress, or apply onerous conditions that would warm Tony Soprano's heart. This is because they know that every time they make a loan or an investment there is a risk of a book write-down, even if the loan is unimpaired.

If this rigid mark-to-market accounting had been in effect during the banking trouble in the early 1990s, almost every major commercial bank in the U.S. would have collapsed because of shaky Latin American and commercial real estate loans. We would have had a second Great Depression.

But put aside for a moment the absurdity of trying to price assets in a disrupted or non-existent market, of not distinguishing between distress prices and "normal" prices. Regulatory capital by its definition should take the long view when it comes to valuation; day-to-day fluctuations shouldn't matter. Assets should be kept on the books at the price they were obtained, as long as the assets haven't actually been impaired.

Mark-to-market accounting does just the opposite. When times are good, it artificially boosts banks' capital, thereby encouraging more investing and lending. In a downturn it sets off a devastating deflation.

Mark-to-market accounting is the principle reason why our financial system is in a meltdown. The destructiveness of mark-to-market -- which was in force before the Great Depression -- is why FDR suspended it in 1938. It was unnecessarily destroying banks.

But bad ideas never die. Mark-to-market was resurrected by the Financial Accounting Standards Board and became effective in the fall of 2007 (FASB rule 157) to the approval of the Bush administration, its Treasury Department, and the Securities and Exchange Commission. Even as FASB 157 began to take its toll on financial institutions last year, Mr. Bush refused to kill or suspend it. When Congress voiced displeasure last fall, the administration and regulatory authorities made some cosmetic changes, but the poisonous essence remained.

Another horrific Bush policy that Mr. Obama has left untouched concerns short selling. In 1938, the SEC, created by FDR, enacted the so-called uptick rule, which held that investors could not short a stock unless it went up in price. In July 2007, the SEC, whose commissioners were handpicked by the White House, got rid of the rule. Market volatility exploded.

Compounding this lunacy was the SEC's inexplicable failure to enforce the rule against "naked" short selling. Before an investor can short a stock, he is supposed to borrow the shares and pay a broker or stockholder a fee. What sellers soon realized was that the SEC was turning a blind eye to naked short-selling, thus adding even more pressure to beleaguered bank equities. Short sellers quickly saw how mark-to-market made seemingly invincible companies vulnerable to destruction. They picked their targets and relentlessly sold financial stocks short.

If the president really takes Roosevelt's legacy seriously, he should suspend mark-to-market accounting rules, restore the uptick rule, and enforce the prohibition against naked short selling. If he doesn't, historians will look back in utter amazement at Mr. Obama's preservation of Mr. Bush's worst economic policies.

Mr. Forbes is chairman and CEO of Forbes Inc. and editor in chief of Forbes magazine.

Printed in The Wall Street Journal, page A13

Forbes is right about the uptick rule, it should be rinstated, but he overstates how detrimental not having it has been.

Agree about the naked short selling. It's much bigger and more scandalous than anyone will ever know.

Mixed feelings about mark to market vs. cost accounting. He's right about the limitations and dangers of mark to market, but you still need to recognize when assets are becoming impaired. Some resolution between the two methods would be best IMO.

[lannarebirth]

Top U.S., European Banks Got $50 Billion in AIG Aid

The beneficiaries of the government's bailout of American International Group Inc. include at least two dozen U.S. and foreign financial institutions that have been paid roughly $50 billion since the Federal Reserve first extended aid to the insurance giant.

Among those institutions are Goldman Sachs Group Inc. and Germany's Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008, according to a confidential document and people familiar with the matter.

Covered Counterparties

Some banks that were paid by AIG after it was bailed out by the government

Goldman Sachs

Deutsche Bank

Merrill Lynch

Société Générale

Calyon

Barclays

Rabobank

Danske

HSBC

Royal Bank of Scotland

Banco Santander

Morgan Stanley

Wachovia

Bank of America

Lloyds Banking Group

Source: WSJ research

Other banks that received large payouts from AIG late last year include Merrill Lynch, now part of Bank of America Corp., and French bank Société Générale SA.

More than a dozen firms with smaller exposures to AIG also received payouts, including Morgan Stanley, Royal Bank of Scotland Group PLC and HSBC Holdings PLC, according to the confidential document.

The names of all of AIG's derivative counterparties and the money they have received from taxpayers still isn't known, but The Wall Street Journal has identified some of them and is publishing others here for the first time.

Lawmakers Want Names

The AIG bailout has become a political hot potato as the risk of losses to U.S. taxpayers rises. This past week, legislators demanded that the Federal Reserve disclose names of financial firms that have received money from AIG, which Fed officials have described as too systemically important in the financial system to be allowed to fail.

In a Senate Banking Committee hearing in Washington on Thursday, Fed Vice Chairman Donald Kohn declined to identify AIG's trading partners. He said doing so would make people wary of doing business with AIG.

But Mr. Kohn told lawmakers he would take their requests to his colleagues. The Fed, through a new committee led by Mr. Kohn to discuss transparency concerns, is now weighing whether to disclose more details about the AIG transactions.

The Fed rescued AIG in September with an $85 billion credit line when investment losses and collateral demands from banks threatened to send the firm into bankruptcy court. A bankruptcy filing would have caused losses and problems for financial institutions and policyholders globally that were relying on AIG to insure them against losses.

Since September, the government has had to extend more aid to AIG as its woes have deepened; the rescue package now has swelled to more than $173 billion.

The government's rescue of AIG helped prevent its counterparties from incurring immediate losses on mortgage-backed securities and other assets they had insured through AIG. The bailout provided AIG with cash to pay the banks collateral on the money-losing trades; it also bought out underlying mortgage-linked securities, many of which are currently worth less than half their original value.

Banks and other financial companies were trading partners of AIG's financial-products unit, which operated more like a Wall Street trading firm than a conservative insurer. This AIG unit sold credit-default swaps, which acted like insurance on complex securities backed by mortgages. When the securities plunged in value last year, AIG was forced to post billions of dollars in collateral to counterparties to back up its promises to insure them against losses.

More Problems

Now, other problems are popping up for AIG. The insurer generated a sizable business helping European banks lower the amount of regulatory capital required to cushion against losses on pools of assets such as mortgages and corporate debt. It did this by writing swaps that effectively insured those assets.

Values of some of those assets are declining, too, forcing AIG to also post collateral against those positions. And if the portfolios incur losses, AIG will have to compensate the banks.

AIG had seen this business as a relatively safe bet for the company and its investors. The structures were designed to allow European banks to shuck aside high capital costs. A change in capital rules has meant that the AIG protection no longer meets regulatory requirements.

The concern has been that if AIG defaulted, banks that made use of the insurer's business to reduce their regulatory capital, most of which were headquartered in Europe, would have been forced to bring $300 billion of assets back onto their balance sheets, according to a Merrill report.

http://online.wsj.com/article/SB1236383945...tml#mod=testMod

[AlexLah]

Yep true but untill now it seems there is still some faith in those pieces of paper. And I guess most people don't even want to think of it as just paper and ink as long as they can be exchanged for goods. So now another thing which is I guess on many peoples mind is the creation of new money by the UK to buy bonds

how crazy is that? Well that money will not be dumped in the supply amount (how do I say that) it will not be brought into circulation and so therefore will not cause inflation? What kind of strange action is that?

From what I understand inflation is caused by increasing the amount of money in circulation and the velocity it goes around (please correct me when wrong).

From several press reports it says the UK is going to print new Pounds but not bring them into the amount of money available.

Anybody has an idea why this is being done?

[Naam]

Yep true but untill now it seems there is still some faith in those pieces of paper. And I guess most people don't even want to think of it as just paper and ink as long as they can be exchanged for goods. So now another thing which is I guess on many peoples mind is the creation of new money by the UK to buy bonds

how crazy is that? Well that money will not be dumped in the supply amount (how do I say that) it will not be brought into circulation and so therefore will not cause inflation? What kind of strange action is that?

From what I understand inflation is caused by increasing the amount of money in circulation and the velocity it goes around (please correct me when wrong).

From several press reports it says the UK is going to print new Pounds but not bring them into the amount of money available.

Anybody has an idea why this is being done?

you mentioned the answer before you asked the question.

[colibra]

Ales I hate to be critical but don't you think you were being a little to positive and upbeat in your post 1012. Might want to buy a wheel barrow now so your won't have to lug around a huge garbage sack full of money to buy one. Best of luck everyone were going to need it.

The bigger the come the harder they fall. I'm not rich so I will hardly notice that there is a total financial colapse but for those that are used to, shall we say, a higher standard of living it could be hard on them. You know like having to drive your own car and walk to refer for a cold one. lol

[AlexLah]

Naam I am just confused what the reason is that they print new money and exchange for bonds. Isn't that something like I make woodcarvings and then exchange them for apples that I grow in my own backyard? Sorry for asking but I think I am having shortcircuited my braincell.

[AlexLah]

Ales I hate to be critical but don't you think you were being a little to positive and upbeat in your post 1012. Might want to buy a wheel barrow now so your won't have to lug around a huge garbage sack full of money to buy one. Best of luck everyone were going to need it.

The bigger the come the harder they fall. I'm not rich so I will hardly notice that there is a total financial colapse but for those that are used to, shall we say, a higher standard of living it could be hard on them. You know like having to drive your own car and walk to refer for a cold one. lol

Well I haven't seen anyone with a % of how likely it could be to see something like that happening. Therefore I am trying to get my head around what the UK is doing sorry better to say why they are doing what they are doing. As long as banks are hoarding money and decrease the amount of money available there will be no inflation, just more people loosing their jobs and ending in tents. These people will have most likely just enough food and water and a bit of money to survive. They will probably have not enough strenght to fight or riot.

On the other side governments would rather have some inflation than deflation so therefore I asked: What's it gonna be boy?

The US has a debt of about 13 Trillion dollars and under current conditions that will never be payed back, their budget deficit will soon be roughly 3 Trillion.

Imagine that, it took hundreds of years to build a deficit of 1.5 trillion and now in a matter of months it will double, yikes!

It might be wheelborrows to be the only form of transportation left....

[lannarebirth]

Ales I hate to be critical but don't you think you were being a little to positive and upbeat in your post 1012. Might want to buy a wheel barrow now so your won't have to lug around a huge garbage sack full of money to buy one. Best of luck everyone were going to need it.

The bigger the come the harder they fall. I'm not rich so I will hardly notice that there is a total financial colapse but for those that are used to, shall we say, a higher standard of living it could be hard on them. You know like having to drive your own car and walk to refer for a cold one. lol

Well I haven't seen anyone with a % of how likely it could be to see something like that happening. Therefore I am trying to get my head around what the UK is doing sorry better to say why they are doing what they are doing. As long as banks are hoarding money and decrease the amount of money available there will be no inflation, just more people loosing their jobs and ending in tents. These people will have most likely just enough food and water and a bit of money to survive. They will probably have not enough strenght to fight or riot.

On the other side governments would rather have some inflation than deflation so therefore I asked: What's it gonna be boy?

The US has a debt of about 13 Trillion dollars and under current conditions that will never be payed back, their budget deficit will soon be roughly 3 Trillion.

Imagine that, it took hundreds of years to build a deficit of 1.5 trillion and now in a matter of months it will double, yikes!

It might be wheelborrows to be the only form of transportation left....

Alex, markets tell you a story everyday. The story they're telling (excepting Gold) is that deflation is forecast into the intermediate future. That story might change next month but it hasn't yet.

[AlexLah]

Hmmmmm....Those "official" numbers from CPI index I would not trust too much, I mean when they replace a steak with a hamburger that sounds a bit strange to me. I just look at what I need to pay for food as an indicator. Milk still is 38-43 THB depending on the brand and size. And that is another funny one

have you noticed that pack size/net content of some food items have been reduced but price remained the same.

The company I used to work for did the same, ha ha ha, ba5tards.