Financial Crisis

[colibra]

Agree lannar

But to get the economy going at some point there going to half to re inflate and pump money into the system. Yes it could be used to control inflation but then you have the debt situation to deal with. Some are saying just to pay off the stimulus packages the tax rate for the highest brackets would need to be 95%. So there is only one way to go inflation above 10% per year for the foreseeable future and probably like 20%. That would bank loans would be expensive as a bank loaning at anything under the inflation rate would be losing money hand over fist.

The other option is to let the dollar collapse. Nice mess you've gotten us into.

[12DrinkMore]

when will you realize that Brown has nothing to do with whatever crimes or misdeeds you blame him?

Brown was Chancellor from 2nd May 1997 – 27 June 2007, he then took over as Prime Minister.

He was

responsible for all economic and financial matters

http://en.wikipedia.org/wiki/Chancellor_of_the_Exchequer

Over 12 years in power as THE MAN RESPONSIBLE for UK Ltd.

He failed to do anything about the housing price bubble, despite warnings as early as 2003 from the FSA, the IMF and various analysts and journalists, coupled with his modification to the inflation indicator from the RPI to the CPI, thus removing the house price bubble from the inflation figure that the MPC uses for its decisions.

He failed to reign in the excesses of the bankers as they awarded themselves billions in bonuses.

He failed to prevent the loss of manufacturing industry, on the premise that the financial service industry would compensate for the loss.

He ran a deficit national budget every year even over the "good years".

He has failed to make long term policies for the Baby Boomer pensioners.

And the list could go on and on, the man is a failure. Even the Labour party itself ran into financial difficulties.

He is now set on a course which he hopes will start another mini-boom so that he will be voted in next year. And he doesn't care if he sends the UK into further misery with his policies.

Although the world is heading into a depression, the situation is much much worse than it need be because of one man, who had eleven good years to prepare for the bad times, but instead borrowed and spent.

And now is spending 150,000,000,000 Quid that didn't even exist yesterday.

The blame lies well and truly where I have put it. At the doors of the monosighted Brown, who came to power as Chancellor in 1997, taking over a strong economy from the Tories after they had battled and fixed the mess left by the previous Labour government.

[AlexLah]

Still found no answer to my question why the UK is doing what they doing. use paper and some ink and exchange for other piece of paper with ink.

But 12, Gordon still have to explain and justify his action's to someone right? Are there not those meetings where a bunch of pensioners old peeps with funny wigs that say hear hear all the time, house of lords and commons?

Same as members of congres in the US of which most of them never take the time to read any bill larger then 5 pages it seems. And recieve large donations whenever it's election time again while being heavily lobbied to assure they serve the best interest of big financial institutions and corparates.

Seems to me those pigstalls have to be cleaned up/out first before any real honest progress can be made.

I am just back to buy a few botties of beer and also some other stuff. Milk has gone up from 42 THB to 44 what used to be 1000 ML Long time ago) is now 946 ML. How about that?

Another question in my mind, how to destroy money. Well you simply invade 1 or 2 country's use taxpayers money to buy bombs, drop those bombs on infrastructure and then use more taxpayers money to build new infrastructure, what the logic in that?

I believe it was in 2006 that the UK made their last payment to Canada and the US to pay of their debt they incurred from fighting WW2. It was just a few Billion US in total they had borrowed......

Other trends, manufacturing moving from country’s like Poland to guess where.............North Africa where the wages are around 300 USD a month compared to 600.

Make sure you have a strong piece of rope in your B.O.B.............

[lannarebirth]

Alex, the reason the UK government is buying up corporate debt instruments is because there is presently very little liquidity in that market. Low liquidity leads to lower valuations (higher interest rates) and forced selling, which reinforces the vicious cycle. By buying the instruments I believe they hope to put a floor under the market so that it may restart trading based on fundamentals rather than the need to raise cash. That they are printing the money to do it is a risky endeavor, but it may accomplish the goal. I hope it does.

[AlexLah]

Ok let me see if I get this right, corparate bonds are issued by corparations that have a somewhat higher risk to default depending on the credit rating they are given. These bonds are issued to give those corparations money to invest and will hopefully give the buyer a good rate of return.

I am not 100% sure but is the financial services sector not the greatest contributor to the UK's GDP and that same sector is being bailed out because they made some bad bet's and investments in those CIA instruments that were repacked resold and transformed and rated tripple A by insurance company's? that never had the money to repay the counterparty's in the first place if things went bad?

I get a feeling we are running in circles here.

You know, the UK is listed as a corparation as well.

Edited March 7, 2009 by AlexLah

[lannarebirth]

Ok let me see if I get this right, corparate bonds are issued by corparations that have a somewhat higher risk to default depending on the credit rating they are given. These bonds are issued to give those corparations money to invest and will hopefully give the buyer a good rate of return.

I am not 100% sure but is the financial services sector not the greatest contributor to the UK's GDP and that same sector is being bailed out because they made some bad bet's and investments in those CIA instruments that were repacked resold and transformed and rated tripple A by insurance company's? that never had the money to repay the counterparty's in the first place if things went bad?

I get a feeling we are running in circles here.

You know, the UK is listed as a corparation as well.

Alex, there is material ALL OVER the net explaining the course the UK is taking, together with its goals and possible ramifications. Here's just one:

http://www.dailymarkets.com/economy/2009/0...-british-pound/

[AlexLah]

lana thanks for the link, this all, is freakin insane.

QUOTE: Therefore the best outcome at this point from the credit crisis would be for a period of stagflation i.e. low economic growth with high inflation and interest rates. The high inflation will be a necessary evil so as to devalue the value of the record amounts of debt.

We are doomed: http://www.thenation.com/doc/20090316/scheer

Buy Gold.....

Edited March 7, 2009 by AlexLah

[Naam]

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.

LRB explained the main reason.

[Naam]

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

keep on dreaming

[rethaired]

lana thanks for the link, this all, is freakin insane.

QUOTE: Therefore the best outcome at this point from the credit crisis would be for a period of stagflation i.e. low economic growth with high inflation and interest rates. The high inflation will be a necessary evil so as to devalue the value of the record amounts of debt.

We are doomed: http://www.thenation.com/doc/20090316/scheer

Buy Gold.....

Stocks of gold companies and/or physical gold?

[Naam]

Stocks of gold companies and/or physical gold?

if you expect a real breakdown than physical gold is the answer to your question. that is of course assuming you have the possibility of storing it safely and still have access any time.

[cloudhopper]

A must-read IMO especially for anyone hoping for a politically - (at least as recently practiced in the US) - led solution to this crisis:

http://www.wallstreetwatch.org/soldoutreport.htm

[Naam]

A must-read IMO especially for anyone hoping for a politically - (at least as recently practiced in the US) - led solution to this crisis:

we can hope CH but unfortunately our hopes cannot compete with a fraction of the dough lobbyists can shell out

[flying]

if you expect a real breakdown than physical gold is the answer to your question. that is of course assuming you have the possibility of storing it safely and still have access any time.

Not assuming a mad max but............Gold is not hard to store/hide

$100K is only just over 6 pounds or 2.8KG

I highly recommend thinking outside the box when it comes to storage.

A big shiny safe is not the answer. IMHO

[Naam]

if you expect a real breakdown than physical gold is the answer to your question. that is of course assuming you have the possibility of storing it safely and still have access any time.

Not assuming a mad max but............Gold is not hard to store/hide $100K is only just over 6 pounds or 2.8KG I highly recommend thinking outside the box when it comes to storage. A big shiny safe is not the answer. IMHO

true! we keep ours cool and dry in the freezer to avoid rusting which makes the bars look somehow cheap

[rethaired]

if you expect a real breakdown than physical gold is the answer to your question. that is of course assuming you have the possibility of storing it safely and still have access any time.

Not assuming a mad max but............Gold is not hard to store/hide

$100K is only just over 6 pounds or 2.8KG

I highly recommend thinking outside the box when it comes to storage.

A big shiny safe is not the answer. IMHO

I know my GF could use a 3 kg gold necklace! Seriously, I never thought of it that way (not having that amount of money as spare change), but you are right, it would not be difficult to hide somewhere safe! If anyone has seen the excellent movie, "the Lives of Others", they were able to hide a typewriter which, if found, would surely meant death, which beats the idea of finding a deserted island, I suppose! BTW, where would you store it? And, where do you live?

Edited March 8, 2009 by rethaired

[rethaired]

Stocks of gold companies and/or physical gold?

if you expect a real breakdown than physical gold is the answer to your question. that is of course assuming you have the possibility of storing it safely and still have access any time.

If one expects a real breakdown. Who knows? This IS the one million dollar question (preferably in bullion), isn't it?

A good optioon though might be having a house sitting on a little farm with some veggies and chickens*, a windmill, and a computer is a good option too! As Candide would say with some reluctance and dejection: "Yes! We must take care of our garden!"

* Or a few geese laying golden eggs!

Edited March 8, 2009 by rethaired

[flying]

if you expect a real breakdown than physical gold is the answer to your question. that is of course assuming you have the possibility of storing it safely and still have access any time.

Not assuming a mad max but............Gold is not hard to store/hide $100K is only just over 6 pounds or 2.8KG I highly recommend thinking outside the box when it comes to storage. A big shiny safe is not the answer. IMHO

true! we keep ours cool and dry in the freezer to avoid rusting which makes the bars look somehow cheap

nooo

Freezers are way inside the box. Most burglars go there 2nd after master bedroom.

I always laugh at the big safe idea as I think most serious crooks seeing that will have 2 options. Cutting torch or wait with gun for owner to return who will then gladly open it after a short time.

[AlexLah]

Here nice clippy about the crash in Argentina, first clip is full of unhappy people rioting, thought it nice viewing material for the Sunday.

http://foundingfather1776.wordpress.com/20...apse-looks-like

I have my gold in my safe, try to come and get it

[Naam]

if you expect a real breakdown than physical gold is the answer to your question. that is of course assuming you have the possibility of storing it safely and still have access any time.

Not assuming a mad max but............Gold is not hard to store/hide $100K is only just over 6 pounds or 2.8KG I highly recommend thinking outside the box when it comes to storage. A big shiny safe is not the answer. IMHO

true! we keep ours cool and dry in the freezer to avoid rusting which makes the bars look somehow cheap

Freezers are way inside the box. Most burglars go there 2nd after master bedroom. I always laugh at the big safe idea as I think most serious crooks seeing that will have 2 options. Cutting torch or wait with gun for owner to return who will then gladly open it after a short time.

the problem is that the owner will also gladly reveal any hidden spot(s) when one of his/her loved ones is threatened. it all depends how far the criminals go

[flying]

the problem is that the owner will also gladly reveal any hidden spot(s) when one of his/her loved ones is threatened. it all depends how far the criminals go

That is a two way street in some places

[midas]

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.

"yorcever"

No he has not said this ! He did not put it in such simplistic terms as you have

The U.S. Financial System Is Effectively Insolvent

Nouriel Roubini, 03.05.09, 12:01 AM EST

There is a grave risk of a global L-shaped depression.

There is, in fact, a rising risk of a global L-shaped depression that would be even worse than the current, painful U-shaped global recession.

With economic activity contracting in 2009's first quarter at the same rate as in 2008's fourth quarter, a nasty U-shaped recession could turn into a more severe L-shaped near-depression (or stag-deflation). The scale and speed of synchronized global economic contraction is really unprecedented (at least since the Great Depression), with a free fall of GDP, income, consumption, industrial production, employment, exports, imports, residential investment and, more ominously, capital expenditures around the world. And now many emerging-market economies are on the verge of a fully fledged financial crisis, starting with emerging Europe.

http://www.forbes.com/2009/03/04/global-re...ni-economy.html

[midas]

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.

Yes indeed Chaimai............if we are going to quote anyone ..lets quote someone

credible as you said ............like Nouriel Roubini ! ...................?

But please tell me something Chaimai - if Roubini mentions " speculation about rioting "

- does that suddenly become " wilder speculation " on his part ?

Leading Economist Warns of Food Riots

When top trend forecaster Gerald Calente predicted riots and revolution, many people shrugged and thought, "he's gone off the deep end".

But leading economist Nouriel Roubini is also now warning of food riots, and blaming it on the Fed and Treasury's policies and bank priorities:

http://georgewashington2.blogspot.com/2008...food-riots.html

[flying]

if Roubini mentions " speculation about rioting "

- does that suddenly become " wilder speculation " on his part ?

Many for better or worse have a 50w capacity for what they term nonsense in a crisis.

When they use the term it just means it makes no sense (nonsense) to them as it lives in the 60-100w range

That does not make it untrue just nonsensical to them.

Your lucky you have the capacity to look at the mess without freaking out or burying your head in the sand saying NO IT IS NOT HAPPENING there will be no social consequences from this financial crisis.

[Naam]

Your lucky you have the capacity to look at the mess without freaking out or burying your head in the sand saying NO IT IS NOT HAPPENING there will be no social consequences from this financial crisis.

did anybody say that here?

[flying]

Your lucky you have the capacity to look at the mess without freaking out or burying your head in the sand saying NO IT IS NOT HAPPENING there will be no social consequences from this financial crisis.

did anybody say that here?

Not exactly but I was more or less telling Midas I didn't see his posts as crazy or far fetched or nonsensical. Because I am pretty sure he never brought up pestilence or plague

Some folks see social consequences & Financial Topics such as this one as disconnected.

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

[Naam]

"Your lucky you have the capacity to look at the mess..."

wasting famine will be sent against them, consuming pestilence and deadly plague; the fangs of wild beasts will tear at their flesh, the venom of vipers that glide in the dust will circulate in their bloodstream. taken away will be all their gold, their homes and the slaves they were lusting after, their crates of Singha and Chang shall be pulverised and no 7/11 will be able to replace them. their women, daughters and female family members shall be sold to brothels in Abu Dhabi, Lumumbashi and Tamanrasset where their bodies will be abused by former investment bankers banned to these remote areas for the crimes against humanity they committed. retirees in the land of smile will be required to report to immigration each and every day seven days a week and the fee shall be one thousand talents... ahmm... make that baht...

there, there Flying! nothing wrong to appreciate this forecast but it is not necessary to wet the pants with joy

[midas]

"Your lucky you have the capacity to look at the mess..."

wasting famine will be sent against them, consuming pestilence and deadly plague; the fangs of wild beasts will tear at their flesh, the venom of vipers that glide in the dust will circulate in their bloodstream. taken away will be all their gold, their homes and the slaves they were lusting after, their crates of Singha and Chang shall be pulverised and no 7/11 will be able to replace them. their women, daughters and female family members shall be sold to brothels in Abu Dhabi, Lumumbashi and Tamanrasset where their bodies will be abused by former investment bankers banned to these remote areas for the crimes against humanity they committed. retirees in the land of smile will be required to report to immigration each and every day seven days a week and the fee shall be one thousand talents... ahmm... make that baht...

there, there Flying! nothing wrong to appreciate this forecast but it is not necessary to wet the pants with joy

[AlexLah]

Looking for news about this alledged printing of new crispy Pound notes, I noticed that the money will not even be printed!

It will just be a book entry

Funny also to see that they are lowering the max speed in the UK from 60 Mph to 50 Mph. Very smart move, I guess they know that less cars will be on the road so drivers might be tempted to push the pedal a bit deeper.

I'd say the Brits have been royally shafted.

I posted the linky to those YT clips about the crash of Argentina and decided to watch all 12 parts, an absolutely amazing story about greed corruption and the influence of the slimey stinking bastards IMF bankers. If you want to know how a country is destroyed you should look at all 12 parts, highly recommended. Something similair although a bit more sophisticated is now being done to several other country's. Making sure that they run into massive debts that can never be repayed and in the end make the debt so high that not even the interest on that debt can be payed.

To me it is very clear that the whole plan has been to create larger debts so that there will be more taxes to be payed to collect the interest on it.

Easy money, they don't even need a physical war.

Edit: Here that site again of this guy in Argentina http://ferfal.blogspot.com/

Edited March 8, 2009 by AlexLah

[Naam]

I'd say the Brits have been royally shafted.

they are entitled to Alex. after all it is "United Kingdom" but make no mistake! the shafting does not end at the channel. i believe that royal shafting by inflation is in for all those who don't have any means to prepare themselves. i don't believe the gurus who talk about deflation in the offing