Financial Crisis

[Naam]

Well my money's on gold as the true safety.

I think government bonds are anomalies since the sovereign risk, the systemic risk is what's attempting to be hedged but then the very risk is also the hedge itself , so it looks fairly ridiculas to me. I suppose central banks can maintain demand for thier government bonds by buying them all up themselves? What % of total is this now compared to 1-5 or 10 years ago? How far/ long can that go on for?

sorry, wrong assumption. the percentage of government bonds bought (more or less) by the issuer is miniscule. multiple oversubscriptions of new emissions are proof. another illogical assumption is that central bank buying can create or maintain demand.

[mccw]

Well my money's on gold as the true safety.

I think government bonds are anomalies since the sovereign risk, the systemic risk is what's attempting to be hedged but then the very risk is also the hedge itself , so it looks fairly ridiculas to me. I suppose central banks can maintain demand for thier government bonds by buying them all up themselves? What % of total is this now compared to 1-5 or 10 years ago? How far/ long can that go on for?

sorry, wrong assumption. the percentage of government bonds bought (more or less) by the issuer is miniscule. multiple oversubscriptions of new emissions are proof. another illogical assumption is that central bank buying can create or maintain demand.

http://www.moneynews.com/Headline/fed-debt-Treasury/2012/03/28/id/434106

Would it be true to say that the increase in debt load has been off set by the decrease in interest rates, thus keeping the debt serviceable? But now interest rates can not come down any further; so all future debt will now add to the servicing bill. How can it be serviced? Taxes and cuts are politically difficult, take years to filter through etc. So further printing? Effects will be?.....

[Naam]

http://www.moneynews...03/28/id/434106

1. Would it be true to say that the increase in debt load has been off set by the decrease in interest rates, thus keeping the debt serviceable?

2. But now interest rates can not come down any further; so all future debt will now add to the servicing bill. How can it be serviced?

3. Taxes and cuts are politically difficult, take years to filter through etc.

4. So further printing?

5. Effects will be?.....

1. partly true for some countries but not for the Greatest Nation on Earth™ which can't even service its interest payments without issuing new debt.

2. true

3. true

4. true

5. the jury is still out debating. right now the jurors have agreed to disagree.

[yoshiwara]

Is this a glimpse of what it will be like when

Hurricane Sandy is another reminder of just how incredibly fragile the thin veneer of civilization that we all take for granted on a daily basis really is. Many of the hardest hit areas along the Jersey shore and the coast of Long Island have descended into a state of anarchy.

NY/NJ Gas Shortages: Mile-Long Lines, Rationing, Fights, Police Draw Guns

http://www.breitbart...shortages-Sandy

Did you ever watch that program "doomsday preppers" on nat geo/ you tube? All those comments from the state believers saying how dumb or crazy the preppers are or "nothing ever happens" etc etc; well i bet those in NY etc wish they had a room full of supplies on hand right now! Just like those catch in middle the London riots ,or Katrina, or Thai floods, Russian floods, Burmese floods, Pakistani earthquake floods, Chinese earthquake, Haiti, Japan, Italy, turkey, etc tsunami etc etc shit does happen and it seems to be hitting the fan more often than ever before.

I'm sure its not just my perception or the media coverage; seems there are so many many earthquakes and massive natural disasters since 2000; its like a once in 10year event is getting to 1 a year to now last couple of years building to more like 2-4 per year.

As we've talked about already the extreme weather around the world is leading in to food prices increasing in leaps and bounds.

This is just the beginnings

Does anything happen in Bournemouth on your list?

Edited November 3, 2012 by yoshiwara

[midas]

Is this a glimpse of what it will be like when

Hurricane Sandy is another reminder of just how incredibly fragile the thin veneer of civilization that we all take for granted on a daily basis really is. Many of the hardest hit areas along the Jersey shore and the coast of Long Island have descended into a state of anarchy.

NY/NJ Gas Shortages: Mile-Long Lines, Rationing, Fights, Police Draw Guns

http://www.breitbart...shortages-Sandy

Did you ever watch that program "doomsday preppers" on nat geo/ you tube? All those comments from the state believers saying how dumb or crazy the preppers are or "nothing ever happens" etc etc; well i bet those in NY etc wish they had a room full of supplies on hand right now! Just like those catch in middle the London riots ,or Katrina, or Thai floods, Russian floods, Burmese floods, Pakistani earthquake floods, Chinese earthquake, Haiti, Japan, Italy, turkey, etc tsunami etc etc shit does happen and it seems to be hitting the fan more often than ever before.

I'm sure its not just my perception or the media coverage; seems there are so many many earthquakes and massive natural disasters since 2000; its like a once in 10year event is getting to 1 a year to now last couple of years building to more like 2-4 per year.

As we've talked about already the extreme weather around the world is leading in to food prices increasing in leaps and bounds.

This is just the beginnings

I think the most disturbing part is the abrupt change in peoples psyche over the last 30 to 40 years in that people today are significantly less tolerant and they don't hesitate to use violence to get what they want now. That's why I was fascinated by that quote regarding the thin veneer of civilisation because it is perfectly true.

Relatives talked to me about their experiences during the depression and World War II. They were both examples of a crisis and yet people seemed to remain civil towards each other and regarded neighbours as someone who they should help in times of difficulty whereas now neighbours are often regarded as ‘ competitors ‘ or someone who will deprive them of something they believe they are entitled to – not the neighbours.

it's me me me and it's been a common theme throughout this financial crisis. Instead of acting collectively as a civil society and placing more emphasis on adhering to the laws and unhindered free market practices ,society was totally absorbed with making even more money at any cost and just making sure the stock " market " was ok in what has been essentially a lawless environment

( there have been relatively few meaningful prosecutions )

maybe it's just a generational thing I don't know but we are totally surrounded by evidence ( now with the aftermath of Sandy ) of how absolutely intolerant people are in this age of instant gratification.

Here in Thailand the other night a 14 year old kid stabbed his mother to death with a 12 inch knife simply because she wouldn't let him play more computer games.

we are on a dangerous and slippery slope

Edited November 3, 2012 by midas

[Naam]

Does anything happen in Bournemouth on your list?

yesterday it rained in Tottenham... a very bad omen when there's rain in Tottenham on 2nd novermber!

[cloudhopper]

Anyone interested in learning about the roles of credit and base money in inflation and deflation should listen to Canadian Nicole Foss.

[mccw]

http://www.moneynews...03/28/id/434106

1. Would it be true to say that the increase in debt load has been off set by the decrease in interest rates, thus keeping the debt serviceable?

2. But now interest rates can not come down any further; so all future debt will now add to the servicing bill. How can it be serviced?

3. Taxes and cuts are politically difficult, take years to filter through etc.

4. So further printing?

5. Effects will be?.....

1. partly true for some countries but not for the Greatest Nation on Earth which can't even service its interest payments without issuing new debt.

2. true

3. true

4. true

5. the jury is still out debating. right now the jurors have agreed to disagree.

5. However it goes will not be pleasant.

Best to prepare and not make like an ostrich

Edited November 4, 2012 by mccw

[mccw]

http://youtu.be/YVpP_yAe7hs

[midas]

http://youtu.be/YVpP_yAe7hs

interesting mccw

and now another different problem in Japan

http://ajw.asahi.com/article/0311disaster/fukushima/AJ201211030057

One thing for sure, the authorities will never tell about the real situation

[Naam]

http://www.moneynews...03/28/id/434106

1. Would it be true to say that the increase in debt load has been off set by the decrease in interest rates, thus keeping the debt serviceable?

2. But now interest rates can not come down any further; so all future debt will now add to the servicing bill. How can it be serviced?

3. Taxes and cuts are politically difficult, take years to filter through etc.

4. So further printing?

5. Effects will be?.....

1. partly true for some countries but not for the Greatest Nation on Earth which can't even service its interest payments without issuing new debt.

2. true

3. true

4. true

5. the jury is still out debating. right now the jurors have agreed to disagree.

5. However it goes will not be pleasant.

Best to prepare and not make like an ostrich

buying gold and hoping/praying its purchase power will act as general saviour is the behaviour of the proverbial ostrich. by the way, real ostriches do not behave the way most people think.

[kblaze]

i doubt 12drinkmore knew this thread would turn out to be 500 pages strong 3+ years later

[cloudhopper]

Gotta be a TV record!

Kudos 12DM!

[cheeryble]

I think the most disturbing part is the abrupt change in peoples psyche over the last 30 to 40 years in that people today are significantly less tolerant and they don't hesitate to use violence to get what they want now.

we are on a dangerous and slippery slope

I'm afraid this piece of depressive gloom also is also myth. Probably caused by a psychological phenomenon which tends to make us over emphasise the present.

Did you know that a couple of thousand years ago in France an average person stood a 70% chance of losing TWO close relatives (mother/father, brother sister, son/daughter) to violence!!

Steven Pinker writes at length on big closely cited evidence that violence is decreasing, and though contested (and though I have noted Pinker to be wrong on another matter) the big picture on this one is very convincing.

Check both sides:

Contested by John , links at

http://blog.practicalethics.ox.ac.uk/2011/10/has-violence-declined-john-gray-on-steven-pinker/

The latter piece has a nice summing up on the argument:

"The world we live in a violent place, however available evidence suggest that it was significantly more violent in the not-too-distant past and much more violent in the distant past. It is not entirely clear why violence is declining and it is not clear that it will continue to decline, but it seems hard to deny that it is declining particularly when you do not engage with the relevant evidence."

So Midas.....things are not so bad.

ps: the second link is from the University of Oxford's Pratical Ethics.

If you look at the links to the right there are some interesting ethics subjects including

"The ban on doping, not Armstrong, is the problem with cycling"

And

"Ethical problems surrounding the BP oil spill"

As someone who saw the best ever contrarian play when BP was being bombarded ceaselessly by the media (and bought at $31) I naturally take the position that BP is a paragon and whatever they say is ethically spot on......

Here in Thailand the other night a 14 year old kid stabbed his mother to death with a 12 inch knife simply because she wouldn't let him play more computer games.

Edited November 5, 2012 by cheeryble

[Naam]

i fail to see any connection between "financial crisis" and a young boy killing his mother because she won't let him play video games.

[mccw]

http://youtu.be/YVpP_yAe7hs

interesting mccw

and now another different problem in Japan

http://ajw.asahi.com/article/0311disaster/fukushima/AJ201211030057

One thing for sure, the authorities will never tell about the real situation

"Members of Japans nuclear watchdog who are charged with drafting nuclear safety rules have received sizable funds from the atomic industry. The reports raise concerns that regulations may be diluted after last years Fukushima nuclear disaster.

The Japanese Nuclear Regulation Authority (NRA) said that four of the six members of the panel had been in receipt of over $500,000 that took the form of grants, donations and compensation over the past three to four years."

With (legalised) corruption in the regulators in even this most dangerous of industries it really evidences how corporate power is total out of control, from nuclear meltdowns to Market manipulation, fraud and tax avoidance, the elite commit crimes and cause untold suffering in broad daylight, while the government and regulators do nothing.

[midas]

I think the most disturbing part is the abrupt change in peoples psyche over the last 30 to 40 years in that people today are significantly less tolerant and they don't hesitate to use violence to get what they want now.

Here in Thailand the other night a 14 year old kid stabbed his mother to death with a 12 inch knife simply because she wouldn't let him play more computer games.

we are on a dangerous and slippery slope

I'm afraid this piece of depressive gloom also is also myth. Probably caused by a psychological phenomenon which tends to make us over emphasise the present.

Did you know that a couple of thousand years ago in France an average person stood a 70% chance of losing TWO close relatives (mother/father, brother sister, son/daughter) to violence!!

Steven Pinker writes at length on big closely cited evidence that violence is decreasing, and though contested (and though I have noted Pinker to be wrong on another matter) the big picture on this one is very convincing.

Check both sides:

http://www.ted.com/t...f_violence.html

Contested by John , links at

http://blog.practica...-steven-pinker/

The latter piece has a nice summing up on the argument:

"The world we live in a violent place, however available evidence suggest that it was significantly more violent in the not-too-distant past and much more violent in the distant past. It is not entirely clear why violence is declining and it is not clear that it will continue to decline, but it seems hard to deny that it is declining particularly when you do not engage with the relevant evidence."

So Midas.....things are not so bad.

ps: the second link is from the University of Oxford's Pratical Ethics.

If you look at the links to the right there are some interesting ethics subjects including

"The ban on doping, not Armstrong, is the problem with cycling"

And

"Ethical problems surrounding the BP oil spill"

As someone who saw the best ever contrarian play when BP was being bombarded ceaselessly by the media (and bought at $31) I naturally take the position that BP is a paragon and whatever they say is ethically spot on......

I appreciate your response cheeryble .

Ok your links seem to support the argument that violence has decreased over a long period of time but this covers all forms of violence even during “ normal “ times and not specifically how people's behaviour would possibly change during a worsening crisis which is what I meant to refer to.

thinking about this further my initial comments didn't concentrate enough on violence in terms of a worsening of the financial crisis resulting in some form of collapse or crash. Events like Katrina and more recently Sandy has shown how quickly law and order breaks down when essential services are no longer available. If we are to be mentally prepared for the effects of such a breakdown possibly on a wider scale this is what I meant to say . Just as example say Iran was finally attacked and a major war erupted in the Middle East involving the superpowers this would severely disrupt oil supplies which will undoubtedly have a huge chain reaction on food supplies especially throughout a country like USA.

I think the pertinent question would be how quickly and to what extent would be the normal threshold for violent behavior change in the average person ? I'm not saying every where will be the same but don't forget in a place like America at the end of 2010 it was estimated that 45% of Americans own a gun.That is a huge number. So the question directly related to the financial crisis thread becomes if Joe the plumber is normally happy to keep his gun locked away out of sight in a cupboard, at what point in times of societal breakdown would he be prepared to bring it out and use it against his neighbours if he was hungry and thirsty?

As Gerald Celente often reminds us with one of his well-known sayings “ when people lose everything and they have got nothing else to lose, they lose it “.

Edited November 5, 2012 by midas

[mccw]

"Greeces PM Antonis Samaras believes Greeces financial well-being depends on whether the parliament will pass the new cuts. He said that once the cuts approved and the 2013 budget adopted, all the talk about Greece leaving the eurozone will be over.

If the 2013 does not pass the parliament, Finance Minister Yannis Stournaras warned that Greece would face bankruptcy and unprecedented upheaval, because alternative does not exist.

In the meantime, the number of parliamentarians supporting austerity continues to diminish, as MPs come under great pressure from the voters. From the 300-seat Greek parliament, the ruling coalition must have at least 151 voices to make its laws pass. As of now the ruling coalition has only a minimal majority of six voices."-rt

Majority of only six

Looking shakey

24hr strike + a week of protests ahead.

[cloudhopper]

He said that once the cuts approved and the 2013 budget adopted, all the talk about Greece leaving the eurozone will be over.

Sure it will, if approval of cuts and adoption of a budget have any actual effects on reality. Other than strikes, riots and a plummeting GDP.

[cloudhopper]

Interesting view on Chinese debt. Notice Thailand has a greater corporate debt/GDP than the US!

http://www.zerohedge.com/news/2012-11-05/chinese-credit-bubble-full-frontal

[Naam]

Interesting view on Chinese debt. Notice Thailand has a greater corporate debt/GDP than the US!

http://www.zerohedge...le-full-frontal

any debt/GDP figure is irrelevant and

the only ratio that counts is debt/revenue. private, corporate as well as sovereign

debtors need income/revenue to service debt. obfuscated and fictitious numbers

drawn from thin air and compiled by eggheads cannot neither service and of course

not redeem any debt at maturity if GDP does not generate equivalent revenue (in

most cases it does not!).

sovereign debtors use since decades debt/GDP ratios to bullsh*t those who are

actually burdened with the service service, namely its citizens/taxpayers. most of

the latter sheeple who are fed the debt/GDP tranquilizer don't seem to realise that

a number of sovereign debtors not only roll-over debt at maturity but issue new

additional debt just to service existing one.

[mccw]

Any one know %s of what currencies the Chinese debts is denominated in?

If largely Dollar could be another reason they might decide a higher yuan is beneficial and could accept some loss on the foreign currency reserves value.

[mccw]

http://www.moneynews...03/28/id/434106

1. Would it be true to say that the increase in debt load has been off set by the decrease in interest rates, thus keeping the debt serviceable?

2. But now interest rates can not come down any further; so all future debt will now add to the servicing bill. How can it be serviced?

3. Taxes and cuts are politically difficult, take years to filter through etc.

4. So further printing?

5. Effects will be?.....

1. partly true for some countries but not for the Greatest Nation on Earth which can't even service its interest payments without issuing new debt.

2. true

3. true

4. true

5. the jury is still out debating. right now the jurors have agreed to disagree.

5. However it goes will not be pleasant.

Best to prepare and not make like an ostrich

buying gold and hoping/praying its purchase power will act as general saviour is the behaviour of the proverbial ostrich. by the way, real ostriches do not behave the way most people think.

Who's buying gold any wishing on a prayer? Not me. PMs are just a small part of a comprehensive medium and long term plan.

I'm now aiming to move to Chiang Mai to build a fully sustainable property for myself + some rental investments (I started a topic in the real estate forum about this in case you like to offer some of your wisdom) while maintaining a few on long term contracts in UK.

Just also pondering to diversify to other country which should weather the future energy / resource outlook better.

Any thoughts or investments of your own? Or do you prefer mostly paper based assets?

[mccw]

^any alternative physical asset investment thoughts in the wider world forum?

[Naam]

Who's buying gold any wishing on a prayer? Not me. PMs are just a small part of a comprehensive medium and long term plan.

I'm now aiming to move to Chiang Mai to build a fully sustainable property for myself + some rental investments (I started a topic in the real estate forum about this in case you like to offer some of your wisdom) while maintaining a few on long term contracts in UK.

Just also pondering to diversify to other country which should weather the future energy / resource outlook better.

Any thoughts or investments of your own? Or do you prefer mostly paper based assets?

not sure whether you addressed me but here's my two Satang. i ran out of ideas to diversify more than we did. we own various properties which do not generate enough cash to make a decent living, we have a substantial stash of gold which, if sold, wouldn't last more than a fistful of years and we own since 2007 agricultural land of which approximately one third is leased out to share croppers on a basis 75:25 (25% share for us).

i have never made a proper feasibility study in what way all the land used would be enough to finance our living expenses and that for two main reasons. the land wasn't bought for our personal use. the initial plan was a caricative purpose and the land is located in a country and an area where i'd hate to spend the remainder of my statistical life span.

i very much like your idea of a fully sustainable property which will come in handy in case of a global financial meltdown but i don't like rental properties. the "don't like" also applies for investing in tangible assets in a different country for the simple reason that you can't control how the investment is handled and it's the handling which generates results.

[Naam]

Any one know %s of what currencies the Chinese debts is denominated in?

If largely Dollar could be another reason they might decide a higher yuan is beneficial and could accept some loss on the foreign currency reserves value.

Chinese sovereign debt traded offshore is peanuts and virtually all in US-Dollars. Chinese sovereign debt denominated in domestic CNY is not accessible for foreigners.

besides, there's no reason at all why China would aim for a stronger domestic currency. the appreciation that happened in recent years was exclusively caused by oUtSide pressure and the threat of sanctions.

[mccw]

Any one know %s of what currencies the Chinese debts is denominated in?

If largely Dollar could be another reason they might decide a higher yuan is beneficial and could accept some loss on the foreign currency reserves value.

Chinese sovereign debt traded offshore is peanuts and virtually all in US-Dollars. Chinese sovereign debt denominated in domestic CNY is not accessible for foreigners.

besides, there's no reason at all why China would aim for a stronger domestic currency. the appreciation that happened in recent years was exclusively caused by oUtSide pressure and the threat of sanctions.

I meant the corporate debt referenced in the other post.

But the other reason a bit stronger yuan could be not so bad is if the companies manufacturing the products are buying raw materials in other currencies? Especially if domestic manufacturing for domestic demand; which given the state of other countries right now is mostly likely the direction they are looking.

[mccw]

Who's buying gold any wishing on a prayer? Not me. PMs are just a small part of a comprehensive medium and long term plan.

I'm now aiming to move to Chiang Mai to build a fully sustainable property for myself + some rental investments (I started a topic in the real estate forum about this in case you like to offer some of your wisdom) while maintaining a few on long term contracts in UK.

Just also pondering to diversify to other country which should weather the future energy / resource outlook better.

Any thoughts or investments of your own? Or do you prefer mostly paper based assets?

not sure whether you addressed me but here's my two Satang. i ran out of ideas to diversify more than we did. we own various properties which do not generate enough cash to make a decent living, we have a substantial stash of gold which, if sold, wouldn't last more than a fistful of years and we own since 2007 agricultural land of which approximately one third is leased out to share croppers on a basis 75:25 (25% share for us).

i have never made a proper feasibility study in what way all the land used would be enough to finance our living expenses and that for two main reasons. the land wasn't bought for our personal use. the initial plan was a caricative purpose and the land is located in a country and an area where i'd hate to spend the remainder of my statistical life span.

i very much like your idea of a fully sustainable property which will come in handy in case of a global financial meltdown but i don't like rental properties. the "don't like" also applies for investing in tangible assets in a different country for the simple reason that you can't control how the investment is handled and it's the handling which generates results.

Thanks for sharing.

Your idea of what's needed to maintain a decent standard of living must be very different from mine.

I like the idea of making fat profits from informed risk taking in the markets but thinking really I'd rather lead a more simple and stress free life. Fair play to those that can do it well , without the help of dirty tricks like the banksters etc

[Naam]

Thanks for sharing.

Your idea of what's needed to maintain a decent standard of living must be very different from mine.

I like the idea of making fat profits from informed risk taking in the markets but thinking really I'd rather lead a more simple and stress free life. Fair play to those that can do it well , without the help of dirty tricks like the banksters etc

"decent standard of living" cannot be quantified because it depends completely on the individual, his resources and his very individual perceptions. i have friends who would happily sacrifice one of their balls in exchange for my life style and i have friends who pity me because, according to them, i am living like a pauper at the edge of civilisation without the bare minimum of required infrastructure

[Naam]

Any one know %s of what currencies the Chinese debts is denominated in?

If largely Dollar could be another reason they might decide a higher yuan is beneficial and could accept some loss on the foreign currency reserves value.

Chinese sovereign debt traded offshore is peanuts and virtually all in US-Dollars. Chinese sovereign debt denominated in domestic CNY is not accessible for foreigners.

besides, there's no reason at all why China would aim for a stronger domestic currency. the appreciation that happened in recent years was exclusively caused by oUtSide pressure and the threat of sanctions.

I meant the corporate debt referenced in the other post.

But the other reason a bit stronger yuan could be not so bad is if the companies manufacturing the products are buying raw materials in other currencies? Especially if domestic manufacturing for domestic demand; which given the state of other countries right now is mostly likely the direction they are looking.

China is many years away from the point where domestic demand reaches a substantial percentages. except for domestic housing and infrastructure the output of the export orientated industry hardly includes products for which there is a domestic demand.

besides, the assets available for offshore investors (corporate "Dim Sum" bonds denominated in CNH) are extremely limited. one way to invest directly in China and indirectly in the currency are the ADRs which are available internationally without any problems or limitations.