Prepare for a Global Depression

[icytailmark]

well with the news that italy would have to pay 150 Billion a year i think Italy has no choice but to default. This would kill the european market and the rest of the world will follow.

[jjjnettie]

the writing has been on the wall for a while now. :(

[Kevnool]

I see they cant manage money like me.

[avandonk]

Let us be fair, if he cannot run the country into the ground while controlling all of the media what is the point of all the bunga bunga parties.

Bert

[GrahamL]

I have complete faith in the good people of the worlds finacial institutions not to bugger things up ..again .


http://www.guardian.co.uk/commentisfree/2011/nov/07/one-per-cent-wealth-destroyers

[Octane]

Thanks for the link, Graham. Excellent reading.

H

[Stardrifter_WA]

I am in denial, I'm waiting on a better reality. :D When a new and improved reality appears, then I will, once again, take notice.

Until then, I have my fingers in my ears....lalalalalalala :lol:

:P

[Stardrifter_WA]

As long as the Stars come out each night, all is ok :thumbsup: Maybe the world will become so broke that they won't be able to pay their light bill.....and all the lights go out......wooohooo :P

[Paul Haese]

This has been the inevitable correction blowing in the wind for the last 3 years. Pumping all that money into every economy just delayed the correction. Europe needs to get its house in order. However, I doubt that a heavy recession will be avoided. Let's face it infinite growth in a finite system is impossible.

[icytailmark]

i feel sorry for the greeks and italians. They have hard road ahead of them. I still cant believe how these countries got into so much debt. Why did the IMF let them get into so much debt? I thought the IMF is suppose to monitor world money?

[Octane]

The IMF is only interested in lining its own pockets.

H

[Merlin66]

Guys,
You want to be over here....
We're currently living in Belgium, and when you see the amount of civil unrest in most of the European countries and understand the depth of the problems....inevitably something's got to go...
A global depression will be bad enough but I think there are underlying currents of something even more dramatic....

[casstony]

Greedy bankers and foolish consumers aren't exclusive to the northern hemisphere - when the world economy collapses our enormous housing debt will see us not much better off than the rest of the world.

[casstony]

A glance at history outlines the likely possibilities - world leaders have chosen to stick their head in the sand and risk world war rather than rather than suffer the short term pain involved in reducing debt.

[AndrewJ]

One word.... Traders;)
I reckon the real problems started when the international monetary system was changed to remove any requirement for solid backing of currency with assets ( ie gold ). Having to back everything with gold etc meant people couldnt trade as freely and as recklessly as they could when it was just bits in a computer.
Just think what will happen when the traders get their hands on something as diaphanous as carbon.
Wonder how much you can get for a burning country??
Is it worth burning a country for profit???

Andrew

[supernova1965]

Right but I believe they are also trying to prop up a failing system (Feudalism/Capitalism) we need a hybrid of Capitalism and Democracy this is the next step in our evolution.

[overlord]

Not to sound callous but i Hope so. Then i'll be able to buy a good business really cheap. There is another reason.... IT's been 20 years since the last recession lol. U know what that means? It means the longer the growth goes.... the deeper the depression. Next depression in Australia, house price will finally collapse.... OVER 60 years.... just like between 1890 and 1960, and we're gonna see great depression and war. Bet on it.

[Paul Haese]

One of capitalisms major problems is it requires large corrections to reset itself.

It must happen and should have happened 3 years ago. It was stupid to pour so much money into each economy, because now many countries are so far in debt they will not be able to feed their poor when a depression or recession does arrive. This country is not exempt either.

If we get out of this without a major war we will be lucky. Examination of the last two world wars had very similar economic conditions prior to those events. Perhaps it is inevitable that we repeat the same mistakes time and time again.:sadeyes:

[casstony]

Whether it's the stock market, housing market, commodities or anything else the bankers can get their grubby little fingers into, as soon as you hear "it's different this time" you know we're in trouble.

[AstralTraveller]

Nah, the trouble is mate, they manage it like me. :rolleyes:




Certainly is. And capitalism must have growth, hence it is unstable.



Sorry Warren but that is like mixing oil and water. While parliament was a step ahead of absolute monarchy it was never intended as democracy for all. Universal suffrage was eventually won - previously people were excluded on the basis of religion, race, nationality, wealth, knowledge (ie education) and of course gender - but with the tremendous and structural disparity in wealth (=power) simply having the right to vote does not give us all an equal say in the running of the world. In my view, so long as the productive capacity of the world is in private hands we can never have true democracy. How to move towards a truly democratic system while avoiding the mistakes of the past is the really big question of our time.

[supernova1965]

Actually the can't mix oil and water saying is now defunct it can be done:P:D

http://www.newscientist.com/article/dn3408-oil-and-water-do-mix-after-all.html

[blink138]

did you pick up all of that from your astrology chart chucky? you seen this coming well before us didnt you! a bit more warning would have been nice though
pat

[sjastro]

How ironical that Keynesian economics was such a dirty term when times were good and the market would sort everything out without government involvement.

Now Keynesian economics is the way to go irrespective of political ideology.

Are we going to have a depression?
The thing in our favour is that governments learnt a lot about the depression of the 1930s and are implementing policies which are a stark opposite to those implemented at the time.

Regards

Steven

[casstony]

Supporters of Keynesian economics are only making the situation worse. Pumping money into an economy only works if the economy is not already saturated with debt. Recessions are necessary to clear inefficiency/malinvestment from the system but the burden has become so great that the necessary economic contraction is going to be very painful. Rather than steer us through a managed economic contraction our glorious leaders are condemning us to a depression and the potential violent consequences that come with it. imho

I don't think think our governments are worth a cracker as far as economic management goes.

[gregbradley]

It used to be gurus predicting the tops of stock markets. Since the GFC there is a glut of those who try to predict the next financial disaster.

I suppose then they can release a book saying they predicted it if one did happen.

Certainly now is a good time to make hay while the sun is shining.
Fortunately for us Australia is the best placed western economy to withstand another recession.

One thing that is different though, China, not beholden to the people, make policies that steer the country through these messes and are also
not beholden to the west and its monetary system.

I agree the abolishment of the gold standard was the beginning of the next turmoil and the first thing the big manipulators would want to get rid of. The GFC couldn't really have occurred if countries still ran on the gold standard. It makes it so much harder to manipulate a currency and value when money's value is pegged to physical reserves of gold.

Greg.

[casstony]

The disaster is already in place Greg - the debt already exists.

If a household has taken on excessive debt there are two possible soloutions: ignore the problem, get as many credit cards as you can and spend your way into bankruptcy or; live frugally, make do with what you have and get the debt paid down.

Nations are facing the same two choices and electing to create more debt instead of tightening their belts. If debt reaches an unsustainable level nations blow up just as surely as a household can.

Memory fails me but there was an American President who made a statement to the effect that unregulated bankers are the greatest potential enemy a nation might have.

[FlashDrive]

My bet is ... this is another step in the chain of events that will ultimately lead to .... One World Government.

Your always hearing the terms ... Globalization ... The International Community .... Global Economy ... World Leaders meeting in Brussels ... The G20 .... Global Village ... Global Trade Agreements ....Global Banking ... etc ... etc ... need I go on.

I'm not a " Conspiracy Theorist " ... I'm a Realist .... one only has to keep abreast of current events and watch as events start to unfold ... most sensible people can " discern " where things are headed.

Watch ... and you will see ...!!

Flash .

[casstony]

I don't see One World Government as being even remotely possible anytime soon. Europe can't even manage a common currency (not that it was ever a good idea to begin with). Disintegration is more likely than unification.

[Merlin66]

Don't see a world government, or any really large government surviving...
Look at Belgium, due to infighting between the French speaking and the Flemish regions they haven't managed to establish a government for over 18 months....the local region councils do everything....now they are saying it works better than the real thing!
Strong tribal groups.....barter system....

[midnight]

The problem with the Euro is individual country's inability to inflate itself out of trouble by adjusting its currency.

Italy (just like Greece etc) can not simply devalue their currency when in trouble. Look what has happened to the US.

The Aus $ hasn't fundamentally risen substantially, it is the US dollar dropping (if you don;t agree look at AU to say Yen). It basically means the people in that country need to produce exports at a cheaper price which lead to increase sales from abroad and curtail the debt issue. The EU does not have that relative flexibility because of a strong German market.

This is the principle behind borrow and inflate. As long as you service the interest on the debt and you continue to grow your economy, the debt over time deflates because $1billion in 1990 is still $1billion today but back in 1990, your $1billion through growth would be up around $4 or $5 billion today. Italy has on regular occassions had this level of debt to GDP in the past. Just not under the common EU currency. That's how exchange rates fundamentally work.

At least the night sky is tax free (for now anyway:lol:)

Darrin...

[AndrewJ]

Dont think so.
When we run out of oil, a lot of things will have to be decentralised.
Its interesting to look how we started in villages but couldnt survive unless we made towns. Then it had to become cities then states then countries, then trading blocs, and now "ze vorld".
( no wonder we need moon and Mars bases )
I accept many benefits have occurred along the way,
but we have also lost a lot and its ( now proving its ) not sustainable.
The same parallel is happening with business.
ie we cant survive if we are small so we need to get bigger.
Then bigger again, and then ???? oops, nowhere to go anymore,
well, we may just have to takeover ourselves
( gotta be a dollar in that for me somewhere ).
What really annoys me about it tho, is they say
"we need to get bigger to survive and give you a better experience",
"we need economies of scale" etc etc etc.
Then they say that
"now we are bigger, the only way we can make stuff more affordable for you is to charge you lots more it"
and as long those near the top can still take their cut every step of the way, without being held accountable, it wont stop.

Gotta luv that sort of logic

Andrew

[Barrykgerdes]

All is lost. The world can't survive. Prepare to meet you doom!

All you can do is learn to survive without the modern tools of living and hope that the next big rock that hits earth knocks out 99.9% of the population and misses you.

Barry

[gregbradley]

I totally agree with you Tony on all aspects.
It blows me away that these Nations honestly think lending someone who is already way underwater high interest loans is going to save them.

The viewpoint must be that they can produce their way out of it. So then they would have to plan to increase national production to compensate for the extra debt. I don't hear any talk like that though.

Its a bit like someone is drowning so you give them a 50kg bag of sand to hold onto.

I can't help but think this over lending to nations is a knowing plan.
They all fell for it. Just like it is very easy to fall for the offer of easy bank credit beyond your ability to pay, the basis of the GFC.

Part of the problem is their choices are so limited. The required actions to take are politically difficult/impossible. So it would start with a full disclosure of the financial position. You'd have to let everyone in the country know exactly where the nations finances stand clearly. Then a fresh election as really you need a fresh Govt and they can campaign on how they are going to really fix the situation. Then cutbacks so that the budget is in surplus on an immediate basis, then at the same time encourage production in the nation (how you do those 2 would be up to the creativity of the leaders, probably invest where you can in infrastructure where it will improve productivity most ), stop borrowing money. Pay of debt starting with the highest interest debt and working through it.

These Euro countries probably have to realise it could be a 25 year plan to get on top of the situation and to stop borrowing money and start creating surpluses.

In Australia in a way we have the seeds of a bad scene. Most pollies say we are in an economic boom (I know - if you're not a mining company that is not true) yet our budget is heavily in deficit. I also hear lots of times on the media how the Govt agreed to spend this amount on that and this amount on the other - its easy to spend money anyone can do that and be popular. Its hard to economise and create a surplus. Yet if we don't create a surplus now whilst there is a boom, what chance do we have if there is another economic shock?

You'd end up like one of those Lotto winners who finally wind up bankrupt. We'd all be wondering - what happened, we were making hand over fist in the mining boom - where did it all go?

For example how the hell did Japan, who 15-20 years ago was being touted as about to become the world's largest economy end up being #4 in the world and over 200% national debt?? Wow, they messed it up, it was in their hands at one point. They have the highest national debt.
The Western bankers fixed them up but good.

Greg.

[FlashDrive]

Gentleman ... you all make valid comments .... and rightly so .. but from where I'm sitting I see it taking a different course. It may not happen for some time to come ... eg: who would have predicted the collapse of Communism in Russia.... that took the World by surprise.

Let's watch and see

Flash :hi:

[Stardrifter_WA]

I am a little more upbeat about the situation. You, just have to look to what happened in Japan during the 80's where they paid way to much for their investments. They survived the crash by collectively writing down the value of assets. It was sure painful for the investors, but Japan survived the crisis and has been slowly, very slowly, clawing its way back. Admittedly it has taken Japan 15 years, but, in the end, the world didn't collapse, as everyone predicted, at the time.

I suspect that we won't see a complete collapse, however, we may not see any real growth for some to to come, maybe even a decade or more.

The talk of a depression seems to be extreme. Yes, the situation is dire, but will a 30's style depression happen? I doubt it.

Yes, we will probably see a recession, it can't be avoided, but a depression seems to me to be rather extreme. As is the talk of war. With countries in dire straights, the last thing anyone needs is a war. Quite the contrary, as the US is trying to extricate itself from a war and it isn't because they want to start another. They simply cannot afford the one they have now.

There will be some pain, particularly for the investors, but the world will continue, albeit with slow growth. And that can be a good thing, it teaches us to live within our means.

The world won't stop, but it won't be barrelling along at breakneck speed anymore. It is time to slow down and reflect.

[OICURMT]

I predict the next disaster will occur tomorrow...


and tomorrow, the statement will still be true... :P

OIC!

[MikeyB]

Japan may have the highest national debt, but 'Western bankers' had very little to do with it. Uniquely, Japanese government debt is almost entirely internal, "Foreigners, mainly central banks, account for just 5% (http://www.economist.com/node/18988858)." (Source: 'The domino that never falls', The Economist, 21 July 2011).

[PeterM]

For me I guess the real scary thing for us in Oz is that we have let our farmers down so terribly by importing so much from overseas. I do hope indeed that when Europe turns to complete crap we are able to be self sufficient in the food area.
When people and their families get hungry common sense, reason and hope can appear to be lost and survival kicks in, things can go where you never expected them to go very quickly. From what I see and read about some areas in Europe there are early signs that we should be very, very concerned about.
Peter

[space oddity]

Nostradamus predicted the end of days for 2012. He might just have got it right. 2012 is shaping up to be an interesting year. Transit of Venus, solar eclipse, economic collapses. The whole western world has been seduced by cheap imports and their own sense of self worth-paying ourselves big bucks and all sorts of standards and conditions whilst all the while living on borrowed money. As a society, we have all been living beyond our means. The old Chinese curse "may you live in interesting times" is about to come true.