Big Trouble Brewing For The Global Economy

[ruger17hmr]

Big Trouble Brewing For The Global Economy


It may be prudent to be cautious and prepared for the upcoming economic turmoil, which will surpass the aftermath of Lehman and Bear Stearns collapse. as the risk is high and rising.

Big Trouble Brewing For The Global Economy - Seeking Alpha

 

[RockofStrength]

Very interesting. I like in particular how he mentions the recent nationalization of part of Dexia...

To put this into perspective for our US readers, that would be the equivalent of the USA guaranteeing $2.6 trillion...for a single bank. Anybody care to guess whether the amount that they decided to guarantee will be ultimately sufficient to cover the actual amount of the total potential losses? My guess is that over time the number will prove to be far, far below the final and true cost.

The markets are being shaken up a bit, y'all.

 

[Farley]

Very interesting (or should I say scary) article. Definitely worth reading.

I found this excerpt to be especially interesting:

"The bottom line here is that the European situation is quite far from resolved, and as we've been saying all along, it really can't until large losses are taken by someone. For now, the banks are trying desperately to convince the world that the losses should be shared by everyone through the miracle of inflation (with central banks printing money, a.k.a. "quantitative easing" or QE, to buy the bad debts off the banks) while the people of various countries are increasingly protesting this regrettable practice of socializing banks' losses, yet allowing privatized profits."

The leaders of those countries should just do what our fearless leaders did and bail them out at the expense of the tax payer...although our leaders claim 'most' of the institutions have 'paid back' the money they were given.

 

[GREEN607]

Who knows what the over-all answers are to the 'weak' world economy. But I do know some of the contributing factors, globally, are:

A. people living way beyond their means (some people/families in Asia, Europe and of course, the US)....... have 'spent' money they don't have and will never have, to the tune of 400-500% insolvency. Debts they could not pay off, if they made double payments, for two lifetimes).

B. Individuals failing to take responsibility for their finances and spending (particularly in Europe and the US), in the prudent manner that our previous generations so carefully did. My Grandfather had a simple plan. If they needed something, for which they had not planned/budgeted the extra money....... he went and mowed lawns, did carpentry repairs, etc...... whatever it took, so that he had the cash (or at least 90% of it), before he made the purchase or financial move. For two generations now..... people have been blindly, even wrecklessly, spending, because the credit cards are there, and they have a dozen cards or more. Even small purchases that one makes, with no foreseeable way to pay for them, begin to add up..... so, multiply those (as they stack up, a little here, a little there) by the millions of households that spend in such a manner........ and yes, it messes with the global economy.

C. Banks, that have carelessly made imprudent loans to people and businesses, due to greed for the interest $$....... that would never have been 'approved' by a competent financial institution, 60 years ago. Reagan-omics taught us about jobs and income..... how the 'trickle down effect' works. Well, no one seems to recognize that the same is true with debt. Actually, it's kind of reversed.... a 'trickle up' effect, if you will. All the consumers who, even temporarily, re-nig on part of their debt....... eventually adds up to billions (probably more realistically trillions) of dollars that the financial institutions, are now without. Old loans don't get paid back..... so new loans are suffering. Prudent, responsible people (globally and locally) are now punished, for the failure of others to be responsible.

D. The things we spend our money on. This is a BIG factor in the global financial squeeze. I have warned friends and family for years now, about the fallacy of the manner in which corporations market their products in particular (that is, as opposed to services and research). Consider how the costs of 'common' items have risen. A major factor in price increases (other than inflation itself) is the cost of disposable packaging. You may not realize it (many financial and business leaders never come to realize it, either)...... but that, in and of itself, is billions and billions of dollars annually.....that simply get thrown away. Thank God, some people and businesses, recycle. At least they recycle part of the things they can. But the percentage of 'recycled products/packaging'.... is unfortunately, minimal. It made alot more sense, back in the 1940'-50's-60's when they sold food products etc, in glass jars and the like. Those jars got saved by the consumer, and re-used for many, many years. No longer. And that is sad.

Oh, and don't even get me started on how people have to buy a new car, every 3-4 years. Any idea how many used cars are sitting at all the dealers right now.... with little prospect of a 'solvent' buyer showing up to buy them?

There are obviously hundreds and hundreds of other major contributing factors, that make up the over-all 'failure' of the global economy.... and point to an impending world-wide recession... if not a depression. Unfortunately, in todays' world, we are 'in competition' with each other for the dollars.... as in company-to-company, region-to-region, and of course nation-to-nation. So the answers, are extremely complicated and close to impossible to agree upon.

 

[ZombieApocolypse]

The leaders of those countries should just do what our fearless leaders did and bail them out at the expense of the tax payer...although our leaders claim 'most' of the institutions have 'paid back' the money they were given.

Jon Stewart did a skit after the bailouts. Turns out all of a sudden the banks were posting profits for a month or so straight. Jon found out The government was borrowing money from the banks, (that the gov bailed out at 0 apr) with interest. So the profits the banks were showing, was from loaning money to the gov. that they had originally borrowed from the gov.

Jon Stewart went on to call the gov. the worst loan sharks in history.

 

[HeadlessRoland]

any takers on a bet when hyperflation hits?

 

[RockofStrength]

any takers on a bet when hyperflation hits?

10 Federal Reserve Notes says one month

 

[ZombieApocolypse]

10 Federal Reserve Notes says one month

Arent they going to argue again in about a month to raise the debt ceiling again? Or did FEMA finding all that money make everything ok?

 

[Carmelbythecorn]

Politicians are rotten bastards! When can the treason trials begin?