Are we in the middle of a financial meltdown?

1,054 posts in this topic

 

We are tottering on the edge of something rather interesting at the moment.

Yes we are possibly witnessing the complete bankrupting of the western economy and the rise of China as the world's major super power especially if we chuck in the 700 billion dollars.

I cannot imagine the US allowing this happen without something happening militarily.

0

Share this post


Link to post
Share on other sites

Hat's off for that one. Even at my most indirect I think I'd struggle to come up with something like that!

 

We could be standing at the edge of the US no longer being the major economic powerhouse in the world and a period of chaos not seen for 60 years.

 

 

We are tottering on the edge of something rather interesting at the moment.
0

Share this post


Link to post
Share on other sites

There's something to that. Historically the world's leading power has always been the strongest economically, until it goes sideways.

 

Spain -> (inflation, collapse) -> France -> (inflation, collapse, war) -> Britain -> (war, inflation, collapse) -> USA -> ... ?

0

Share this post


Link to post
Share on other sites

China though is going to have a rather hard time of it if the whole western economy buckles. In fact Russia has gone into slow down and China could well begin to stutter quite quickly. This will of course hit German companies such as BMW quite hard as these market's growth have balanced out weaker performance and demand in traditional wstern markets. To put it bluntly we're all in this together. I remember some rather cock-sure comments from France and Germany last week about how their economies would fare better than those evil Anglo-Saxons... Hypo Real Estate and Dexia seems to be proof that that may not be the case.

0

Share this post


Link to post
Share on other sites

Russia has good natural resources. China is very western based for the drive of it's economy but maybe could internalize some of this. India has the manpower. Who knows? All I know for sure is if we don't work a few things out quickly then there's big rivers of poo flowing in all directions shortly.

0

Share this post


Link to post
Share on other sites

 

Spain -> (inflation, collapse) -> France -> (inflation, collapse, war) -> Britain -> (war, inflation, collapse) -> USA -> ... ?

Hang on, I know this one. Is it...

 

USA -> (inflation, free beer at hooters bars, and as many randy 26 year old red-headed twins as you can carry away at the end of the night?)

0

Share this post


Link to post
Share on other sites

 

France and Germany last week about how their economies would fare better than those evil Anglo-Saxons... Hypo Real Estate and Dexia seems to be proof that that may not be the case.

I think that even though France and Germany will be affected, the UK and US will fare far worse, for reasons I have probably stated somewhere before.

I can't really blame them having a laugh at the UKs so called boom economy.

0

Share this post


Link to post
Share on other sites

 

Open up 180. I don't by it, at all. I expect to see 300+ loss by the close, at least.

Well I was completely wrong, only by say 700 points, or so.

 

This knot is a tough one to unwind. The Jewish holiday today was a factor, as the Congress was away, but come the end of the week if the consensus is still to vote against the buyout, I still believe a major downtrend will ensue. There is really no other alternative to consider. No upside is great enough for investors to ignore selling into strength positions, and away from value buys.

 

I hate the doom and gloom shit but I just don't see it any other way in the next few weeks.

0

Share this post


Link to post
Share on other sites

A major downtrend will occur anyway as the world runs out of supplies. The question will be how fast. How fast can the people adjust to a different lifestyle? Although I believe we won't run out of energy very fast, it will get more expensive. So it will be with many other commodities.Copper , iron and coal should be ok for a while, but many specialty metals, necessary for our modern society may get short , particular if the West has to share their prosperity with the third world (developing)countries.

The distortions in our economy this time is caused by financial mismanagement and not by natural disasters. Maybe they should make a war again to get the economy (profits) going again.

0

Share this post


Link to post
Share on other sites

 

There's something to that. Historically the world's leading power has always been the strongest economically, until it goes sideways.

 

Spain -> (inflation, collapse) -> France -> (inflation, collapse, war) -> Britain -> (war, inflation, collapse) -> USA -> ... ?

Well historically speaking, looking back to the 1930s USA - > Economic collapse, war, global dominance

 

So i guess historical analogies are pretty useless.

0

Share this post


Link to post
Share on other sites

There's also been talk of "Bouncing Dead Cat" syndrome - which is an apparent phenomenon in situations of market freefall. The market dives, recovers some, dives again etc. You get the idea.

Lets see - seems pretty weird whats happening now ...

 

I bet there are investors buying up stocks which have dived - so that when the rescue package (hopefully) comes in and the prices recover they make a profit.

It all seems rather immoral to me this free market business ... no less here than in the food industry for example.

 

I thought this was an interesting post - made me think.

 

This crisis is bringing into question the whole concept of "money". By definition cash is just a "promise to pay" and once people lose confidence in a product its fecked.

That is all money has ever been, doesn't matter what economic system is in place.

Something acts as the means of transaction and the system relies on confidence in it to function.

From an academic economics point of view money is a very strange thing indeed.

Even with a gold standard - money is still a confidence trick. Gold is only worth what people have confidence in it to be worth and it's value swings all over the place over time against other commodities and goods.

0

Share this post


Link to post
Share on other sites

Personally I think this crisis is more or less over , shockingly the Irish have shown the way - just extend guarentees charging handsomely for the priveledge to stressed banks. Threat of a run extinguished , problem more or less solved.

0

Share this post


Link to post
Share on other sites
This topic is now closed to further replies.