"Uhh, Mein Fuhrer....."
Posted on 01/20/2016 7:06:17 AM PST by SeekAndFind
The global financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability, a leading monetary theorist has warned.
"The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up," said William White, the Swiss-based chairman of the OECD's review committee and former chief economist of the Bank for International Settlements (BIS).
"Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief," he said.
"It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something," he told The Telegraph on the eve of the World Economic Forum in Davos.
"The only question is whether we are able to look reality in the eye and face what is coming in an orderly fashion, or whether it will be disorderly. Debt jubilees have been going on for 5,000 years, as far back as the Sumerians."
The next task awaiting the global authorities is how to manage debt write-offs - and therefore a massive reordering of winners and losers in society - without setting off a political storm.
Mr White said Europe's creditors are likely to face some of the biggest haircuts. European banks have already admitted to $1 trillion of non-performing loans: they are heavily exposed to emerging markets and are almost certainly rolling over further bad debts that have never been disclosed.
(Excerpt) Read more at telegraph.co.uk ...
Consequence of 50 years of unsound financial policy.
Paging Jonathon Cahn.
We won’t get out of 2016 in one piece....
I was thinking, gee, this sounds like that guy Ambrose Evans-Pritchard. Yep, that’s who it is. Between him, David Stockman, and Niall Fergusen, we are definitely doomed.
Does this mean that you really can’t borrow your way to prosperity? Somebody should tell Congress
Beans. Bullets. Bibles. Survival necessities.
This much is true. When your economic policy is tax, print, borrow, commit to ever expanding unfunded liabilities,and stifle capitalism, economic death is sure to follow.
The Muslims in the EU countries is the icing on the cake. Sucks to be them.
1. Taxation will be much simpler than now, meaning very few tax loopholes in return for much lower tax rates.
2. Business regulations will be drastically streamlined to encourage real business activity.
3. Currencies will go back to being backed by a physical precious metals, a combination of gold, silver, platinum, palladium, and possibly nickel and copper.
We are entering the age of the Debt Cartel.
Deadbeat countries, credit card holders, student loan recipients, are all about to get the upper hand.
Very close to my investment strategy. Bread, bullets, bullion and booze.
That is what happens when you expand credit.
>> I was thinking, gee, this sounds like that guy Ambrose Evans-Pritchard. Yep, that’s who it is. Between him, David Stockman, and Niall Fergusen, we are definitely doomed <<
Evans-Pritchard is totally unreliable. That’s not to say that he’s necessarily wrong in the instant case. But most of the time, when I read one of his articles, I find it’s best to take his conclusions and turn them around 180 degrees. Then you’re more likely to find the correct answer!
Stockman used to be a sensible guy. But now he’s almost as bad as Ambrose. But at least he mostly confines his doom-and-gloom stuff to “gold bug” commercials on cable TV. No intellectual heft these days, and very easy to ignore.
But Niall Ferguson? I say he’s absolutely one of the finest minds on the contemporary scene. He’s one of my intellectual heroes, and I rank him nearly as high as Victor Davis Hansen, Tom Sowell and Arthur Brookes.
Luckily we learned our lesson in 2008, and the too big to fail banks have been broken up into small enough pieces that they won’t have to be bailed out.
"Uhh, Mein Fuhrer....."
Of interest...
.......re, your statement “we are all definitely doomed”
respectfully, let me point out a few counter facts:
1. We are not “all”......................”doomed”. Some people are ‘definitely’ going to lose their jobs and they will be hard to impossible to replace. So, some of those people will be, kind a sort of, “doomed”. But, many of them will discover they have skills and talents they did not know they had and will improvise, persevere and survive.
2. Some geographic areas in the US (rustbelt) are going to get hammered and yes, some people there are going to be “doomed”. But,not ALL.
3. Many TRILLIONS of wealth are going to simply evaporate kind of like what is happening to the stock market as I type this morning. It’s down 300 points at 9:56 am. I don’t know how many billions of lost wealth (jobs) that is but it is a lot and it likely will not be regained in any of our lifetimes.
4. In the great depression, which ultimately will be seen as a cake walk by experts, some 80% of people still got up and went to work every day. Again, not “ALL” were “doomed”. I know my dad worked all through the depression.
As I tell my two kids, “it is going to get real bad but you must be sure you are in a recession/depression proof business”. Or, if not recession “proof” it should be “recession/depression resistant”. For the most part, and broadly speaking, this means the food industry, the housing industry, the service industry, the transportation industry or the health industry.
And in other news:
Baltic Dry Index Falls for Eleventh Straight Day.
[snip]: "The index has plunged 115 points or around 24 percent in January."
oh oh
One small correction - the wealth does not ‘evaporate’. You still own the same number of shares of the same companies. It is just that other investors are temporarily not offering you as much cash for your small stake. However, you are still the beneficial owner of whatever future streams of income your stock represents.
If you continue to hold the companies you own, you are likely to be rewarded over the long term.
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