World Financial Collapse Imminent

[macker]

Originally Posted by jolinar of malkshor

So you don't use the healthcare system? You didn't get educated in Canada? Do you use the highways or transit systems? The list goes on and on.

Bottom line is: If people want these social services to continue at the rate they are at, they must be prepared to pay more in taxes. The problem with that is we have governments that can not be trusted to manage our money properly.

The US had no other choice then to basically transfer debt from the private balance sheet to the public balance sheet. The underlying debt problem hasn't been addressed but rather shifted from the individual balance sheet to the government balance sheet. The problem was that over the last 10 years 1/2 of all consumer spending, which drives 70% of the US economy, was from home equity withdrawals. It was unsustainable and the US government had to step in.

It is still like an aneurysm in that you know the problem is still there but you don't know when it is going to cause more severe problems. I would hate to see how things would have turned out if the governments/Fed hadn't stepped in to help people manage their money. Roubini in his book points out that this decade US public debt will double as a share of national GDP and is expected to hit 9 Trillion or more. Public and private debt will be something that we will be talking about for years and years.

[sergei_makarov]

Originally Posted by Sylvanfan

My question is that if they do abandon the US dollar as the standard currency in which commodities like wheat, oil, soy beans, and copper are valued, what are they going to move to? Europeans are hardly shining economic stars in their own right, they're as bad as us North Americans for having debt, and this is with a long history of bankrupting themselves as nations. Fart, they expect to make a good living, have a fantastic social safety net, and do it while working 35 hours a week with 7 weeks paid hollidays a year. Even if the Eurounion split is Germany big enough to rule the economic world?

It's gotta to be the Chinese Yuan that takes over the world.

We can already see the shift happening when two of the bigger economies in Russia and China agreed to no longer use the USD in trade.

I think currently, there is no currency that can replace the Dollar... the Euro has its own issues and the Europeans are making the same mistakes that the US made by propping up internal companies that failed which weakens the value of the Euro internally driving Europe further and further into debt... and the Chinese RMB isn't near ready yet considering it's a blocked currency and will need time to transition and be ready on the international stage.

[moncton golden flames]

Originally Posted by Sylvanfan

My question is that if they do abandon the US dollar as the standard currency in which commodities like wheat, oil, soy beans, and copper are valued, what are they going to move to? Europeans are hardly shining economic stars in their own right, they're as bad as us North Americans for having debt, and this is with a long history of bankrupting themselves as nations. Fart, they expect to make a good living, have a fantastic social safety net, and do it while working 35 hours a week with 7 weeks paid hollidays a year. Even if the Eurounion split is Germany big enough to rule the economic world?

It's gotta to be the Chinese Yuan that takes over the world.

the amero?

[Caged Great]

The smartest thing that any individual can do to insure that they don't get bent over if/when things go south right now is to buy physical silver/gold (silver is extremely under priced at the moment)

Silver usually is worth 1/16th what gold is. Right now, Silver is only 33 dollars an ounce where gold is over 1100. Silver should be closer to 70 dollars per ounce. In November, it was only 24 dollars, so it's already gone way up.

Look at buying anything that is sterling silver.

[Sylvanfan]

Originally Posted by sergei_makarov

We can already see the shift happening when two of the bigger economies in Russia and China agreed to no longer use the USD in trade.

I think currently, there is no currency that can replace the Dollar... the Euro has its own issues and the Europeans are making the same mistakes that the US made by propping up internal companies that failed which weakens the value of the Euro internally driving Europe further and further into debt... and the Chinese RMB isn't near ready yet considering it's a blocked currency and will need time to transition and be ready on the international stage.

Yeah, and I don't see the gold standard being particularly practical either. But if/when the US loses the priveledge to just print more money without backing it with some form of collateral....things are going to get a lot worse. It's bad enough that the Federal government has the issues they have, but state and municipal governments are even worse off.

[sergei_makarov]

Originally Posted by J pold

Yeah I think a lot of this is smoke and mirrors call me crazy but I have an optimistic view of the world going forward. The American economy will defy the pessimists in my opinion, the housing market is still extremely shaky, and unemployment needs to get down to healthy levels (7-5%) but they will recover. It will be a slow painful process but they will get there.

I disagree. The prevailing policy of printing money and saving failed companies is only making things worse for the US... throwing money down a rat hole. There will come a point when the international community will no longer accept the Americans quadrupling/quintupling their debt again.

[mikey_the_redneck]

Originally Posted by Sylvanfan

My question is that if they do abandon the US dollar as the standard currency in which commodities like wheat, oil, soy beans, and copper are valued, what are they going to move to? Europeans are hardly shining economic stars in their own right, they're as bad as us North Americans for having debt, and this is with a long history of bankrupting themselves as nations. Fart, they expect to make a good living, have a fantastic social safety net, and do it while working 35 hours a week with 7 weeks paid hollidays a year. Even if the Eurounion split is Germany big enough to rule the economic world?

It's gotta to be the Chinese Yuan that takes over the world.

The IMF is promoting 2 global currencies to be used in the future. One is a currency called the "bancor" and the other is called an SDR (Special Drawing Rights).

I believe the SDR's are currently based on the euro, the dollar, and the yen.

The elite bankers will use American national debt, and the resulting economic chaos from hyper-inflation, as leverage to convince Americans to merge the U.S. further into the North American Union, and into more global governance, including a new currency.

I believe usury is the single greatest threat facing mankind. A fiat currency can work, but not with a fractional reserve banking system that basically runs like a private banking cartel.

[afc wimbledon]

In the short term a 5 or 6 point rise in the base rates would be painfull but a bloody good lesson to most (of course I say this as someone about to take on another 100,000 debt to fix me house up!)

[mikey_the_redneck]

Originally Posted by Sylvanfan

Yeah, and I don't see the gold standard being particularly practical either. But if/when the US loses the priveledge to just print more money without backing it with some form of collateral....things are going to get a lot worse. It's bad enough that the Federal government has the issues they have, but state and municipal governments are even worse off.

The collateral on the national debt is the American people's income taxes, because that is where the interest payments for the $14trillion national debt come from.

[missdpuck]

Originally Posted by macker

as is : http://www.amazon.com/Crisis-Economi.../dp/1594202508 Nobody likes to hear the negativity that these guys are always ranting and raving about but if you listen to what they are saying they are at least partially right here.....

Yeah and it seems like Michael Ruppert was right about a lot of stuff too. I just have to back off when he starts sounding like a wacked out conspiracy theorist. Perhaps you have seen the documentary "Collapse".

[worth]

Originally Posted by Caged Great

The smartest thing that any individual can do to insure that they don't get bent over if/when things go south right now is to buy physical silver/gold (silver is extremely under priced at the moment)

Silver usually is worth 1/16th what gold is. Right now, Silver is only 33 dollars an ounce where gold is over 1100. Silver should be closer to 70 dollars per ounce. In November, it was only 24 dollars, so it's already gone way up.

Look at buying anything that is sterling silver.

When I was looking at this back in 2004 Silver was $16 an ounce and gold was $650 an ounce. Amazing what 6 or 7 years does.

[Flame Of Liberty]

Originally Posted by Devils'Advocate

I was listening to a 60 Minutes podcast the other day. There were two segments I found particularly interesting:
(1) A Reagan budget aide coming out saying that there is nothing that can be cut in any significance from the U.S. budget. You can lop off a million here and a million there, but that does nothing in the long term towards the trillions in debt. The only cuts that would make any significant impact would be military, medicare or social security, all of which would be suicide at the voting booth. His solution: "Raise taxes". The government may be going broke, but the country is not. The amount of personal wealth in the United States is mind boggling.
(2) Steve Balmer and Bill Gates are on opposite sides of an Oregon bill. The bill states that people making over $200,000 a year have to pay an education tax to provide more funding to a failing school system. The state can't afford to pay for more teachers when clearly more are needed, nor can it provide adequate supplies for the classroom. Gates says that the money is needed and that he should pay his fair share. Balmer says that Bill no longer has to worry about keeping the Microsoft executives that would leave to greener pastures should the bill pass.

I think the issue is that the political system in the United States is completely broken. Increased revenues from taxes on the rich are absolutely needed, yet both parties are trying to outbid each other to the tax floor. The Republicans cry tax cuts are the solution to every problem, and then spend like drunken sailors when in office. The Democrats claim they are the party of fiscal responsibility, balancing tax cuts with spending programs, but Obama's extension of the Bush tax cuts only hurts the country in the long run. I mean, if it is obvious to even Reagan's budget people, it has to be obvious to most people... the country is in trouble and something needs to be done, but no political party is willing to make the sacrifice needed because they will be booted out of office.

Yeah, throwing money at drunken sailors is always a good idea. Let me guess, you are on gov payroll?

Ever thought that the US citizens were able to generate so much wealth because their gov was smaller (relative to the rest of the world), took a smaller cut thus the citizens generated enough wealth to sustain the drunken sailor spending? Now it's gotten out of hand and it's killing the goose that lays the golden egg. Raise taxes, keep gov spending on max to attract poor voters, kill the middle class and see what happens. Brilliant.

[Caged Great]

Originally Posted by worth

When I was looking at this back in 2004 Silver was $16 an ounce and gold was $650 an ounce. Amazing what 6 or 7 years does.

I figure it can't hurt if you have some money to invest. I was buying a silver tea service and some silverware anyway because it was relatively cheap (almost scrap value even though it was antique) and I always wanted to have one.

Plus I always like having something tangible just in case.

[blankall]

Originally Posted by krynski

I don't see the US paying off their debt. Its wayyy to fricken large. There will be permanent long-standing issues for the US. I don't really see them being a permanent powerhouse anymore. longevity seems to be severely impacted, and I do not believe domestic taxation will make any significant cut towards the US's debt. Ultimately, they are almost most-definitely SCREWED. I don't know so much about Canada's debt, but im pretty sure we are in a much better position. 566.7 billion in debt is a lot more manageable than 14 trillion.

Usually when comparing debt, you look at external debt.

The US's debt really is nowhere near as bad as many other countries when measured on a per capita or % of GDP basis:

http://en.wikipedia.org/wiki/List_of..._external_debt

You've also compared Canada's federal debt to the US's total debt. Canada's total debt is over 1 trilliion now. Slightly less than the US on a per capita and % of GDP basis but pretty comparable.

[MoneyGuy]

Originally Posted by J pold

Yeah I think a lot of this is smoke and mirrors call me crazy but I have an optimistic view of the world going forward. The American economy will defy the pessimists in my opinion, the housing market is still extremely shaky, and unemployment needs to get down to healthy levels (7-5%) but they will recover. It will be a slow painful process but they will get there.

If you're crazy then so am I. There will be no world financial collapse. It will take time but the mammoth U.S. economy will emerge from this and the sun will rise again in the morning.

[Slava]

Originally Posted by MoneyGuy

If you're crazy then so am I. There will be no world financial collapse. It will take time but the mammoth U.S. economy will emerge from this and the sun will rise again in the morning.

and to go one step further, I think the US market outperforms most of the BRIC markets this year as well (barring anything catastrophic or game changing taking place).

[billybob123]

Originally Posted by Devils'Advocate

(1) A Reagan budget aide ...

IF there's anyone who understands deficit spending with disastrous tax cuts, it's someone who worked for Reagan.

Foreign debt TRIPLED under Reagan; budget deficit increased 20%.

The people who bow at the altar of Reaganomics as the solution to America's problems are either idiots or delusional. Or both.

[macker]

The Fed has effectively thrown two jerry cans of gas onto the fire in the last year so we are seeing the immediate results and this will help buffer things for the next year at least. This doesn't solve the issue that there were 8 million jobs lost in the private sector that don't look to be comming back anytime soon. The workforce looks unadaptable, unflexible, there are issues in education, immigration and utilizing the workforce better. Stop focussing on old jobs and help people find new jobs. There are certain jobs that will never come back and that the US workforce simply won't be able to compete in anymore. The Fed/US government can artificially support things all they want in the short term but unless new jobs are created it is just pushing things out into the future and not dealing with the issue. This is magnified in an economy that is so dependent on consumers consuming.

Things that could derail things in the near term would be energy prices as this is another tax to the consumer that could cause more problems to an already wounded consumer. The Fed has been very accomodating in the past year but interest rates are going to have to reconnect again at some point. Also inflation is showing up all around the world and based on the government data out of the US it is a non issue thus far. What happens if/when inflation shows up in the US. Surely the Fed is running out of Gas

[Mr.Coffee]

Let's not use the word energy prices when we really mean oil prices. Nat gas is part of the answer moving forward and achieves multiple solutions to problems American people have identified. And it benefits Albertans / Canadians, greatly.

The only thing I was going to say, was that maybe the more globally integrated everything becomes, the less we can afford to live the way we live. Maybe that's just a reality we have to face one day.

[Pinner]

Originally Posted by MoneyGuy

If you're crazy then so am I. There will be no world financial collapse. It will take time but the mammoth U.S. economy will emerge from this and the sun will rise again in the morning.

OK your both crazy

At this point who would buy American bonds ?

I'm amazed interest rates haven't spiked through the roof, 22% interest rate like in 1982 would cripple the economy.