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As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse," said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast.
Under the French bank's "Bear Case" scenario, the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010.
Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade
Inflating debt away might be seen by some governments as a lesser of evils.
If so, gold would go "up, and up, and up" as the only safe haven from fiat paper money. Private debt is also crippling. Even if the US savings rate stabilises at 7pc, and all of it is used to pay down debt, it will still take nine years for households to reduce debt/income ratios to the safe levels of the 1980s.
The bank said the current crisis displays "compelling similarities" with Japan during its Lost Decade (or two), with a big difference: Japan was able to stay afloat by exporting into a robust global economy and by letting the yen fall. It is not possible for half the world to pursue this strategy at the same time.
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Prepare for the Great Depression.
Survival Seeds
I wish they would think about the average working man and talk about buying silver. Gold is out of my income bracket at this time. Should I buy silver below $20? Thanks.
ReplyDeleteI bought at $9.00 an ounce, WTF are you waiting for? Silver is a Buy until $25.00 an ounce.
ReplyDeleteWhat this article does not mention is that the savings in the US grew because many people stopped paying mortgages while still employed or on UI. They did it because their mortgages already under water and it does not make sense to keep paying, living yourself without a cushion for the future. So, if people continue with the same rate of savings, it means the same amount of financial institutions is going to fail due to delinquent mortgages. The more local governments are going to fail, since they are not getting revenues in form of property taxes. What the government is trying to do is devalue the dollar. Imagine you borrow $10,000 that buy a small car and give back $10,000 that buy a tooth brush. Well, it means that your standard of living is going down the tube; you can wipe your ass with your RRSP or 401K plan, and your savings for that matter. For a while government is going to milk you through increasing taxes. They’ll introduce tax on toilet paper by inches, tax on exhaled carbon dioxide, tax on farts, etc. It also means skyrocketing commodities, including gasoline, electricity and natural gas. Do they have another option? Sure they do. They can declare a martial law, declare bank holidays and take your bank accounts, pension plans and safety deposit boxes with stacked silver and gold to pay for their thievery. Can anyone see another option?
ReplyDeleteTo 5:12, that is why one should NEVER use a safety deposit box.
ReplyDeleteTo 5:12, this is why you NEVER use a safety deposit box
ReplyDelete@ 6:08 & 6:09
ReplyDeleteI actually do not have a box, have nothing to put in there. Ha-ha. I came to this country with $1200 in my pocket and it looks like I'll leave with the same amount. What an irony.
You're lucky it didn't leave you penniless and stuck here.
ReplyDeleteThe ideal solution is to liquidate all banks and burn their "paper" claims to private land. This will give individuals and their local governments the ability to produce and manufacture for their local communities instead of being bled through interest payments to far off lands. The key to this scenario is understanding where the law enforcement loyalties lay - it is with the people or with the institutions? History suggests, with the exception of the American Revolution lead by General George Washington, that the institutions will win over the alliance of the armed enforcers. You can presently expect the sheriffs and police to enforce court orders in favor to the banks, and the militaries to enforce the dictates of Central Banks. The enforcers will be rewarded for their "loyalties" with gold, guns and girls by the bankers, who coincidentally control the smuggling operations required to channel these rewards to their armed servants. It shall be revealed to us whether the Armed Forces of the United States will serve under a Constitution with Strength, Honor and Valor, or if they have been conquered from within by the slow quiet cancer born of fear/terror and greed.
ReplyDeletePersonally, my hopes lie with the US Marines, who cannot be purchased with any earthly treasure or kingly promise.
"My only answer as to why the Marines get the toughest jobs is because the average Leatherneck is a much better fighter. He has far more guts, courage, and better officers... These boys out here have a pride in the Marine Corps and will fight to the end no matter what the cost."
2nd Lt. Richard C. Kennard, Peleliu, World War II
Enough said.
Sheeple work for penny.
ReplyDeleteThe smart print money.
Broken record is
ReplyDeleteas broken record does