When we look at the world economy today, wherever we turn we see a wall of risk. And sadly this is an insurmountable wall with risks that are totally unprecedented in history. There has never before been a potentially catastrophic combination of so many virtually bankrupt major sovereign states (US, UK, Spain, Italy Greece, Japan and many more) and a financial system which is bankrupt but is temporarily kept alive with phoney valuations and unlimited money printing. But governments will soon realise that they are not alchemists who can turn printed paper into gold. The consequences of the global financial crisis are potentially catastrophic.
As the Austrian economist von Mises said: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency involved.”
In our view, governments like the US and the UK and many others will not abandon further credit expansion. They are committed to printing increasing amounts of worthless paper money in order to finance the growing deficits and the rotten financial system. Therefore there is no chance of Quantitative Easing ending but instead it will accelerate in 2010 and after. The consequence of this will be a hyperinflationary depression in many countries due to many currencies becoming worthless. No economy in the world, including China, will avoid this severe economic downturn which is likely to have a major impact on the world economy for many, many years to come.
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The 100 Trillion dollar question on most peoples minds that visit this site?
ReplyDeleteHow long can the USA keep it propped up ?
A month ?
6 Months ?
A Year ?
Two years ?
The really bad thing about hyperinflation is timing. You want to hold onto your dollars as long as possible and then accumulate commodities
Accumulate too soon and you could be sitting on "stuff" for ??? I dunno -- see above
buy gold
ReplyDeletebuy food
bye bye america
9:58 - agreed! I heard a couple of politicians talking about 5 years, but most think within 2 years. Many are now starting to talk by the end of THIS year. Watch your food prices, they are going to start going up, gas is supposed to top $3 this summer, so that will add to the misery.
ReplyDelete10:41 - Agreed! Buy food, get prepared and stay alert!
I still think we will have deflation for quite a few years when this depression is official. The banks are in survival mode and arent going to be making many loans for quite a few years. The money supply in people's hands is actually decreasing not increasing. This will be like the US in the 30's imo not like Germany then.
ReplyDeleteThe only reason oil has gone up is because of the speculative carry trades going on due to the feds zero interest to the investment banks. I see oil going back down to $60 when they finally raise the rates enough to kill a lot of that carry trading.
ReplyDeleteHow in the hell can I even begin to feel that I am prepared when everytime I go to sites such as these you get every scenario known to man; all on the same page?!
ReplyDeleteBuild your cash
Spend your cash on Pm's
Oil to $300
Oil to $50
Inflation
Hyperinflation
Deflation
Recession
Depression
WTF I am Sooooooooooooooooooo confused !
1:28
ReplyDeleteYou are not alone. No else knows either! Everyone is guessing and anyone who says otherwise is a liar!
Go with your gut and a good deal of faith.
:)
TLDM.org
ReplyDeletethis will help
you are not alone
Dear EA, here's a comment guideline thingy I lifted off Mish's site.
ReplyDeleteI'm sure he won't mind if you 'borrow' it.
Comment Guidelines: Comments should be succinct, constructive and relevant to the story. We encourage engaging, diverse and meaningful commentary. Comments that include personal attacks, racial, religious, or ethnic slurs are not permitted. We continuously review and remove any inappropriate comments.
2010 is the year. Reasons:
ReplyDelete1. Dubai World stopped servicing its debt until May 2010. It'll still default in May, and Dubai, the emirate is not far off. Will trigger more CDS and other exotic derivatives, leading back to the City.
2. We've only begun with Greece. Greece has yet to default. Even if Germany and France bail it out, that's not the big event.
3. The U.K. Has the same debt to GDP ration as Greece. The Brits would like you to ignore the fact that they printed over 1 trillion pounds to paper over the Crash 2008; you must include this number to the fictitious 60% debt to GDP ratio, bring it up to just under 130%!! Also, Jim Rogers said the Pound is weeks away from collapse. Bottom line: are derivatives lead back to the City. Wall Street and City are intertwined.
4. Bernanke said the other day that the Fed would not bail out U.S. Government debt anymore. Now that could be a Dollar defence stance. However, in light of what's happening to the U.K. there's probably a lot of truth to it.
Look for a revalued Dollar in the near future. Downward, that is, making exports, most particularly oil, way more expensive. Since everything is tied to oil, this will fuel inflation if the Fed doesn't increase interest rates. If the Fed does increase interest rates, it will make the economy contract even more.
The macro outlook is simple, the micro not. Regardless, set you house in order and enjoy the calm before the storm. Build a model, write a book, knit, spend time with family, etc. Enjoy while you can.
What we're seeing right now before our own eyes is the complete disintegration of the American and European economies. It's like watching a train wreck in slow motion. Things are literally becoming MORE unglued with each passing day. There is NOTHING that can be done to stop this slide into the Greatest Depression. Along with the current economic disintegration, we are witnessing fiat currency disintegration--the collapse of the Euro, British pound, etc. Soon we'll see the collapse of the USD. That will likely be followed by a hyper inflationary event. The only protection from ALL these scenarios is GOLD. Gold is money, gold is currency, gold is "real" wealth. It will ensure we get through the even more difficult times that are fast approaching.
ReplyDeleteMost people are going to be caught completely unprepared for what will soon happen. I do not wish to be one of those people. I truly believe we are on the cusp of a huge upward move in the price of gold and gold stocks. I'd prepare accordingly because once the mania and craziness starts, there will be no physical gold (or silver) to buy and gold stocks will have gone through the roof.
Gerald celente seems to think the crash willcome after March when the fiscal support runs out.
ReplyDeleteMy guess is this collapse will happen before the next election. That way all the newly elected can say they "inherited" the mess and had nothing to do with causing it.
ReplyDeleteMeanwhile, my unemployment will run out in about 6 weeks and then I'll have to consider some extreme options. I will never sell my Nikon D3, so I'll have plenty of photos for future historians to debate over.
Confusion is right, first off we have deflation right now, some things are higher , such as food, but over all deflation. Rents down and commercial rentals down, buying a car down, NOW the inflation will come when the feds raise rates. They can't do that until Jobs are back a bit. Jobs won't come back until employers know the rules and feel confident. We have to shake out the home that sit empty which is another issue, the banks will be hit again BIG TIME,
ReplyDeleteso,,,,,,,,,,, expect inflation to be a bay for a few years, that' s not an issue yet. We need to get the housing shake down and job creation, until those 2 things stabilize, expect rates to stay low. This is a very slow process, we are talking 3-8 yrs , very slow.
Cheri in California
Debt per person? Okay Uncle Sambo, I'll pay you back in a dollar value based on the year I was born and we'll call it even. You tured the USD to toilet paper, not me. But understand you need to stay the f@#k out of my life and wallet from here on out you useless piece of sh%t.
ReplyDeleteI figure about $4,200 will square us. Whom do I address the check to?
only half the people pay taxes. Looks much higher per tax payer if you figure a huge amount of people are going to retire in the next 10 years.
ReplyDeleteThis is not good at all.
9 weeks of unemployment left and then I am done. Trying to sell belongings like furniture and electronics in the meantime. I suspect many people on the outside don't let others what sort of plight they are facing, but in reality they are exhausting all of their means and will be on the street or in shelters in the coming months.
ReplyDeleteAn alternate take on deflation...
ReplyDeleteMy friend, debt is the very essence of fiat. As debt defaults, fiat is destroyed. This is where all these deflationists get their direction. Not seeing that hyperinflation is the process of saving debt at all costs, even buying it outright for cash. Deflation is impossible in today's dollar terms because policy will allow the printing of cash, if necessary, to cover every last bit of debt and dumping it on your front lawn! Worthless dollars, of course, but no deflation in dollar terms!"
Sincerely,
FOFOA
Saving debt. Sounds familiar, doesn't it?
Everything is a gamble at this point, with a few golden exceptions, of course.
ive been putting on weigh cuz i eat gold
ReplyDeleteill eat gold till i collapse
1:28, EA posts articles that double talk. So whichever way it happens, he's still right.
ReplyDeleteI am continually amazed how around 10% of the population is aware of this information, that is the coming collapse, and the other 90%, or dumbed down idiotic TV addicted mind controlled American public aka Sheeple, have no clue. Most of my friends and family think we are in a recovery, yes, a recovery.
ReplyDeleteI look for TSHF sometime around August, based on my studies. However, it could be any day now, as things are snowballing fast.
Ever wonder where you will be one year from now?
"Machines are gonna fail and the system's gonna fail...then, survival. Who has the ability to survive? That's the game - survive."
ReplyDeleteLewis Medlock (Burt Reynolds)
Deliverance 1972
I was in Sam's Club yesterday (Sat. @ 1PM ish), 15 or so check out lanes, 4 open. I pushed my cart up to the register with no one ahead of me. Folks, this was a Saturday afternoon and the store was quiet! All the women that did the food demos were fired a few weeks back. This is not a good sign.
ReplyDeleteI went to WalMart to buy another 100 round box of .223. I left without it, because no one seemed to be working near the ammo case. The previous time I had to wait 20 minuets or so before someone showed up. As it was the ammo case was 80% empty. This store was very quiet as well.
What is my city going to do with an industrial complex large enough to employ 5,000 people? There are several here in Anaheim (Disneyland) California. It could be converted into a prison, the parking lot could be the recreation yard, that's all I can think of.
I read many comments about learning a new skill and that's great, but who is your customer base? I'm learning all about Square Foot gardening and Hydroponic gardening, powered by the small solar system on my roof. I could build an 8 square foot hydroponic, solar powered garden for about $2K. Any takers?
How about we team up and build a new kind of bike? A quadcycle with bench seats and a place to store some groceries, design it for torque, not speed, so a single person could peddle it, while hauling the groceries and kids. We might need something like this when gas is 20 bucks a gallon.
jeffsfo@yahoo.com
The collapse isnt the major element we should all worry about, yes its going to happen and it will be by 2011, BUT the more worrying event is the natural disaster in 2012 that will wipe out a third of the population. That is something nobody can prepare for
ReplyDeleteHa! Some of you have knew things were "off" but still made fun of us "Tin Foil Hat People."
ReplyDeleteYou know the silver, gold, guns, water and food bunch...Now I'm starting to see even the intellectuals talking guns and ammo.
Even as this Titanic is slowly sinking all I can think is "Damn this world is about to get super surealistic!"
Part of me feels sad for all the poor and hungry...Part of me knows we have this coming for letting everyone manipulate us and not want to learn or use our civil rights even as they took em.