Economist Predicts Upcoming Crash to be Worse Than 2008 - Page 2 - U2 Feedback

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Old 07-13-2012, 09:55 AM   #21
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Originally Posted by ladyfreckles View Post
I don't worry about it so much. I'm in a lucky situation where a crash wouldn't effect us too much because of the type of work we're in.
At 50% unemployment (I don't buy this prediction at all, but for the sake of argument), it would affect you immensely regardless of how recession-proof you think your job may be because that would amount to almost a total social collapse. With those sorts of numbers, we're all going down, the question is how far down.
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Old 07-13-2012, 10:37 AM   #22
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Yeah, 50% unemployment would be only a stepping stone towards the total collapse of... uhh... the entire world economic system. Not gonna happen. And to say that 100% inflation would come in tandem is absurd. 50% unemployment would cause mass deflation. And one could argue that the unemployment could be caused by the inflation, which is somewhat legitimate. But inflation only happens when printed money is actually spent, which, in an economy not at structural capacity (like every Western economy), will cause growth. When inflation picks up too much, the Fed can easily take money out of circulation.
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Old 07-13-2012, 12:30 PM   #23
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Yeah, 50% unemployment would be only a stepping stone towards the total collapse of... uhh... the entire world economic system. Not gonna happen. And to say that 100% inflation would come in tandem is absurd. 50% unemployment would cause mass deflation. And one could argue that the unemployment could be caused by the inflation, which is somewhat legitimate. But inflation only happens when printed money is actually spent, which, in an economy not at structural capacity (like every Western economy), will cause growth. When inflation picks up too much, the Fed can easily take money out of circulation.
That's true but don't forget stagflation. In someways we are partially there. Prices do rise (even if product containers keep the same price they reduce the quantity of the product), and the unemployment rate when you include people who gave up looking for work is quite high in much of the developed world.

Stagflation - Wikipedia, the free encyclopedia

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Economists offer two principal explanations for why stagflation occurs. First, stagflation can result when the productive capacity of an economy is reduced by an unfavorable supply shock, such as an increase in the price of oil for an oil importing country. Such an unfavorable supply shock tends to raise prices at the same time that it slows the economy by making production more costly and less profitable.[5][6][7]

Second, both stagnation and inflation can result from inappropriate macroeconomic policies. For example, central banks can cause inflation by permitting excessive growth of the money supply,[8] and the government can cause stagnation by excessive regulation of goods markets and labor markets.[9] Either of these factors can cause stagflation. Excessive growth of the money supply taken to such an extreme that it must be reversed abruptly can clearly be a cause. Both types of explanations are offered in analyses of the global stagflation of the 1970s: it began with a huge rise in oil prices, but then continued as central banks used excessively stimulative monetary policy to counteract the resulting recession, causing a runaway wage-price spiral.[10]
The good thing is oil prices aren't going up to shock levels at this point. The only thing that could fuck it up is cap and trade or other energy regulations from the EPA to make energy costs "necessarily skyrocket" .

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Not only drastic, but is it even sustainable? At a certain percentage the structure collapses and most would agree that happens before it reaches 50%.
Yes those kind of stats remind me of Haiti. Of course it's still possible but you would have to have MASS bank failures with people hiding their currency under the mattresses. All banks have to do is increase their reserve currency to around 10% to avoid bank runs from collapsing the economy.
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Old 07-13-2012, 12:46 PM   #24
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As someone who is going to graduate college in ten months' time, let me just say that my country had laid a tremendous base for its incoming workers.
Most of Asia is booming. If I was a young person graduating now I'm not sure if I would stay in the West at all, quite frankly.
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Old 07-13-2012, 12:56 PM   #25
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China seems to be slowing down, though.


China GDP: Slowdown deepens, raises risks to global economy - Jul. 12, 2012
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Old 07-13-2012, 02:20 PM   #26
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Stagflation could be a problem, but it generally arises either from resource price shock or loose monetary policy where the inflation causes the growth to end. The 1970s featured both of these things, and central banks know how to manage it. The Fed has been exceedingly cautious. Given its current line on more quantitative easing, stagnation is a much bigger threat than inflation. Stagflation is also far more likely in an economy starting out much closer to structural capacity.
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Old 07-13-2012, 02:21 PM   #27
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Originally Posted by financeguy

Most of Asia is booming. If I was a young person graduating now I'm not sure if I would stay in the West at all, quite frankly.
I'm happy to stay in the US, and I'd be happy to stay in Canada or Australia, but if I were in Europe, I'd be very tempted to leave.
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Old 07-13-2012, 04:33 PM   #28
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Most of Asia is booming. If I was a young person graduating now I'm not sure if I would stay in the West at all, quite frankly.
Depends on where.

You can happily stay in North America, move to Alberta (particularly the northern half) and live extremely well.
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Old 07-13-2012, 05:23 PM   #29
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Originally Posted by digitize

I'm happy to stay in the US, and I'd be happy to stay in Canada or Australia, but if I were in Europe, I'd be very tempted to leave.
I don't think that even now the US outperforms the whole of Europe combined?

I've been in Asia a lot this year. It's amazing how different 'the feel' is over there. But Asia will hit a serious barrier at some point, I feel. The West exploited other people and the entire planet a lot to get where it is. I'm not sure whether the growth can be limitless.
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Old 07-13-2012, 07:54 PM   #30
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Isn't one of the problems with currency now how weak the US dollar is?
The dollar is at a 2 year high against the euro. Too strong a currency is bad for a nation's exports - e.g. Japan routinely intervenes to weaken the yen when it gets too high.
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Old 07-13-2012, 11:03 PM   #31
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The West exploited other people and the entire planet a lot to get where it is.
I know, our ancestors were smart people.
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Old 07-19-2012, 12:52 AM   #32
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Most of Asia is booming.
And Latin America.
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Old 07-19-2012, 10:28 PM   #33
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2008 can't happen in America again. We have Dodd-Frank and Occupy Wall St to protect us.
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Old 07-19-2012, 10:41 PM   #34
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Originally Posted by INDY500 View Post
2008 can't happen in America again. We have Dodd-Frank and Occupy Wall St to protect us.
I wouldn't even be joking about it. Youse have a puppet government, just like us.





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Old 07-23-2012, 07:33 PM   #35
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Moody's puts Germany on notice - Jul. 23, 2012
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Old 07-23-2012, 08:14 PM   #36
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Germany, The Netherlands and Luxembourg, some of the moralist countries (Slovakia and mostly Finland are absent of this decision, unfortunately) that claim that the it's the PIIGS fault, proving their own poison and facing the cold truth about this crisis the same way the PIIGS are tasting. I'm loving it.
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Old 07-23-2012, 11:43 PM   #37
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Once again, Moody's is a year late to the party
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Old 07-23-2012, 11:53 PM   #38
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Hilarious and depressing at the same time.
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Old 07-25-2012, 08:52 PM   #39
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Well... Every single profecy from hell is happening, faster than predicted.

1) After the spanish banks, spanish autonomous regions went bankrupt and they're asking for a bailout to the Spanish central government. The interests over public debt have reached 8%. I've warned by spanish friends that they would watch the exact same movie I watched in Portugal last year. It's happening every little step by step, even the interests have a perfect match.
So, Spain will have to be "rescued" until the beggining of September.
Guess what's the amount? €300 000 million.

2) Guess who entered today to the Top 10 of Bankrupcy Probability ranking, straight to #10? That's it: Itáliaaa! And their interests have already overcome the 6% mark. So, instead of 6 months to Italy, I'll give them... until the end of 2012. It's estimated that Italy will need about €450 000 million... That the UE fund doesn't have.

3) Greece went to elections and elected a large government formed by 3 parties, those that Merkel, Schauble, Van Rompuy and Juncker made pressure (over the greeks) to be voted. Guess what's the result: Greek's recession in 2012 will reach more than 7% (imagine if they implemented the whole plan).

So... The plan elabotared by the moralists of Central Europe and the bureauctars of the inexistant european institutions... Failed wherever it was implemented. Merkel and the Germany public opinion still deny the option to let the ECB work as a "normal" central bank. Some of the CEO's of the biggest german companies have already expressed their dissatisfaction that the recession in Europe and the result of this receipt is affecting the performance of their companies.

And there's a deafening silence... Except for Roesler, german Minister of the Economy and Merkel's coalition partner and for Schauble, as well as for Van Rompuy, Juncker or Draghi that, everytime their open their mouth is to throw more fuel to this huge fire. The summits serve to throw buckets of water in a fire of huge proportions.
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Old 07-28-2012, 10:27 PM   #40
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Originally Posted by Aygo View Post
Well... Every single profecy from hell is happening, faster than predicted.

1) After the spanish banks, spanish autonomous regions went bankrupt and they're asking for a bailout to the Spanish central government. The interests over public debt have reached 8%. I've warned by spanish friends that they would watch the exact same movie I watched in Portugal last year. It's happening every little step by step, even the interests have a perfect match.
So, Spain will have to be "rescued" until the beggining of September.
Guess what's the amount? €300 000 million.

2) Guess who entered today to the Top 10 of Bankrupcy Probability ranking, straight to #10? That's it: Itáliaaa! And their interests have already overcome the 6% mark. So, instead of 6 months to Italy, I'll give them... until the end of 2012. It's estimated that Italy will need about €450 000 million... That the UE fund doesn't have.

3) Greece went to elections and elected a large government formed by 3 parties, those that Merkel, Schauble, Van Rompuy and Juncker made pressure (over the greeks) to be voted. Guess what's the result: Greek's recession in 2012 will reach more than 7% (imagine if they implemented the whole plan).

So... The plan elabotared by the moralists of Central Europe and the bureauctars of the inexistant european institutions... Failed wherever it was implemented. Merkel and the Germany public opinion still deny the option to let the ECB work as a "normal" central bank. Some of the CEO's of the biggest german companies have already expressed their dissatisfaction that the recession in Europe and the result of this receipt is affecting the performance of their companies.

And there's a deafening silence... Except for Roesler, german Minister of the Economy and Merkel's coalition partner and for Schauble, as well as for Van Rompuy, Juncker or Draghi that, everytime their open their mouth is to throw more fuel to this huge fire. The summits serve to throw buckets of water in a fire of huge proportions.
What I've been told from someone I'd consider reliable is that the Irish "return to the bond markets" is basically to get as much cash as possible into the government's books, in advance of imminent Eurozone collapse. The fact that the Irish have gone into the market to raise funds at double the rate of the IMF bailout rate indicates no more and no less than there is more to this story than meets the eye.

(as always the real story is never fully reported, perhaps, at most, hinted at, in the mainstream media)

Successful return to the bond markets - Editorial, Opinion - Independent.ie

From what I've been told, someone in our NTMA (the Irish National Treasury Management Agency) made the decision to pull the trigger, this was accepted within the government (currently, the historically British-allied Fine Gael party). There has been a political calculation that the eurozone in its current form is very unlikely to survive.

I'm very sorry to report that the same source believes that Spain/Portugal/Greece are basically going to be left up shit's creek without a paddle. Unless, of course, Spain, Portugal, Greece and Italy negotiate to form their own currency union.

So essentially at this juncture the entire euro project is a busted flush - dead.
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