User Tag List

Page 1 of 5 12345 LastLast
Results 1 to 10 of 47

Thread: A Primer on the Coming Crash

  1. #1
    Games People Play Forum Donor
    V.I.P
    Achievements:
    OverdriveSocial50000 Experience PointsVeteranCreated Blog entryTagger First Class
    Overall activity: 99.7%

    JustPassinThru's Avatar
    Join Date
    Sep 2013
    Location
    New California
    Posts
    54,592
    Thanks
    11,060
    Thanked: 41,641
    Blog Entries
    2
    Rep Power
    21474896

    A Primer on the Coming Crash

    Insanity: Now even JUNK bonds have NEGATIVE yields | Sovereign Man

    Insanity: Now Even Junk Bonds Have Negative Yields | Zero Hedge

    This oversimplifies it, a bit - and the author, Simon Black, is selling something. Nonetheless he's right on the basics - and it's an easy overview on why he, and I, and many others, think we're in for it.

    I'd invite you to try to scan over this, maybe try several times. This is why I think Trump isn't going to last or be able to stop the economic-bubble popping. He didn't make this, but it's looking like he'll be holding the bag.


    75 years ago this month, a group of 744 delegates from around the world gathered at the very posh Mount Washington Hotel in New Hampshire to build a brand new global financial system.


    The year was 1944. World War II was still raging in Europe and the Pacific.


    But with the successful invasion of Normandy well underway, the Allies knew that Hitlerís days were numbered. And they needed to start preparing for a post-war world.


    Everyone knew the US would emerge from World War II as the the dominant superpower.


    So the financial system they designed put the United States at the center of the world economy.


    They called it the Bretton Woods system, named for the town in New Hampshire where they gathered.


    And their central idea was that the value of the US dollar would be fixed to gold at a rate of $35 per troy ounce, while every other currency would be fixed to the US dollar.


    The Swiss franc, for example, was fixed at a rate of 4.3 francs per US dollar, while the Danish krone was fixed at 4.8.

    Bretton Woods ushered in a period of remarkable economic stability worldwide.


    During the roughly quarter-century that the Bretton Woods system was in place, banking crises were almost nonexistent. Recessions were rare.


    And global debt fell from nearly 150% of GDP at the end of World War II, to roughly 30% by the early 1970s.


    Then it all came to a screeching halt in 1971.


    The United States, weighed down by a costly war in Vietnam, suddenly and unilaterally terminated the agreement.


    The US government wanted the flexibility to print as much money as it needed without being forced to maintain the gold standard.


    So the whole system collapsed, practically overnight.


    And it was replaced by a new standard where unelected central bankers have supreme authority to conjure near infinite quantities of money out of thin air.


    The effects have been pretty disastrous.


    Ever since the end of Bretton Woods, global debt has skyrocketed to roughly $200 TRILLION, approximately 225% of GDP.


    Banking crises and financial shocks have become much more commonplace. Market crashes are more severe. Recessions are more common. Inflation worldwide has soared.


    (Itís ironic that, back in 1944, the price of a room at the Mount Washington was $18. Today itís over $250.)


    Perhaps most of all, we now regularly witness some of the most extreme financial anomalies imaginable.


    And one of the most obvious examples of this is negative interest rates.


    In a number of countries, including Switzerland, Japan, Denmark, and the entire Eurozone, central bankers have printed so much money that interest rates are actually negative.


    If you buy a TEN YEAR German government bond, for instance, your annual investment return will be NEGATIVE 0.27% per year, based on this morningís rates.

    Thatís insane.

    But just a few days ago the insanity reached a whole new level.


    According to the Wall Street Journal, there are now some JUNK BONDS in Europe that have negative yields.


    Think about this: a junk bond is basically debt issued by a company with financials so risky that analysts expect thereís a good chance the company wonít pay its debts.


    Hell, the company might not even be in business by the time the debt matures.


    And yet, despite these substantial risks, investors are willing to loan money to these companiesÖ at NEGATIVE rates of return.


    Seriously?? You take all that risk and then GUARANTEE that youíll lose money.


    Honestly Iím not a pessimistic person. But this sort of absurdity makes me pause and consider what might happen next.


    The global economic expansion is one of the longest on record, ever. Financial markets around the world are soaring at all-time highs. Stocks. Bonds. Real Estate.


    One of the only things we know for sure about financial markets is that they are ALWAYS cyclical. Up/Down, Boom/Bust. These cycles have been with us forever.


    Itís impossible to predict exactly WHEN the decline will occur. But when you see JUNK bonds with NEGATIVE yields, itís likely that weíre probably close to the end of the boom phase.


    Itís possible this madness could continue for a while longer. Or it could end tomorrow.





  2. The Following 3 Users Say Thank You to JustPassinThru For This Useful Post:

    Beachcomber (07-17-2019),Garden House Queen (07-17-2019),Stan Fan (07-17-2019)

  3. #2
    Senior Member Achievements:
    Social50000 Experience PointsCreated Blog entry3 months registered
    Overall activity: 42.0%

    jirqoadai's Avatar
    Join Date
    Jan 2019
    Location
    TEXAS
    Posts
    3,899
    Thanks
    2,962
    Thanked: 2,076
    Blog Entries
    2
    Rep Power
    3599422
    junk bonds have crashed before without a world wide depression.
    panic is the globslists friend. President Trump will be fine. if history is indicative as to the future, Mike Pence will be the one holding the bag.

  4. The Following 2 Users Say Thank You to jirqoadai For This Useful Post:

    Canadianeye (07-17-2019),teeceetx (07-17-2019)

  5. #3
    running down a dream Achievements:
    50000 Experience Points1 year registered
    Overall activity: 24.0%

    ruthless terrier's Avatar
    Join Date
    Dec 2016
    Location
    somewhere in the south
    Posts
    3,535
    Thanks
    2,210
    Thanked: 5,133
    Rep Power
    5705465
    hopefully the big balloon sinks slowly this time.
    ďItís the home of the brave and the land of the free where the less you know the better off youíll be."

  6. #4
    Games People Play Forum Donor
    V.I.P
    Achievements:
    OverdriveSocial50000 Experience PointsVeteranCreated Blog entryTagger First Class
    Overall activity: 99.7%

    JustPassinThru's Avatar
    Join Date
    Sep 2013
    Location
    New California
    Posts
    54,592
    Thanks
    11,060
    Thanked: 41,641
    Blog Entries
    2
    Rep Power
    21474896
    Hope is for children.

    And stock prices and fundamentals have truly reached fantasy territory. Put simply...THEY ARE NOT WORTH what they are selling. The price-to-earnings ratio is way off on most of them - and in some, they don't even generate profits. Some, probably never can.

    So you buy shares of Snap, say (Snapchat) and you will NEVER, EVER get a return on your money. That's not how it's put out there but that's how it will work. You just have to hope for a Bigger Fool to buy your shares at some future point.

    These tech geeks, and their cousins, 23-year-old bankers and money managers, have no CLUE about fundamental value. It's the Hive Mind - and when they start running for the exits, they will all follow, like lemmings. Remember the 2009 crash? I sure do. This one will be worse.

  7. The Following User Says Thank You to JustPassinThru For This Useful Post:

    Garden House Queen (07-17-2019)

  8. #5
    Senior Member Achievements:
    Social50000 Experience PointsCreated Blog entry3 months registered
    Overall activity: 42.0%

    jirqoadai's Avatar
    Join Date
    Jan 2019
    Location
    TEXAS
    Posts
    3,899
    Thanks
    2,962
    Thanked: 2,076
    Blog Entries
    2
    Rep Power
    3599422
    JPT. youve blocked your pm box. railroad for sale at under 11 bucks per foot in cent pa.
    pays 3 bucks twice a year since 1893. always will.

  9. #6
    Junior Member Achievements:
    Veteran50000 Experience PointsCreated Blog entry
    Overall activity: 3.0%

    Freewill's Avatar
    Join Date
    May 2014
    Posts
    2,045
    Thanks
    1,806
    Thanked: 2,090
    Blog Entries
    1
    Rep Power
    4061461
    I don't know if I did ok or not but I moved my stocks and bonds into "safe" money where I will make, hopefully, around 8 percent and the principle is protected and resets every two years. It seemed to me that with the finatial advisor I had my account would go up trailing the market index but go down pretty much with the market. So I got out at what may be the top. those of you still in the market can thank me, I expect the market to really takeoff now that I am out.

    As i understand banks now create money buy loaning money. Every dollar they loan is not backed by anything, it just increases the money pool which is not really good for investors, it will have to end someday, when and KNOWING when will be the trick. That said, when the crash occurs who will be safe? No one in my opinion, except maybe those who don't have money to be invested, they should stay the same.

    Another problem is SS and the baby boomers retiring. Every dollar that went into the SS trust fund instantly was invested in federal government securities and instantly was spent. So every year this large some of money is collected and becomes debt, which I am sure our representatives look at and see that as a problem. How do you fix large amounts of debt? Default or bankruptcy. In other words screw the people you owe the money. Now we have illegals who have never put a dime into the system draining the system, we are ripe for disaster. I think it would have been much better if years ago SS was privatized, but that would have cut off congress from all the money so that wasn't going to happen.

    I am not sure when the chickens are coming home to roost. We the people have only ourselves to blame. We elect people like AOC and expect them to make calm rational decisions and they actually do. They are calmly and rationally seeing the American economy falter and will help all they can so that socialism can take over. It may actually be the only outcome that is possible considering what our government has done.

    I just hope this turns out to be hand wringing and the market continues it bull run, but I doubt it.
    Last edited by Freewill; 07-17-2019 at 08:04 AM.

  10. The Following User Says Thank You to Freewill For This Useful Post:

    Garden House Queen (07-17-2019)

  11. #7
    V.I.P. Forum Donor
    V.I.P
    Achievements:
    50000 Experience Points1 year registered
    Overall activity: 11.0%

    Beachcomber's Avatar
    Join Date
    Dec 2016
    Location
    A private area on a beach in southeast Florida
    Posts
    2,635
    Thanks
    3,162
    Thanked: 4,026
    Rep Power
    11148383

    As an old guy with an undergraduate major in politico/economic theory
    this brought back memories of one of the hot topics at the time.

    For further information some may want to read this book:

    EDIT:

    Shared this with my wealth manager son and a couple others in class with me
    at the time.


    https://www.seeitmarket.com/fed-up-book-review-taking-look-behind-curtain-16574/





    Last edited by Beachcomber; 07-17-2019 at 07:55 AM.

  12. #8
    Games People Play Forum Donor
    V.I.P
    Achievements:
    OverdriveSocial50000 Experience PointsVeteranCreated Blog entryTagger First Class
    Overall activity: 99.7%

    JustPassinThru's Avatar
    Join Date
    Sep 2013
    Location
    New California
    Posts
    54,592
    Thanks
    11,060
    Thanked: 41,641
    Blog Entries
    2
    Rep Power
    21474896
    Quote Originally Posted by Beachcomber View Post
    As an old guy with an undergraduate major in politico/economic theory
    this brought back memories of one of the hot topics at the time.

    For further information some may want to read this book:

    EDIT:

    Shared this with my wealth manager son and a couple others in class with me
    at the time.


    https://www.seeitmarket.com/fed-up-book-review-taking-look-behind-curtain-16574/





    Interesting review; and I can spot nothing wrong with the summaries and theses set out.

    I doubt I'll wade into it, though - some things I just cannot change; and this demented new financial set of policies, is one of those things. We need to return to a Gold Standard - re-ratification of the Bretton Woods arrangement would be a good start.

    But it will be painful. And we have the new breed of socialist idiots who think we can just print up money. We will have to have collapse before we can get to reform - if then.

  13. The Following User Says Thank You to JustPassinThru For This Useful Post:

    Beachcomber (07-17-2019)

  14. #9
    Alumni Member & VIP V.I.P Achievements:
    50000 Experience PointsSocialVeteranTagger Second Class
    Overall activity: 72.0%

    Rickity Plumber's Avatar
    Join Date
    Nov 2014
    Posts
    23,885
    Thanks
    16,961
    Thanked: 21,862
    Rep Power
    21474864
    Quote Originally Posted by jirqoadai View Post
    JPT. youve blocked your pm box. railroad for sale at under 11 bucks per foot in cent pa.
    pays 3 bucks twice a year since 1893. always will.
    Funny . . . @JustPassinThru accepts my PM's all the time.


    I wonder what the deal is?



  15. #10
    V.I.P. Forum Donor
    V.I.P
    Achievements:
    50000 Experience Points1 year registered
    Overall activity: 11.0%

    Beachcomber's Avatar
    Join Date
    Dec 2016
    Location
    A private area on a beach in southeast Florida
    Posts
    2,635
    Thanks
    3,162
    Thanked: 4,026
    Rep Power
    11148383
    Quote Originally Posted by JustPassinThru View Post
    Interesting review; and I can spot nothing wrong with the summaries and theses set out.

    I doubt I'll wade into it, though - some things I just cannot change; and this demented new financial set of policies, is one of those things. We need to return to a Gold Standard - re-ratification of the Bretton Woods arrangement would be a good start.

    But it will be painful. And we have the new breed of socialist idiots who think we can just print up money. We will have to have collapse before we can get to reform - if then.
    Always good to have more info and ammunition in your educated and intellectual stockpile.

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •