Moneyweek: The End of Britain

Post by **clv101** » 17 Sep 2013, 18:10

fifthcolumn wrote:So looks like Graduates are basicaly fecked (if it's a single income).

Here's an article on the 'plight' of Generation Y:
http://www.huffingtonpost.com/wait-but- ... 30620.html

fifthcolumn · Post by **fifthcolumn** » 17 Sep 2013, 19:02

Ha! That was a pretty good article. Being a sarcastic Brit (even though I live in "I'm special land") I wasn't expecting to see such a piece of sarcasm and mockery turn right round and say "things will be alright, keep on dreaming". I expected it to say "STFU, you're not special, suck it up."

Little John · Post by **Little John** » 18 Sep 2013, 01:14

UndercoverElephant wrote:They are predicting a massive property crash, and I'm not sure they are right.

Their analysis of the situation is spot on, apart from one thing. What is happening right now has never happened before on the global scale it is happening now, and that means the outcome is going to be different to all the times something like this happened on a national or regional scale. In other words, it is effectively the whole world that is in trouble, because everywhere is using the same fiat currency system - even the countries that aren't broke (e.g. China). In previous instances when a country or region suffered financial collapse, that collapse was measured relative to the non-collapse of the rest of the world. But what if it is the whole world that is going down together? This has not happened.

My guess is that we are going to see money-printing on a scale unprecedented even now. Every country with fiat money will keep printing, resulting in a runaway house price boom - we are just as likely to see hyperinflation in house prices as we are to see a house price crash.

I don't think anybody can predict how this ends, apart from that it is going to be very messy. There is simply NO way for anybody to protect themselves. Doesn't matter if your wealth is in bonds, stocks/shares, cash, property or gold. Any of them could go tits up, one way or another.

It's at a time like this that I am inclined to look at what is real and matters and discount what is not real because, sooner or later, it won't matter.

So bearing in mind the above and accepting your argument that everyone is in the same leaky FIAT boat, if I think out loud about this, each of the players will be tempted into printing. Not just because they have debt to inflate away, but because if even the creditor nations do not print sufficient to debase their currencies in line with others' printing, their currency will become too expensive and their exports will collapse. so they have to join the printing party as well. Eventually the whole world's currencies are debased, in which case, the relative levels of debt to credit will not have improved for any of the debtor nations because everyone has debased on lock-step with one another.

So, back to square one of some people owing shit to other people that they cannot pay.

What happens then?

It seems to me that when all the bullshit is peeled away, there are some people on one side of the planet (Chindia et al) who have been making stuff and selling it to people on the other side of the planet (Western Europe and the USA), but who have been paid for that stuff with FIAT promises to pay that are not worth the paper they are written on or the digital storage space they occupy.

In the end, it comes down to stuff. Money is just a proxy (or is supposed to be) for stuff. We in the West, on the back of debt fuelled growth, have got our hands on loads of stuff that we have nothing to exchange for except worthless promises. Offering even more worthless promises on top of the already worthless ones we have given them are unlikely to impress the people who supplied us that stuff. So what happens then?

War, I guess.

Or possibly that's all bollocks.

In fact, I'd be bloody amazed if it isn't all bollocks. I haven't thought about this enough

chip in anyone....

the_lyniezian · Post by **the_lyniezian** » 18 Sep 2013, 09:32

fifthcolumn wrote:lynezian,

I didn't even comment on this thread...

UndercoverElephant · Post by **UndercoverElephant** » 18 Sep 2013, 11:29

stevecook172001 wrote:
UndercoverElephant wrote:They are predicting a massive property crash, and I'm not sure they are right.

Their analysis of the situation is spot on, apart from one thing. What is happening right now has never happened before on the global scale it is happening now, and that means the outcome is going to be different to all the times something like this happened on a national or regional scale. In other words, it is effectively the whole world that is in trouble, because everywhere is using the same fiat currency system - even the countries that aren't broke (e.g. China). In previous instances when a country or region suffered financial collapse, that collapse was measured relative to the non-collapse of the rest of the world. But what if it is the whole world that is going down together? This has not happened.

My guess is that we are going to see money-printing on a scale unprecedented even now. Every country with fiat money will keep printing, resulting in a runaway house price boom - we are just as likely to see hyperinflation in house prices as we are to see a house price crash.

I don't think anybody can predict how this ends, apart from that it is going to be very messy. There is simply NO way for anybody to protect themselves. Doesn't matter if your wealth is in bonds, stocks/shares, cash, property or gold. Any of them could go tits up, one way or another.
It's at a time like this that I am inclined to look at what is real and matters and discount what is not real because, sooner or later, it won't matter.

So bearing in mind the above and accepting your argument that everyone is in the same leaky FIAT boat, if I think out loud about this, each of the players will be tempted into printing. Not just because they have debt to inflate away, but because if even the creditor nations do not print sufficient to debase their currencies in line with others' printing, their currency will become too expensive and their exports will collapse. so they have to join the printing party as well. Eventually the whole world's currencies are debased, in which case, the relative levels of debt to credit will not have improved for any of the debtor nations because everyone has debased on lock-step with one another.

So, back to square one of some people owing shit to other people that they cannot pay.

What happens then?

It seems to me that when all the bullshit is peeled away, there are some people on one side of the planet (Chindia et al) who have been making stuff and selling it to people on the other side of the planet (Western Europe and the USA), but who have been paid for that stuff with FIAT promises to pay that are not worth the paper they are written on or the digital storage space they occupy.

So what happens then? War, I guess.

Maybe.

If I had to bet then I believe what will happen is that China will suddenly announce that it is backing its currency with gold. It will do the reverse of what Nixon did in 1970, and the renminbi will become the de-facto global reserve currency. There will then be a seismic shift in economic power from the US to China, as everybody starts offloading dollars and dollar-denominated assets and replacing them with gold-back Chinese renminbi-denominated assets. The US will try everything in its power to stop this, but ultimately there will be nothing it can do. It will not be in a position to back the US dollar with gold, it can't gain anything by threatening China with military force or economic sanctions and it can't stop other nations from dumping dollars and buying Chinese currency and assets.

At this point everyone will expect there to be a war (in the middle east because the US can't go after China), but the US will have a major problem fighting a big war because it will be in a position where it is having trouble sourcing/affording enough of the right sort of oil to fight that war.

After that I have no idea...

UndercoverElephant · Post by **UndercoverElephant** » 18 Sep 2013, 18:48

http://theeconomiccollapseblog.com/arch ... e-currency

Little John · Post by **Little John** » 18 Sep 2013, 19:24

Tarrel · Post by **Tarrel** » 18 Sep 2013, 21:28

Federal Reserve announced today that they are maintaining the QE programme, in spite of expectations to the contrary.

Looks like the money-printing continues..

http://www.bbc.co.uk/news/business-24152993

Little John · Post by **Little John** » 18 Sep 2013, 21:53

Tarrel wrote:Federal Reserve announced today that they are maintaining the QE programme, in spite of expectations to the contrary.

Looks like the money-printing continues..

http://www.bbc.co.uk/news/business-24152993

That's because the publicly stated expectations to the contrary are bollocks

acman · Post by **acman** » 18 Sep 2013, 22:28

Where this leads is anyones guess, as posted on here, we, as in globally, have never been here before, where the major, mainly western, nations are, i.e massive money printing, seem pretty obvious now it's not having the desired effect, bearing in mind how long, and the amounts printed up, still the general public have no idea what is happening. Even people who I meet in the course of my job who are quite intelligent, just don't seem to understand, even when it's pointed out. Maybe some do I suppose, just don't want to think about it.
Maybe we are watching the end of the USD as the worlds reserve currency, fascinating times, certainly historical.

UndercoverElephant · Post by **UndercoverElephant** » 19 Sep 2013, 21:01

It seems obvious to me that the only way the current global economic/monetary scenario can end is with a massive shift of power away from the US and towards China. What this means for the UK I do not know, but I doubt it is anything good.

Little John · Post by **Little John** » 19 Sep 2013, 21:09

UndercoverElephant wrote:It seems obvious to me that the only way the current global economic/monetary scenario can end is with a massive shift of power away from the US and towards China. What this means for the UK I do not know, but I doubt it is anything good.

The USA goes down all guns blazing and the world lets off the biggest firework display in human history? I can't see it ending up any other way than via some major global conflict.

Tarrel · Post by **Tarrel** » 19 Sep 2013, 21:26

Jim Puplava, over at The Financial Sense Newshour, has a different perspective:

http://www.financialsense.com/financial ... al-economy

In Jim’s first Big Picture topic, “Land of the Giants”, he discusses how the globalization of capitalism in recent years has unleashed a process of intense industrial concentration. Jim explains how the concentration is growing and roughly 1400 global corporations are now acting like independent fiefdoms, exerting tremendous influence on global economies. Despite the rise of Asia, the vast majority of these firms are based in western countries.

In the podcast, he likens the World's largest corporations to some of the autonomous city-states and highly influential families that were around at the time of the Renaissance; separate from, and even more powerful than, nation-states. The figures he quotes on wealth and market-share concentration are staggering.

Listen out for the clip of the grilling of Apple's CEO by the Senate Committee about how much cash they keep offshore!

Reliability warning: He's looking at this from a US standpoint, satisfied by the fact that many of the global mega-corporations are US-based. Although he doesn't state it explicitly, I think he is implying that this will protect the US from shifts in the World's economic centre of gravity.

Snail · Post by **Snail** » 19 Sep 2013, 21:49

That sounds wishful thinking. Companies are increasingly viewing themselves from a global perspective.

---
I've recently finished Kim Stanley Robinson's Mars Trilogy; in it, companies evolve from multnationals to transnationals to 'metanationals' (corps which are so powerful they strongly influence or even own parts of national governments). For eg, a Government will 'invite' a metanational in to run part (and then all) of the country. The metanationals increasingly become similar to nation-states themselves.

emordnilap · Post by **emordnilap** » 25 Sep 2013, 09:46

Snail wrote:For eg, a Government will 'invite' a metanational in to run part (and then all) of the country. The metanationals increasingly become similar to nation-states themselves.

I've always liked true stories.