Crisis may make 1929 look like "a walk in the park"

Kieran · Post by **Kieran** » 24 Dec 2007, 13:33

http://www.telegraph.co.uk/money/main.j ... tviewedbox
Crisis may make 1929 look a 'walk in the park' - Telegraph

Cheery reading for a Christmas Eve!

PaulS · Post by **PaulS** » 24 Dec 2007, 15:06

Staggering stuff. Not just because of what is says, but also of who says it.

Good responses as well. Obviously, the public finds a monetary collapse deal more acceptable than Peak Oil!

bobthebaker · Post by **bobthebaker** » 24 Dec 2007, 17:18

I've said this in another thread that there will be 4 crises :-

1) Financial
2) Food
3) Oil
4) Climate

Expect "interesting" times on a more or less permanent basis from now on!

syberberg · Post by **syberberg** » 24 Dec 2007, 17:41

PaulS wrote:Staggering stuff. Not just because of what is says, but also of who says it.

Good responses as well. Obviously, the public finds a monetary collapse deal more acceptable than Peak Oil!

I'd say "easier to understand" than "acceptable", but I know what you mean. My guess is that, because of the cycles of boom and bust we've already had, it's something that we're well aware of. Whereas, we've had an increasing supply of oil/gas since the end of WWII, with only a minor disruption caused by politics in 1970/71. We've never encountered a direct, physical, limit to growth until now. Our entire system has never seen this before as so doesn't know how to react. If that makes any sense.

Totally_Baffled · Post by **Totally_Baffled** » 24 Dec 2007, 17:43

anyone notice the pound?

Down to $1.97 and at lowest ever against Euro.

The market must be pricing in future interest rate cuts?

Kieran · Post by **Kieran** » 24 Dec 2007, 18:22

syberberg wrote:
PaulS wrote:Staggering stuff. Not just because of what is says, but also of who says it.

Good responses as well. Obviously, the public finds a monetary collapse deal more acceptable than Peak Oil!
I'd say "easier to understand" than "acceptable", but I know what you mean. My guess is that, because of the cycles of boom and bust we've already had, it's something that we're well aware of. Whereas, we've had an increasing supply of oil/gas since the end of WWII, with only a minor disruption caused by politics in 1970/71. We've never encountered a direct, physical, limit to growth until now. Our entire system has never seen this before as so doesn't know how to react. If that makes any sense.

Makes a lot of sense Syberberg. People often can't even see something that doesn't fit into the world view that they've built up. I tend to think that PO will scarcely be mentioned during the crash (as a number of other posters have pointed out).

With you 100% there bobthebaker. My gut feeling is that 2008 is the year when a lot of TSHTF.

oilslick · Post by **oilslick** » 24 Dec 2007, 19:20

Totally_Baffled wrote:anyone notice the pound?

Down to $1.97 and at lowest ever against Euro.

The market must be pricing in future interest rate cuts?

More than that, I think people are taking money out of the country - at least anyone with half a brain would be.

Just think of those Russian billionaires trying to sell mayfair property before it's too late. Then think of all the other asset classes they might be ditching.

Maybe I see it too black and white but I can't see why anyone would keep money here unless they had to.

phobos · Post by **phobos** » 24 Dec 2007, 21:42

bobthebaker wrote: 1) Financial
2) Food
3) Oil
4) Climate
!

oh FOC

snow hope · Post by **snow hope** » 25 Dec 2007, 00:20

bobthebaker wrote:I've said this in another thread that there will be 4 crises :-

1) Financial
2) Food
3) Oil
4) Climate

Expect "interesting" times on a more or less permanent basis from now on!

I would generally agree with the above.

The Financial crises has started :-
US Sub-prime
Northern Rock
Consumer (credit card) debt
Holiday Firm collapse. http://news.bbc.co.uk/1/hi/england/glou ... 157085.stm
Maxjet Airlines go Bankrupt, http://news.bbc.co.uk/1/hi/business/7159286.stm
many more companies will go bankrupt in 2008 Q1 - just watch and see.

Then the food problems will arise as prices go up and up and the rising unemployed find it harder to not go hungry........

2008 is the year the world will start to see what is really ahead.

Andy Hunt · Post by **Andy Hunt** » 25 Dec 2007, 00:58

The article says the banks have got a couple of months max to get it right.

So we are looking at March-time as crash time.

Kind of handy to know we have 2 months.

snow hope · Post by **snow hope** » 25 Dec 2007, 23:32

That Telegraph article sure pulled no punches!

I would like to hear people's views on the following scenario :-

1. US/UK/Western Govts. decide to drop interest rates dramatically (say to approx 2%) over the next few months to stave off a big global downturn/recession.
2. Inflation jumps dramatically to approx. 10% or more - for all the reasons we already know.
3. Legislation is put in place (as has already been done/planned in the US) to prevent millions losing their houses as a property crash takes place and personal debt spills out of control for millions.
4. Economies bobble along not too badly, energy plateaus due to weaker economy and some forced conservation due to lack of money in people's pockets.

The result being that we avoid a financial calamity as increasingly being postulated.

Do folks think this is possible?

MacG · Post by **MacG** » 26 Dec 2007, 00:31

snow hope wrote:Do folks think this is possible?

Yeps. Add a bit about "unemployment benefits" also, and the stew is ready to serve.

Believe all of it will be the-name-of-the-game for the year to come.

PaulS · Post by **PaulS** » 26 Dec 2007, 09:46

I don't think so.
There are some 500 TRILLION dollars worth of various derivatives in the world financial market, which is about 10 years worth of WORLD GDP. Much of that is likely to prove worthless and that's whats going to crash the financial systems.
Governments simply do not have enough money to make a dent in this massive black hole. And if they start printing money on a trillion scale, we will end up with hyperinflation (which might actually help governments as it would devalue their commitments - be they bonds, government salaries, pensions, NHS, education, unemployment benefits etc.)

That might well be were we end up - all sums reduced to near zero and starting again, this time at a much lower level of support and general expenditure.

biffvernon · Post by **biffvernon** » 26 Dec 2007, 09:59

snow hope wrote:3. Legislation is put in place (as has already been done/planned in the US) to prevent millions losing their houses as a property crash takes place and personal debt spills out of control for millions.

I don't see that you can actually have 'millions losing their houses'. They are large things and quite easy to find. There is a very limited number of park benches and even fewer people willing to sleep on them when houses are empty. Landlords will accept any rent rather than no rent. Following financial turmoil there will still be the same number of houses and the same number of people with most of the people in most of the houses, empty properties and rough sleepers being only a marginal phenomenon.

Andy Hunt · Post by **Andy Hunt** » 26 Dec 2007, 15:11

Bobthebaker's second crisis is the food crisis. Now THAT could be the real problem.

You can't print more food unfortunately.