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Switch to Forum Live View Economic doom and gloom?
2 years ago  ::  Jun 09, 2012 - 11:05AM #1
christzen
Posts: 6,569
Buffet says the chance of a recession is low. Roubini,who predicted the 2008 crash, says one is inevitable and in fact already happening. An article I read this morning says that the stagflation of the 70's is back, without the options of fixing it that were available then ( lowering interest rates,since we are at near rock bottom now), and will be here for a long time. One guy  I read but can't remember his name predicts total economic collapse starting this year, 50% unemployment,90% drop in the stock market. Europe is in trouble. So is China.

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2 years ago  ::  Jun 09, 2012 - 11:16AM #2
TENAC
Posts: 26,593

Jun 9, 2012 -- 11:05AM, christzen wrote:

Buffet says the chance of a recession is low. Roubini,who predicted the 2008 crash, says one is inevitable and in fact already happening. An article I read this morning says that the stagflation of the 70's is back, without the options of fixing it that were available then ( lowering interest rates,since we are at near rock bottom now), and will be here for a long time. One guy  I read but can't remember his name predicts total economic collapse starting this year, 50% unemployment,90% drop in the stock market. Europe is in trouble. So is China.

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Buffet hasnt seen a recession in years.  Along with Gates, and other ubers.  Hat tip to those guys.


Peter Schiff was on UP (Chris Hayes, msnbc) this morning.  It was remarkable listening to the stark differences of economic positions.  Kudos to Hayes who brought Schiff on the show, but will likely never do it again.


Schiff pretty well agrees with Roubini overall.  The stagflation you mention is certainly occuring.  Schiff's position is that inflation is here (and it is) but the lure of non existence interest rates is the only thing keeping anything afloat and that will end.


Those opposed to Schiff on the show looked and sounded like rank amatuers in discussion.  Academics who had not ever had to deal with real world economics.

Any man can count the seeds in an apple....
.......but only God can count the apples in the seeds.
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2 years ago  ::  Jun 09, 2012 - 11:23AM #3
christzen
Posts: 6,569

Jun 9, 2012 -- 11:16AM, TENAC wrote:


Buffet hasnt seen a recession in years.  Along with Gates, and other ubers.  Hat tip to those guys.




 


True. But he was referring to the economy as a whole and not his personal finances.

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2 years ago  ::  Jun 09, 2012 - 11:27AM #4
TENAC
Posts: 26,593

Jun 9, 2012 -- 11:23AM, christzen wrote:


Jun 9, 2012 -- 11:16AM, TENAC wrote:


Buffet hasnt seen a recession in years.  Along with Gates, and other ubers.  Hat tip to those guys.




 


True. But he was referring to the economy as a whole and not his personal finances.




You dont see a recession unless you live it.  I repeat, Buffet, et al have not seen a recession in decades.......

Any man can count the seeds in an apple....
.......but only God can count the apples in the seeds.
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2 years ago  ::  Jun 09, 2012 - 11:31AM #5
christzen
Posts: 6,569

So, how bad and how long? And is the guy predicting total collapse a nutter? One phrase I remember from his piece was "the cure will become the poison", suggesting that the QE's will come back around and kill us .

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2 years ago  ::  Jun 09, 2012 - 11:46AM #6
TENAC
Posts: 26,593

In any economic system, monetizing the debt is the end all.


We have been doing that routinely and accelerated it under obama to unsustainable.



From Schiff:


"If debt moves to $20 trillion in a couple of years (and is due to)  and interest rates move to 10%, it will mean $2 trillion in interest payments.  Thats more than total tax collections this year."



This is a problem.



www.msnbc.msn.com/id/46979738/vp/4774733...


Any man can count the seeds in an apple....
.......but only God can count the apples in the seeds.
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2 years ago  ::  Jun 09, 2012 - 10:20PM #7
Bodean
Posts: 9,593

To me, the Canary in the Mine, is a change in pattern.


Normally, when the stock market goes up, gold goes down.  When the stock market goes down, gold goes up.


This recent run has seen both the Stock Market and Gold both go up.


IMO, this is because the stock market gains are on the back of debt and are not real.  There is no real wealth being created out of it, thus Gold continues to rise.  The market ALWAYS wrings itself of false wealth.


That's a pretty good indicator that this house of cards is just that .. a house of cards .. and they always come crashing down.


The Scary Part about it, recent bubbles were due to expansion ... expansion in the tech market, expansion in the housing market.  They both popped.  The problem I see, is that this bubble is being driven by the Federal Reserve, and debt.  While the housing market came in to save the day for Tech Bubble bursting ... there is nothing that can save the day on a "debt bubble".


Our nation is too deep in debt.  Individually, we are too deep in debt.  As a Nation, we are too deep in debt.

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2 years ago  ::  Jun 09, 2012 - 10:37PM #8
Hatman
Posts: 9,634
The end-game of the debt-note confidence game always goes badly...for everyone except those who get the nod to get out at the opportune time, as well as those few who trade the soon-to-be-useless mounds of notes for tangible, durable goods of intrinsic value in advance of the scientifically-created depression/recession.

Hell, even Keynes himself admits the point, and he dreamt up the game---or lent a veneer of respectability to it in the employ of his masters:

"If, however, a government refrains from regulations(including taxation, my note) and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich, the worthlessness of the money becomes apparent, and the fraud upon the public can be concealed no longer."
-- John Maynard Keynes(1883-1946) British economist
Source: The Economic Consequences of the Peace, 1920, page 240

With goodwill to all the People-

Hatman
"History records that the moneychangers have used every form of abuse, deceit, intrigue, and violent means possible to maintain their control over governments by controlling money and it's issuance."
-- James Madison(1751-1836), Father of the Constitution for the USA, 4th US President
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2 years ago  ::  Jun 10, 2012 - 3:46AM #9
paeng
Posts: 557

As I pointed out before, we are looking at the effects of three predicaments: a debt-ridden global capitalist economy, the threat of a resource crunch, and the long-term effects of pollution, including climate change. These predicaments feed on each other.


Debt is part of a global capitalist economy because the latter requires increasing production and consumption of goods in order to maintain continuous economic growth, and thus requires and leads to ever-increasing credit. As more move to the service sector to make more money from financing, even more credit is created.


Because resources are limited (as Schiff points out elsewhere), then continuous economic growth is not possible. Even with technological advancements, whatever resources are saved has to be consumed elsewhere due to competition. But because more human beings worldwide want a middle class lifestyle, then increasing demand will take place, and a resource crunch is inevitable.


The effect of production and consumption is pollution, and this has added to resource damage (such as polluted water). With CO2 concentrations now at around 400 ppm, the NAS and other top science groups believe that this will have a forcing effect on the climate, contributing to problems such as major storms, floods, droughts, and heat waves, all of which will disrupt events ranging from mining operations to food harvests.


With that, we should expect at best a "lost decade" of high food and oil prices coupled with unemployment worldwide, but with these two other predicaments, likely a permanent global recession.


For resources, demand from most of the world will increase significantly, but conventional oil production will hardly increase, necessitating the use of non-conventional sources (some of which will increase food prices more, create more pollution, or require more resources such as fresh water; in all cases, they will be more expensive than crude oil in terms of energy needs) to keep up with increasing global demand. And when conventional oil production starts dropping....


Finally, we should expect more abnormal weather, which in turn will contribute to higher prices for various goods, including food.


With that, secondary issues will come into play, ranging from increasing prevalence of wars over resources to internal conflict such as food riots and protests over austerity measures.



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2 years ago  ::  Jun 10, 2012 - 8:01AM #10
arielg
Posts: 9,116

 Every problem is an opportunity.  We can look at the situation from the point of view of process, rather than  fixed outcomes.  There is no ideal achievable state. 


All the disasters that are bound to happen, are the result of the  universally accepted notion or "permanent growth and expansion", the unquestioned principle that drives modern economies all over the world.  Modern man cannot  conceive of a life  not driven  by this view. The  alternative is seen  as "stagnation".  


 But maybe this so-called stagnation is not such a bad state. It would  put a stop to our present drive to disaster.  It would allow human to learn to enjoy the present rather than live for the promise of a better future. It would curtail  the population explosion. It would allow the planet to renew itself. Humanity may be due for a recession of it's ways.


 

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