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Grim Reality Check From Prophetic Black Swan Author

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http://finance.yahoo.com/news/Debt-Spreading-Like-a-Cancer-cnbc-3976061884.html;_ylt=AljHqE2T_aM6504IxC2qAXS7YWsA;_ylu=X3oDMTE1ZXYzNHF2BHBvcwM5BHNlYwN0b3BTdG9yaWVzBHNsawNkZWJ0c3ByZWFkaW4-?x=0&sec=topStories&pos=6&asset=&ccode=

Debt Spreading 'Like a Cancer': Black Swan Author
On Thursday June 10, 2010, 11:32 am EDT
The economic situation today is drastically worse than a couple years ago, and the euro is doomed as a concept, Nassim Taleb, professor and author of the bestselling book "The Black Swan," told CNBC on Thursday.
"We had less debt cumulatively (two years ago), and more people employed. Today, we have more risk in the system, and a smaller tax base," Taleb said.
"Banks balance sheets are just as bad as they were" two years ago when the crisis began and "the quality of the risks hasn't improved," he added.
The root of the crisis over the past couple of years wasn't recession, but debt, which has spread "like a cancer," according to Taleb, who is now relived that public attention has shifted to debt, instead of growth.
The world needs to prepare itself for austerity, he warned. "We need to slash debt. Unfortunately, that's the only solution," Taleb said.

What would austerity look like? Would it increase prices or do the opposite? The global bubble behind the troubles was based on HPINFLATION. The antidote must be DEFLATION. Sucking debt and spending out of the system will deflate the bubbles and bring the economy back into alignment where spending is related to production in a sustainable way. No pain, no gain. The medicine is deflation.

There is nothing to fear from deflation if you have little or no debt and have not invested in things that will drop dramatically in price when the austerity measures hit. . Embrace it.

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He's wrong. There is more than one way to achieve balance. Clearly austerity is a solution that is in the hands of the debtor but will cause pain to both the debtor and creditor.

The alternative is for those who have accumulated the other side of the debt (money), could trade honestly with those who are in debt. Rather than just lending it back again making things worse.

No, he's not wrong. There is no easy way to resolve the amount iof debt accumulated by so many western govt.s. Most govt leaders would privately agree with this professor, but cannot be seen doing so. Exactly how the correction will play itself out in defferent countries is the only question. But you can be sure that there is a correction coming and on the way and even in progress.

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What would austerity look like? Would it increase prices or do the opposite? The global bubble behind the troubles was based on HPINFLATION. The antidote must be DEFLATION. Sucking debt and spending out of the system will deflate the bubbles and bring the economy back into alignment where spending is related to production in a sustainable way. No pain, no gain. The medicine is deflation.

product_deflatine.jpg

Edited by Dave Spart

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He's wrong. There is more than one way to achieve balance. Clearly austerity is a solution that is in the hands of the debtor but will cause pain to both the debtor and creditor.

The alternative is for those who have accumulated the other side of the debt (money), could trade honestly with those who are in debt. Rather than just lending it back again making things worse.

There is nothing stopping the rich spending their money, but if they don't, they will feel the pain too. You can lead a horse to water, but you can't make it drink.

The problem is, our entire financial system is geared towards rewarding those with capital, with risk free gains. Is it any wonder that the rich are now hoarding all the wealth?

The government should stop borrowing any more from these parasites for starters. They may only get a small return on gilts now, but it is essentially risk free, at the cost to the rest of us taxpayers.

We then need a banking system which isn't a one way, government insured bet too. Again, why are people going to risk their money in this environment when they get a small, but safe, return on their savings?

The whole system is geared up to keep the rich safe and the poor working to keep things that way. It's a disgrace and needs changing.

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http://finance.yahoo.com/news/Debt-Spreading-Like-a-Cancer-cnbc-3976061884.html;_ylt=AljHqE2T_aM6504IxC2qAXS7YWsA;_ylu=X3oDMTE1ZXYzNHF2BHBvcwM5BHNlYwN0b3BTdG9yaWVzBHNsawNkZWJ0c3ByZWFkaW4-?x=0&sec=topStories&pos=6&asset=&ccode=

Debt Spreading 'Like a Cancer': Black Swan Author
On Thursday June 10, 2010, 11:32 am EDT
The economic situation today is drastically worse than a couple years ago, and the euro is doomed as a concept, Nassim Taleb, professor and author of the bestselling book "The Black Swan," told CNBC on Thursday.
"We had less debt cumulatively (two years ago), and more people employed. Today, we have more risk in the system, and a smaller tax base," Taleb said.
"Banks balance sheets are just as bad as they were" two years ago when the crisis began and "the quality of the risks hasn't improved," he added.
The root of the crisis over the past couple of years wasn't recession, but debt, which has spread "like a cancer," according to Taleb, who is now relived that public attention has shifted to debt, instead of growth.
The world needs to prepare itself for austerity, he warned. "We need to slash debt. Unfortunately, that's the only solution," Taleb said.

What would austerity look like? Would it increase prices or do the opposite? The global bubble behind the troubles was based on HPINFLATION. The antidote must be DEFLATION. Sucking debt and spending out of the system will deflate the bubbles and bring the economy back into alignment where spending is related to production in a sustainable way. No pain, no gain. The medicine is deflation.

There is nothing to fear from deflation if you have little or no debt and have not invested in things that will drop dramatically in price when the austerity measures hit. . Embrace it.

That is why it will happen. I suspect that Cameron and Osborne are heavilly into cash.

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The government should stop borrowing any more from these parasites for starters. They may only get a small return on gilts now, but it is essentially risk free, at the cost to the rest of us taxpayers.

I agree. The government should borrow its money from the fairies instead of people who actually have money to lend.

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http://finance.yahoo...6&asset=&ccode=

Debt Spreading 'Like a Cancer': Black Swan Author
On Thursday June 10, 2010, 11:32 am EDT
The economic situation today is drastically worse than a couple years ago, and the euro is doomed as a concept, Nassim Taleb, professor and author of the bestselling book "The Black Swan," told CNBC on Thursday.
"We had less debt cumulatively (two years ago), and more people employed. Today, we have more risk in the system, and a smaller tax base," Taleb said.
"Banks balance sheets are just as bad as they were" two years ago when the crisis began and "the quality of the risks hasn't improved," he added.
The root of the crisis over the past couple of years wasn't recession, but debt, which has spread "like a cancer," according to Taleb, who is now relived that public attention has shifted to debt, instead of growth.
The world needs to prepare itself for austerity, he warned. "We need to slash debt. Unfortunately, that's the only solution," Taleb said.

What would austerity look like? Would it increase prices or do the opposite? The global bubble behind the troubles was based on HPINFLATION. The antidote must be DEFLATION. Sucking debt and spending out of the system will deflate the bubbles and bring the economy back into alignment where spending is related to production in a sustainable way. No pain, no gain. The medicine is deflation.

There is nothing to fear from deflation if you have little or no debt and have not invested in things that will drop dramatically in price when the austerity measures hit. . Embrace it.

Run towards the light cool.giftongue.gif

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I agree. The government should borrow its money from the fairies instead of people who actually have money to lend.

I hear Peter Pan pisses free money out the end of his tinkle, used to take a leak on Hamish`s roof in Aberdeen after nights out with Tinkerbell I heard.

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There is nothing stopping the rich spending their money, but if they don't, they will feel the pain too. You can lead a horse to water, but you can't make it drink.

The problem is, our entire financial system is geared towards rewarding those with capital, with risk free gains. Is it any wonder that the rich are now hoarding all the wealth?

The government should stop borrowing any more from these parasites for starters. They may only get a small return on gilts now, but it is essentially risk free, at the cost to the rest of us taxpayers.

We then need a banking system which isn't a one way, government insured bet too. Again, why are people going to risk their money in this environment when they get a small, but safe, return on their savings?

The whole system is geared up to keep the rich safe and the poor working to keep things that way. It's a disgrace and needs changing.

Which investments provide risk free gains for those with capital?

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That is why it will happen. I suspect that Cameron and Osborne are heavilly into cash.

<and> I am with them, the difference is they are building for their retirement but I have passed the finishing post and spending mine. Deflation great, cash gets you great discounts on your purchases in deflationary times. ;)

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I agree. The government should borrow its money from the fairies instead of people who actually have money to lend.

They shouldn't be borrowing at all, in the long run.

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Which investments provide risk free gains for those with capital?

Gilts and in savings accounts under £50k are two obvious ones. Even when 'hunkering down', it's still easy for the rich to increase their wealth.

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Gilts and in savings accounts under £50k are two obvious ones. Even when 'hunkering down', it's still easy for the rich to increase their wealth.

I expect Gilts (both nominal bonds and linkers) and savings accounts under £50k to provide negative, after tax, real returns. I don't see them as ways to increase wealth.

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I agree. The government should borrow its money from the fairies instead of people who actually have money to lend.

I think you will find that fairies are now called "Quantitative Easings."

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The alternative is for those who have accumulated the other side of the debt (money), could trade honestly with those who are in debt. Rather than just lending it back again making things worse.

Nice summary, I've been thinking along these lines recently. The recycling of that debt via further loans and leverage just made it worse as you say. I haven't seen that debt recycling/amplifying idea come up many times.

The world doesn't need austerity, the debtors need to stop spending money they dont have and receiving it back all over again for further loans.

The subject of "trading honestly" probably needs a discussion of its own. I don't see how there will be a level playing field when one side gives it workers lots of rights and environment responsibility when the other can undercut but doing the opposite. Currency fixing by China may be seen as dishonest but I suspect that was a way to defend themselves against the US manipulating its own and others currencies, if you fix yours and you are big enough, you currency is less likely to be subject to booms/runs.

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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