Jump to content
House Price Crash Forum
Realistbear

German Finance Minister Warns Of Debt Addictions

Recommended Posts

http://uk.finance.yahoo.com/news/german-finance-minister-warns-of-debt-addictions-afp-bf670f7a231e.html?x=0

German finance minister warns of debt addictions
8:34, Thursday 24 June 2010
German Finance Minister Wolfgang Schaeuble warned eurozone peers and the United States on Thursday not to get hooked on borrowing, as a war of words brewed ahead of a G20 summit in Toronto.
"Governments should not become addicted to borrowing as a quick fix to stimulate demand," Schaeuble wrote in an op-ed piece printed in the Financial Times and Handelsblatt newspapers.
"Deficit spending cannot become a permanent state of affairs," he stressed.

I remember Merv saying a few years back that house prices are a matter of opinion whereas debt is real. Apply that to the entire Ponzi we have in the west and it makes reality grim.

Share this post


Link to post
Share on other sites

Realistbear

Can you kindly explain to me what is your game plan, for the comming crash?

Mine is to hold cash and wait for massive deflation.

But I have had so sleepless nights.

Share this post


Link to post
Share on other sites

Realistbear

Can you kindly explain to me what is your game plan, for the comming crash?

Mine is to hold cash and wait for massive deflation.

But I have had so sleepless nights.

That sums up what I have done. Just a few stocks (in Oakmark Income Equity Fund) and about 10% in bonds (PIMCO Total Return) and the rest in cash (Mostly $).

I am a little skittish on currency fluctuations and can see how much manipulation is involved which makes calls these days very difficult. Sterling is up about 3 cents from a longer trend based on the Budget which, to me, has done very little to address the underlying problems of debt and HPI (which I see as the prime source of the credit collapse).

When the market s eventually get called on their irrational exuberance and Ponzi-like behaviour deflation will be the order of the day. But how long it will last is another question altogether.

Looking to buy a house next year now as they seem to have held the correction back for another 12 months with ultra low IR, banks stalling repos and a lot of propaganda that has worked on the minds of the public very effectively!

Share this post


Link to post
Share on other sites

That sums up what I have done. Just a few stocks (in Oakmark Income Equity Fund) and about 10% in bonds (PIMCO Total Return) and the rest in cash (Mostly $).

I am a little skittish on currency fluctuations and can see how much manipulation is involved which makes calls these days very difficult. Sterling is up about 3 cents from a longer trend based on the Budget which, to me, has done very little to address the underlying problems of debt and HPI (which I see as the prime source of the credit collapse).

When the market s eventually get called on their irrational exuberance and Ponzi-like behaviour deflation will be the order of the day. But how long it will last is another question altogether.

Looking to buy a house next year now as they seem to have held the correction back for another 12 months with ultra low IR, banks stalling repos and a lot of propaganda that has worked on the minds of the public very effectively!

Why dont you buy yourself HKD. Pegged to the dollar but likely to rise with a yuan revaluation?

Share this post


Link to post
Share on other sites

The debt is real - but is not going to be paid back.

How does this fit with your predictions?

My prediction is basically that the HPC is coming. It has been delayed another year, but its coming. Another 40-50% off peak IMO.

The debt is paid back regardless--the market always wins. We will be penalised through IR hikes, lower bond values and possible write-downs. A higher level of poverty as we begin to work for our wealth instead of borrow for it.

Austerity + deflation.

As for gold--anyone's guess. It hasn't risen to the moon like many expected and the ETFs may be its undoing in the end. I wouldn't put any money in gold at these levels.

David has his majority--albeit an unforseen combination to get there. ;) That was a no-brainer anyway as Broon was gone before he lost the vote.

Share this post


Link to post
Share on other sites

Why dont you buy yourself HKD. Pegged to the dollar but likely to rise with a yuan revaluation?

I do not like playing with currency--I just happen to have $ because I lived in the US for a number of years.

About 2-3 years ago I was plugging the Norwegian Kr and wish I had put 10% or so there.

Asia? Might implode if China overheats and a panic starts.

Best to stick with $ for the short-medium term as there is a lot more bad news to come out of Europe before the day is done and we get back to more or less normal. The ETF timebomb is probably next.

Share this post


Link to post
Share on other sites

My prediction is basically that the HPC is coming. It has been delayed another year, but its coming. Another 40-50% off peak IMO.

The debt is paid back regardless--the market always wins. We will be penalised through IR hikes, lower bond values and possible write-downs. A higher level of poverty as we begin to work for our wealth instead of borrow for it.

Austerity + deflation.

As for gold--anyone's guess. It hasn't risen to the moon like many expected and the ETFs may be its undoing in the end. I wouldn't put any money in gold at these levels.

David has his majority--albeit an unforseen combination to get there. ;) That was a no-brainer anyway as Broon was gone before he lost the vote.

Debt and default thereof very nearly killed the market once before - and that was when the money flowing !

Edited by Alan B'Stard MP

Share this post


Link to post
Share on other sites
"Deficit spending cannot become a permanent state of affairs," he stressed.

true, but then neither can running structural trade surpluses when everyone else is doing austerity.

double, triple talk from germany at the moment. I ,look forwards to seeing either their economy or their holier-than-thou rhetoric implode when they realise they can no longer rely on us lot to buy up all their output.

Share this post


Link to post
Share on other sites

The debt is real - but is not going to be paid back.

How does this fit with your predictions?

Money is credit.

Debt creates money.

With no money loaned out Deflation results.

The Debt stays the same but the value of the comodity drops.

We have reach the top of a Debt bubble it was so big it filled the share market, the propery market and the commodities market as well.

Who is left to borrow too? Other than beggars and crooks.

Only when people start to borrow again will the imperfect system of money that we use work again.

Share this post


Link to post
Share on other sites

Looking to buy a house next year now as they seem to have held the correction back for another 12 months with ultra low IR, banks stalling repos and a lot of propaganda that has worked on the minds of the public very effectively!

:ph34r::ph34r::ph34r:

RB about to throw in the towel? We've seen it all now...

Share this post


Link to post
Share on other sites

Debt and default thereof very nearly killed the market once before - and that was when the money flowing !

And what did they do when it stalled?

oh ye..print...as everyone has every time they have had the chance to, every single time in human history.

But ofc, "this time it's different."

:lol:

Share this post


Link to post
Share on other sites

And what did they do when it stalled?

oh ye..print...as everyone has every time they have had the chance to, every single time in human history.

But ofc, "this time it's different."

:lol:

Did the Tories print in the 80s recession and the early 90s recession?

Serious question. I don't remember them doing so, only remember them allowing the pound to devalue.

Share this post


Link to post
Share on other sites

Did the Tories print in the 80s recession and the early 90s recession?

Serious question. I don't remember them doing so, only remember them allowing the pound to devalue.

They always print.

Share this post


Link to post
Share on other sites
Guest sillybear2

That's all very nice, but the only reason Germany continues to enjoy huge trade surpluses (often in excess of China) is due to the profligacy of other countries, if the anglo-saxon economies lived within their means, and stopped buying German cars they're not really entitled to, then their economy would be f***d too. Our own scrappage scheme paid for with borrowing was essentially an industrial subsidy for their factories.

Edited by sillybear2

Share this post


Link to post
Share on other sites

That's all very nice, but the only reason Germany continues to enjoy huge trade surpluses (often in excess of China) is due to the profligacy of other countries, if the anglo-saxon economies lived within their means, and stopped buying German cars they're not really entitled to, then their economy would be f***d too. Our own scrappage scheme paid for with borrowing was essentially an industrial subsidy for their factories.

*sigh* sorry but this post is idiotic and reflects what seems to be the all too pervasive projection of morals into economics.

I really would suggest reading some economic papers/texts on the effects of currency pegs and in particular how this relates to the euro and its undervaluation with respect to germany. Also look up 'dutch disease' as this historically pertains to the uk. And another one to help your understanding is how to cure a trade deficit (i.e. delibrately bringing on a recession which no government would ever do).

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 144 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.