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Laughing Gnome

Leaving The Eye Of The Storm?

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Towards the end of last year I had the impression that the crisis was entering it's second phase, with the focus moving from bank insolvencies to sovereign debt. I believed we were moving out of the pussy recession (apologies to all those who are out of work) and

into fresh financial mayhem.

What's happening with the Euro crisis, escalating fiscal and trade deficits and sovereign defaults. Who tamed the bond vigilantes?

Maybe it's just that the noise level has been turned down and I am not suficiently attuned to what's going on and what's important,

but I am beginning to wonder if the present "crisis" is of no greater significance than all the crisii of the past which have been subsumed in the onward march.

eg, 70's oil shock, South American debt crisis, 70's - 80's inflation, 80's recession, savings and loans collapse, 90's recession, Russian default, collapse of the Asian Tigers, Long Term Capital Management, the dotcom bubble, another South American debt crisis.

Maybe all the aferementioned are baked in and we are about to get payback of all the forementioned with compound interest, but so far the greatest global economic event since forever seems mild in comparison with the aforementioned. Maybe this is just how it goes and everything will be patched over and sail on for another forty years with nothing more than a gradual reduction in standard of living.

Where's the bloody mayhem!???

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Towards the end of last year I had the impression that the crisis was entering it's second phase, with the focus moving from bank insolvencies to sovereign debt. I believed we were moving out of the pussy recession (apologies to all those who are out of work) and

into fresh financial mayhem.

What's happening with the Euro crisis, escalating fiscal and trade deficits and sovereign defaults. Who tamed the bond vigilantes?

Maybe it's just that the noise level has been turned down and I am not suficiently attuned to what's going on and what's important,

but I am beginning to wonder if the present "crisis" is of no greater significance than all the crisii of the past which have been subsumed in the onward march.

eg, 70's oil shock, South American debt crisis, 70's - 80's inflation, 80's recession, savings and loans collapse, 90's recession, Russian default, collapse of the Asian Tigers, Long Term Capital Management, the dotcom bubble, another South American debt crisis.

Maybe all the aferementioned are baked in and we are about to get payback of all the forementioned with compound interest, but so far the greatest global economic event since forever seems mild in comparison with the aforementioned. Maybe this is just how it goes and everything will be patched over and sail on for another forty years with nothing more than a gradual reduction in standard of living.

Where's the bloody mayhem!???

The crisis will pass. But it will not be without a resolution of the sovereign debt problem. As it stands the UK, USA and others are still racking up debt at an alarming rate. The national debt is soaring despite the start of cuts. It will continue to rise and if bond rates are forced up then we cannot pay the interest let alone the principal on over ONE TRILLION POUNDS in national debt. We will be forced to inlfate ourselves out of it. The B of E are tring to have their cake and eat it. They want you to believe all inflation is imported so they are powerless and interest rate increases will not help. On the other hand they want to say the recovery is too weak to raise rates yet. On the third hand our balance of payments was the worst on record 1st Q this year, yet we are told exports are powering ahead. There will be more difficult moments to come.

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Towards the end of last year I had the impression that the crisis was entering it's second phase, with the focus moving from bank insolvencies to sovereign debt. I believed we were moving out of the pussy recession (apologies to all those who are out of work) and

into fresh financial mayhem.

What's happening with the Euro crisis, escalating fiscal and trade deficits and sovereign defaults. Who tamed the bond vigilantes?

Maybe it's just that the noise level has been turned down and I am not suficiently attuned to what's going on and what's important,

but I am beginning to wonder if the present "crisis" is of no greater significance than all the crisii of the past which have been subsumed in the onward march.

eg, 70's oil shock, South American debt crisis, 70's - 80's inflation, 80's recession, savings and loans collapse, 90's recession, Russian default, collapse of the Asian Tigers, Long Term Capital Management, the dotcom bubble, another South American debt crisis.

Maybe all the aferementioned are baked in and we are about to get payback of all the forementioned with compound interest, but so far the greatest global economic event since forever seems mild in comparison with the aforementioned. Maybe this is just how it goes and everything will be patched over and sail on for another forty years with nothing more than a gradual reduction in standard of living.

Where's the bloody mayhem!???

We had one of the biggest stock market crashes in history. GDP fell massively. The recession was one of the longest on record. Only property has strangely kept up but this will crash in real terms over the next decade.

Compared to previous recessions its been bad for the private sector. As GDP is so far down from the start of the recession then it has to keep rising goin forward based upon previous recessions.

The next crisis will be a government crises where debt isn't repaid or inflated and where governments finally tell the public that the unfunded liabilities cannot be repaid. 5-10 years away this mega crisis will occur.

Edited by ringledman

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The crisis will pass. But it will not be without a resolution of the sovereign debt problem. As it stands the UK, USA and others are still racking up debt at an alarming rate. The national debt is soaring despite the start of cuts. It will continue to rise and if bond rates are forced up then we cannot pay the interest let alone the principal on over ONE TRILLION POUNDS in national debt. We will be forced to inlfate ourselves out of it. The B of E are tring to have their cake and eat it. They want you to believe all inflation is imported so they are powerless and interest rate increases will not help. On the other hand they want to say the recovery is too weak to raise rates yet. On the third hand our balance of payments was the worst on record 1st Q this year, yet we are told exports are powering ahead. There will be more difficult moments to come.

Yes, I get the either way we're fecked angle, but consider this. Sterling has climbed and is hanging on regardless of the interest rate bottling this morning, And inflation IS largely imported, and the recent rise will temper the rise of imported oil.

What i don't get is how sterling is STILL hanging in, in spite of an increasing trade deficit. and this has been going on for DECADES!

When will something finaly happen?

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The next crisis will be a government crises where debt isn't repaid or inflated and where governments finally tell the public that the unfunded liabilities cannot be repaid. 5-10 years away this mega crisis will occur.

that'll be nice for the labour government coming into power in 2015!

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Yes, I get the either way we're fecked angle, but consider this. Sterling has climbed and is hanging on regardless of the interest rate bottling this morning, And inflation IS largely imported, and the recent rise will temper the rise of imported oil.

What i don't get is how sterling is STILL hanging in, in spite of an increasing trade deficit. and this has been going on for DECADES!

When will something finaly happen?

Compare one flawed independent variable (sterling) verses another independent flawed variable (euro, dollar, any other western currency) and it is irrelevant which is rising or falling. They are both still rubish and worthless.

Compare any of these worthless currencies verses gold or silver and it is clear that they are collapsing at a rate of 20-30% per annum.

Edited by ringledman

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We had one of the biggest stock market crashes in history. GDP fell massively. The recession was one of the longest on record. Only property has strangely kept up but this will crash in real terms over the next decade.

Compared to previous recessions its been bad for the private sector. As GDP is so far down from the start of the recession then it has to keep rising goin forward based upon previous recessions.

The next crisis will be a government crises where debt isn't repaid or inflated and where governments finally tell the public that the unfunded liabilities cannot be repaid. 5-10 years away this mega crisis will occur.

I won't argue with your historic GDP figures, but the social fallout has seemed comparatively small. I am not seeing gangs of squaters and crusties displaced into crappy al-fresco Special Brew locations.

10 years away? Wasn't it always so. Might be dead by then. I want to live through some history.

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Compare one flawed independent variable (sterling) verses another independent flawed variable (euro, dollar, any other western currency) and it is irrelevant which is rising or falling.

Compare any of these worthless currencies verses gold or silver and it is clear that they are collapsing at a rate of 20-30% per annum.

i take your point ringledman. it's a race to the bottom and presently we are losing, but how ffs?

We dont make or do much anymore. It's all imported.

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I won't argue with your historic GDP figures, but the social fallout has seemed comparatively small. I am not seeing gangs of squaters and crusties displaced into crappy al-fresco Special Brew locations.

10 years away? Wasn't it always so. Might be dead by then. I want to live through some history.

Marc Faber made an interesting point a year or two back that went something along the lines of-

today's great recessions and depressions won't be as bad as the previous ones for the Western world. We wont see lines of people starving like the last depression. However we will see an increase in social drop outs, terrorisms, wars, etc. Still strife but a different form.

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Marc Faber made an interesting point a year or two back that went something along the lines of-

today's great recessions and depressions won't be as bad as the previous ones for the Western world. We wont see lines of people starving like the last depression. However we will see an increase in social drop outs, terrorisms, wars, etc. Still strife but a different form.

Looks like he was right. Don't know of the man TBH, I must check out.

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that'll be nice for the labour government coming into power in 2015!

The blog - GolemX1V goes into great detail about all this . Written by David MALONE

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i take your point ringledman. it's a race to the bottom and presently we are losing, but how ffs?

We dont make or do much anymore. It's all imported.

A slow decline over the next decade. As has occured over the past 10 years. 2000-2010 was the first decade in recorded history in which the USA's real wealth and salaries fell compared to the previous. This trend will continue for the Western world, the UK included.

Having only 12% of our economy as manufacturing is a disgrace. Production is the main source of wealth for any nation. If this doesn't reverse up to 40% over the next decade or two then we really are fuked.

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The blog - GolemX1V goes into great detail about all this . Written by David MALONE

Not read Golem but I can guess. Maybe I should more than gues and have a look, but my guess is that a socialist government would give him a heart attack, as opposed to a Labour Party coniption.

My money would not be on Labour, rather Nick Griffin and his gang. Enjoy!

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A slow decline over the next decade. As has occured over the past 10 years. 2000-2010 was the first decade in recorded history in which the USA's real wealth and salaries fell compared to the previous. This trend will continue for the Western world, the UK included.

Having only 12% of our economy as manufacturing is a disgrace. Production is the main source of wealth for any nation. If this doesn't reverse up to 40% over the next decade or two then we really are fuked.

Totally agree Ringledman, except I believe that the decline in salaries has a longer history, by at least an additional decade.

I lack the stats to back that up, but I don't dispute the general point.

Edited by Laughing Gnome

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Yes, I get the either way we're fecked angle, but consider this. Sterling has climbed and is hanging on regardless of the interest rate bottling this morning, And inflation IS largely imported, and the recent rise will temper the rise of imported oil.

What i don't get is how sterling is STILL hanging in, in spite of an increasing trade deficit. and this has been going on for DECADES!

When will something finaly happen?

I can only assume that the rest of the world judges our economy better than many HPC posters do! ;)

Ultimately, the trade deficit can't continue to rise indefinitely - it has to reverse sooner or later. If Sterling is remaining too strong, then I can only assume that the time isn't right yet, in the eyes of the market. BUT... it has to come. How can demand for Sterling remain high, if the economy is slowly eating itself? Sooner or later, this process has to reverse and it will be good for UK exports and jobs.

Of course, it will push up the prices of imported goods, but arguably, we're have been living in suspended disbelief - it's not that inflated prices are the aberration, but rather the cheap ones which we have grown used to.

Edited by Traktion

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Haha - LTCM

John Merriweather was a w**ker, used to phone me up (brokerage/custodian bank) and ask me to do impossible feats of reconciling like he needed to know 'yesterday'. I'd always get a call in the afternoon after a long city liquid lunch asking what LTCMs position was on 'everything' at hh:mm:ss on the dd:mm:yy meaning id have to work to midnight or close of business stateside.When it went pair shaped I had to work a 36hour day (nonstop) and ring fence as much client money as I could. We lost millions and he wasted my life away git!

Edited by tomposh101

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  • 312 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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