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We Are Facing Another Global Financial Crisis Of Epic Proportions


suntory

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HOLA441
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Under those circumstances it's quite possible that there will be a sudden and complete turnaround in policy towards increasing rates - if it's perceived by say the Fed that cheap oil is here for any length of time.

It would be very ominous for house prices (and likely also the stockmarket although in time that stock market effect would likely be mitigated by the low oil price).

Clearly, cheap oil would mean cheaper petrol for the car. Cheaper energy. Possibly cheaper goods in shops that rely on oil as a component.

This is all great news for HPI as it will allow the cash saved by the average Joe to be ploughed into property. Fill yer boots , I say :P:P

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HOLA444

This is what happens next - we've been here before. Oh and they'll be watching the Chinese version of this film:

There'll be a recession in China as the reality of losses take time to heal. The bubble has burst. Unlike the 2008 crash in the Shanghai - that was caused by the US crash in the housing/banking sector. This is the actual one for the Chinese - there's no excuses or outside cause. The economy got overheated.

Jeremy Irons will need to 2015 to the list of financial crashes. "We can't help ourselves".

Edited by 200p
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HOLA445

This is what happens next - we've been here before. Oh and they'll be watching the Chinese version of this film:

There'll be a recession in China as the reality of losses take time to heal. The bubble has burst. Unlike the 2008 crash in the Shanghai - that was caused by the US crash in the housing/banking sector. This is the actual one for the Chinese - there's no excuses or outside cause. The economy got overheated.

Jeremy Irons will need to 2015 to the list of financial crashes. "We can't help ourselves".

Thanks for the clips. I gotta watch that film now. Seems awfully close to what is happening right now.

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Clearly, cheap oil would mean cheaper petrol for the car. Cheaper energy. Possibly cheaper goods in shops that rely on oil as a component.

This is all great news for HPI as it will allow the cash saved by the average Joe to be ploughed into property. Fill yer boots , I say :P:P

I also say that (or at least something like that - the fill yer boots bit). For those that want to and have already decided to then they should fill their boots. If the purchase works out then ok but if house prices do crash because of the prospect of higher interest rates and perhaps possible tighter mortgage lending (maybe due to restructuring of the economy at long last) then take the consequences and don't ask taxpayers and savers for another interest rate bail out along with all the stuff like HtB etc.

I don't think the benefits of a low oil price will feed through that quickly (apparently early in the year low oil price benefits didn't show up in the UK's confidence index) although given time most likely they will eventually on some items. Even fuel and energy prices lag well behind as evidenced recently. By the time the reductions turn up they'll be taken up by the higher interest rates.

Higher interest rates tend to seriously dampen house prices even with a low oil price - that was demonstrated in the 90s

Note: This is not investment advice - just in case.

Edited by billybong
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Indeed and it seems rather scary this decoupling. Koos Jansen from bullionstar.com has written in his latest piece that the Chinese government has pushed their citizens into gold for the last few years. Since property and now equities have collapsed in China, people will naturally flee into safer assets such as gold. In the meantime, the Yuan is being devalued by 3%.

To be honest I think this China situation will just be a blip for the west.

1) Interest rates are going to stay lower for longer now as central bankers take the easy option.

2) A lot of the fall in China is based on the fact that a lot of Chinese firms specialise in producing plastic-tat for western consumers, and western consumers now seem to be buying less tat - which is fundamentally unproductive for our economies. Many people now seem prepared to buy less, but of better quality when they do buy.

3) The low oil price will juice the western economies, as people spend less of fuel and as transport costs are held down.

4) The fundamentals are much better in the UK and US than they were, and a drop off in China doesn't massively lower demand for Western goods/services as largely we are not net exporters to China.

5) The Chinese stock market is an unregulated bubble that grew by 150% in 12 months, so recent falls are really just a correction from a traditional over zealous boom.

6) The Chinese Government (like ours) doesn't want civil unrest (today...... when they can really mess things up tomorrow), so will deploy powers like reducing interest rates and indeed reducing the bank's asset reserve ratios as they just did and have previously.

I personally don't think we have yet reached the end of the extend and pretend phase. The Chinese can still cut rates further and allow even more bank lending.

Of course, it will end eventually, but may be just not yet.

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HOLA4411

The DJIA has been relatively quiet and flat so far today.

The Fed must be mulling over which direction to go next - and what the story is going to be and how it'll tie in with the still rapidly falling oil price and their announcements about there likely to be interest rate rises in the near future.

Up, Down or just a period of sideways. No doubt soon the committee will reach a decision.

Central banks - they're a right laugh.

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Wow - anyone just see the BBC news at 6 on China ?

****** me - how China are just delaying the inevitable by encouraging more debt - borrowed too much in recent years etc...

All done with a straight face as if we haven't done the same.

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HOLA4415

Its annoying all these people saying its good news when it rallies. Its not that straightforward.

Don't worry laura, today waS nothing more than a DEADCATBOUNCE ...the fireworks will continue tomorrow :lol:

Wednesday's are well known as 'short days' among the old shool traders, so get ya shorts on for more fun :ph34r:

As long as it goes down tomorrow, I reckon we'll see volatile market action, then followed by a LONG bear market...with housing following behind...NICE :D:lol:

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Latin american currency index is at 22 year lows - Ironically Antofagasta a Chilean miner was the highest riser today on the FTSE 100. You cant make this sh*t up.

Peoples Bank of China thinks it has saved the world with its token rate cuts. FTSE 100 and DJIA all giving it the 'Everything is Awesome'.

Not sure I want to join the delusional party just yet.

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