Bloo Loo Posted April 12, 2008 Share Posted April 12, 2008 This is not the case, as the money will not be absorbed into the bank by interest charges, because the creditors will default. THATS WORSE: the pledged asset is a LIABILITY, and adds further to the losses the bank needs to cover in its balance sheet. And they lose the interest they would have got over the term. It really is the last thing a bank wants. Quote Link to comment Share on other sites More sharing options...
Bubble&Squeak Posted April 12, 2008 Share Posted April 12, 2008 I don't believe that is the case. People have not been building up equity because of the increase. What they have been doing is MEWing the proceeds on things.... Holidays, Cars etc..I think the percentages released are much bigger this time. How many 90% + house loans where there around. An interesting point, although I still can't get my head around how this could be THAT high a percentage compared to the whole lent... would be interesting to see some figures, I can imagine it would take a bit of work to get what would only be a ball park figure though Quote Link to comment Share on other sites More sharing options...
PiXeL8r Posted April 12, 2008 Share Posted April 12, 2008 THATS WORSE: the pledged asset is a LIABILITY, and adds further to the losses the bank needs to cover in its balance sheet. And they lose the interest they would have got over the term.It really is the last thing a bank wants. So if people start defaulting, which they are BTW, the money stays in the system. Yes it is worse for the banks. Hyperinflation is scary. Quote Link to comment Share on other sites More sharing options...
Bubble&Squeak Posted April 12, 2008 Share Posted April 12, 2008 (edited) THATS WORSE: the pledged asset is a LIABILITY, and adds further to the losses the bank needs to cover in its balance sheet. And they lose the interest they would have got over the term.It really is the last thing a bank wants. I can only see reasons why, in the long term, money supply by the creation of debt is going to decrease massively. Again I can only see deflation long term. EDIT: Grammar Edited April 12, 2008 by Bubble&Squeak Quote Link to comment Share on other sites More sharing options...
Saberu Posted April 12, 2008 Share Posted April 12, 2008 I called the hyperinflationary depression months ago, this guy only gets second dibs (I called it for both the US and UK) but I prefer to describe it as a hyperinflationary stagflationary depression Quote Link to comment Share on other sites More sharing options...
Bubble&Squeak Posted April 12, 2008 Share Posted April 12, 2008 hyperinflationary stagflationary depression That is one hell of a mouthful! Quote Link to comment Share on other sites More sharing options...
PiXeL8r Posted April 12, 2008 Share Posted April 12, 2008 (edited) An interesting point, although I still can't get my head around how this could be THAT high a percentage compared to the whole lent... would be interesting to see some figures, I can imagine it would take a bit of work to get what would only be a ball park figure though I bet the historic % of equity figures would be a good place to start. I wonder what they say? Has anyone seen somewhere to get them? Edited April 12, 2008 by PiXeL8r Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 12, 2008 Share Posted April 12, 2008 So if people start defaulting, which they are BTW, the money stays in the system. Yes it is worse for the banks. Hyperinflation is scary. only a small percentage will default, the banks will need to keep more of their income to stay afloat and they will lend less. Much less. This is already happening. Interest rates for other lending are rising also. Money is also leaving these shores by the GOLD boat load. This place is Leaking money. The replacement for it is going to the very banks that created it. Quote Link to comment Share on other sites More sharing options...
PiXeL8r Posted April 12, 2008 Share Posted April 12, 2008 (edited) only a small percentage will default, the banks will need to keep more of their income to stay afloat and they will lend less. Much less.This is already happening. Interest rates for other lending are rising also. Money is also leaving these shores by the GOLD boat load. This place is Leaking money. The replacement for it is going to the very banks that created it. Have you seen the default rates in the US. Last time I saw them it was up to 8% of subprime. Britain has it's own subprime which is just about starting to implode. Edited April 12, 2008 by PiXeL8r Quote Link to comment Share on other sites More sharing options...
shindigger Posted April 12, 2008 Share Posted April 12, 2008 do you think america will produce another big one..9/11? Without a shadow of a doubt. Quote Link to comment Share on other sites More sharing options...
babesagainstmachines Posted April 12, 2008 Share Posted April 12, 2008 (edited) Nearly 100% (all bar about 4% I seem to remember) of all money created is as debt, there are few vehicles for moving this debt around now... the debt creation will slow dramatically and therefore so will money creation. Deflation is completely unavoidable IMHO. All money is debt in a fiat system, notes and coins included. As of February, in the UK 2.86% of money was circulating notes and coins - that is, non-interest bearing. Free money if you like. In addition to this, a further 1.35% of money was reserve balances at the central bank. 4.21% of the money is "real" money. The other 95.79% is privately issued credit. The domestic broad money supply figure for the UK is 1.69T. EDIT: FIxed some maths Edited April 12, 2008 by dazednconfused Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 12, 2008 Share Posted April 12, 2008 Have you seen the default rates in the US. Last time I saw them it was up to 8% of subprime. Britain has it's own subprime which is just about starting to implode. I agree. Its alarming, there is no cure except that which to market inflicts. PAy down debt, stock some food is about all you can do. If you are starving and everyone around you is starving , being able to buy a block of flats with an ounce of the gold stuff is not going to be a lot of help. Quote Link to comment Share on other sites More sharing options...
Errol Posted April 12, 2008 Share Posted April 12, 2008 comercial? Do you mean comical? Your posts are comical. Ignoring my rather obvious spelling error, there was nothing comical about my post. What I said was an absolute fact. Look it up (and laugh). Quote Link to comment Share on other sites More sharing options...
Errol Posted April 12, 2008 Share Posted April 12, 2008 This chart is hilarious. Look at the dollar one for even more laughs. Quote Link to comment Share on other sites More sharing options...
PiXeL8r Posted April 12, 2008 Share Posted April 12, 2008 (edited) Deflation is completely unavoidable IMHO. There will not be deflation as the central banks will keep bailing out banks from the OTC derivative meltdown. Which means adding more money to the system. The can not let the debts deflate as it would bring the $500 derivative market to failure. So they have to hyper-inflate not deflate. Failure is not an option with derivative market because of it's size. Edited April 12, 2008 by PiXeL8r Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 12, 2008 Share Posted April 12, 2008 There will not be deflation as the central banks will keep bailing out banks from the OTC derivative meltdown. Which means adding more money to the system. The can not let the debts deflate as it would bring the $500 derivative market to failure. So they have to hyper-inflate not deflate.Failure is not an option with derivative market because of it's size. That is a view, but you have not yet explained how money poured into the broken banks will end up in circulation Quote Link to comment Share on other sites More sharing options...
Live Peasant Posted April 12, 2008 Share Posted April 12, 2008 For the uneducated amongst us (that'll be me then) where would be the best place to be located to avoid this possible outcome? I'm presuming that the Eurozone and the East won't be feeling the effects to the same degree? Or is this a false assumption? Quote Link to comment Share on other sites More sharing options...
PiXeL8r Posted April 12, 2008 Share Posted April 12, 2008 I agree. Its alarming, there is no cure except that which to market inflicts.PAy down debt, stock some food is about all you can do. If you are starving and everyone around you is starving , being able to buy a block of flats with an ounce of the gold stuff is not going to be a lot of help. Agree, if it comes to that gold doesn't taste very good. But you would still have resources to fall back on with the rest of the world. There would be nothing stopping you going somewhere else with your global currency - gold. Quote Link to comment Share on other sites More sharing options...
PiXeL8r Posted April 12, 2008 Share Posted April 12, 2008 That is a view, but you have not yet explained how money poured into the broken banks will end up in circulation It is already in the system. In that it has entered it in the massive run up of houses and debt. Propping up the banks means the inflation already created does not get deflated. So the money poured into the banks supports the already introduced inflation. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 12, 2008 Share Posted April 12, 2008 It is already in the system. In that it has entered it in the massive run up of houses and debt. Propping up the banks means the inflation already created does not get deflated.So the money poured into the banks supports the already introduced inflation. so are you arguing that there is going to be more money in the system after today, sufficiently more to encourage hyperinflation, which we DO NOT have witht the current amount of money, or are you saying that the money in circulation is already hyperinfaltionery? Quote Link to comment Share on other sites More sharing options...
PiXeL8r Posted April 12, 2008 Share Posted April 12, 2008 So is that it everyone now agrees, that the money being poured into banks supports the already introduced hyperinflation. Quote Link to comment Share on other sites More sharing options...
PiXeL8r Posted April 12, 2008 Share Posted April 12, 2008 (edited) so are you arguing that there is going to be more money in the system after today, sufficiently more to encourage hyperinflation, which we DO NOT have witht the current amount of money, or are you saying that the money in circulation is already hyperinfaltionery? I am saying that the money already in the system is hyperinflationery. The banks being supported just keeps it here. Look at the debt figures. Government & private. Lending money that can't be defaulted on is hyperinflation. Edited April 12, 2008 by PiXeL8r Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 12, 2008 Share Posted April 12, 2008 I am saying that he money already in the system is hyperinflationery. The banks being supported just keeps it here. sorry, I fail to see the hyperinflation with the current cohort of money in circulation. I see inflation in low order items I see deflation in high order items All I can see is the BUST phase in the boom bust world we live in You might like to review this video. It takes about an hour but the lecturer is extremely captivating. http://video.google.com/videoplay?docid=-2...rassimir+petrov Quote Link to comment Share on other sites More sharing options...
narco Posted April 12, 2008 Author Share Posted April 12, 2008 (edited) The key will be the bond market. When China and Japan start dumping dollar holdings, the $100 dollar bill will be more functional as toilet paper. Edited April 12, 2008 by narco Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 12, 2008 Share Posted April 12, 2008 The key will be the bond market. When China and Japan start dumping dollar holdings, the $100 dollar bill will be more functional as toilet paper. the west will wish they were more respectful of the olympic torch next time round. Quote Link to comment Share on other sites More sharing options...
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