Thursday, October 23, 2008

Peston points out the countries which are seeing capital flight. We are not far behind.

Now there are runs on countries!

First the money markets close, then banks collapse, now whole countries collapsing as credit unwinds. Of course Iceland has already gone, now it's S Korea, Hungary. Watch and learn - the currencies collapse, and the stockmarket collapses. LINE UP AND WATCH WHOLE COUNTRIES FALLING. Luckily, IMF has funds to support the early fallers, but no organisation has enough funds to bale out a country the size of the UK or US. "And now we're seeing a massive flight of capital out of economies perceived to have been living beyond their means - either because they have a substantial reliance on foreign borrowings, or because they are net importers of good and services, or both." This means us soon, here in UK. Get ready....

Posted by doom&gloom @ 06:18 PM (1733 views)
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25 thoughts on “Peston points out the countries which are seeing capital flight. We are not far behind.

  • stillthinking says:

    It is strange why more people haven’t shifted money out of the UK. I put it down to British indolence myself. Maybe they think the biggest fall has already happened so they missed the boat. Or maybe they just salute themselves on having the money.

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  • stillthinking says:

    “There will come a point when GB will either have to let inflation rip by letting the pound collapse or put up interest rates to protect the currency. Either way projections of a shallow short recession will have to be rewritten. A Labour Govt without a sterling crisis? Impossible.”

    This is true. We have had a New Labour government for a decade and there hasn’t been a sterling crisis.

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  • Badger says the UK is better placed than other countries to weather the storm. Maybe these are the countries he has in mind.

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  • An estate agent writes: “These countries have weakened currencies. This will make them attractive as tourist destinations and their economies will rebound because of all the revenue this will bring in”.

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  • Much as I dislike the political behaviour:

    The fact is that for all its ills the UK is a relatively stable country. This is an historical fact in an hysterical climate. The bigger gamble would be to shift money out.

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  • Have to agree with plato. It is often frustrating how little changes in this country, but precisely becasue of that it is relatively stable.

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  • I agree with Plato, NS&I give shocking rates but I do get a nights sleep. I can’t see the banks going completely to the wall but I can see a period where withdrawals are capped or suspended. The Euro zone has all sorts of problem economies (Italy etc) so although stirling is getting hit hard now I wouldn’t like Euros next year.

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  • plato. I would like to agree that the UK will remain ‘stable’ in the future (by way of a non-depreciting currency at least). The country has had a relatively long financial and political history. But South Korea is a wealthy exporter. And Hungary has a long stable history (except for the Communist bit).

    Personally I think all bets are off. The rules have changed. Never before have we been so indebted. The smaller countries/currencies decline first, then contagion to larger countries/currencies. The emperor has no clothes.

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  • Ignorance is bliss. Wait till panic grips Joe Blogg….

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  • Stillthinking,

    Which country do you propose we move our money to? I’m not really sure there are any countries in a better position than us. Canada maybe, but the Canadian Dollar is pretty expensive.

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  • jonb,

    The US dollar? The Swedish Krona?

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  • Many have underestimated the strength the dollar derives from being the reserve currency, and the US military is there to put out any fires that may threaten that status.

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  • planning4acrash says:

    Jon B. Private bullion coins in personal possession are the safest position in the face of meltdown. Hold 50% cash, 50% bullion, and you stay stable which ever way the wind blows. I’d only have savings in national savings right now.

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  • P4aC – why only National Savings? They are guaranteed by the Govt but so is the first 50K in a bank. Other than a couple % on the interest rate, what’s the difference?

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  • doom&gloom

    I’m in a state of denial at the moment. Have they really damaged the country so terminally! We are still in stage of forecasting albeit accurate so far. I’m clinging on to the hope that all that is happening is rescuable. Just doing my bit to save the currency.So although you make perfect sense I hope you are wrong.

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  • planning4acrash says:

    Government doesn’t have enough money or will to bail out all savings if all the banks become exposed to their bankrupt state. The nature of fractional reserve banking is that banks don’t have the money that depositors want to withdraw.

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  • planning4acrash says:

    If government printed enough to bail banks from a total run on all banks and sterling, your paper would loose 9 10ths of its value over night, so the guarantee is meaningless. That is why I support a 50% holding of physical bullion coins. All is risky now

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  • planning4acrash says:

    But, better than that is to invest in self sufficiency and productive assets. Real assets. Like, a pressure canner, food preserving book and a supply of glass jars is a better investment than gold. Same applies to gardening/allotments. This is warfare!

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  • gardeniadotnet says:

    @p4ac This is warfare!

    A war unlike any other.

    Every man for himself.

    Dulce et decorum est pro patria mori ? Not this time.

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  • planning4acrash says:

    Plato. When private banks print money and government can print £1trillion in a week, equal to the “value” of the entire country’s blood sweat and tears, it becomes clear that it is not “your” money. This is not “your” system. The fiat system we had was set up to fail. All fiat systems fail. The elite are aware of that and control the fall to their advantage. The only solution is to cut through the mess and decide what we want. Not looking back, but looking forward. I look now to liberty and the Austrian school of economics for the solutions. I’m getting through the audio books on the media section at mises.org during my commute. I follow lewrockwell.com podcasts religiously and am always on the looking for more info.

    Its like with global warming. Do we want carbon tax? Do we believe the government?

    The signature to look out for is, anything the government says, that blames us, and puts the government forward as saviour, stinks to high heaven. New Age bunkum has a stench to it also, as does anything that moves us away from real physical solutions. Any solution that makes us dependent on anything else is likely to be a lie.

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  • planning4acrash says:

    I’m spamming peep’s with this message at the moment. Its key, because global carbon tax will be paid to central banks, as a global tax/ponzi scheme to fund global government, justify a control grid and tattle tale squads, including children reporting on parents for having too many baths, having too big a car engine, forgetting to bring a re-usable bag to the supermarket (nothwithstanding how supermarkets put 100x more plastic in packaging than a flimsy bag ever has)

    Here is a great 10min podcast on climate change that is convenient to share and provides, towards the end, a refreshing solution to the crisis:
    http://www.lewrockwell.com/podcast/?p=episode&name=2008-08-12_018_the_state_and_the_climate.mp3

    This is a great movie on implications of using CFL lightbulbs: http://www.brasschecktv.com/page/343.html

    If you enjoyed the first podcast, have a listen to this: http://mises.org/media.aspx?action=author&ID=1124

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  • gardeniadotnet says:

    I think that in the next few months there will be an economic collapse followed by a period of anarchy.
    Then I hope, for the sake of my children, that Humanity will rise like a phoenix from the ashes.

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  • sold 2 rent 1 says:

    P4AC,

    Where were you tonight?

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  • planning4acrash says:

    garden, glad to see you back.

    S2R, I’ll try next time. Just glad that I could help you guys achieve your goal of a meetup. You gained a bit of independence tonight. Now, not even the webmaster can seperate bloggers with the loss of a password.

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  • gardeniadotnet says:

    @p4ac

    We few, we happy few, we band of brothers…

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