Author Topic: 2008 aint nothing. Real Crash is coming. What do u think?  (Read 13857 times)

KittyWrestler

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2008 aint nothing. Real Crash is coming. What do u think?
« on: May 30, 2012, 09:44:34 AM »
I just flipped through Peter Schiff's new book "Real Crash" that indicates the 2008 Great Recession is nothing comparing to what is coming. He argues that government is spending way beyond its means as we all know it. Right now, the rest of the world is still willing to let us borrow. When that money party is over, we are in deep deep deep trouble that makes 2008 Great Recession looks like nothing..

I am just curious to see what you guys think about Schiff's long term strategy that he indicated in multiple books:
1. Buy gold
2. Buy foreign
3. Specifically buy foreign currencies
4. Buy raw materials, energy, etc..

Thanks!

grantmeaname

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #1 on: May 30, 2012, 10:26:19 AM »
He argues that government is spending way beyond its means as we all know it. Right now, the rest of the world is still willing to let us borrow. When that money party is over, we are in deep deep deep trouble that makes 2008 Great Recession looks like nothing..
Why would that happen? I agree that if it did happen it would be bad, but what would cause that?

In other news, we're the biggest economy in the world. If we go down, holding yen isn't gonna help much, and it's hard for me to believe buying gold will either. If there's a real crash, I think having skills and good, quality tools you know how to use are the currencies that will matter. If you're worried about a crash, go learn how to splint broken legs, hunt deer, and repair bikes.

smedleyb

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #2 on: May 30, 2012, 10:48:27 AM »
Why would that happen? I agree that if it did happen it would be bad, but what would cause that?

What causes crash 2.0 is the recognition that the federal government -- which stepped in to alleviate the financial crisis of 2008-2009 -- is itself insolvent.  The great economic upheaval caused by the perception that the government can't pay it's bills will lead to panic and chaos. 

So the story goes...


sol

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #3 on: May 30, 2012, 10:54:36 AM »
This guy is betting on losses.  If the world economy tanks, you might lose slightly less money on foreign currencies than on US currency, but not by enough to cover your ass.

In that event, I don't think any financial instrument you own is going to make money.

grantmeaname

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #4 on: May 30, 2012, 11:06:08 AM »
What causes crash 2.0 is the recognition that the federal government -- which stepped in to alleviate the financial crisis of 2008-2009 -- is itself insolvent.  The great economic upheaval caused by the perception that the government can't pay it's bills will lead to panic and chaos.
I get the insolvency part. But it's pretty obvious that Greece is insolvent, and all that's happened to Greece is that the government has to pay a little more to borrow money, and the citizens and politicians alike have had to endure some political theater at the hands of their creditors. Further, the other PIIGS are in a similarly bad situation and have suffered no consequences whatsover. So if the US gets scary debt levels, why wouldn't we expect a slight rate increase and some political theater?

adam

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #5 on: May 30, 2012, 11:08:20 AM »
I don't think any of those are good ideas at all.

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #6 on: May 30, 2012, 11:10:13 AM »
This guy is betting on losses.  If the world economy tanks, you might lose slightly less money on foreign currencies than on US currency, but not by enough to cover your ass.

In that event, I don't think any financial instrument you own is going to make money.

QFT. Your biggest hedge against massive financial collapse is to a) not hold any debt, and b) make yourself useful with a valuable skill set and common resources. No amount of financial planning and monetary hoarding beyond that will do you a lick of good.

Sparafusile

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #7 on: May 30, 2012, 11:14:51 AM »

What causes crash 2.0 is the recognition that the federal government -- which stepped in to alleviate the financial crisis of 2008-2009 -- is itself insolvent.  The great economic upheaval caused by the perception that the government can't pay it's bills will lead to panic and chaos. 


This line of thought is incorrect. The US government will never NOT be able to pay its bills. Many times, when talking about how bad the economy is, the US is compared to Greece. Greece's financial problems stem from the fact that they spend more money than they produce and the EU will not give them any more. The US, on the other hand, spends more money than they produce, but can print its own money. The difference is that Greece is a currency user whereas the US is a currency issuer.

The United States can NEVER run out of money because they print it themselves. The US will never default because there is a never ending supply of money to pay debts. The US could pay of their entire national debt tomorrow if they wanted to. That's not to say that it wouldn't wreck the economy, it surely would, but it could be done.

clarkai

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #8 on: May 30, 2012, 11:20:19 AM »

This line of thought is incorrect. The US government will never NOT be able to pay its bills. Many times, when talking about how bad the economy is, the US is compared to Greece. Greece's financial problems stem from the fact that they spend more money than they produce and the EU will not give them any more. The US, on the other hand, spends more money than they produce, but can print its own money. The difference is that Greece is a currency user whereas the US is a currency issuer.

The United States can NEVER run out of money because they print it themselves. The US will never default because there is a never ending supply of money to pay debts. The US could pay of their entire national debt tomorrow if they wanted to. That's not to say that it wouldn't wreck the economy, it surely would, but it could be done.

So, then, what we have to worry about is inflation, correct?

Sparafusile

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #9 on: May 30, 2012, 11:21:45 AM »
Right. So I guess one way to look at it is, by not paying off the debt, they are preventing inflation.

adam

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #10 on: May 30, 2012, 11:23:41 AM »

This line of thought is incorrect. The US government will never NOT be able to pay its bills. Many times, when talking about how bad the economy is, the US is compared to Greece. Greece's financial problems stem from the fact that they spend more money than they produce and the EU will not give them any more. The US, on the other hand, spends more money than they produce, but can print its own money. The difference is that Greece is a currency user whereas the US is a currency issuer.

The United States can NEVER run out of money because they print it themselves. The US will never default because there is a never ending supply of money to pay debts. The US could pay of their entire national debt tomorrow if they wanted to. That's not to say that it wouldn't wreck the economy, it surely would, but it could be done.

So, then, what we have to worry about is inflation, correct?

Inflation is something we deal with every day.  The only thing you have to worry about is hyper inflation on the off chance that the US just decides to start printing money like crazy, which I don't see happening.

People in the US are pretty good at paying their taxes, Greece? Not so much.

KittyWrestler

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #11 on: May 30, 2012, 11:25:26 AM »
Really interesting!! Also knowing China and Japan holding the biggest US debt cuz they have their political agendas to hope in some sort of way, they can take certain control of the world and weaken the US dominating position . The Chinese didn't buy our treasuries to make money, they buy because they are hungry for world power.

I am envisioning that if US economy do collapse, we will just see a lot more Chinese and Japanese next door neighbors coming here for some barging house hunting and basement shopping..Actually, it's already happening.. Look who is buying those $2000 Louie Vuitton bags!

But I do believe one predication: the standard of life here in US will drop dramatically in the future. However, the mustachian way of living will probably be pretty immune to that since most of you have already learned on how to live on little. That's by far is the most crucial way to prepare us from the next crash.

sol

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #12 on: May 30, 2012, 11:31:01 AM »
Does that last post strike anyone else as ignorant and slightly racist, or is it just me?

adam

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #13 on: May 30, 2012, 11:38:47 AM »
Oh look, a relevant post:
http://www.npr.org/blogs/money/2012/05/30/153950742/the-worlds-richest-countries-and-biggest-economies-in-2-graphics?ft=1&f=93559255

Just look at the size of our GDP compared to the rest of the world.  China isn't going to do shit to us.  Without us their economy doesn't exist.

edit: They are growing of course, and things can change, but I have 0 worries about China "ruining" us in any way.
« Last Edit: May 30, 2012, 11:41:59 AM by adam »

smedleyb

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #14 on: May 30, 2012, 11:52:03 AM »

What causes crash 2.0 is the recognition that the federal government -- which stepped in to alleviate the financial crisis of 2008-2009 -- is itself insolvent.  The great economic upheaval caused by the perception that the government can't pay it's bills will lead to panic and chaos. 


This line of thought is incorrect. The US government will never NOT be able to pay its bills. Many times, when talking about how bad the economy is, the US is compared to Greece. Greece's financial problems stem from the fact that they spend more money than they produce and the EU will not give them any more. The US, on the other hand, spends more money than they produce, but can print its own money. The difference is that Greece is a currency user whereas the US is a currency issuer.

The United States can NEVER run out of money because they print it themselves. The US will never default because there is a never ending supply of money to pay debts. The US could pay of their entire national debt tomorrow if they wanted to. That's not to say that it wouldn't wreck the economy, it surely would, but it could be done.

Argentina prints their own money; they went belly up.  Zimbabwe prints its own money; it's pretty much insolvent. 

Your idea that hyperinflation (rapid money printing) saves the day is silly, since it would utterly destroy the banks and the Fed while plunging the state into economic chaos.  It might not technically be a default but there won't be a government around to "settle up," so to speak.

Also, not paying off debt does not keep inflation in check.  In fact, debt expansion and inflation are two sides of the same monetarist coin. 

KittyWrestler

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #15 on: May 30, 2012, 11:55:41 AM »
Oh look, a relevant post:
http://www.npr.org/blogs/money/2012/05/30/153950742/the-worlds-richest-countries-and-biggest-economies-in-2-graphics?ft=1&f=93559255

Just look at the size of our GDP compared to the rest of the world.  China isn't going to do shit to us.  Without us their economy doesn't exist.

edit: They are growing of course, and things can change, but I have 0 worries about China "ruining" us in any way.

That's very true. Right now, China and Japan CAN sell dollars and causing a global turmoil and send dollar down to the floor. But why would they? Why would you bankrupt your best customer? We are still their best market to consume their goods. Without us, their economies go to shit holes. So, although I know there is a lot of sayings on dollar collapse, dollar collapse, it's unlikely to happen because nobody is willing to pull that trigger.. The world still needs us to buy their stuff. So as long as we keep that balance, I don't think it will be a total disaster. But, hey who knows.. If Washington is stupid enough to still spend like fat pigs, and if China and Japan find other better markets to sell their products, and if our GDP starts to shrink badly.. anything could happen.. but we may not see that in our life time..

But I fear for our children...

smedleyb

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #16 on: May 30, 2012, 12:02:27 PM »
Does that last post strike anyone else as ignorant and slightly racist, or is it just me?

Right?  I didn't know aspirational Chinese consumers purchasing expensive handbags in American malls was one of the signs of the impending social and economic apocalypse. 

The things you learn on MMM...

Bank

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #17 on: May 30, 2012, 12:27:58 PM »
"In the long run, we are all dead." --- John Maynard Keynes.

You might amend that to say that in the case of a global financial meltdown, our portfolios are all dead.  Particularly now, as globalization has enhanced the correlation of returns across asset classes and markets.  Diversify as best you can, hone your marketable skills, and hope for the best.  At least that's my strategy.

igthebold

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #18 on: May 30, 2012, 12:29:06 PM »
QFT. Your biggest hedge against massive financial collapse is to a) not hold any debt, and b) make yourself useful with a valuable skill set and common resources. No amount of financial planning and monetary hoarding beyond that will do you a lick of good.

Hear, hear. The expense/dependence side of the equation seems much more important than investment/money parking strategies in this example. The more you depend on a consumer economy for subsistence, personal “happiness,” entertainment, friendship, etc, the more you're going to feel a recession.

Sparafusile

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #19 on: May 30, 2012, 12:34:25 PM »

Argentina prints their own money; they went belly up.  Zimbabwe prints its own money; it's pretty much insolvent. 

Your idea that hyperinflation (rapid money printing) saves the day is silly, since it would utterly destroy the banks and the Fed while plunging the state into economic chaos.  It might not technically be a default but there won't be a government around to "settle up," so to speak.

Also, not paying off debt does not keep inflation in check.  In fact, debt expansion and inflation are two sides of the same monetarist coin.

I don't disagree with you. My comments were written tongue-in-cheek. Hyperinflation is a bad thing. So is overspending and rising debt.

On the other hand, hyperinflation doesn't always end in disaster. Take Germany in the 20's for example. They suffered horribly hyperinflation, mass unemployment, elected Hitler, destroyed Europe, and lost a world war. But in the end it turned out okay, right? I think we'll be fine.

$_gone_amok

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #20 on: May 30, 2012, 01:05:23 PM »
Does that last post strike anyone else as ignorant and slightly racist, or is it just me?

+1

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #21 on: May 30, 2012, 01:38:14 PM »
So, then, what we have to worry about is inflation, correct?

Which is why foreign currencies appeal to some folk.

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #22 on: May 30, 2012, 07:26:56 PM »

What causes crash 2.0 is the recognition that the federal government -- which stepped in to alleviate the financial crisis of 2008-2009 -- is itself insolvent.  The great economic upheaval caused by the perception that the government can't pay it's bills will lead to panic and chaos. 


This line of thought is incorrect. The US government will never NOT be able to pay its bills. Many times, when talking about how bad the economy is, the US is compared to Greece. Greece's financial problems stem from the fact that they spend more money than they produce and the EU will not give them any more. The US, on the other hand, spends more money than they produce, but can print its own money. The difference is that Greece is a currency user whereas the US is a currency issuer.

The United States can NEVER run out of money because they print it themselves. The US will never default because there is a never ending supply of money to pay debts. The US could pay of their entire national debt tomorrow if they wanted to. That's not to say that it wouldn't wreck the economy, it surely would, but it could be done.

Argentina prints their own money; they went belly up.  Zimbabwe prints its own money; it's pretty much insolvent. 

Your idea that hyperinflation (rapid money printing) saves the day is silly, since it would utterly destroy the banks and the Fed while plunging the state into economic chaos.  It might not technically be a default but there won't be a government around to "settle up," so to speak.

Also, not paying off debt does not keep inflation in check.  In fact, debt expansion and inflation are two sides of the same monetarist coin.

Argentina may have been able to print their own money, but unfortunately they borrowed US$,, and tried to fix their exchange rate at the same time...oops.

It's not even worth my time listing the ways Zimbabwe is not the USA.

IMHO, not only is the money you borrowed from China quite small - so far less than 8% GDP -  YOU BORROWED US $

You can repay the debt. If necessary with some extra help from the presses. But more importantly it has economically & hence strategically linked your 2 countries. The partnership between China & the USA will dominate this century. By 2100 USA + China* GDP will make this discussion trivial.

That as a result of SE Asia working hard we can borrow money at these rates is great. But I agree interest rates should tend to go up from here, and inflation seems unnaturally low...


* By 2100 it'll be in bigger blocks, so think greater SE Asia and an economically amalgamated USA, Canada, Mexico, ...

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #23 on: May 30, 2012, 07:41:22 PM »

Argentina prints their own money; they went belly up.  Zimbabwe prints its own money; it's pretty much insolvent. 

Your idea that hyperinflation (rapid money printing) saves the day is silly, since it would utterly destroy the banks and the Fed while plunging the state into economic chaos.  It might not technically be a default but there won't be a government around to "settle up," so to speak.

Also, not paying off debt does not keep inflation in check.  In fact, debt expansion and inflation are two sides of the same monetarist coin.

I don't disagree with you. My comments were written tongue-in-cheek. Hyperinflation is a bad thing. So is overspending and rising debt.

On the other hand, hyperinflation doesn't always end in disaster. Take Germany in the 20's for example. They suffered horribly hyperinflation, mass unemployment, elected Hitler, destroyed Europe, and lost a world war. But in the end it turned out okay, right? I think we'll be fine.
Lol this is a joke, right? The only reason Germany turned out okay in the end is because we stepped in to rebuild it. Recall from history that the whole reason Germany had that economic trouble during the 1920s was because they got stuck with the entire bill from WWI, which of course ruined their economy. I don't think that had Germany just been left alone after WWII that they would be the kingpin of the Euro right now keeping the whole thing from sliding into the Mediterranean. Meanwhile, we here in America continue to willingly take on the charges for multiple wars at record pace. Yet I don't think anyone will give us the same type of support that we gave Germany after the dust settles this time so things will be getting way worse than pre-WWII Germany.

Mr Mark

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #24 on: May 30, 2012, 08:13:48 PM »
I just flipped through Peter Schiff's new book "Real Crash" that indicates the 2008 Great Recession is nothing comparing to what is coming. He argues that government is spending way beyond its means as we all know it. Right now, the rest of the world is still willing to let us borrow. When that money party is over, we are in deep deep deep trouble that makes 2008 Great Recession looks like nothing..

I am just curious to see what you guys think about Schiff's long term strategy that he indicated in multiple books:
1. Buy gold
2. Buy foreign
3. Specifically buy foreign currencies
4. Buy raw materials, energy, etc..

Thanks!

As to investment strategy, it almost makes me want to do the exact opposite of whatever Schiff says to do.   \s

But in reality, not a damn thing.  That's what is so fantastic about long term balanced asset allocation.  I already have ~20% of my stock allocation in overseas equities  which is 2%overweight to market, over weighted to emerging and non-Japanese Pacific. My big Dow corps and S&P500 are already heavy overseas.  And I have 10% in REITs and commodities. Bonds at a hyper aggressive 15%, for other reasons.

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #25 on: May 31, 2012, 03:45:26 AM »
I think trying to predict something so huge, complex, and such an outlier is a losers game. Personally, I'd say have a solid investment porfolio that will do well in any situation - crash, inflation, prosperity.

If you have income producing assets - local and international shares and property, you'll do fine. I look at friends of mine from Zimbabwe - wealthy fifteen years ago, wealthy now. Why? Diversity in investments that are still earning income. Their rental properties in Harare don't do wonderfully, but they aren't worthless, and they are getting paid in US $. 

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #26 on: May 31, 2012, 05:33:16 AM »
What causes crash 2.0 is the recognition that the federal government -- which stepped in to alleviate the financial crisis of 2008-2009 -- is itself insolvent.  The great economic upheaval caused by the perception that the government can't pay it's bills will lead to panic and chaos.
I get the insolvency part. But it's pretty obvious that Greece is insolvent, and all that's happened to Greece is that the government has to pay a little more to borrow money, and the citizens and politicians alike have had to endure some political theater at the hands of their creditors. Further, the other PIIGS are in a similarly bad situation and have suffered no consequences whatsover. So if the US gets scary debt levels, why wouldn't we expect a slight rate increase and some political theater?
If Greece continues in it's current vein, it may be forced to depart the Euro and return to Drachma.  There will have to be border controls to prevent people attempting to remove Euros and depositing them in neighbouring countries.  You will see similar issues as when Argentina de-pegged from the US $.  The Argentinian Peso was expected to de-value by 10-15%.  As often happens though, investors took fright the market over-reacted and it actually devalued about 75%.  In a short space of time imports were costing the Argentinians nearly 3 times as much.  Greece will probably experience a similar effect as it has to import a lot of goods, including fuel and food.  It is likely that the UN would have to move in to ensure basic necessities are provided at least in the short term.  Political theatre will be overtaken by television reports showing civil unrest, possibly civil war and food parcels being delivered to the needy.  The middle classes will be virtually wiped out.

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #27 on: May 31, 2012, 06:07:35 AM »
Just look at the size of our GDP compared to the rest of the world.  China isn't going to do shit to us.  Without us their economy doesn't exist.

edit: They are growing of course, and things can change, but I have 0 worries about China "ruining" us in any way.
I think that is a touch naive.  From 2000-2011 China has grown it's GDP by an average 9.6% per annum.  Over the same period, the fastest growing G7 economy (Canada) averaged just 3.0% pa.  As a result, since 2000 the US has seen it's share of global GDP decline by a little over 8%.  China's share has increased by about 4.5%.

9 of the top 10 fastest growing countries are in Asia ..... and they have massive populations which are growing both in number and in resource demands.

The closest short-term risk to the USA from China will come if they (and other countries) manage to undermine the use of the US $ as gobal reserve currency.  There has been some movement to get oil producers to accept renminbi instead of the US $ in payment.  http://www.ft.com/cms/s/0/63132838-732d-11e1-9014-00144feab49a.html#axzz1wRp0U0yF

catalana

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #28 on: May 31, 2012, 06:11:29 AM »
People in the US are pretty good at paying their taxes, Greece? Not so much.
Jeeeeeezzzzzz.  Nope - It is just that 21% of Greeks are unemployed versus 8% of Americans.

[Although who knows if those two figures have been calculated on anywhere near the same basis......]

adam

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #29 on: May 31, 2012, 06:44:03 AM »
Just look at the size of our GDP compared to the rest of the world.  China isn't going to do shit to us.  Without us their economy doesn't exist.

edit: They are growing of course, and things can change, but I have 0 worries about China "ruining" us in any way.
I think that is a touch naive.  From 2000-2011 China has grown it's GDP by an average 9.6% per annum.  Over the same period, the fastest growing G7 economy (Canada) averaged just 3.0% pa.  As a result, since 2000 the US has seen it's share of global GDP decline by a little over 8%.  China's share has increased by about 4.5%.

9 of the top 10 fastest growing countries are in Asia ..... and they have massive populations which are growing both in number and in resource demands.

The closest short-term risk to the USA from China will come if they (and other countries) manage to undermine the use of the US $ as gobal reserve currency.  There has been some movement to get oil producers to accept renminbi instead of the US $ in payment.  http://www.ft.com/cms/s/0/63132838-732d-11e1-9014-00144feab49a.html#axzz1wRp0U0yF

China is also fond of cooking the books, so you can't exactly trust their numbers.  Look at how they're playing with their currency.  And I did say that things can change, but they still have a lot of catching up to do.

adam

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #30 on: May 31, 2012, 06:45:53 AM »
People in the US are pretty good at paying their taxes, Greece? Not so much.
Jeeeeeezzzzzz.  Nope - It is just that 21% of Greeks are unemployed versus 8% of Americans.

[Although who knows if those two figures have been calculated on anywhere near the same basis......]

That's not the only reason.

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #31 on: May 31, 2012, 08:04:59 AM »
Just look at the size of our GDP compared to the rest of the world.  China isn't going to do shit to us.  Without us their economy doesn't exist.

edit: They are growing of course, and things can change, but I have 0 worries about China "ruining" us in any way.
I think that is a touch naive.  From 2000-2011 China has grown it's GDP by an average 9.6% per annum.  Over the same period, the fastest growing G7 economy (Canada) averaged just 3.0% pa.  As a result, since 2000 the US has seen it's share of global GDP decline by a little over 8%.  China's share has increased by about 4.5%.

9 of the top 10 fastest growing countries are in Asia ..... and they have massive populations which are growing both in number and in resource demands.

The closest short-term risk to the USA from China will come if they (and other countries) manage to undermine the use of the US $ as gobal reserve currency.  There has been some movement to get oil producers to accept renminbi instead of the US $ in payment.  http://www.ft.com/cms/s/0/63132838-732d-11e1-9014-00144feab49a.html#axzz1wRp0U0yF


I just finished http://www.amazon.com/The-Birth-Plenty-Prosperity-Created/dp/0071421920 and it describes 4 basic principles/tenants that must be present for a country to prosper economically. If the book is correct in it's theory, China(and other asian countries) will boom hugely for a while(much like America did) and then settle into a nice steady maturation.

Think puberty-->adulthood.

I can't say that the book is right, but it definitely makes many very good cases for it's ideas.

grantmeaname

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #32 on: May 31, 2012, 08:55:19 AM »
Jeeeeeezzzzzz.  Nope - It is just that 21% of Greeks are unemployed versus 8% of Americans.

[Although who knows if those two figures have been calculated on anywhere near the same basis......]
Greece loses €15b/year to tax evasion, more than 25% of the €52b the government actually collects on the a GDP of €215b. The Grecian government deficit each year is €20b, or more than 9% of the GDP. This adds to the publicly-held debt, which is currently at 165% of the GDP. Meanwhile, 75% of private sector and 79% of public sector employees pay bribes each year, totaling €550m for petty bribes alone.

I'd say the problems go a bit deeper than just unemployment.

catalana

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #33 on: June 01, 2012, 01:53:55 AM »
Jeeeeeezzzzzz.  Nope - It is just that 21% of Greeks are unemployed versus 8% of Americans.

[Although who knows if those two figures have been calculated on anywhere near the same basis......]
Greece loses €15b/year to tax evasion, more than 25% of the €52b the government actually collects on the a GDP of €215b. The Grecian government deficit each year is €20b, or more than 9% of the GDP. This adds to the publicly-held debt, which is currently at 165% of the GDP. Meanwhile, 75% of private sector and 79% of public sector employees pay bribes each year, totaling €550m for petty bribes alone.

I'd say the problems go a bit deeper than just unemployment.
Fair comment, and thanks for the links.  This prompted me to look at worldwide research on tax evasion (perhaps something I should have done before just reacting!) and Europe does stand out as a bad egg.  If I had more time, it would be interesting to look at possible causes.

grantmeaname

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #34 on: June 01, 2012, 06:40:57 AM »
It's interesting to me to note that the Grecian government budget would be almost totally balanced if all the taxes due were collected. The deficit would shrink to less than 2.5% of their GDP if their citizens weren't all tax evaders. That said, I think the numbers just happen to line up coincidentally. It's a good cautionary tale anyway, even if it is a numerical convenience. Maybe instead of austerity, Greece needs honest taxpayers.

Bank

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #35 on: June 01, 2012, 07:56:11 AM »
It's interesting to me to note that the Grecian government budget would be almost totally balanced if all the taxes due were collected. The deficit would shrink to less than 2.5% of their GDP if their citizens weren't all tax evaders. That said, I think the numbers just happen to line up coincidentally. It's a good cautionary tale anyway, even if it is a numerical convenience. Maybe instead of austerity, Greece needs honest taxpayers.

This point reminds me of an old joke attributed to workers in the Soviet Union -- "We pretend to work and they pretend to pay us."  In Greece, citizens have pretended to pay their taxes, and the government pretended to serve their interests.

BenDarDunDat

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #36 on: June 01, 2012, 08:17:51 AM »
2008 was a bad crash. I don't think there's a way to predict how bad the next crash will be, other than the fact that we know there will be one. Crashes happen.

Gold - (disclosure, I'm long $GLD) goes down during market crashes just like equities..and like equities it plunges when margin calls are forced. However, Gold tends to appreciate at a higher rate when central banks print more money.  I'm of the opinion that Europe - or at the very least, Greece, Italy, and Spain will print more money to spur economy. If that occurs, China will be forced to debase their currency to keep Chinese folks working. I'm long because I think the world currency printers will have to be active in the coming years.

Buy foreign currencies? Like what? China is forcing everyone to race to the bottom. All over the world, the unemployed and the disenfranchised are tossing out governments. The Feds all over the world are instituting a tax on the franchised to pacify the disenfranchised.

 
« Last Edit: June 01, 2012, 12:39:42 PM by BenDarDunDat »

dancedancekj

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #37 on: June 01, 2012, 12:35:54 PM »
Does that last post strike anyone else as ignorant and slightly racist, or is it just me?

Well, those Asian women do love the LV and Coach bags. It's funny, because my sister (we're Korean) has always been Mustachian in terms of her finances, but I swear she loves that Coach bag like nobody's business.

KittyWrestler

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #38 on: June 08, 2012, 12:23:43 PM »
Does that last post strike anyone else as ignorant and slightly racist, or is it just me?

Well, those Asian women do love the LV and Coach bags. It's funny, because my sister (we're Korean) has always been Mustachian in terms of her finances, but I swear she loves that Coach bag like nobody's business.
Yeah totally. I am Chinese. I have relatives coming here to US buying 15 coach bags in one shot saying "I can't believe how cheap it is here!!" I mean, really? I haven't lived in China for 20 years... so I cannot relate  the Asian's snob attitude towards brand names.. And I swear I just cannot understand what the heck is so nice about that ugly brown bag that called Louie something something..


TLV

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #39 on: June 08, 2012, 12:51:14 PM »
When I lived in Japan, it seemed like the people there cared about what other people thought in a different way than Americans do. Instead of "if I get this expensive thing I'll be better than everyone else," it was "If I don't get this expensive thing I'll be scorned and shunned." Obviously I'm generalizing from a small and biased sample of experience, but I've read other sources that concluded the east asian culture values conformity (even) more than the U.S., and I expect that has something to do with the stereotype that they like LV and Coach bags. (And they certainly did - I noticed those bags MUCH more often in Japan than I do here, and they're not rare here by any means.)

KittyWrestler

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Re: 2008 aint nothing. Real Crash is coming. What do u think?
« Reply #40 on: June 08, 2012, 12:59:46 PM »
When I lived in Japan, it seemed like the people there cared about what other people thought in a different way than Americans do. Instead of "if I get this expensive thing I'll be better than everyone else," it was "If I don't get this expensive thing I'll be scorned and shunned." Obviously I'm generalizing from a small and biased sample of experience, but I've read other sources that concluded the east asian culture values conformity (even) more than the U.S., and I expect that has something to do with the stereotype that they like LV and Coach bags. (And they certainly did - I noticed those bags MUCH more often in Japan than I do here, and they're not rare here by any means.)
You are actually exactly right. The culture difference caused the different behavior. My dad who still lives in China is amazed that in US, you can never tell who's got money and who doesn't. It's quite nice that way. But in Asia, you have to dress in certain ways to even earn basic treatments. I will never forget back in the late 80's, I tried to go to a 4 star hotel to look for my dad, the door man pushed me out said, "you garbage go somewhere else..." I was so pissed, I dug out my mom's dress she bought from England (which was rare at that time in China) and went back, nobody stopped me.. Well, that was long time ago.. but the root elementary of this issue never changed...