Global financial system implosion begins

[Fruitloop]

and 'cos no-one knows exactly where the buck stops

 

[gosub]

You do realise dropping gold was one of the reasons the UK was able to get out of the great depression quicker than the US?

Mid term you are better off holding gold than sneering at it. Personally think OPEC should carry on with its plans for a gas&oil backed currency, or rather I can see the logic, not sure UK would come through that very well

 

[Fruitloop]

A personal 'matter-energy allowance' beckons.

 

[Giles]

Why don't countries just stick to a "no overdrafts" policy? They can't spend out more in any given year than they take in in taxes, and if they run out, they stop spending til they get some more tax in.

It would be simpler all round.

Giles..

 

[FabricLiveBaby!]

You do realise dropping gold was one of the reasons the UK was able to get out of the great depression quicker than the US?

I think he's referring to the fact that Gordon Brown sold most of our gold stocks at an all time low.

He's a twat

excuse the DM's link please, but the picture does it justice.

http://www.dailymail.co.uk/news/art...00-What-Gordon-Brown-sold-2bn-fetch-13bn.html

 

[FabricLiveBaby!]

lol Grdon Brwn.

 

[Dr Jon]

You do realise dropping gold was one of the reasons the UK was able to get out of the great depression quicker than the US?

No I didn't - and I'm not sure that today's situation is the same.

"Printing" trillions in funny money has taken governments and central banks into moral hazard territory. People can see this and know that it can only lead to hyperinflation and the destruction of savings.

This is why China and India are ditching dollars (and other fiat currencies) for gold, commodities and other assets that have real value.

 

[A Dashing Blade]

This is why the China and India are ditching dollars (and other fiat currencies) for gold, commodities and other assets that have real value

In what way does gold have a "real" value?

 

[A Dashing Blade]

Time to tell the non-domestic creditors to suck it up. And by that, I mean all of us, not just PIIGS. Bye bye profiteers. Shame the gamble didn't work out, eh lads. Ah well. Some you win, some you lose. Don't let the door hit you on the arse on the way out.

Got a pension plan?

 

[yield]

Why don't countries just stick to a "no overdrafts" policy? They can't spend out more in any given year than they take in in taxes, and if they run out, they stop spending til they get some more tax in.

It would be simpler all round.

Giles..

Got a pension plan?

@Giles - UK Pension plans depend on government debt/gilts.

In what way does gold have a "real" value?

Quite. Commodity fetishists lol

 

[gosub]

You take out a self administered pension plan, you can be as esoteric as you like.

 

[laptop]

Meanwhile... EU bank stress tests released after close of business today.

Gives governments the weekend to panic about any emergency before the markets open on Monday

 

[gosub]

Irish banks all passed the stress test last time

Redwood blogged on this this morning

 

[Dr Jon]

In what way does gold have a "real" value?

Governments can't just print it, for a start.

The Screaming Fundamentals For Owning Gold And Silver

 

[elbows]

Let them eat gold.

 

[A Dashing Blade]

Governments can't just print it, for a start.

So it can't ramp on on pure speculation?

The Screaming Fundamentals For Owning Gold And Silver[/QUOTE]

"The punch line is this: Gold and silver are not (yet) in bubble territory"

see chart above

"The reasons to hold gold and silver, and I mean physical gold and silver, are pretty straightforward. So let’s begin with the primary reasons to own gold.

1.To protect against monetary recklessness
2.As insulation against fiscal foolishness
3.As insurance against the possibility of a major calamity in the banking/financial system
4.For the embedded 'option value' that will pay out if and when gold is remonetized"

All of which are totally quantifiable

 

[BigTom]

Why don't countries just stick to a "no overdrafts" policy? They can't spend out more in any given year than they take in in taxes, and if they run out, they stop spending til they get some more tax in.

It would be simpler all round.

Giles..

simpler does not necessarily mean better.. governments can (usually) borrow money more cheaply than the private sector.. so, as long as you recognise that the public and private sectors are not really separate there are times when it is a very good idea in economic terms for governments to borrow money to invest in the economy.. This applies particularly where there are goals which play out over a long time frame (such as climate change) which want very large levels on investment whose payback time is likely to be measured in decades rather than years..
If you've got cash in the bank, great but if you ahven't your still better off borrowing money than not.
Would you apply the same reasoning to the private sector as well? Lots of companies seem to borrow money all the time - the basic reasoning being that if you can invest and make a higher return than the interest charges you're better off borrowing money than not, and that money invested should always return more than the interest rate of leaving it sat in a bank so don't keep lots of cash in the bank..
If you'd not apply the same logic to both sectors, I'd be interested in knowing why?

 

[Dr Jon]

So it can't ramp on on pure speculation?

Of course it can. Like any other commodity. Obviously.

All of which are totally quantifiable

How total do you want?
I thought the analysis Martenson provided was quite clear...?

 

[A Dashing Blade]

How total do you want?

A quantifiable definition of "monetary recklessness" and "fiscal foolishness" wouold be a start

I thought the analysis Martenson provided was quite clear...?

It's an OK, "scratching the surface" description of what's happening at the moment.
I see no link between those problems and a reason to buy gold.

 

[Ae589]

So it can't ramp on on pure speculation?

That's not a chart of the value of gold, it's an upside down chart of the value of the dollar, which has been destroyed through money printing.

 

[ferrelhadley]

August 2 default D Day
http://www.marketwatch.com/story/tr...l-2011-07-15-1531360?link=MW_home_latest_news

 

[Sunray]

August 2 default D Day
http://www.marketwatch.com/story/tr...l-2011-07-15-1531360?link=MW_home_latest_news

Politicians are not politicians because they are really fucking stupid. This will not happen because a US default would instantaneously usher in a new world order.

 

[teahead]

Commentating on the way the waves fall isn't so hard you know...
How about some proper hard info all you stay-at-home city peeps?

 

[teahead]

Politicians are not politicians because they are really fucking stupid. This will not happen because a US default would instantaneously usher in a new world order.

So capital controls are what's what. See them pull the plug on what's left of the Euro bath...

 

[teahead]

And incidentally, pulling them a little closer to the juicy front being built by Russia and China in gold, in quiet behind the scenes negotiations with the rest of Asia. Even, could it be real, the nasty poop the US has been making in Pakistan, Syria, Iran...

 

[Sunray]

I'm now starting to wonder if the Euro is dead in its current form. Are the politicians clutching at weeds in the gutter of a slowly toppling skyscraper.

When they are going to shout 'RUN'?

 

[camouflage]

Why don't countries just stick to a "no overdrafts" policy? They can't spend out more in any given year than they take in in taxes, and if they run out, they stop spending til they get some more tax in.

It would be simpler all round.

Giles..

Hmm. Sometimes political considerations demand more is spent than taxes can cover. I don't mean to say slimy rubbish politicians popularity contest blah blah blah, I mean there are things people honestly care more about than balanced budgets. And rightly so in my opinion.

 

[Sunray]

I decided to read up on why its taking so long for the US to sort its self out, surely thats what politicans do in the end.

Now I am wondering if they will, they have religious zealots in power. Religion and politics has been such rosy mix in the past.

A full blown US debt default, this threads title will be prophetic. Sterling suddenly seems a safe haven.

 

[Steel Icarus]

Look, I don't really understand how economies work. Or money, really. But here's the question: if the US defaults, as seems entirely possible, and the Euro goes tits up (if this makes sense - I'm not sure how to put it) at what point between "bread goes up to £2 a loaf" and "having to eat the woman across the street" are we likely to get to?

 

[Maurice Picarda]

Bread £4 a loaf, but your children will be sending you remittances from their black economy jobs in Kuala Lumpur. Anthropophagy only really comes with spectacular natural disasters.