Global financial system implosion begins

[Steel Icarus]

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.

I appreciate you answering, but I had to look some of that up. Do you have something I could understand?*

*I'm really not being sarky here although it might read like that. I just don't get how monetary systems work.

 

[Maurice Picarda]

I don't really know anything about it tbh. I get to mix with people who talk to senior economists, and pick up on the current chatter, that's all. The consensus is pretty bearish, but I'm sure you could tell that from reading the papers. The widely touted crisis is Western rather than global and it will hurt, but it doesn't mean that society will collapse any more than it did in the 30s. Not that the 30s ended well for Europe, of course.

 

[Dr Jon]

I appreciate you answering, but I had to look some of that up. Do you have something I could understand?*

*I'm really not being sarky here although it might read like that. I just don't get how monetary systems work.

Richard Heinberg has written "Economics for the Hurried" which might be useful:

Part 1
Part 2

 

[yield]

2nd Loans, 2nd Wave of Losses
NYTimes July 16, 2011

“The big four are pretending that the second liens are still money good because many are still performing,” said Christopher Whalen, editor of the Institutional Risk Analyst, a research publication. By performing, he means that borrowers are still making payments, if only the minimum. Many home equity lines require only the payment of interest for the first 10 years.

Banks have written off about $500 billion in assets since 2008, Mr. Whalen said. Most of those assets were related to housing, but write-downs on second liens have been pretty sparse so far at the big banks.

“If home prices do not stabilize, much less recover, then banks are likely to feel pressure to begin wholesale write-downs of first and second liens,” Mr. Whalen said. “There is probably as much loss prospectively facing the banking industry as a whole on residential real estate exposures as have already been charged off.”

DENIAL in the banking industry — known in the trade as “extend and pretend” — is a powerful thing. But it works for only so long.

Still not only a sovereign debt crisis.

 

[magneze]

So, if the US budget cannot be agreed by this Friday they default. Is that right? Sounds bad.

 

[laptop]

So what's happened to the eight banks that failed the EU stress test on Friday night?

 

[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.

Yes, but it it better for everyone in the long run if governments only dole out to people what they can afford: no money left = no more handouts unless they can persuade people to give them more of their money in taxes.

Borrowing money for big projects can be a good thing, but borrowing just to fund day-to-day expenses is a bad thing. Once people get used to "something for nothing" (which means borrowing off your own people in the future) it is very hard to tell them they cannot keep getting something for nothing.

Giles..

 

[love detective]

So what's happened to the eight banks that failed the EU stress test on Friday night?

they have until the end of the year to raise the capital required to make them pass it - which in total is only around 2.5bn euros (nine banks failed it not eight)

they don't seem to have been the most stressful of stress tests

 

[love detective]

So, if the US budget cannot be agreed by this Friday they default. Is that right? Sounds bad.

they have until August 2nd to agree to raise the debt ceiling/limit

they won't default - what's going on at the moment is just political theatre/spectacle

 

[magneze]

they have until August 2nd to agree to raise the debt ceiling/limit

they won't default - what's going on at the moment is just political theatre/spectacle

I read that the actual deadline was Friday because all the paperwork or something couldn't be completed by 2nd August otherwise...

 

[Dr Jon]

Just spotted this article re "Bankster-led Political-economic Warfare:"

the wholly non-partisan Australian economist Steve Keen observed:

"This is the biggest transfer of wealth in history," as the giant banks have handed off their toxic debts (stemming from fraudulent activities) to tax payers in their respective countries. These big banks created bubbles -- using fraud -- because that's the only way they could make the obscene profits they feel they now deserve.
...
Indeed, this isn't the "Great Recession", it's the Great Bank Robbery . In simple language, the big banks have pillaged and looted the rest of the world, and now they are beginning to pillage and loot the USA. It is not only Greece that is losing its sovereignty; the big banks are in the process of turning America into a banana republic as well. Remember, the trillions in bailouts went to banks, not to Main Street , and a large percentage of the bailouts went to foreign banks (and see this ). And so did most of the money from the second round of quantitative easing .

In short, warfare initiated by the big banks has now gone global. As Warren Buffet, one of America's most successful capitalists and defenders of capitalism, has pointed out, "There's class warfare, all right, but it's my class, the rich class, that's making that war." And winning it.
...
Most remain largely unaware of the colossal crime that has been committed against them.

That lack of awareness we must bring to an end.

Also see:

The Good, the Bad and the Ugly

Outlaw Josey Wales

Unforgiven

 

[elbows]

Regarding the US debt issue, haven't we seen this kind of thing before, where politics stalls things till the last minute but it still goes through in the end?

 

[mack]

Regarding the US debt issue, haven't we seen this kind of thing before, where politics stalls things till the last minute but it still goes through in the end?

Yeah - it's been done on the West Wing

 

[frogwoman]

Can someone give me a run-down of this American debt thing? Is it really as bad as it's being made out to be?

 

[yield]

Can someone give me a run-down of this American debt thing? Is it really as bad as it's being made out to be?

The Republicans are pushing for more budget spending cuts before increasing the Federal debt ceiling.

If it's not agreed they'll not pay out on outstanding treasuries as in debt.

China warns U.S. debt-default idea is "playing with fire"
Reuters Jun 8, 2011

But, as love detective said, it'll be agreed as it's only for show political brinkmanship.

Assuming you mean the sovereign debt thing not the dodgy loans/mortgages corporate financial bubble.

 

[elbows]

Yeah, plus the Obama administration would like to be able to get rid of some of the Bush-era tax cuts or make equivalent raises to certain taxes. The Republicans aren't keen on that.

Some commentators seem to think that whatever tax & spending decisions are made, it won't be on anything like a large enough scale to tackle the problem, and these themes will need revising in a much more dramatic way at some point in the newt few years. Ratings agencies have made loud noise about the need to cut government spending in the USA, and it seems plausible that they will not be satisfied by this round of decisions, and so the ghastly market will make its preference known loud and clear many times in future, with some devastating results for many people.

 

[Dr Jon]

Max Keiser interviews Steve Keen

 

[yield]

Max Keiser interviews Steve Keen

I'm usually dubious of presstv.ir sources but I'd agreed with Steve Keen on most of that.

 

[Sunray]

The Republicans are pushing for more budget spending cuts before increasing the Federal debt ceiling.

If it's not agreed they'll not pay out on outstanding treasuries as in debt.

China warns U.S. debt-default idea is "playing with fire"
Reuters Jun 8, 2011

But, as love detective said, it'll be agreed as it's only for show political brinkmanship.

Assuming you mean the sovereign debt thing not the dodgy loans/mortgages corporate financial bubble.

^^^ This is what I thought. Then I read that the tea party feels that its been sent by god to roll back the state. Religion is driving their political mandate, are you going to stand by those comments. Do you have as much faith as they do.

I watch on if they initiate economic Armageddon.

 

[Crispy]

The Tea Party are not in power. Democrats and sane republicans outnumber them easily. The US will not default (this time )

 

[A Dashing Blade]

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.

No it's not. This is the USD Dollar Index over the same period.

"The U.S. Dollar Index (USDX) indicates the general int'l value of the USD. The USDX does this by averaging the exchange rates between the USD and 6 major world currencies. The ICE US computes this by using the rates supplied by some 500 banks."

 

[A Dashing Blade]

The US will not default (this time )

However markets are spooking atm because of the percieved lack of knowledge among US politicians wrt how important US Treauries are to the global financial transactions

 

[Ae589]

No it's not. This is the USD Dollar Index over the same period.

I just meant that gold's rise is not primarily speculation, it's more to do with the devaluation of the currencies it's measured in. I didn't actually mean you'd got the wrong chart.

 

[Dr Jon]

City bonuses totalled £14bn last year

Good to know the money-juggling / money-printing parasites are still doing nicely...

 

[Dr Jon]

Fed planning for potential default

The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government's $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday

 

[taffboy gwyrdd]

The lack of decent anti-banker perspective in the lamestream is still a shocking deriliction of basic journalistic ethics.

 

[A Dashing Blade]

The lack of decent anti-banker perspective in the lamestream is still a shocking deriliction of basic journalistic ethics.

This.
To the power of infinity.
The UK public has no real concept of of the magnitude by which they're being screwed over.

 

[Dr Jon]

I like the idea presented here of vigilantes and bounty hunters tracking these vermin down and bringin home their heads / scalps.

 

[Ae589]

From Dr Jon's link:

“We’re not moving toward Hitler-type fascism, but we’re moving toward a softer fascism: Loss of civil liberties, corporations running the show, big government in bed with big business. So you have the military-industrial complex, you have the medical-industrial complex, you have the financial industry, you have the communications industry. They go to Washington and spend hundreds of millions of dollars. That’s where the control is. I call that a soft form of fascism — something that’s very dangerous.” – Ron Paul

This is where I get confused about the Tea Party - Ron Paul is a poster boy, but everything they seem to want is pro-corporation.

 

[Crispy]

I thought Ron Paul has nothing to do with the Tea Party