Headed for another recession?

It's coming soon, our whole economies are based on stupid house prices. Here in the UK a new couple to the housing market has to work all their lives to own something that is semi detached, small garden (and I mean micro), crammed into a small living space. The government used to give such things away for almost free at one time. People slog all their lives with massive mortgages to repay to the stinking bankers who are behind this house inflation along with the estate agents. All the economy based on house price movement, house doing up prgrammes on every channel, 'House in the Country' 'Property Ladder' etc etc, all to mind control people into getting up to their necks with debt................ When interet rates start rising it's going to get interesting

originally posted by: eManym
The epic world wide economic crash has been fallacy that has been tossed around for over a decade and won't happen. There is a process going on with economic decline but it is very slow. So slow that people will grow accustomed to the changes and accept it as just the status quo.

Why do you believe the economic crash is a "fallacy"? Are you well-read in macro economics and the various fiat monetary systems being used by the world's "great" economies of today? Can you elaborate at all? I sure would love to know what I am missing here

originally posted by: FamCore

originally posted by: eManym
The epic world wide economic crash has been fallacy that has been tossed around for over a decade and won't happen. There is a process going on with economic decline but it is very slow. So slow that people will grow accustomed to the changes and accept it as just the status quo.

Why do you believe the economic crash is a "fallacy"? Are you well-read in macro economics and the various fiat monetary systems being used by the world's "great" economies of today? Can you elaborate at all? I sure would love to know what I am missing here

Macro economics are nothing but a study of national bank loans. It is nothing but a prediction note based on the studies of different national transactions.
Macro economics is actually in real life based on micro economics movements within a nation. Not the big transactions between nations.

Macro economics is a study polititions use to argue finiances. And it is far from accurate because what matters in the end are the results from micro economoics. In other Words how a nation actually spends its Money.

a reply to: Reallyfolks

Recession?

Is that the PC term for Complete Market Collapse?

Because that's what is coming.

Peace

originally posted by: Reallyfolks
Doomsday clock for global market crash strikes one minute to midnight as central banks lose control

www.telegraph.co.uk...
No more tricks for next recovery

There actually is one more trick for a recovery. During the Civil War the US ran out of money due to the immense costs and Congress refused to debase the currency as it was all in gold and silver at the time. Lincoln went to the banks to finance him but the interest rates they demanded were very high. Instead he took a new plan to Congress to use their authority to create a fiat currency which was the Greenback.
en.wikipedia.org...

For the next 30 years Greenbacks were in circulation though no more were printed other than replacements after 1865. They were very popular and actually were more popular than gold, to the point that Congress actually had to outlaw them eventually in a contraction of the money supply.

If the dollar were to collapse again we would simply issue a new fiat currency, it's not a difficult thing to do. Most likely if we experience a global currency collapse (which a dollar crash would cause) a one world currency will be in place within days.

a reply to: Aazadan

Ok but we are on a fiat currency, basically it's worth nothing but we imagine and have faith in. If one fiat currency crashes, is it really logical to assume people would imagine or have faith that it's worth more or better than just what crashed?

originally posted by: Reallyfolks
a reply to: Aazadan

Ok but we are on a fiat currency, basically it's worth nothing but we imagine and have faith in. If one fiat currency crashes, is it really logical to assume people would imagine or have faith that it's worth more or better than just what crashed?

Yes. It happens all the time. If the dollar crashes and it takes 1 million dollars to buy what previously cost $1 you print a new currency, say it's equal to 1 million old dollars, and the loaf of bread again costs $1. Everyone loses their savings but prices are again affordable and provided you don't have further runaway inflation (in the US's position this is easy to stop) the problem is solved.

If you want a successful historical example look at the Real in Brazil, where they stopped hyperinflation through the use of a fiat currency.

a reply to: Aazadan

So the new currency with no real value, would be worth 1 million of the old currency with no real value. The savings would be wiped out. Wow who knew it would be that simple

originally posted by: Reallyfolks
a reply to: Aazadan

So the new currency with no real value, would be worth 1 million of the old currency with no real value. The savings would be wiped out. Wow who knew it would be that simple

Simple doesn't mean painless.

At the end of the day currency is necessary because not all jobs trade with each other equally. An hour of work from a plumber is not worth the same as an hour of work from a typist, or an hour of work from a lawyer. Currency represents a system of measuring the value of these works against each other and facilitating trade. Currency and credit (all currency is basically credit, since the currency is debt based) are nothing more than a ledger stating how much work you are entitled to from others. That ledger doesn't need any hard asset behind it because it's representing the work of others.

Does that make sense to you?

originally posted by: Reallyfolks
a reply to: Aazadan

Ok but we are on a fiat currency, basically it's worth nothing but we imagine and have faith in. If one fiat currency crashes, is it really logical to assume people would imagine or have faith that it's worth more or better than just what crashed?

Who will crash Depends on the nation who gets to print the New world currancy. There is no doubt that the US will crash. The US will crash hard and will not be forgiven by the New nation who gets to print the New world currancy. The EU nations will not all crash because they will be needed to boost the economy for the New nations who gets to print the New currancy.

The US will crash do to moral standards and arrogance they show, not because they have a lot of debth. Because we all know that currancy is nothing but FIAT Money. It is in reality nothing.
The New nation who gets to print the New world currancy will determin through agreements what kind of buying Power all other nations will have. This is what the US and the EU fear the most, because right now they have the buying Power no one else have.

a reply to: spy66

The printing of money is already largely outside of the hands of individual nations. No single nation controls the supply of Euro's and every bank in the US has the ability to create dollars. Any one world currency would be beyond the printing control of a specific nation, instead it would be under the control of multinational banks just as various national currencies are now.

originally posted by: Aazadan
a reply to: spy66

The printing of money is already largely outside of the hands of individual nations. No single nation controls the supply of Euro's and every bank in the US has the ability to create dollars. Any one world currency would be beyond the printing control of a specific nation, instead it would be under the control of multinational banks just as various national currencies are now.

I personaly dont see it that way. There are only Three Powers working the economy right now. The US, China and Russia. Where China and Russia are attacking the dollar. Practically everything in the world is traded in US dollars created by the US federal reserve bank. There is only one world sentral banking system: The Federal Reserve. Every other currancy is linked up to it. Even Russia and China. If they werent they would not be able to inflate the US dollar or the pound or the euro at the same time. The dollar, the pound and the euro all when tup at the same time.
This is what China did when they put some of their US bonds on the market. And it was the US Federal Reserve who had to cash it in. This is not mentioned to the Public as far as i know through the media in Norway.

China is not going to make deal With the IMF. They dont have to. The IMF will be deamed helpless if the US and EU cant trade. What currancy will the IMF produce that China and Russia will Accept?

a reply to: spy66

Every bank can create fiat currency from nothing. You may not see it that way, but that is precisely how it works through Fractional Reserve Banking. If I deposit $100 in a bank and the leverage rate is 10:1 they can make $1000 in loans based on that $100. Thereby, through depositing $100 they have created an additional $900 in the system. Congress and the Fed can control the creation of physical money such as coinage and paper dollars but these days those are nothing more than a physical representation of account balances on digital ledgers.

What China did wasn't put US bonds on the market, they took maturing treasuries and rather than reinvest the proceeds in new bonds as is typical they kept the money, largely due to the low interest rate currently being offered. That resulted in the US having excess bonds on the market, which were then bought up by others.

Because each currency is backed by the debt of other currencies of their host nations, China making more US bonds available to be bought by western nations, means western nations are buying US debt. That's a sign of confidence in the dollar which leads to an increase in the dollars value in those countries. Since dollars are part of what backs the pound and the euro, the dollar going up increases those currencies (the pound and euro also back the dollar).

As far as the IMF goes, China loves the idea they've pushed hard for it. They want a playing field where everyone is attempting to use the same currency, not one where most countries have a demand for the dollar, because that exposes them to the fiscal policy of one specific nation.

originally posted by: Aazadan

originally posted by: Reallyfolks
a reply to: Aazadan

So the new currency with no real value, would be worth 1 million of the old currency with no real value. The savings would be wiped out. Wow who knew it would be that simple

Simple doesn't mean painless.

At the end of the day currency is necessary because not all jobs trade with each other equally. An hour of work from a plumber is not worth the same as an hour of work from a typist, or an hour of work from a lawyer. Currency represents a system of measuring the value of these works against each other and facilitating trade. Currency and credit (all currency is basically credit, since the currency is debt based) are nothing more than a ledger stating how much work you are entitled to from others. That ledger doesn't need any hard asset behind it because it's representing the work of others.

Does that make sense to you?

Pianless would be an understatement. Just don't see it being simple either. Could be wrong.

a reply to: Aazadan

Wouldn't say they create currency as much as they create purchasing power through fractional reserve banking. Fed creates currency or rather federal reserve notes at 260 per every 1000 printed.

originally posted by: Reallyfolks
a reply to: Aazadan

Wouldn't say they create currency as much as they create purchasing power through fractional reserve banking. Fed creates currency or rather federal reserve notes at 260 per every 1000 printed.

Currency is nothing other than a physical representation of purchasing power. It exists so that every time we make a purchase, we don't have to both go to the bank and have a ledger of how much each of us owes the other person adjusted. In the era of debit and credit cards however the need for cash has been largely diminished because we can electronically send a message to the bank to adjust our accounts.

As long as the banks have built their systems so that they can add a new currency quickly and easily, it becomes fairly simple to change account balances. I've never programmed something for the financial sector, but I have programmed currencies in games before and adding a new one is just a matter of making a database entry and adjusting the formatting of your periodic updates of exchange rates to include the new one. Those are both fairly simple tasks, and the banking industry has very competent people building these systems so it wouldn't be difficult. I would imagine any local bank could do this with their on staff programmer even.

So long as power and the internet (or phones, but any phone network can also carry network signals using older modems) remain operational it would be a very rapid shift. Without either you would see local currencies pop up quickly though without electricity most people would have no means of generating income. Then again, most of these collapse scenarios are predicated on the idea that the power goes out. Why would the power go out unless we were hit with a massive solar flare?