Huge National Debts Could Push Euro Zone into Bankruptcy

What type of effect could this do to the global economies?

reply to post by GreenBicMan


Well I see my pension dissapear more and more every decade and ours is one of the better performing versus others in Canada.

The stock market of yesteryear is gone. It's going to be wildly unpredictable and logic and common sense that applied before won't apply now.

Fear and irrationale behaviour is going to take over and I fear unless you can monitor and change your position with the market and have insider knowledge then how are you going to predict future trends.

Shorting the EURO seems like a good bet because Ireland will need a bailout by fall. Spain and Italy may be able to push it off until next year. Germany can't shoulder the burden.

I'm buying land(agriculture, wood lots)

[edit on 6-5-2010 by DEEZNUTZ]

[edit on 6-5-2010 by DEEZNUTZ]

reply to post by DEEZNUTZ


Yeah what you state is just a lot of regurgitated information that is from people that have been severely burned in the market.

There is no historical precedent for negative returns for anyone invested over a 20 year time span in US equity markets.

Take 1990-2010 for example. Dow is only up what.. 6000 or so points? Dollar cost average that over 20 years and you are filthy rich with only $10,000 capital.

Equity markets are always the best investment over a long time period. Anything else is not taking historical performance into their misinformed view of the marketplace and is quite confused on how to form a statistical sample size.

reply to post by LieBuster


You are not that bright unfortunately.

Go take a look at the last 100 years of the DJIA.

If you still can't figure it out let me know and I will hold your hand.

Originally posted by GreenBicMan
reply to post by LieBuster

 

You are not that bright unfortunately.

Go take a look at the last 100 years of the DJIA.

If you still can't figure it out let me know and I will hold your hand.

You guys both valid points. GreenBic is correct that historically there has never been a period of time in which over 20 years you would have lost money invested in the broad stock market. However, up until a year ago, there wasn't a 10 year period with negative returns. So history is meant to be broken, and historical data taken out of context means very little.

What I would say to both of you is this; when viewing historical data, consider whether or not the economic environment and contributing factors of those times are the same as what is going on currently. If not, try to find timeframes in which it more closely resembles what is currently happening.

From my viewpoint, I think what is happening now is unprecedented and the closest example concerning debt and deficits was during the Great Depression and WWII. However, that timeframe was much different in that we had a huge manufacturing infrastructure and were not reliant on foreign nations. Back then when we borrowed, it was from US citizens primarily. Now we are dependent on foreign nations for energy/food/commodity/labor/essentials needs, and for borrowing money, all while we do not have an infrastructure to even produce our own goods if need be. So, what happens if the foreign spigot is turned off? What happens if European contagion spreads, and China's bubble bursts like many see happening. That my friend is a situation in which their is no historical stock market chart to reference or look back on. But if the contagion is contained, China doesn't pop, and the US gets its budget under control, markets could be good. Personally I think that last scenario is very unlikely though.

Right now as I type, mainstream media in Asia are painting the possibility of Asia being affected by European financial crisis. Another BS - media claim that USA is experiencing highest employment figures in months.

I can see where this is going. They (NWO/SOB manipulators) are turning back the wheel so that USA can regain "fake" financial trust and confidence.

The next 12 months will be pretty interesting. They may choose to crash commodity market or create another Asian financial crisis.

Originally posted by Mr_Alex
What type of effect could this do to the global economies?

Think ripple effect.

reply to post by johnny2127


I would actually recommend looking back in the early 70's during the energy crisis. This instance in history is actually quite rare. It was the LOWEST we have been under the 200 DAILY EMA in history.

This recession/depression/crisis whatever it was came close. But did not fulfill the same percentage as previous. I think it was around 58%, but I have to look again. Although I did confirm this at the time however long ago I researched it.

So, I would say that we have technically seen a decline like this before. There was also an article I found on the internet a while back I posted to the website but after a quick look I can't find it - basically stating the same thing I just said.

Following that decline in the 70's the market rebounded almost lockstep just like we have this time. In fact if you have been following the market thread I have been harping on this for at least 6-8 months. It is almost identical to the rally during the energy crisis.

So, I guess all I can say is I will take historical performance over any conjecture that bases itself on less than 5% sample size of the market over the past 100+ years. It just doesn't make sense statistically to get all bent out of shape over such a small sample that everyone in the media and in this website like to tout.

It does garner webclicks though and advertising dollars. That is one thing the past 2 years have done for a lot of people proclaiming that the market would crash. The only problem with that is you have to endure the market going up exponentially between.

reply to post by GreenBicMan


Again man, you are looking at market data without considering the macro economic environment. I have told you multiple times, it's not all about technicals. Technicals take a snapshot but it is not in context of the economy or geopolitical climate at the time. You data only is relevant if the economic and geopolitical settings are similar. Which they aren't. America, the world, the economy and the financial situations are completely different.

this $ crisis is nothing new:

The conflict between Capital and Labor.

"Go to now, ye rich men, weep and howl for your miseries that shall come upon you. Your riches are corrupted, and your garments are moth-eaten. Your gold and silver is cankered; and the rust of them shall be a witness against you, and shall eat your flesh as it were fire. Ye have heaped treasure together for the last days. Behold, the hire of the laborers who have reaped down your fields, which is of you kept back by fraud, crieth: and the cries of them which have reaped are entered into the ears of the Lord of Sabaoth. Ye have lived in pleasure on the earth and been wanton; ye have nourished your hearts, as in a day of slaughter. Ye have condemned and killed the just; and He doth not resist you. Be patient therefore, brethren, unto the coming of the Lord. Behold, the husbandman waiteth for the precious fruit of the earth, and hath long patience for it, until he receive the early and latter rain. Be ye also patient; stablish your hearts: for the coming of the Lord draweth nigh. Grudge not one against another, brethren, lest ye be condemned: behold, the Judge standeth before the door" (Jam. 5:1-9).

Observe that the above passage makes express reference to "the last days" (v. 3). It tells us that in these "last days" there shall be a class of "rich men" (v. 1). It speaks of them having "heaped treasure together" (v. 3). It declares that their riches have been acquired by "fraud" (v. 4). It makes mention of them having "condemned and killed the just" (v. 6). It intimates that their rapacity and dishonesty will evoke and provoke a loud "cry" (v. 4) from their victims. It denounces them for having "lived in pleasure on the earth, and been wanton" (v. 5). It pictures the sorrows and anguish brought upon the laboring classes whose cries have entered into the ears of the Lord of hosts (v. 4). It announces the terrible judgments of heaven which shall yet descend upon them for their crimes, and predicts that they shall "weep and howl for the miseries that shall come upon them" (v. 1).

What human wisdom could have delineated so faithfully the present conflict between capital and labor! What mortal mind could have foretold, almost two thousand years beforehand, the amazing and heart-rendering situation that is now before our eyes. Who but men "moved by the Holy Spirit" could have foreseen the recent rise of multi-millionaires, the accumulation and concentration of three-fourths of the wealth of the world in the hands of scarcely one hundred men, the hoarded riches of the capitalist and monopolist, the extravagant and voluptuous living of the wealthy, the suffering which should be brought upon the laborer by the rapacity of his merciless employer! How remarkable is this prophecy in view of our twentieth century trusts and syndicates which corner the markets, hoard up raw materials, and rob the masses by fixing extortionate prices! And what is the significance of these things? They are another proof that the cud of the age is reached. They are further intimation that the "last days" are upon us. The cries of the distressed poor have reached heaven and the Divine Judge is just about to come to the deliverance of His people and deal in vengeance with those who have robbed them. The Lord’s people are not to resist and fight: the command is "Grudge not one against another, brethren, lest ye be condemned." Believers are here urged to stablish their hearts and be patient, for "the coming of the Lord draweth nigh."
www.pbministries.org...

Originally posted by GreenBicMan
reply to post by LieBuster

 

You are not that bright unfortunately.

Go take a look at the last 100 years of the DJIA.

If you still can't figure it out let me know and I will hold your hand.

Well looks to me like i called you out on your theory, said why and you have been unable to answer the question.

Shares in zimbarwa are going up but i don't think anyone is too happy do you.

We could also look at the FTSE 100 over a long period of time that does not include a lot of names that have fell out and in some cases are no longer trainning.

Pound went up 20,000% against the DM in the 1930 so was everyone rich in the UK or do you think it still took the same amout of work/wages/£ to buy a loaf of bread.

i'm not interested in Tulips from amsterdam i want food/property/silver/gold/cars and i threw cars in to make it fair because they are 10 X cheaper than when they first come out.

knock off the insults and answer the question please because you might find you enjoy the learning process.

Greenbicman,


Why the insults? I've been quite successful in the markets and I take a big picture look at the world when investing. It's the only prudent thing to do. Past trends are irrelevent today as the markets are not functioning on any where near the same principles as it did before.

The "HOUSE" changes the rules on a daily basis.

Originally posted by Shenron
You people are too paranoid. The only problem here is, that we're all in the euro zone, but I doubt this will cause any serious devaluation. This isn't the first time a country goes bankrupt (look at Argentina for example) and certainly not the last.
The Greeks will just have to tighten their belts and bear it, no matter how much they protest. There is no other option for them, unless they want sanctions from IMF, which would leave them without gas, pharmaceuticals and other necessities. That's just how things work. They'll be punished for years of laziness, conservative thinking and tax evasion.
The same goes for any other country, that will go bankrupt.

You could be right but i see another picture that greece maybe the tip of iceburg and unrest will sweep the world as more and more people are taxed to death and then what is the IMF going to do.

think of it like being in a casino and someone just found magnets under the table and on all the other tables, people had been lossing more than normal.

would you like to be a doorman when that kicks off.

too many people can see whats happening between the banksters and goverment and when they are forced from the comfort zone they will be asking a lot of questions and none of the media spin will work when peoples needs are here and now.

just a theory but i think it's as good as your.

This huge debt the EU has just jumped up by another $1tr and thats on top of $100bn put by for greece and the 'Investors' are loving it.

thats a mere £2000 extra debt for every person in europe and if you exclude all the public sector workers, who take money from the system then it comess in at about £8000 extra debt for every tax paying person in the EU.

it's clear the answer to debt is more debt, i've been so stupid and will be selling my silver eagles off at face value so i can get into more dedt.

anyone that says they understand the economy as it running just now is a mad fool or is lieing.

Originally posted by LieBuster
This huge debt the EU has just jumped up by another $1tr and thats on top of $100bn put by for greece and the 'Investors' are loving it.

Actually.. the vast majority of that money is a Mechanism that can be called upon if needed..

So it is not a debt unless it is used.. At the moment, it is to calm the markets.. Which it will.

We'll see what happens next..

Originally posted by DEEZNUTZ
Shorting the EURO seems like a good bet because Ireland will need a bailout by fall. Spain and Italy may be able to push it off until next year. Germany can't shoulder the burden.

I wouldn't touch it with a 40ft pole at the moment. I got out Thursday when the futures market went crazy and the Dow started to drop and I'm glad I did.

Plunge protection teams, nuclear bailouts. What free market? The eurozone was down roughly 10% last week and now they've nearly recouped those losses in a day as the ECB and some of the other governments push this liquidity into the market.

How is anyone that isn't a huge bank or hedge fund meant to survive these massive spikes? These governments try to blame market makers like Goldman for this, blame HFT but then they pull this? They're just as bad.

There is no free market and anyone that plays in it is going to lose their shirt.

Futures say Dow will go up 391, after Thursday it's just too much for me. I feel like I'm watching histories largest pump and dump taking place before my eyes.

Originally posted by DEEZNUTZ
reply to post by GreenBicMan

 

Shorting the EURO seems like a good bet because Ireland will need a bailout by fall. Spain and Italy may be able to push it off until next year. Germany can't shoulder the burden.

Just came across this and have a question for you..

Why will Ireland need a bailout by Fall? Just as a matter of interest..

Ireland has a public debt the same percentage as Germany.. 36% lower than Greece and somewhere similar lower than Portugal and Spain..

Its deficit may be the largest in the EU but is already retreating in a Snowball fashion.. Almost the quickest deficit drop in the EU.. Tuned to be all but gone in 2.5 years and at this stage looks to be gone earlier..

Not trying to completely destroy your post there or anything but how can your logic be taken seriously when you are using 12 month old data as a basis for your argument?

And of course.. the whole EU trillion dollar stabilization mechanism that was dropped today mean that Irish Bond interest rates just hit the floor and borrowing rates also collapsed along with a rallying of every market in the country..

Also the whole Fiscal plan that is to be unveiled in a month by Van Rompoy that will form the basis of a United Fiscal and Economic Government out of the EUROZONE will also create serious stability for the EURO and EUROZONE over the next 2 years.. No matter how scary the concept of a United States of Europe may be.

Originally posted by Dermo

Originally posted by LieBuster
This huge debt the EU has just jumped up by another $1tr and thats on top of $100bn put by for greece and the 'Investors' are loving it.

Actually.. the vast majority of that money is a Mechanism that can be called upon if needed..

So it is not a debt unless it is used.. At the moment, it is to calm the markets.. Which it will.

We'll see what happens next..

Well yes indeed your right so we have ten of trillions of euros on one shelf we call debt and on the other shelf we have this $1tr doing nothing.

This new money will do nothing to calm the markets unless it's spent to buy up useless shares under the biger fool then me rules.

Have you ever know countries not to spend this money and to then come back and ask for more and if so then how come national debts keep rising and we now find ourselves here today.

I will read up on the economic miracle in Irland, good luck to them because thats quite a pull back from the brink and i'm not quite sure how they have managed it.

We seem unable to agree if the markets are loaded or not against your average investor/ punter with a gambling habit so maybe we should explore this avenue.

reply to post by LieBuster


I get what you are saying but I think you might be missing a couple of key points with the Markets..

The Mechanism is there to place the money where needed IF a country is about to default..

This in turn has given investors confidence that they will not lose their investments because the nations in question will not default as a result of the Mechanism..

This in turn has rallied the highly undervalued markets which were down as a result of loss of confidence in the EUROZONE.. So now they are back up and the vast majority of that money will not need to be used unless there is a massive collapse in the future..

This is why it is not debt.. As the money may have been signed off on but It has not been borrowed yet.. It is however there to be borrowed if needed.. Get it?

If Spain needs a bailout.. Which Im not saying won't happen.. And 250billion is needed for it.. then that 250 will be debt..

But because the interest rates on Spanish bonds collapsed, their cost of borrowing wend down substantially and the income tax made from profits in the markets all as a result of the mechanism being signed into force .. This makes trouble in Spain or Portugal infinitely less likely..

reply to post by Dermo


Not sure i agree with the 'highly undervalued markets' or not but if people know they are having to borrow money because confidence left the market because they had borrowed to much money in the first place is going to realy hit the spot do you.

No i susgest the market is licking it's lips because they know a lot of toxic shares will be purchased using this funney money so dealers get off the hook and pay a few backhanders to those that allowed us to go down this path and tax payers get to pick up the bill for decades to come.

The nuke option is being played far too much on the markets and it's time to go to war with the bankers and then lets see if these fancy investment tools are all they are cracked up to be.

People will only be pushed so far and the a$$terity measures have not even started so we are going to go backwards and forwards untill something cracks, we all know it but think if we play a little longer we can somehow manage to come out better.

I shot the money fairy of the west and shes not coming back.