Global Economy - What will be the Black Swan Event?

Will it be the collapse of European banks, civil wars breaking out from the populist movement, terrorist attacks or North Korea? Things sure seem to be heating up all around the globe. Whether you've been paying attention to the financial side of things, geopolitical, or none of the above, I do believe we will see some events that rattle the global markets within the next year or two. What do you all think?


I'm presenting a few important topics worth mentioning. I look forward to hearing from my friends here on ATS. Catch ya in the comments [proceed below]

Exhibit A: Venezuela

Venezuela has defaulted on two of its US dollar-denominated sovereign bond issues. Downgrading Venezuela’s sovereign rating to SD (“selective default”), the ratings agency Standard & Poors said that Venezuela had “failed to make $200 million in coupon payments for its global bonds due 2019 and 2024 within the 30-calendar-day grace period.”

...A further $420m of bond payments are already overdue: unless Venezuela finds some dollars in a hurry, these will also go into default very soon.

Exhibit B: Flattening Yield Curve for US Bonds

Check out the yield curve for yourself: www.marketwatch.com...

An inverted yield curve would not be pretty. Economists and Fed talking heads are proposing the idea of negative interest rates here in the US now. Fun!

Low inflation and neutral interest rates as well as political uncertainty are all weighing on longer-dated bond yields, keeping them low even as the Fed boosts the cost of borrowing in the near-term

Exhibit C: Saudi Arabia & Iran

It looks like this feud will continue to play out via proxy wars, but with everything so destabilized in Saudi Arabia right now, I could see things escalating further as well.

Are we heading towards a direct war between Saudi Arabia and Iran?
So far Tehran and Riyadh have fought via proxies. Neither is really geared up for a direct war with the other but one successful rocket attack on the Saudi capital from Yemen could upset the apple cart.

P.S. It is Two and a Half Minutes to Midnight

P.P.S. US is In Debt at an estimated $170,000 per TaxPayer, with $20.5 Trillion in National Debt

Well, with the housing market at an all time high, the stock market at an all time high, debt to income ratio at an all time high, student loan debt at an all time high, with record tax revenue.. I'd say we're long overdue for a collapse. I've noticed a lot of houses are for sale on the market in my area, and they are just throwing up new houses everywhere.

I recall the last time this situation happened, we entered an economic recession. It's all an engineered cash grab for the elites. There is no way to stop it, just prepare for it.

If your house has gained significant value, sell it. If you've made a killing in a stock market, get out now. Don't leave a bunch of spare cash in the bank, put it in sound investment accounts. Banks aren't giving good rates on pretty much any kind of investments, but they are charging insane interest rates on loans and credit cards.. I don't claim to be an economic expert, but just from seeing what happened before, versus what is happening now, I can't help but feel a sense of de ja vu

a reply to: FamCore

Like the second coming of Jesus, people predict financial collapse all the time. You all will be long dead before the economy collapses or Jesus shows up again.

The thing is there are 7.3 billion people in the World and people will continue to have babies. As long as people continue to copulate there will be economy. Babies need to eat. Babies need diapers. My faith is not in the dollar, the government, or Big Oil. My faith is in people's desire to continue to have children.

originally posted by: eXia7
Well, with the housing market at an all time high, the stock market at an all time high, debt to income ratio at an all time high, student loan debt at an all time high, with record tax revenue.. I'd say we're long overdue for a collapse. I've noticed a lot of houses are for sale on the market in my area, and they are just throwing up new houses everywhere.

I recall the last time this situation happened, we entered an economic recession. It's all an engineered cash grab for the elites. There is no way to stop it, just prepare for it.

If your house has gained significant value, sell it.

The thing is, if the economy crashes the elites will no longer be elites. The very last thing the people with power and privilege want is mass rioting by the millions taking away their power and privilege. Plus the elites enjoy the rich culture provided by having a robust economy. Life without culture is boring for the elites.

I think the elites are actually doing everything in their power to try to get people motivated to be more successful. Wealth comes from leverage. If you own 1000 house and people are paying you rent, then in one day, those 1000 people will do more work than you are capable of doing in 3 years. Again, the very last thing the people with wealth and privilege want to do is work. Money is a medium of exchange and it always flows to the nearest drain like water. What the elites want is highly educated well paid workforce. When your customers have money then as a business owner you have money.

Have you ever walked the streets of New York City during the business week. The level of commerce is just mind boggling. I don't see it ever changing anytime soon. With 7.4 billion people in the world there is just way too much momentum for commerce.

originally posted by: FamCore
P.P.S. US is In Debt at an estimated $170,000 per TaxPayer, with $20.5 Trillion in National Debt

You need to look at both sides of the equation. The US debt per tax payer means nothing. You have to balance the equation with people's willingness to go to work. As long as people are being paid enough to be motivated to show up then the national debt doesn't matter. The amount people pay in taxes doesn't matter. What does matter is the purchasing power of people's take home pay. As long as pay is meaningful, people will continue to show up for work.

When I commute to work in New York City, there's millions of people highly motivated going somewhere for something because they are all around in getting in my way! The economy can't be too bad.

a reply to: dfnj2015

If the economy is doing so great, why is household credit card debt the highest its ever been?

Maybe, just maybe not everyone getting up to go to work is motivated, maybe they're just doing what they need to so they don't get even further into debt.

A majority of Americans don't even have $500 in savings
link

Student loan debt is also enormous [over $1.3 trillion], and loads of graduates are finding they cannot get a career in the degree they earned, having to move back in with their parents and work at Chipotle or construction jobs.

Talking with friends my age, cousins, etc., most of my peers are not living comfortably and are realizing their debts will take a decade, sometimes several decades to pay off. And these are not delinquents.

originally posted by: dfnj2015

originally posted by: eXia7
Well, with the housing market at an all time high, the stock market at an all time high, debt to income ratio at an all time high, student loan debt at an all time high, with record tax revenue.. I'd say we're long overdue for a collapse. I've noticed a lot of houses are for sale on the market in my area, and they are just throwing up new houses everywhere.

I recall the last time this situation happened, we entered an economic recession. It's all an engineered cash grab for the elites. There is no way to stop it, just prepare for it.

If your house has gained significant value, sell it.

The thing is, if the economy crashes the elites will no longer be elites. The very last thing the people with power and privilege want is mass rioting by the millions taking away their power and privilege. Plus the elites enjoy the rich culture provided by having a robust economy. Life without culture is boring for the elites.

I think the elites are actually doing everything in their power to try to get people motivated to be more successful. Wealth comes from leverage. If you own 1000 house and people are paying you rent, then in one day, those 1000 people will do more work than you are capable of doing in 3 years. Again, the very last thing the people with wealth and privilege want to do is work. Money is a medium of exchange and it always flows to the nearest drain like water. What the elites want is highly educated well paid workforce. When your customers have money then as a business owner you have money.

Have you ever walked the streets of New York City during the business week. The level of commerce is just mind boggling. I don't see it ever changing anytime soon. With 7.4 billion people in the world there is just way too much momentum for commerce.

Sounds like some utopia you have dreamed up there.

Everything going on is pretty much opposite of what you suggest.

a reply to: eXia7

It's no utopia. I'm just saying if workers pay had no value they would not show up. The commerce around New York City is very brisk. So my experience doesn't match up with the dire predictions of death of mayhem.

What will be the Black Swan Event?


my opinion is that a broken down or EMP'd Electric Grid will compound & magnify all the Ills that follow the plagues/wars/diseases/civil-economic breakdowns which accompany the 4 horsemen-of-the-Apocalypse

All governments will be overwhelmed & stymied as to what to do next/first/last....
**- in the USA most All of Congress will return 'home' and flee DC, to hoard up all their ill-gotten gains from govt seizure...
**- many State Nat Guards will be in disarray as Troops go AWOL when commanded to begin Martial Law enforcement...

Ya'll can conceive what follows as society breaks down, ATMs become Death Traps for the unarmed loners....etc.

originally posted by: dfnj2015

originally posted by: eXia7
Well, with the housing market at an all time high, the stock market at an all time high, debt to income ratio at an all time high, student loan debt at an all time high, with record tax revenue.. I'd say we're long overdue for a collapse. I've noticed a lot of houses are for sale on the market in my area, and they are just throwing up new houses everywhere.

I recall the last time this situation happened, we entered an economic recession. It's all an engineered cash grab for the elites. There is no way to stop it, just prepare for it.

If your house has gained significant value, sell it.

The thing is, if the economy crashes the elites will no longer be elites. The very last thing the people with power and privilege want is mass rioting by the millions taking away their power and privilege. Plus the elites enjoy the rich culture provided by having a robust economy. Life without culture is boring for the elites.

I think the elites are actually doing everything in their power to try to get people motivated to be more successful. Wealth comes from leverage. If you own 1000 house and people are paying you rent, then in one day, those 1000 people will do more work than you are capable of doing in 3 years. Again, the very last thing the people with wealth and privilege want to do is work. Money is a medium of exchange and it always flows to the nearest drain like water. What the elites want is highly educated well paid workforce. When your customers have money then as a business owner you have money.

Have you ever walked the streets of New York City during the business week. The level of commerce is just mind boggling. I don't see it ever changing anytime soon. With 7.4 billion people in the world there is just way too much momentum for commerce.

While is agree with the you on principle unfortunately it's a bit of fallacy f division.

While its true that collectively everyone would be better of with a healthy, well educated population with plenty of disposal income.

From an individuals point of view they are better off paying as little as possible, minimising tax and generally shafting everyone below them at every opportunity.

originally posted by: FamCore
a reply to: dfnj2015

If the economy is doing so great, why is household credit card debt the highest its ever been?

Maybe, just maybe not everyone getting up to go to work is motivated, maybe they're just doing what they need to so they don't get even further into debt.

A majority of Americans don't even have $500 in savings
link

Student loan debt is also enormous [over $1.3 trillion], and loads of graduates are finding they cannot get a career in the degree they earned, having to move back in with their parents and work at Chipotle or construction jobs.

Talking with friends my age, cousins, etc., most of my peers are not living comfortably and are realizing their debts will take a decade, sometimes several decades to pay off. And these are not delinquents.

I agree personal debt is the most likely main cause of the next big economic downturn.

a reply to: dfnj2015

You just explained their agenda everyone indebted and the bankers who know of collapse in advance,sell off mortgages to foreign investors,if the Democrats are in charge they will probably bring back debtors prisons,people like you play into this trap,if you can't afford to pay cash for something,then you can't afford it,but people have to keep up with the Jones's

I think in the end it will be not one but a whole fanfare of swans to choose from.

The financial situation we find ourselves in is completely untenable. Our entire economy at this point is nothing more than a giant Ponzi scheme. We have flooded the global market with so much cash trying to keep our economy alive that at some point, when the debt is called in, not just ours but many governments are going to find themselves in hot water. You simply can not solve a credit crisis with more credit. it only delays the inevitable and actually makes it worse.

Right now we are stuck in some kind of Wile E. Coyote moment where we have stepped off the cliff and are just waiting for gravity to notice. Our government keeps printing more cash and piling it up beneath us seemingly without realizing that its the weight of that cash that is going to cause the collapse. To make things even worse, our government shoved billions of dollars at large corporations so the corporations could start R&D and production and put people to work, in turn stimulating the economy. Instead of doing that the corporations just stockpiled the cash. Now the corporations have enormous cash reserves with little to no tangible value attached to it. The perfect storm is brewing.

The moment of insolvency will be when the debt is called in. It is impossible to pay. Not difficult, impossible. Its just a matter of time until we find ourselves in a Wiemar, Germany situation. We will go to bed one night with $10,000 dollars in the bank and wake up with $1,000 Patriot dollars or America bucks or whatever they will be called. It is the only way to avoid the 'wheelbarrow full of cash to buy a loaf of bread' scenario.

In the 1930's only one in four Americans lived in a family where someone had a job. From the high of 1929 to the mid thirties the stock market lost 90% of its value. All of the markers that were present in 1929 are here now, only worse. The average American today knows something is wrong but can't do anything about it. There will be many factors involved in the end and a buffet of choices as to which was the final straw that broke the camel's back. But that will be an academic argument because the real issue will be a huge segment of the population not knowing where its next meal is coming from.

a reply to: Vroomfondel

Very well put... there's no telling how long this game of musical chairs will go on. Wondering when the rug will be pulled from underneath us

Personal credit in the US experienced a 7.5 percent increase in default rate earlier this year. This has little effect on the economy unless a large group of consumers are suddenly forced into austerity plans at the same time as happened in the real estate bubble burst. Nothing like 1929 should happen these days, national governments just keep printing more money at a rate that balances any recessionary pressures.

www.nationaldebtclocks.org...

originally posted by: Vroomfondel
I think in the end it will be not one but a whole fanfare of swans to choose from.

The financial situation we find ourselves in is completely untenable. Our entire economy at this point is nothing more than a giant Ponzi scheme. We have flooded the global market with so much cash trying to keep our economy alive that at some point, when the debt is called in, not just ours but many governments are going to find themselves in hot water. You simply can not solve a credit crisis with more credit. it only delays the inevitable and actually makes it worse.

Right now we are stuck in some kind of Wile E. Coyote moment where we have stepped off the cliff and are just waiting for gravity to notice. Our government keeps printing more cash and piling it up beneath us seemingly without realizing that its the weight of that cash that is going to cause the collapse. To make things even worse, our government shoved billions of dollars at large corporations so the corporations could start R&D and production and put people to work, in turn stimulating the economy. Instead of doing that the corporations just stockpiled the cash. Now the corporations have enormous cash reserves with little to no tangible value attached to it. The perfect storm is brewing.

The moment of insolvency will be when the debt is called in. It is impossible to pay. Not difficult, impossible. Its just a matter of time until we find ourselves in a Wiemar, Germany situation. We will go to bed one night with $10,000 dollars in the bank and wake up with $1,000 Patriot dollars or America bucks or whatever they will be called. It is the only way to avoid the 'wheelbarrow full of cash to buy a loaf of bread' scenario.

In the 1930's only one in four Americans lived in a family where someone had a job. From the high of 1929 to the mid thirties the stock market lost 90% of its value. All of the markers that were present in 1929 are here now, only worse. The average American today knows something is wrong but can't do anything about it. There will be many factors involved in the end and a buffet of choices as to which was the final straw that broke the camel's back. But that will be an academic argument because the real issue will be a huge segment of the population not knowing where its next meal is coming from.

National debt isn't anything like personal debt. It can't 'called in' and there is no risk of an involuntary default for the US or other countries that issue debt in their own currency.

The situation is slightly different in the Eurozone. The debt still can't be called in as it's fixed term but there is a possibility of countries defaulting (mainly due to the stupid set up of the ECB).

When it gets leaked that there is no such thing as “peak oil”.Just a pet peeve conspiracy of mine.

a reply to: FamCore

I have been in the camp that we got 4 years before the housing market collapse again for several years now.

In my neck of the woods I see the housing prices back to near where they were before the crash.
However, it appears that the funny money allows the consumers to happily get more into debt.

If they raise the interest rates up to quickly collapse time , as the housing prices will likely have to decrease in value to compensate. When people get large negative equity in their home with high debt elsewhere its a crashy time.

originally posted by: ScepticScot

originally posted by: Vroomfondel
I think in the end it will be not one but a whole fanfare of swans to choose from.

The financial situation we find ourselves in is completely untenable. Our entire economy at this point is nothing more than a giant Ponzi scheme. We have flooded the global market with so much cash trying to keep our economy alive that at some point, when the debt is called in, not just ours but many governments are going to find themselves in hot water. You simply can not solve a credit crisis with more credit. it only delays the inevitable and actually makes it worse.

Right now we are stuck in some kind of Wile E. Coyote moment where we have stepped off the cliff and are just waiting for gravity to notice. Our government keeps printing more cash and piling it up beneath us seemingly without realizing that its the weight of that cash that is going to cause the collapse. To make things even worse, our government shoved billions of dollars at large corporations so the corporations could start R&D and production and put people to work, in turn stimulating the economy. Instead of doing that the corporations just stockpiled the cash. Now the corporations have enormous cash reserves with little to no tangible value attached to it. The perfect storm is brewing.

The moment of insolvency will be when the debt is called in. It is impossible to pay. Not difficult, impossible. Its just a matter of time until we find ourselves in a Wiemar, Germany situation. We will go to bed one night with $10,000 dollars in the bank and wake up with $1,000 Patriot dollars or America bucks or whatever they will be called. It is the only way to avoid the 'wheelbarrow full of cash to buy a loaf of bread' scenario.

In the 1930's only one in four Americans lived in a family where someone had a job. From the high of 1929 to the mid thirties the stock market lost 90% of its value. All of the markers that were present in 1929 are here now, only worse. The average American today knows something is wrong but can't do anything about it. There will be many factors involved in the end and a buffet of choices as to which was the final straw that broke the camel's back. But that will be an academic argument because the real issue will be a huge segment of the population not knowing where its next meal is coming from.

National debt isn't anything like personal debt. It can't 'called in' and there is no risk of an involuntary default for the US or other countries that issue debt in their own currency.

The situation is slightly different in the Eurozone. The debt still can't be called in as it's fixed term but there is a possibility of countries defaulting (mainly due to the stupid set up of the ECB).

Any debt can be called on to collect. And inability to pay results in default. The danger is enormous. Its as simple as our creditors refusing to accept US currency due to its devalued state. The dollar would collapse. The only thing keeping it afloat now is the continued belief that it will somehow maintain its value. A task growing more difficult and unlikely with each passing day.

originally posted by: Vroomfondel

originally posted by: ScepticScot

originally posted by: Vroomfondel
I think in the end it will be not one but a whole fanfare of swans to choose from.

The financial situation we find ourselves in is completely untenable. Our entire economy at this point is nothing more than a giant Ponzi scheme. We have flooded the global market with so much cash trying to keep our economy alive that at some point, when the debt is called in, not just ours but many governments are going to find themselves in hot water. You simply can not solve a credit crisis with more credit. it only delays the inevitable and actually makes it worse.

Right now we are stuck in some kind of Wile E. Coyote moment where we have stepped off the cliff and are just waiting for gravity to notice. Our government keeps printing more cash and piling it up beneath us seemingly without realizing that its the weight of that cash that is going to cause the collapse. To make things even worse, our government shoved billions of dollars at large corporations so the corporations could start R&D and production and put people to work, in turn stimulating the economy. Instead of doing that the corporations just stockpiled the cash. Now the corporations have enormous cash reserves with little to no tangible value attached to it. The perfect storm is brewing.

The moment of insolvency will be when the debt is called in. It is impossible to pay. Not difficult, impossible. Its just a matter of time until we find ourselves in a Wiemar, Germany situation. We will go to bed one night with $10,000 dollars in the bank and wake up with $1,000 Patriot dollars or America bucks or whatever they will be called. It is the only way to avoid the 'wheelbarrow full of cash to buy a loaf of bread' scenario.

In the 1930's only one in four Americans lived in a family where someone had a job. From the high of 1929 to the mid thirties the stock market lost 90% of its value. All of the markers that were present in 1929 are here now, only worse. The average American today knows something is wrong but can't do anything about it. There will be many factors involved in the end and a buffet of choices as to which was the final straw that broke the camel's back. But that will be an academic argument because the real issue will be a huge segment of the population not knowing where its next meal is coming from.

National debt isn't anything like personal debt. It can't 'called in' and there is no risk of an involuntary default for the US or other countries that issue debt in their own currency.

The situation is slightly different in the Eurozone. The debt still can't be called in as it's fixed term but there is a possibility of countries defaulting (mainly due to the stupid set up of the ECB).

Any debt can be called on to collect. And inability to pay results in default. The danger is enormous. Its as simple as our creditors refusing to accept US currency due to its devalued state. The dollar would collapse. The only thing keeping it afloat now is the continued belief that it will somehow maintain its value. A task growing more difficult and unlikely with each passing day.

Explain how the US debt can be called in and collected.