Bubbles: 2010

[Latino4life]

Here it is thou this has been posted to death...

It Is Now Mathematically Impossible To Pay Off The U.S. National Debt

[11]

No, No, No ... your not suposed to get bearish ... shite yet another sodding rally then (enjoy Loopy & Co ... could be last escape chance) ...

Timmy told Euroland to 'sort out' Greece and of course would they dare defy him ... so everything rosy again ... I think not ... in fact a good time to sit back and watch what could be some very nasty churning.

[Latino4life]

This thread should be called "Tales from the crypt 2010" or alike, let the horror comence...

The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.

So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default. The U.S. holds gold, oil, and foreign currency in reserve. The U.S. has 8,133.5 metric tonnes of gold (it is the world's largest holder). That's 16,267,000 pounds. At current dollar values, it's worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that's roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether... that's around $500 billion of reserves. Our short-term foreign debts are far bigger.

The Bankruptcy of the United States is Now Certain

[LivinLOS]

Shhhhh... Dont rock the boat.. DOW at 10k (phew only just but the PPT got it there).. Its not all bailout hot money.. Its real economic activity.. House prices have recovered.. Theres not a huge 2nd wave of mortgage resets out there while so many are underwater..

Baaaa baaaa baaaa.. fingers in my ears.. I cant hear you..

[11]

^ Thats more like the behaviour expected ...

So why is there a G-7, G-20 ... IMF, World Bank ??? ... cos sinking in unison is less painful than being alone!!

Oppps ... its Monday ... we rally on Monday's ... well 80%+ of the Mondays since March '09!

[LivinLOS]

Debt: The U.S. Is on the Edge of a Cliff - BusinessWeek

[The Loop]

$12 trillion is the governments national debt.

$7 trillion is on government bailouts.

Ok lets assume the banks don't need the bailout anymore.

What happens to that $7 trillion to banks?

Wouldn't that be taken off the $12 trillion of government debt.

If so that would bring national debt to $5 trillion?

[11]

^ Its not that straightforward - much of the 'bank' bailouts etc are tied up in mortgage and corporate debt - so its not a quick accounting trick to sell off these ''assets'' (???) - will take time and very much improved market conditions for that to occur.

In the mean time (for US) social security is in deficit and this likely to get worse with unemployment so high and demographic shift (aging population/low birth rate) and for others (Japn, Italy, China) its even more bleak an outlook. Add to that the spiral of heathcare costs and the cost of supporting a bloated government workforce and the figures are not set to improve - rather the hole is ever deepening!

.............

So the Monday rally fizzled out - hummm

Back in good old London town things are looking RTG rosy (?) ...

London's Latest Property Bubble - WSJ.com

[LivinLOS]

The US is an estimated 50 tn in the hole once you count medicare / medicaid / pensions / soc sec..

Go dig up some of the David Walker comptroller videos for the scary facts...

Plus the current level of borrowing over the next couple of years is real freaky too, a failed debt auction and its chaos.. Its that close, yet everyone seems on prozac.

[Rex7777]

Originally Posted by LivinLOS

The US is an estimated 50 tn in the hole once you count medicare / medicaid / pensions / soc sec..

Go dig up some of the David Walker comptroller videos for the scary facts...

Plus the current level of borrowing over the next couple of years is real freaky too, a failed debt auction and its chaos.. Its that close, yet everyone seems on prozac.

I don't think they'll wake up to reality anytime soon. So long as the debt to GDP ratio doesn't get too much worse, they'll continue their usual crap - borrow and spend. What's the current debt level? 90% of GDP? And yet Japan's is about 300%, and they're still getting away with it, more or less. Anyway, it's somewhat comforting to know that most of the rest of the world has similar problems.

[LivinLOS]

Originally Posted by Rex7777

I don't think they'll wake up to reality anytime soon. So long as the debt to GDP ratio doesn't get too much worse, they'll continue their usual crap - borrow and spend. What's the current debt level? 90% of GDP? And yet Japan's is about 300%, and they're still getting away with it, more or less. Anyway, it's somewhat comforting to know that most of the rest of the world has similar problems.

Erm you looked at the Nikkei chart for the last 25 years ??

[Rex7777]

Originally Posted by LivinLOS

Erm you looked at the Nikkei chart for the last 25 years ??

To be sure. The Japanese stock market is way way down from the days when it hit 40,000 or so. Still, the Japanese people are getting by OK. Their country is still functioning. They still have money.

It won't bother me if the USA slowly declines. I'd just rather not see chaos and a complete collapse of the dollar.

[LivinLOS]

Originally Posted by Rex7777

To be sure. The Japanese stock market is way way down from the days when it hit 40,000 or so. Still, the Japanese people are getting by OK. Their country is still functioning. They still have money.

It won't bother me if the USA slowly declines. I'd just rather not see chaos and a complete collapse of the dollar.

However that whole thing changes when its the worlds reserve currency.

The Japanese entered this with VAST savings, assets, etc.. The US has none of those, its debt both public and private changes the whole landscape.

[LivinLOS]

U.S. Losing AAA Is Way to Rein in Pelosi, Reid: David Reilly - Bloomberg.com

[11]

I saw that on CNN last night ..... and shuddered!

Even the thought of a downgrade for the US id frightening ... an actual downgrade would be a catalysm for the bond market ... 10yr would likely jump 100+ basis points on it and stock market would collapse and not like 2008 - more like 1929! (Later on the USD would collpse too!)

That is a very scary road to even peek down ...

Meanwhile Wall St seeks revenge ...

News Headlines

Other than trashing the markets - pulling party funding also hits where it hurts!

[Dupree00]

“I just don’t know how long you can expect people to contribute money to a political party whose main plank of their platform is to punish you,” Mr. Cornyn said.


Contribute? Is that what they call bribes now?

Obama should have these cnuts liquidiated quietly. If these executives started disappearing I think Wall Street would be more civil to Main Street. Where is Musolini when we need him?

[LivinLOS]

Dubai skyscraper Burj Khalifa closes to public - Telegraph

[LivinLOS]

UK sales fall prompts fears of 'double-dip' recession - Telegraph

Greek Ouzo crisis escalates into global margin call as confidence ebbs - Telegraph

[ub2yoo]

Breaking News, Greece get's bailed out by ze Germans...

...yippieh...

...oh, hang on a minute ... Achtung, Stop ... everyone turn around ... that was just an unfounded statement from someone ;-)

Talk about news trading ... nice soap on a EU/USD chart

[LivinLOS]

Actually was superb for me.. I got jittery and cashed out of all my ETF holdings and down to pure metals.. But to do that they FWD price, so you have to sell in the morning and take the evening execution up or down.. Thats 4.5% HUI pop was welcome !! Thanks Germany !!

I am now 99% out of any paper (except now fiat ), just have a few high risk penny stock crapshoot stuff.

Sleep much easier for a while..

[11]

The breakthrough comes as this week's summit of EU leaders in Brussels rapidly evolves from a policy workshop into an historic gathering that may catapult the EU across the Rubicon towards fiscal federalism and a de facto debt union. The EU's top brass are seizing on the crisis to push for a radical extension of EU powers, saying Greece has exposed the deep flaws in the structure of monetary union.

Herman Van Rompuy, the EU's new president, has submitted a text calling for the creation of an "economic government" that shifts responsibility for economic planning from national authorities to the "EU level".

In a parallel move, Commission chief Jose Barroso said Brussels has treaty powers allowing it to take the reins of economic management. "

This is a time for boldness. I believe that our economic and social situation demands a radical shift from the status quo. And the new Lisbon Treaty allows this," he said.

"Economic policy isn't a national, but a European matter. No modern economy is an island. When a member state doesn't make reforms, others suffer because of that."

Germany backs Greek bail-out as EU creates 'economic government' - Telegraph



The implications of this are by far the most significant event since the EU was created. The euro is fatally flawed and this will resolve that flaw - but at the cost of economic soverienty.

(I've waited a very very long time for this).

[11]

[The Loop]

Originally Posted by 11

(I've waited a very very long time for this).

So in summing up 11,is the sky falling or not?..

[11]

Originally Posted by The Loop

So in summing up 11,is the sky falling or not?..

....No (Storm clouds brewing ... not receeding tho).

Sky will only fall if we have an all out real global pandemic.

[The Loop]

Originally Posted by 11

....No (Storm clouds brewing ... not receeding tho).

Sky will only fall if we have an all out real global pandemic.

Seems to be the way,lately.Certainly if China`s economy overheats their will be huge problems.

Can a country go bankrupt?,or they become insolvent?

I think not.

They are non profit,just collect and borrow money,and redistribute.....not sure.

[Dupree00]

Are these guys saying anything?

[The Loop]

Greece bailed out by the EU.

Who`s next??

[LivinLOS]

Originally Posted by The Loop

Greece bailed out by the EU.

Who`s next??

Spain.. Italy.. Etc..

I wanna know when I get my bailout..

[Dupree00]

Anatomy of a Euromess - Paul Krugman Blog - NYTimes.com

[The Loop]

Originally Posted by LivinLOS

Spain.. Italy.. Etc..

I wanna know when I get my bailout..

Right on cue...

http://www.phuket-info.com/forums/ne...s-trouble.html

[Latino4life]

Leaders from the 16-nation euro area said today they have agreed to act if necessary to help Greece reduce its budget deficit and safeguard financial stability in the region. Debt- stricken Greece is struggling to convince investors it is able to reduce its deficit from 12.7 percent of gross domestic product, sparking turmoil on financial markets.

PIGS Exposure Explains ?Shotgun Greek Wedding?: Chart of Day - Bloomberg.com

[11]

Originally Posted by Latino4life

Leaders from the 16-nation euro area said today they have agreed to act if necessary to help Greece reduce its budget deficit and safeguard financial stability in the region.

Nothing like an invite for the markets ...



More on EU (Greek) support scramble here ...

EU Demands Greek Cuts in Bid to Uphold Euro Stability (Update4) - Bloomberg.com

Interestingly ...

Finance ministers are working on measures such as setting up a lending facility for Greece, with each country paying in according to its size, an EU official said. The official, who spoke on condition of anonymity, said it’s premature for a European bond.

[Ed. ...but thats the grand plan (to resolve the euro/ECB's fatal flaw) ... maybe we need to shove Greece off the cliff to panic national Gov's to sign off debt issuing soverignty to an EU central debt issuring agency.]

Shades of 1992 ... a little refresher for those not familier with GBP crashing out of ERM.

BBC ON THIS DAY | 16 | 1992: UK crashes out of ERM

[Latino4life]

Originally Posted by 11

Nothing like an invite for the markets ...

Originally Posted by 11

[Ed. ...but thats the grand plan (to resolve the euro/ECB's fatal flaw) ... maybe we need to shove Greece off the cliff to panic national Gov's to sign off debt issuing soverignty to an EU central debt issuring agency.]

Hmmm can't imagine throwing "packages of salvation" will do the trick and as things seem to be developing the Euro is doomed... Besides so far the "bailout" Merkel, Sarkozy and the rest of those pumpkin twats are offering is more of a moral sort, sort of a pat on the shoulder rather than money...

The inflationary depression still dominates and probably will continue to do so. In time the stimulus will fail to work and the world will slip into total insolvency and deflationary depression. The old M3 is about 3%, but we still have $23.7 trillion floating around. Not only is the US bankrupt, but also so is the rest of the world. It is now only a question of when the dominos will fall. It looks like the first wave in the collapse of the bear market rally is underway. Bonds will follow with higher interest rates and eventually commodities will be hit. Only gold and silver will survive, as the bankers and Wall Street complete their destruction of the world economy.

The Euro is losing ground at the moment but so is the dollar (both down quite a bit compared to the SEK)

The propaganda regarding the PIIGS (Portugal, Italy, Ireland, Greece, Spain) in Europe is being manufactured to drive up the dollar. Money has to be scared into US Treasuries.

The Inflationary Depression

[Latino4life]

Singapore’s ratio of debt to GDP is a whopping 99.2 percent.

But no one seems to be taking any notice. Why are they making so much fuss over Greece, when Singapore is worse off?

If Singapore goes belly up, forget about any substantial growth in Asia to spur global recovery. Anyone who knows about the way business is done in the ASEAN region knows too well that if Singapore defaults, Indonesia will be the first to sink, followed rapidly by Thailand and Malaysia. The contagion will then spread to the rest of Asia. China will not be able to put out the fire.

Global Economic Crisis: Look To Asia for The Financial Tsunami Wave, Not Europe

[11]

^ Thats an interesting obsevation Adrian ... would be a real curve ball that no-one is looking for.