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Thread: Smoke and mirrors and the economy

  1. #1

    Default Smoke and mirrors and the economy

    Just a few of my thoughts about the economy. Up until quite recently I expected everything to go crashing down pretty soon, now I'm not so sure. The event which is going to crash the economy is not a black swan event nor does it have anything to do with Russia, the event has already happened, it's the insolvency of the banks.
    Nothing really makes sense, for instance Glaxo borrows and lends money to a subsidiary in Luxembourg loosing millions but the subsidiary pays only €200,000 on their profit, and it's all legal. Walmart and tesco and MacDonald pay worker less than a living wage, but the government subsidises with wealfare and the companies do what they can to mitigate tax. Our governments borrow money or print money ( which is an IOU) which means we have to pay back later. The banks borrow and lend to the government and this is called quantitive easing, the banks guaranteed a risk free profit and the government, well, they just borrow or print more money. Things seem to be getting better, the quantitive easing is being eased in the USA. Now here is a coincidence, Belgium has just bought $200bn of the USA s bonds. Now this represents more than Belgiums total annual GDP. Where the heck did they get the money from? When Belgium joined the euro they had to cheat on their accounts to become a member because they had too much debt, and now they have a spare $200 bn??? It beggars belief!
    Recently on a couple of occasions I have heard that the coming collapse could come as late as 25 years from now, I hope that's right but personally I think it will be much sooner. As I see it the twin towers have just been hit by suicide bombers, some of us are on the top floor and cannot get out, some are below the fire and are being advised to stay where they are, and others are on the point of going into the buildings. Those without at least a months worth of cash stashed safely away and have a stash of PMs are on the top floors, advice, sit on a chair put your head between your legs and kiss your ass goodby. Those who have the afore mentioned assets have a chance, and those outside the buildings ( the very rich, the politicians, and bankers) unless they are stupid, they will survive.

  2. #2

    Default

    Quote Originally Posted by Tone deaf View Post
    Just a few of my thoughts about the economy. Up until quite recently I expected everything to go crashing down pretty soon, now I'm not so sure. The event which is going to crash the economy is not a black swan event nor does it have anything to do with Russia, the event has already happened, it's the insolvency of the banks.
    Nothing really makes sense, for instance Glaxo borrows and lends money to a subsidiary in Luxembourg loosing millions but the subsidiary pays only €200,000 on their profit, and it's all legal. Walmart and tesco and MacDonald pay worker less than a living wage, but the government subsidises with wealfare and the companies do what they can to mitigate tax. Our governments borrow money or print money ( which is an IOU) which means we have to pay back later. The banks borrow and lend to the government and this is called quantitive easing, the banks guaranteed a risk free profit and the government, well, they just borrow or print more money. Things seem to be getting better, the quantitive easing is being eased in the USA. Now here is a coincidence, Belgium has just bought $200bn of the USA s bonds. Now this represents more than Belgiums total annual GDP. Where the heck did they get the money from? When Belgium joined the euro they had to cheat on their accounts to become a member because they had too much debt, and now they have a spare $200 bn??? It beggars belief!
    Recently on a couple of occasions I have heard that the coming collapse could come as late as 25 years from now, I hope that's right but personally I think it will be much sooner. As I see it the twin towers have just been hit by suicide bombers, some of us are on the top floor and cannot get out, some are below the fire and are being advised to stay where they are, and others are on the point of going into the buildings. Those without at least a months worth of cash stashed safely away and have a stash of PMs are on the top floors, advice, sit on a chair put your head between your legs and kiss your ass goodby. Those who have the afore mentioned assets have a chance, and those outside the buildings ( the very rich, the politicians, and bankers) unless they are stupid, they will survive.
    I've asked before, what if we've already crashed? How would you know?

    There is nothing physical, no standard to measure the economy against. Especially not price discovery in a free market! Could a failure even exist if it's not reported? What if we've already crashed? How would you know?

  3. #3

    Default

    That's an interesting question. The collapse which I see happening is like the UK in 1976/7 during the winter of discontent or the 1930s, in the 80s we had saint Margret to sort us out and of course she sold the Crown Jewels. So what I would say is that when the collapse or reality hits it will be a lot worse than what is happening now, but that's a guess because what is happening now has never happened before and nobody can be 100% sure what will happen tomorrow. With the easing of Q/E for one month Belgium filled the void, next month North Korea perhaps? Everything is that surprising. Almost every country owes money and its deliberate! When I was in Singapore 18 months ago, I read criticism about the prime minister because he was deliberately buying usa dollars with Singapore dollars so his countries currency would stop rising. I'm sure this exercise is being repeated all over the world. It's one big Ponzi scheme, normally there are no winners in a Ponzi scheme except for the first few. The truth is that everyone is too scared to pull the rug from under the financial system and that's why some commentators are saying that as corrupt as everything is, it may take 25 years before it crashes.

  4. #4

    Default

    Quote Originally Posted by Tone deaf View Post
    That's an interesting question. The collapse which I see happening is like the UK in 1976/7 during the winter of discontent or the 1930s, in the 80s we had saint Margret to sort us out and of course she sold the Crown Jewels. So what I would say is that when the collapse or reality hits it will be a lot worse than what is happening now, but that's a guess because what is happening now has never happened before and nobody can be 100% sure what will happen tomorrow. With the easing of Q/E for one month Belgium filled the void, next month North Korea perhaps? Everything is that surprising. Almost every country owes money and its deliberate! When I was in Singapore 18 months ago, I read criticism about the prime minister because he was deliberately buying usa dollars with Singapore dollars so his countries currency would stop rising. I'm sure this exercise is being repeated all over the world. It's one big Ponzi scheme, normally there are no winners in a Ponzi scheme except for the first few. The truth is that everyone is too scared to pull the rug from under the financial system and that's why some commentators are saying that as corrupt as everything is, it may take 25 years before it crashes.
    Belgium could never come up with the money to purchase $200 billion of US Bonds. So I think your point is that the FED is playing a little money laundering game and that there is really no tapering of the QE. If this is true, this is more depressing than you know. The government just announced a downward revision in the GDP of -1%. Yes that's right... the economy contracted by 1%. So if the FED is still printing money behind the scenes, it is no longer having an impact on our economy. Either this or they are revising the GDP down in order to have an excuse to increase the QE again.

    And as you I'm sure you're aware... Ponzi schemes never end well.

  5. #5

    Default

    Quote Originally Posted by SilverBones View Post
    Belgium could never come up with the money to purchase $200 billion of US Bonds. So I think your point is that the FED is playing a little money laundering game and that there is really no tapering of the QE. If this is true, this is more depressing than you know. The government just announced a downward revision in the GDP of -1%. Yes that's right... the economy contracted by 1%. So if the FED is still printing money behind the scenes, it is no longer having an impact on our economy. Either this or they are revising the GDP down in order to have an excuse to increase the QE again.

    And as you I'm sure you're aware... Ponzi schemes never end well.
    I strongly suspect that Belgium is being paid by the fed to buy us bonds. I have no proof, it's just possible that Belgium is borrowing money and expects to profit from it, but this is very remote IMHO.
    I was not aware yet that the growth figures have been revised down, but I had heard that this was likely, I did not expect it to be that much. I expect it was the weather!

  6. #6

    Default

    Quote Originally Posted by SilverBones View Post
    Belgium could never come up with the money to purchase $200 billion of US Bonds. So I think your point is that the FED is playing a little money laundering game and that there is really no tapering of the QE. If this is true, this is more depressing than you know. The government just announced a downward revision in the GDP of -1%. Yes that's right... the economy contracted by 1%. So if the FED is still printing money behind the scenes, it is no longer having an impact on our economy. Either this or they are revising the GDP down in order to have an excuse to increase the QE again.

    And as you I'm sure you're aware... Ponzi schemes never end well.
    I strongly suspect that Belgium is being paid by the fed to buy us bonds. I have no proof, it's just possible that Belgium is borrowing money and expects to profit from it, but this is very remote IMHO.
    I was not aware yet that the growth figures have been revised down, but I had heard that this was likely, I did not expect it to be that much. I expect it was the weather!

  7. #7

    Default The Fed's $16 Trillion Bailouts Under-Reported

    I would like to point out that the Federal Reserve may have given the foreign banks and corporations money 6 years ago to buy U.S. Treasuries.
    The money could have been sitting around for 6 years in foreign banks and the Federal Reserve decided to ask now for a little help with buying U.S. Treasuries.


    The Fed's $16 Trillion Bailouts Under-Reported
    9/20/2011 @ 1:26PM 53,829 views
    Forbes


    The media’s inscrutable brush-off of the Government Accounting Office’s recently released audit of the Federal Reserve has raised many questions about the Fed’s goings-on since the financial crisis began in 2008.

    The audit of the Fed’s emergency lending programs was scarcely reported by mainstream media – albeit the results are undoubtedly newsworthy. It is the first audit of the Fed in United States history since its beginnings in 1913. The findings verify that over $16 trillion was allocated to corporations and banks internationally, purportedly for “financial assistance” during and after the 2008 fiscal crisis.
    Legal Disclaimer: I am not a doctor, nor do I play one on TV.

    "It's tough to make predictions, especially about the future." -- Yogi Berra
    A variant of this has also been attributed to physicist Niels Bohr, and others.

    "Tis against some men’s principle to pay interest, and seems against others’ interest to pay the principal." -- Benjamin Franklin

    The School of Hard Knocks is where you get the lesson after you fail the test.

    Book title: "The Best Way to Rob a Bank Is to Own One"

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