Currency collapse, debt bubble and hyperinflation - worried?
Discussion
Lim said:
Watch out for hyperbole in headlines.
Similar to our GDP increasing by 4.4% this year, but that's YoY from a 2020 reduction of 9.9% so we'll still not be back to 2019 level by the end of this year.In the past a recession ("a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters") was seen as troubling times, now not so much? Any areas of shortfall as a result we've just chucked money at, money brought into existence/borrowed from the future?
I really hope we are not but it seems like we are overly optimistic given everything/one has largely been supported? If no furlough, mortgage/finance breaks it would be a mess wouldn't it? So on tap support means the end of family 'bust' like the old end of boom and bust for the economy.
Lim said:
Theres not inflation because economy is so weak, so not enough activity to produce it? Pumping money is just filling the idle gaps in the lower productivity, not adding extra productivity or spending power?
Can't disagree with this, but what are the long term consequences? It doesn't feel like it can be 'none'?Scootersp said:
Can't disagree with this, but what are the long term consequences? It doesn't feel like it can be 'none'?
If there is no inflation, some would argue there are no long term consequences. Economics isn't a science however, and sometimes it's only obvious in retrospect causation was merely correlation.
Edit I have no work experience in this. Just how it has been explained to me. To use a factory analogy, it's like keeping a diesel machine running, even if it's not making anything, as if stops, it's expensive and time consuming to start it up again. As long as it becomes productive again, there is no net downside for expending the effort.
You can only do this when the factory is running under capacity and demand is pent up. So it's not an infinite energy machine.
The reason there are no long term consequences, is that government can print their own money to keep the machines running, and if there is no inflation, no body is really any worse off.
Edited by Lim on Thursday 25th February 19:28
Scootersp said:
Fittster what do you see as a likely consequence of what's happening? None of us are thick are we, if what's going on benefits us all then why not carry on and create money to directly give to the poorer/jobless and also money in the system to create a perpetual stock market that increase to the benefit of all.
If we could all just refresh our bank balances each time we spent, life would be good wouldn't it but where does that all end?
Professionals who work in financial services are generally well educated. If hyperinflation is about to destroy the bond/gilt market why would they be happy to buy long term investments with such low rates of return?If we could all just refresh our bank balances each time we spent, life would be good wouldn't it but where does that all end?
How long has Japan had low interest rates, tiny inflation and large government debts?
I'm not making any forecasts for the future but those that do need to backup their arguments. Simply saying that the money supply has been increased since 2008 and therefore we face hyperinflation tomorrow isn't good enough.
Fittster said:
Professionals who work in financial services are generally well educated. If hyperinflation is about to destroy the bond/gilt market why would they be happy to buy long term investments with such low rates of return?
.
cynical hat on - because everyone else is, and if they don't, they won't get paid?.
They were well educated in the run up to 2008, and couldn't appreciate that there was more correlation than was claimed in the mortgage backed securities that were on sale.
I'm not convinced that we're going to see hyperinflation, but using the behaviour of financial services as an argument against the possibility doesn't strike me as robust.
Fittster said:
Why don't you buy yourself a subscription to Money Week:
https://moneyweek.com/19085/how-to-protect-against...
Add a bit of paranoia from Zerohedge: https://www.zerohedge.com/markets/michael-burry-wa...
Add an account on House Price crash so you can join those still living with their mum while waiting for society to collapse (and girls to start talking to them)
https://www.housepricecrash.co.uk/
Those should keep you occupied and away from facts.
Ha, you've actually went to the effort of putting that shttps://moneyweek.com/19085/how-to-protect-against...
Add a bit of paranoia from Zerohedge: https://www.zerohedge.com/markets/michael-burry-wa...
Add an account on House Price crash so you can join those still living with their mum while waiting for society to collapse (and girls to start talking to them)
https://www.housepricecrash.co.uk/
Those should keep you occupied and away from facts.
tpost together with links included. Legit question about facts - any thoughts on the 10-year yield going over 1.5 today?
p_k_n said:
Fittster said:
Why don't you buy yourself a subscription to Money Week:
https://moneyweek.com/19085/how-to-protect-against...
Add a bit of paranoia from Zerohedge: https://www.zerohedge.com/markets/michael-burry-wa...
Add an account on House Price crash so you can join those still living with their mum while waiting for society to collapse (and girls to start talking to them)
https://www.housepricecrash.co.uk/
Those should keep you occupied and away from facts.
Ha, you've actually went to the effort of putting that shttps://moneyweek.com/19085/how-to-protect-against...
Add a bit of paranoia from Zerohedge: https://www.zerohedge.com/markets/michael-burry-wa...
Add an account on House Price crash so you can join those still living with their mum while waiting for society to collapse (and girls to start talking to them)
https://www.housepricecrash.co.uk/
Those should keep you occupied and away from facts.
tpost together with links included. Legit question about facts - any thoughts on the 10-year yield going over 1.5 today?
If you are a capitalist (and there aren't many marxists on PH) you believe in free markets. If a financial apocalypse is on its way, why hasn't the market priced it in? All the participants in the markets are idiots? There is some knowledge/information about future inflation levels that is unknown to the market?
People whose expertises and future prosperity is dependent on there not being a currency collapse, debt bubble and hyperinflation seem pretty relaxed, so why should a layman argue against them?
xeny said:
Fittster said:
Professionals who work in financial services are generally well educated. If hyperinflation is about to destroy the bond/gilt market why would they be happy to buy long term investments with such low rates of return?
.
cynical hat on - because everyone else is, and if they don't, they won't get paid?.
They were well educated in the run up to 2008, and couldn't appreciate that there was more correlation than was claimed in the mortgage backed securities that were on sale.
I'm not convinced that we're going to see hyperinflation, but using the behaviour of financial services as an argument against the possibility doesn't strike me as robust.
The market is predicting this economic melt down, and I know of know mainstream academics predicting it, so what are the sources for this prediction?
Even the marxists don't see it: https://thenextrecession.wordpress.com/2021/02/14/...
The only people predicting the end of the world are those selling gold/bitcoin (there is still enough time to buy before the end of days according to them).
Edited by Fittster on Thursday 25th February 20:22
Fittster said:
Why would a random person on the internet know the future yield, inflation rates, FTSE price, etc?
If you are a capitalist (and there aren't many marxists on PH) you believe in free markets. If a financial apocalypse is on its way, why hasn't the market priced it in? All the participants in the markets are idiots? There is some knowledge/information about future inflation levels that is unknown to the market?
People whose expertises and future prosperity is dependent on there not being a currency collapse, debt bubble and hyperinflation seem pretty relaxed, so why should a layman argue against them?
Well the facts and data are there for everyone to see. The fed are quite likely going to institute yield curve control and inflate the debt even further - the scale of the debt is unfathomable so something needs to give. If you are a capitalist (and there aren't many marxists on PH) you believe in free markets. If a financial apocalypse is on its way, why hasn't the market priced it in? All the participants in the markets are idiots? There is some knowledge/information about future inflation levels that is unknown to the market?
People whose expertises and future prosperity is dependent on there not being a currency collapse, debt bubble and hyperinflation seem pretty relaxed, so why should a layman argue against them?
Fittster said:
People whose expertises and future prosperity is dependent on there not being a currency collapse, debt bubble and hyperinflation seem pretty relaxed, so why should a layman argue against them?
I think that the more expert the expert, the less they see the overall picture. Bill Tutte cracked Lorenz, but he'd have made a crap general.p_k_n said:
Fittster said:
Why would a random person on the internet know the future yield, inflation rates, FTSE price, etc?
If you are a capitalist (and there aren't many marxists on PH) you believe in free markets. If a financial apocalypse is on its way, why hasn't the market priced it in? All the participants in the markets are idiots? There is some knowledge/information about future inflation levels that is unknown to the market?
People whose expertises and future prosperity is dependent on there not being a currency collapse, debt bubble and hyperinflation seem pretty relaxed, so why should a layman argue against them?
Well the facts and data are there for everyone to see. The fed are quite likely going to institute yield curve control and inflate the debt even further - the scale of the debt is unfathomable so something needs to give. If you are a capitalist (and there aren't many marxists on PH) you believe in free markets. If a financial apocalypse is on its way, why hasn't the market priced it in? All the participants in the markets are idiots? There is some knowledge/information about future inflation levels that is unknown to the market?
People whose expertises and future prosperity is dependent on there not being a currency collapse, debt bubble and hyperinflation seem pretty relaxed, so why should a layman argue against them?
Simpo Two said:
Fittster said:
People whose expertises and future prosperity is dependent on there not being a currency collapse, debt bubble and hyperinflation seem pretty relaxed, so why should a layman argue against them?
I think that the more expert the expert, the less they see the overall picture. Bill Tutte cracked Lorenz, but he'd have made a crap general.p_k_n said:
Anyone worried about the impending collapse of the dollar and the worldwide domino effect that will have? The markets are melting up and the debt bubble is likely to eventually burst.
Have you started hedging against this possibility? Time to sell tech stocks and buy more gold, silver and bitcoin?
How are all those first 3 connected and then when answered how is that connected to the bottom 4?Have you started hedging against this possibility? Time to sell tech stocks and buy more gold, silver and bitcoin?
You have dot to dotted currency collapse with the stock market bubble and suggesting buying commodities, if bitcoin is a commodity.
Firstly
1. Will the dollar collapse?
Can you answer why you think that will happen?
Clive Milk said:
Firstly
1. Will the dollar collapse?
Can you answer why you think that will happen?
Because all currencies eventually collapse?1. Will the dollar collapse?
Can you answer why you think that will happen?
so 2) When might it happen?
When people lose confidence in the dollar..........bitcoin/crypto rise being a possible embryonic indicator of this?
I don't think any/many people know the full impacts of everything that's going on and how it will play out? Billionaires/Academics/politicians can't agree on deflation or inflation etc. Most of the worlds populace have no idea even how the banking system works at it's basic money lending/creation role let alone the bond market QE etc etc, and you've got politicians from Diane Abbott to <not sure who!> that might know a lot (just looked up Rishi and " After graduating, he worked for Goldman Sachs and later as a partner at the hedge fund firms The Children's Investment Fund Management and Theleme Partners." is that good or bad for us!?)
I'm not necessarily a proponent of financial armageddon but it doesn't feel like we can do what we've done and there be no hardship in some form, else we could just do pretty much what we like?
There is a whole generation of investors who as the wise saying goes are mistaking Brains for a Bull Market, certain assets have risen because of Central Banks and a move out of other assets.
As for inflation, over the longer term, it will appear because there is no alternative to debt reduction, it is a matter of fact that $1 purchasing power in 1935 had been reduced to $0.39 by 1965 , that's the official number, the real number was nearer $0.34
It's really over what length of time this happens but the US could not have funded WW2 without inflating the costs away. We are no different.
Leading economies will never not pay their debts, it's just what the borrower gets back.
Also there is a school of thought which is gaining traction, that Pension and Mutual funds should be mandated to hold a sizeable part of their assets in Government bonds, knowing full well these will never be redeemed.
As for inflation, over the longer term, it will appear because there is no alternative to debt reduction, it is a matter of fact that $1 purchasing power in 1935 had been reduced to $0.39 by 1965 , that's the official number, the real number was nearer $0.34
It's really over what length of time this happens but the US could not have funded WW2 without inflating the costs away. We are no different.
Leading economies will never not pay their debts, it's just what the borrower gets back.
Also there is a school of thought which is gaining traction, that Pension and Mutual funds should be mandated to hold a sizeable part of their assets in Government bonds, knowing full well these will never be redeemed.
I think governments have painted themselves into a corner with QE, basically using debt to fill out the GDP of a full cycle.
The next round of QE is being called ‘build back green’ or ‘build back better’
And ‘covid19 support’
It’s all just the next round of stimulus, with the reasons being ‘virus’ and ‘environment’... rather than ‘government incompetence’ or ‘greedy billionaires’
No one knows the outcome of all this. They’re just steering a car on a big patch of black ice in thick fog.
We could crash, or keep on skidding, or come out to sunshine in full control.
Hedge accordingly.
The next round of QE is being called ‘build back green’ or ‘build back better’
And ‘covid19 support’
It’s all just the next round of stimulus, with the reasons being ‘virus’ and ‘environment’... rather than ‘government incompetence’ or ‘greedy billionaires’
No one knows the outcome of all this. They’re just steering a car on a big patch of black ice in thick fog.
We could crash, or keep on skidding, or come out to sunshine in full control.
Hedge accordingly.
[quote=Mr Whippy
The next round of QE is being called ‘build back green’ or ‘build back better’
And ‘covid19 support’
[/quote]
It is effectively Public works of Victorian times, I drove on the M25 and was amazed at the HS2 sites blighting the Western Home counties, all to save 1/2 hour to Birmingham and at over 100 billion.
The next round of QE is being called ‘build back green’ or ‘build back better’
And ‘covid19 support’
[/quote]
It is effectively Public works of Victorian times, I drove on the M25 and was amazed at the HS2 sites blighting the Western Home counties, all to save 1/2 hour to Birmingham and at over 100 billion.
Mr Whippy said:
I think governments have painted themselves into a corner with QE, basically using debt to fill out the GDP of a full cycle.
The next round of QE is being called ‘build back green’ or ‘build back better’
And ‘covid19 support’
It’s all just the next round of stimulus, with the reasons being ‘virus’ and ‘environment’... rather than ‘government incompetence’ or ‘greedy billionaires’
No one knows the outcome of all this. They’re just steering a car on a big patch of black ice in thick fog.
We could crash, or keep on skidding, or come out to sunshine in full control.
Hedge accordingly.
People said exactly the same after 2008 and what happened? One of the longest bull runs in history. The next round of QE is being called ‘build back green’ or ‘build back better’
And ‘covid19 support’
It’s all just the next round of stimulus, with the reasons being ‘virus’ and ‘environment’... rather than ‘government incompetence’ or ‘greedy billionaires’
No one knows the outcome of all this. They’re just steering a car on a big patch of black ice in thick fog.
We could crash, or keep on skidding, or come out to sunshine in full control.
Hedge accordingly.
btdk5 said:
Mr Whippy said:
I think governments have painted themselves into a corner with QE, basically using debt to fill out the GDP of a full cycle.
The next round of QE is being called ‘build back green’ or ‘build back better’
And ‘covid19 support’
It’s all just the next round of stimulus, with the reasons being ‘virus’ and ‘environment’... rather than ‘government incompetence’ or ‘greedy billionaires’
No one knows the outcome of all this. They’re just steering a car on a big patch of black ice in thick fog.
We could crash, or keep on skidding, or come out to sunshine in full control.
Hedge accordingly.
People said exactly the same after 2008 and what happened? One of the longest bull runs in history.The next round of QE is being called ‘build back green’ or ‘build back better’
And ‘covid19 support’
It’s all just the next round of stimulus, with the reasons being ‘virus’ and ‘environment’... rather than ‘government incompetence’ or ‘greedy billionaires’
No one knows the outcome of all this. They’re just steering a car on a big patch of black ice in thick fog.
We could crash, or keep on skidding, or come out to sunshine in full control.
Hedge accordingly.
And no one front ran that bull run. It wasn’t priced in. No one knew what would happen.
Had everyone seen that coming we’d all be millionaires today.
Feel free to gamble assuming the markets have seen the future correctly, there won’t be a crash, and the next ten years will be another never ending bull run.
Gassing Station | Finance | Top of Page | What's New | My Stuff