Is a worldwide total financial collapse inevitable? - MensTennisForums.com
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post #1 of 11 (permalink) Old 03-15-2016, 04:20 AM Thread Starter
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Is a worldwide total financial collapse inevitable?

I mean not just another recession, not even another depression, I mean all the banks failing and everything and the entire financial system crumbling?

I know my own country has gone from 6 billion dollars of national debt in 2008 to a staggering 125 billion in just 8 years.

USA is what 19 Trillion dollars in debt?

It seems almost every country is in debt with no way of ever even paying off the interest let alone the principal.

Do you think it's inevitable at some point the entire stack of cards will just fall down? What will we do then in a world without money?

We have seen small scale things in Cyprus and Greece with bank failues. We have seen Iceland jail their bankers and forgive debt and do their own thing.

How long before it starts affecting everyone?
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post #2 of 11 (permalink) Old 03-15-2016, 05:01 AM
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Re: Is a worldwide total financial collapse inevitable?


“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.”

― Frédéric Bastiat
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post #3 of 11 (permalink) Old 03-15-2016, 05:32 AM
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Re: Is a worldwide total financial collapse inevitable?

we are going to pay for the wall street frauds
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post #4 of 11 (permalink) Old 03-15-2016, 01:15 PM
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Re: Is a worldwide total financial collapse inevitable?

Maybe, just maybe, they should've let the financial sector go under in 2008.

Problem is there are too many vested interests. There was a bank in the UK in 1995/96 called Barings that went under, something like the second oldest merchant bank in the world due to a rogue trader who saddled it with 1 billion of losses (Nick Leeson). It was not saved. Yet a couple of years later a Hedge Fund in New York was on the verge of collapse due to the Asian Financial Crisis and Russian Debt meltdown (can't remember the name) and it was saved. Started the whole idea of too big too fail.

Fast forward to 9/11 when the markets slumped and the Fed lowered interest rates to stave off recession that just resulted in a housing bubble. Fast forward to 2008 where the Fed cut rates to 0 and the government pumped hundreds of billions into the system to keep it afloat despite its failing being due to its own greed and recklessness saddling taxpayers with the bill. Each time the government intervened and the resulting crisis is worse

Now what do governments have left? Interests rates are negative, quantitative easing was a limited success, governments are up to their eyeballs in debt. The US dollar is being propped up by the Chinese (who on their side of the bargain are unwilling to float the yuan) which means if things do go wrong (and judging by the noises coming out from the City of London where I live nothing much has changed so they will) there will be very little protection.

The irony is a financial serves sector that lives by the free market does not die by it. It is propped up like a welfare recipient.
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post #5 of 11 (permalink) Old 03-15-2016, 11:34 PM
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Re: Is a worldwide total financial collapse inevitable?

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Originally Posted by TigerTim View Post
Maybe, just maybe, they should've let the financial sector go under in 2008.

Problem is there are too many vested interests. There was a bank in the UK in 1995/96 called Barings that went under, something like the second oldest merchant bank in the world due to a rogue trader who saddled it with 1 billion of losses (Nick Leeson). It was not saved. Yet a couple of years later a Hedge Fund in New York was on the verge of collapse due to the Asian Financial Crisis and Russian Debt meltdown (can't remember the name) and it was saved. Started the whole idea of too big too fail.

Fast forward to 9/11 when the markets slumped and the Fed lowered interest rates to stave off recession that just resulted in a housing bubble. Fast forward to 2008 where the Fed cut rates to 0 and the government pumped hundreds of billions into the system to keep it afloat despite its failing being due to its own greed and recklessness saddling taxpayers with the bill. Each time the government intervened and the resulting crisis is worse

Now what do governments have left? Interests rates are negative, quantitative easing was a limited success, governments are up to their eyeballs in debt. The US dollar is being propped up by the Chinese (who on their side of the bargain are unwilling to float the yuan) which means if things do go wrong (and judging by the noises coming out from the City of London where I live nothing much has changed so they will) there will be very little protection.

The irony is a financial serves sector that lives by the free market does not die by it. It is propped up like a welfare recipient.

Word.
As long as consumerism is sold as the only way to keep the holy dream of year on year 'growth' alive , we are doomed.Exponential growth..
Anyone with the even the slightest talent in math can see that.
Here its explained by Albert A Bartlett ( University of Colorado)
https://www.youtube.com/watch?v=F-QA2rkpBSY

Have you read any of EF Schumachers works?
https://www.youtube.com/watch?v=qDtF9-owes4

Last edited by nowornever; 03-15-2016 at 11:37 PM.
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post #6 of 11 (permalink) Old 03-16-2016, 12:07 AM
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Re: Is a worldwide total financial collapse inevitable?

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Originally Posted by 2003 View Post
I mean not just another recession, not even another depression, I mean all the banks failing and everything and the entire financial system crumbling?

I know my own country has gone from 6 billion dollars of national debt in 2008 to a staggering 125 billion in just 8 years.

USA is what 19 Trillion dollars in debt?

It seems almost every country is in debt with no way of ever even paying off the interest let alone the principal.

Do you think it's inevitable at some point the entire stack of cards will just fall down? What will we do then in a world without money?

We have seen small scale things in Cyprus and Greece with bank failues. We have seen Iceland jail their bankers and forgive debt and do their own thing.

How long before it starts affecting everyone?

It already did yet its being handed our money and the dream continues a bit more while causing extinction of life in a non linear fashion.

http://racingextinction.com/the-film/
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post #7 of 11 (permalink) Old 03-17-2016, 10:34 AM
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Re: Is a worldwide total financial collapse inevitable?

Governments have an unlimited capacity to create inflation by printing money (more so than they have already been doing). Inflation wipes out most debts (other than the small percentage of debt that is inflation-linked or denominated in foreign currency).

Inflation is close to zero in Europe, but this is because of the way the currency union was originally designed, at a time when inflationary currency devaluations were seen as the worst form of economic ill-discipline, and of course because it was informed by the German experience of hyperinflation between the wars. Japan has demographic problems (no immigration, low birth rate, ageing population). The rebalancing of China's economy away from (often wasteful) investment towards what is hoped will be greater consumption has exerted a depressing influence on economic activity.

Overall, these headwinds can be overcome by a dose of inflation, which will ease debt burdens and encourage spending over saving. However, this will have a damaging effect on real asset values, especially obviously the value to lenders of their outstanding loans, which will be repaid in inflated nominal currency.

So no, I don't see a risk of economic collapse because I expect policy-makers will in the end be forced to print money to prevent such a scenario developing. Alternatively, we may just scrape along without much inflation, but with very slow erosion of debt and slow growth.

Last edited by chalkdust; 03-17-2016 at 08:36 PM.
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post #8 of 11 (permalink) Old 03-17-2016, 08:58 PM
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Re: Is a worldwide total financial collapse inevitable?

Quote:
Originally Posted by chalkdust View Post
Governments have an unlimited capacity to create inflation by printing money (more so than they have already been doing). Inflation wipes out most debts (other than the small percentage of debt that is inflation-linked).

Inflation is close to zero in Europe, but this is because of the way the currency union was originally designed, at a time when inflationary currency devaluations were seen as the worst form of economic ill-discipline, and of course because it was informed by the German experience of hyperinflation between the wars. Japan has demographic problems (no immigration, low birth rate, ageing population). The rebalancing of China's economy away from (often wasteful) investment towards what is hoped will be greater consumption has exerted a depressing influence on economic activity.

Overall, these headwinds can be overcome by a dose of inflation, which will ease debt burdens and encourage spending over saving. However, this will have a damaging effect on real asset values, especially obviously the value to lenders of their outstanding loans, which will be repaid in inflated nominal currency.

So no, I don't see a risk of economic collapse because I expect policy-makers will in the end be forced to print money to prevent such a scenario developing. Alternatively, we may just scrape along without much inflation, but with very slow erosion of debt and slow growth.
What you've just said makes no sense at all. Inflation is created by loans, i.e. by money creation, which has debt attached to (more than the money created itself due to the interest). The problem is that everybody and their dog are maxed out on debt so in the real economy few are taking loans which severely decreases money creation. Central banks can ZIRP and NIRP but it doesn't matter much at this point.

Money velocity has been going down for months and the real economy is in a de facto deflation.

What you could have said is that inflation conceals debt as long as people have margin to get on more debt.

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post #9 of 11 (permalink) Old 03-17-2016, 09:10 PM
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Re: Is a worldwide total financial collapse inevitable?

Answering OP's quesntion: yeah I can see total collapse unless the Central Banks decide to make a debt jubilee and give, not lend, money to creditors to compensate for their losses.

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post #10 of 11 (permalink) Old 03-18-2016, 12:53 AM
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Re: Is a worldwide total financial collapse inevitable?

Hopefully.
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post #11 of 11 (permalink) Old 03-18-2016, 03:36 PM
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Re: Is a worldwide total financial collapse inevitable?

as a banker, as an economist - yes of course

whats what happened when u have weak leaders and pigs who never go to jail aka as bankers

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