Societe Generale tells clients how to prepare for 'global collapse'

amcluesent

Societe Generale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.

"As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse," said the 68-page report, headed by asset chief Daniel Fermon.

The bank said the current crisis displays "compelling similarities" with Japan during its Lost Decade (or two), with a big difference: Japan was able to stay afloat by exporting into a robust global economy and by letting the yen fall. It is not possible for half the world to pursue this strategy at the same time.

SocGen advises bears to sell the dollar and to "short" cyclical equities such as technology, auto, and travel to avoid being caught in the "inherent deflationary spiral"

Inflating debt away might be seen by some governments as a lesser of evils.

If so, gold would go "up, and up, and up" as the only safe haven from fiat paper money.

Really2

amcluesent wrote: »

Societe Generale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.

"As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse," said the 68-page report, headed by asset chief Daniel Fermon.

The bank said the current crisis displays "compelling similarities" with Japan during its Lost Decade (or two), with a big difference: Japan was able to stay afloat by exporting into a robust global economy and by letting the yen fall. It is not possible for half the world to pursue this strategy at the same time.

SocGen advises bears to sell the dollar and to "short" cyclical equities such as technology, auto, and travel to avoid being caught in the "inherent deflationary spiral"

Inflating debt away might be seen by some governments as a lesser of evils.

If so, gold would go "up, and up, and up" as the only safe haven from fiat paper money.

I don't think it is a prediction just telling people how to prepare for the worst (if that is how they are thinking.)
Much like turning a door on it's side in the 80's.

But if there was a collapse gold would only be of use if you physically held it.

Even if you held it how would you spend it? (yes that loaf of bread is worth all your gold sir)
Or how would you keep it (yes gun beats gold Sir, so now hand it over)

So prepare if that is how you think, but like the 80's I will not be doing anything if there is not much point.
Once you get past the point survival kicks in anyway, that can do funny things to people.

dopester

amcluesent wrote: »

Inflating debt away might be seen by some governments as a lesser of evils.

We've already had the long wave inflationary cycle (end of WW2) and then a mega credit expansion binge leading to surging HPI (house price inflation) under Nu Labour.

People can go on and on about inflating our way out, but it will only lead to a worse outcome. We've had the inflation !

The system is trying to rebalance, because it has to rebalance. Inflating will only wipe out the economy. Don't expect the young to recognise your house prices when baby-boomer greed has thought only about itself.

Those who say that government has the power to prevent deflation are right. But they are answering the wrong question. Obviously, the government can print all the money it wants. It can slap any number of zeros on a piece of paper and raise the nominal money supply to a higher power. This has always been true, but it is a mistake to stop your inquiry there, because you have merely answered a misleading question.

One could just as well say that "the government has the power to to prevent you from dying of cancer." It can. By taking you out and shooting you first. But the cure in that case, like the printing-press cure for deflation, is worse than the disease.

StevieJ

We must be approaching the dark days of winter again, the doomers are out in force, must be something deep in the human psyche :eek:

HammerSmashedFace

The US is set to collapse within the next 10-15 years under it's exponential debt growth, the rest of the West is likely to go with it. We are approaching the peak of the unsustainable model that we have built for ourselves over the past 100 years.

Live each day as if it were your last, as one day it will be.

Generali

StevieJ wrote: »

We must be approaching the dark days of winter again, the doomers are out in force, must be something deep in the human psyche :eek:

We're bloomin' not over here. It's 10 o'clock at night and it's still 30C in the kitchen and more than that when I brave the outside to visit the beer fridge.

Wookster

Generali wrote: »

We're bloomin' not over here. It's 10 o'clock at night and it's still 30C in the kitchen and more than that when I brave the outside to visit the beer fridge.

Why on earth do you have the beer fridge outside? It should be next to your seat by the sofa!

Generali

Wookster wrote: »

Why on earth do you have the beer fridge outside? It should be next to your seat by the sofa!

It heats up the house.

Anyway it's traditional to have it outside. There or in the laundry.

Generali

DD5 wrote: »

No sh*t sherlock, well unless you intend living forever of course.

I see nothing has changed on this forum, still full of Mad tinfoil Hatters wasting their lives worrying about things they have no influence on and wasting money building bomb shelters under their stairs.

Oh well, back to the pensions and MFW forums for me, places where people are taking advantage of the downturn to increase their net worth instead of running around like Chicken Little telling people the sky is going to fall or ling curled in a ball afraid of the future.

See you soon.

Don't be a stranger.

Generali

DD5 wrote: »

G'day gen . I hear that things are going well for you in Oz. Couldn't have happened to a nicer chap.

I still lurk on here for the admittedly few crumbs of interesting economic news and views (almost exclusively from yourself and Inspector Monkfish), but tend to spend more time in pensions and the investments threads, with a bit of time in the DFW as I find it a real gauge on the UK economy as a whole. I also naturally hang around the MFW board, only 5 months to the end of the mortgage free challenge.

Take care, cobber!

And you old thing.

Toodle pip!

ThrowingStonesAtYou

DD5 wrote: »

No sh*t sherlock, well unless you intend living forever of course.

I see nothing has changed on this forum, still full of Mad tinfoil Hatters wasting their lives worrying about things they have no influence on and wasting money building bomb shelters under their stairs.

Oh well, back to the pensions and MFW forums for me, places where people are taking advantage of the downturn to increase their net worth instead of running around like Chicken Little telling people the sky is going to fall or lying curled in a ball afraid of the future.

You know, the "Mad tinfoil Hatters" could equally accuse you of wasting your life worrying about how to "increase your net worth". One day you'll be dead, and your net worth won't do you much good.