Demand is screwed, says the head of the IMF

OptionARMAGEDDON

http://www.independent.co.uk/news/business/news/the-world-prays-for-an-economic-miracle-2360072.html

I posted a long time ago and clearly stated that with the large amount of leverage out in the system, this crisis was LOOONG from over, not least the crisis caused in the states as a result of subprime and prime lending products. Well, it looks as if all that global debt, much of it weighted against property, is on the edge of writedown and with much of it taken on by national governments, is going to start to take down whole states and perhaps split the eurozone. 6 weeks, either to write off the debt (splitting the eurozone) or to do something equally as drastic.

When I talked about Option ARMAGEDDON, this was exactly the sort of thing I was talking about. With inflation still above where we could do with it, can the BOE pump more cash into the system? Its going to be more difficult than in 08/09. With prices of resources crashing globally, its pretty plain to see the deflationary camp were probably right. Will commodities fall like they did in 08? Probably not. But fall significantly they have been, and will continue to do.


I think it sensible if individuals prepared for the worst now. Its pretty obvious with various national states about to fall under their weight of debt (not their problem really) and a large number of banks with obscene exposure to these soon to be third world states, that lending is about to dry up pretty fast.

IMHO, this is going to be the big one, that finally clears a lot of the crap from the system. QE a few billion is like putting a sticking plaster onto an arterial bleed. Unfortunately, if we want to save the global economy, someone is going to have to tornequet a few nations and cut them off!


Long term interest rate prospects? Good job I got that tracker!:beer:

Edit: has anyone seen the latest LIBOR rates? They are obscene! Base rate below 2.5% for the NEXT TEN YEARS!

http://markets.ft.com/RESEARCH/markets/DataArchiveFetchReport?Category=BR&Type=ICAP&Date=09/23/2011


http://www.youtube.com/results?search_query=alphaville+big+in+japan&aq=1&oq=Alphaville+ pretty much sums up the mood!

pqrdef

Demand has a long way to fall, because western economies have blown themselves up to ginormous levels of bloat by training us to demand stuff we don't want or need. A scary proportion of what we pay for stuff goes not on manufacturing or distribution but on the systems that get us to buy the stuff. This goes for public bodies and corporates as well as consumers - they're all profligate wasters of money on stuff that isn't worth it, because they're all targeted by armies of people whose job is to shape their thinking.

DervProf

pqrdef wrote: »

Demand has a long way to fall, because western economies have blown themselves up to ginormous levels of bloat by training us to demand stuff we don't want or need. A scary proportion of what we pay for stuff goes not on manufacturing or distribution but on the systems that get us to buy the stuff. This goes for public bodies and corporates as well as consumers - they're all profligate wasters of money on stuff that isn't worth it, because they're all targeted by armies of people whose job is to shape their thinking.

Do you think this applies to property ?

JWF

Yes. There is plenty of "I need" rather than "I would like".

StevieJ

When I talked about Option ARMAGEDDON, this was exactly the sort of thing I was talking about

And there is me thinking that it was referring to your pet hobby horse Alt-A or Option ARM resets, then again with the state of interest rates at the moment I shouldn't imagine that resets would be quite so damaging.

OptionARMAGEDDON

You are forgetting that Option Arm was neg am. For every day that went by on the loan, the loan amount climbed. Combine that with a lost household income, and carnage occured. Matters not, as it all got put on the government coffers anyhow.

TruckerT

OptionARMAGEDDON wrote: »

I think it sensible if individuals prepared for the worst

Now what we need is a definition of 'the worst' - what percentage of the world's population will actually feel a difference if the capitalist system self-destructs?

How about the people in Pakistan affected by the floods - should they prepare for even worse? How about the populations of some African countries who trek for weeks in search of food and water, leaving their dead children behind them at the roadside? China is hailed as a shining beacon - but look at the conditions in which millions of Chinese people exist...

To what extent are these conditions created by the very capitalist system which, at last, is in danger of collapse?

TruckerT

OptionARMAGEDDON

Blinking socialists. They dont know any different. We on the other hand, have had a bite of the apple and we like it. Capitalism will not fail, it will change. THe laissez faire model is dead however. We can let the east lend us as much money as we like. Thing is, there is no forward guarantee that they will get it back.

Mortgage and lending controls are what is needed, with support to small and medium business. Debt shoiuld be used to invest, not to artificially prop up growth.

TruckerT

There is no law of nature which specifies which economic system the human race should adopt, but there is a general principle in nature that a population of parasites would not normally destroy the host organism on which it depends

But that is what the banking system started to do over the last few decades, and it appears to be determined to complete it's mission in the very near future

TruckerT

TruckerT

OptionARMAGEDDON wrote: »

You could say the same for the entire human race. Once somalians and pakistanis stop having a million babies each, perhaps there would be enough food to go around.

Perhaps if chavs stopped breeding at an alarming rate, those of us that have to work wouldnt have to pay 40-50% tax to support all those hungry mouths.

Actually, mother nature's only requirement of us all is that we should continue to reproduce!

Anything else is a matter of choice

TruckerT

purch

Edit: has anyone seen the latest LIBOR rates? They are obscene! Base rate below 2.5% for the NEXT TEN YEARS!

I'm not sure that you understand what you are posting.

The current LIBOR has nothing to do with what Base rates or anything else will be for the next 10 years, or even the next week.

They are the current offered rate.

Too much information and not enough knowledge leads to embarrassment.