Doom laden financial article

Thrugelmir

sabretoothtigger wrote: »

GDP rises from population growth mostly which in turn ultimately makes investment justified and profitable

GDP is little more turnover. Turnover does not equate to any given level of profitability.

Electrum

All the problems from 2007/8 have only been pushed into the future. Everytime they push them into the future with more debt they make it worse.

How can you solve the problem of too much debt with more debt?

What is the end game? Some kind of currency revaluation?

Or maybe negative interest rates? Then the debtors win, namely the USA who are the largest debtor nation in the history of the world. China suffers who is is the largest creditor nation in the history of the world.

Generali

Electrum wrote: »

All the problems from 2007/8 have only been pushed into the future. Everytime they push them into the future with more debt they make it worse.

How can you solve the problem of too much debt with more debt?

What is the end game? Some kind of currency revaluation?

Or maybe negative interest rates? Then the debtors win, namely the USA who are the largest debtor nation in the history of the world. China suffers who is is the largest creditor nation in the history of the world.

Why would China care? The only reason they are such massive creditors is that they have been financing the consumption of the rest of the world. I very much doubt that they give a flying fox about the value of their reserves beyond what is required to pay for necessary imports and maintain the solvency of the PBoC.

I think the point people miss is that there is no end game. We are not living in a film that builds to a dramatic climax followed by a denouement. There is no morality to this borrowing nor any reckoning to be had. Life will just continue on.

Let's say that the US does monetize its debts. Fine. The rest of the world sucks it up and then carries on buying coke and Levis and Apple only next time perhaps using Euros a bit more and dollars a bit less.

The fact is that the world is a highly productive place these days and nobody is stupid enough to plough salt into the soil not even ISIS (who I reckon are really all about the oil with the God stuff just there to pull in the gullible).

Anyway, I think we have a bright future ahead of us with automation continuing to save people from dangerous and boring work and freeing us up to do things which are more enjoyable like serving our zombie robot overlords.

Thrugelmir

Electrum wrote: »

China suffers who is is the largest creditor nation in the history of the world.

China will be self sufficient. As will own or have direct access to everything it needs that it cannot source internally.

China may not be in the best of heath itself either. One party controls the state, the banks, the stock market etc etc. GDP is unlikely to be anywhere near the published levels.

sabretoothtigger

China doesnt have enough oil or gas afaik but relys on coal a little too much. Every nation is richer trading then attempting to be solely self reliant

Thrugelmir wrote: »

GDP is little more turnover. Turnover does not equate to any given level of profitability.

My premise is that people are productive, investment to support and enable that positive is justified and shown in returns. A country in retraction has a more complicated path to find long term gains, most obviously Japan and china have a declining working population. Im sure they can find a path to growth but I dont take it for granted and I think its harder to find

If theres any doom, its probably quite simple in its origin

Thirty years from now there will be a huge amount of oil – and no buyers. Oil will be left in the ground. The Stone Age came to an end, not because we had a lack of stones, and the oil age will come to an end not because we have a lack of oil.” Sheikh Yamani

Totally agree but I think oil goes to 200 a barrel still before its over, next decade I guess

Let's say that the US does monetize its debts. Fine. The rest of the world sucks it up and then carries on buying coke and Levis and Apple only next time perhaps using Euros a bit more and dollars a bit less.

The US will be buying less coke Levi and Apple and hopefully producing more for others, their own interests will determine less of the worlds direction. It could all be a gradual transition if currencies are not fixed

What is the end game? Some kind of currency revaluation?

It could be argued thats whats happening now but I see QE and all that kind of false accounting of value as a big hiccup. If every major country has just floating currency, we'd just swing up and down wildly at times maybe but eventually find a direction that suits business best.
With fixed ratios, it does seem to suggest collapse more to me and illiquid ideas must be defeated before we can move on with more productive ventures.
Politics wants to save face constantly and in some countries will not relent control, so there is a build of pressure in the system, the normal becomes extreme. Failure is normal but block that normal adjustment and its the doom scenario