The Next Crash

globalds

We all know that there will be another crash that will ripple across the planet.

I was wondering if anyone had any notions on what it will be ..with perhaps an expected due date.

I will predict China and more than likely bad debt.

my reasoning might seem a bit out there .But if you have ever been the fan of a football team you just know that when something good happens to your club ,It surely means that it is very close to the world changing its mind about what that news means.

so this http://www.bbc.co.uk/sport/football/36852323

followed by this https://www.thesun.co.uk/sport/football/1575395/wolves-set-to-smash-championship-transfer-record-by-beating-liverpool-to-benficas-20m-brazilian-forward-anderson-talisca/

leads me the conclusion cash must be falling from the sky somewhere in China and it is perhaps a few months before the world decides that it is not worth a scrap .

Seriously it looks like China could well have no control over the debt mountains piling up and I will stand by my prediction but hope my club has at least one season of rosy days so will predict collapse after May next year

http://www.telegraph.co.uk/business/2016/09/18/bis-flashes-red-alert-for-a-banking-crisis-in-china/

Moto2

Tuesday week

AFF8879

The collapse of Deutsche Bank is the next most likely trigger, if there is one, IMO. Then we'll see how all the extensive regulations/capital requirements that spawned out of the last crisis hold up in reality...

padington

The real crash is in the price of cash relative to everything else as nation states play begger thy neighbour by increasing the competitiveness of their economy by devalueing their currency.

The crash is the sound of everything getting more expensive in relation to money earned.

michaels

padington wrote: »

The real crash is in the price of cash relative to everything else as nation states play begger thy neighbour by increasing the competitiveness of their economy by devalueing their currency.

The crash is the sound of everything getting more expensive in relation to money earned.

Does that everything include the price of labour?

BBC has a piece on Chinese banks this morning.

CLAPTON

padington wrote: »

The real crash is in the price of cash relative to everything else as nation states play begger thy neighbour by increasing the competitiveness of their economy by devalueing their currency.

The crash is the sound of everything getting more expensive in relation to money earned.

if a country A devalues its currency then indeed its imports become more expensive and exports cheaper

if country B devalues its currency then indeed its imports become more expensive and its exports cheaper

it would seem that 'A' become dearer due to its own devaluation and cheaper due to 'B' devaluation

so basically no change?

Conrad

CLAPTON wrote: »

if a country A devalues its currency then indeed its imports become more expensive and exports cheaper

if country B devalues its currency then indeed its imports become more expensive and its exports cheaper

it would seem that 'A' become dearer due to its own devaluation and cheaper due to 'B' devaluation

so basically no change?

Benefits of Devaluation in Argentina Peso

When Argentina left the fixed exchange rate, it was very grim situation. Capital fled from Argentina and consumer spending fell amidst uncertainty. However, the devaluation made Argentina exports much more competitive and imports uncompetitive. This led to a big increase in export demand (helped by rise in price of soya).


Also, the devaluation forced people to buy less imports and more domestically produced goods which was good for Argentinian industry.


Since the devaluation and debt default, Argentina has posted impressive rates of economic growth. This suggests that despite defaulting on debt and leaving the ‘security’ of a fixed exchange rate the economy can recover.

mwpt

Conrad wrote: »

Benefits of Devaluation in Argentina Peso

When Argentina left the fixed exchange rate, it was very grim situation. Capital fled from Argentina and consumer spending fell amidst uncertainty. However, the devaluation made Argentina exports much more competitive and imports uncompetitive. This led to a big increase in export demand (helped by rise in price of soya).

Also, the devaluation forced people to buy less imports and more domestically produced goods which was good for Argentinian industry.


Since the devaluation and debt default, Argentina has posted impressive rates of economic growth. This suggests that despite defaulting on debt and leaving the ‘security’ of a fixed exchange rate the economy can recover.

I really miss Generali, antrobus et al. Argentina is now an example we should aspire to. Why not Zimbabwe?

Good grief.

Conrad

mwpt wrote: »

I really miss Generali, antrobus et al. Argentina is now an example we should aspire to. Why not Zimbabwe?

Good grief.

Where did I say we should aspire to these countries?


Merely I posted a comment regarding an experience of devaluation in a conversation about devaluation.

michaels

Conrad wrote: »

Benefits of Devaluation in Argentina Peso

When Argentina left the fixed exchange rate, it was very grim situation. Capital fled from Argentina and consumer spending fell amidst uncertainty. However, the devaluation made Argentina exports much more competitive and imports uncompetitive. This led to a big increase in export demand (helped by rise in price of soya).


Also, the devaluation forced people to buy less imports and more domestically produced goods which was good for Argentinian industry.


Since the devaluation and debt default, Argentina has posted impressive rates of economic growth. This suggests that despite defaulting on debt and leaving the ‘security’ of a fixed exchange rate the economy can recover.

Yes at the expense of going through a period of zero foreign credit. The UK runs a trade deficit of what - 5% of GDP? Effectively loosing 5% of everything we consume would be pretty painful. and of course it would be worse than that as defaulting would probably also mean kissing goodbye to being a financial services centre and the earnings that provides.

pop_gun

I wouldn't worry about China. They have a $3trn surplus. They're running huge deficits in their own currency because everyone else is doing the same. Why should it be fiscally responsible in a world that's not.

As for the next crash. I suspect it will be caused by the artificially low oil price. The Saudis and OPEC economies will be on the verge of bankruptcy, forcing the Saudis and others to secretly sell a quantity of their oil in a currency other than the U.S. dollar. This will undermine the petrodollar and the U.S. economy. This will affect the world economy given the U.S. dollar is the reserve currency.