It’s different this time

silvertooth

It is. Bailouts won't fix this. Chris Duane introduced me many years ago to the idea that next time the debt-based fiat system broke, it would be something that physically broke in the real world.

This virus shock is that physical thing.

We have so many moving parts here now in our complex financialization of the real economy, that it's done and not coming back from this in it's current form. Something else will be born, but this thing is done.

a) demand destruction
b) supply destruction
c) debt defaults will cascade

Importantly, American oil companies are going broke. However, it's not just oil. It's everything.

There is no clear bail out or even series of bailouts that can save all of it. There's too many things that will break now.

I'm interested in your feedback. I see this as the physical thing that's different than a single conceptual thing that can be targeted. The collapse this time is going to be broad, deep, physical, and it's everything this time.

Jonbvn

To precis:
Silver ramper believes an even more OCD silver ramper.

Thrugelmir

When the dust settles. Life will carry on. 

RelievedSheff

And back in the real world, life carries on, people continue to go about their business and just get on with life without worrying about a glorified common cold.

dinsdale_

Just to clarify, what does it mean for the 'debt based system' to break?
I can see some companies going out of business and job losses, are you suggesting some kind of foundation change to how the financial system operates? 
Could you be more specific?

I would argue at worst there could be recession before the markets pick up again...

Thrugelmir

dinsdale_ said:

Just to clarify, what does it mean for the 'debt based system' to break?
I can see some companies going out of business and job losses, are you suggesting some kind of foundation change to how the financial system operates? 
Could you be more specific?

I would argue at worst there could be recession before the markets pick up again...

We live in a world of debt. Where many people and companies live life on a thread. Only a matter of week of weeks from financial meltdown. Low interest rates have induced complacency. Nanny state will provide all the answers. 

lisyloo

Thrugelmir said:

dinsdale_ said:

Just to clarify, what does it mean for the 'debt based system' to break?
I can see some companies going out of business and job losses, are you suggesting some kind of foundation change to how the financial system operates? 
Could you be more specific?

I would argue at worst there could be recession before the markets pick up again...

We live in a world of debt. Where many people and companies live life on a thread. Only a matter of week of weeks from financial meltdown. Low interest rates have induced complacency. Nanny state will provide all the answers. 

If its relatively short term (china has turned things around), then isn't the most likely scenario that people will take payment holidays and their debt will increases but not to a point that it's a big deal over 25 years.

Some of us may have to work 12 months longer due to our pension investments not being as good as we expect. Not great if you hate your job but not a massive deal in the scheme of  a 35 year retirement.

Landlords will also not pay their mortgages if they don't get rent and might need to lengthen their term.

Isn't this a more likely scenrio than the end of civilisation as we know it?

Malthusian

Has Deutsche Bank collapsed yet? What happened to all that?

lisyloo

It on page 5. The summary is that it's either too big to fail (and the implication is it's being propped up) or certain posters have mental health issues (I'm noly summarising what was said).

EverythingIWant

Yes I have been researching the ‘everything bubble’ for some time. It will be difficult and painful for a lot of people if this does pop now. Keep an eye on HSBC and Deutsch Bank. 

silvertooth

dinsdale_ said:

Just to clarify, what does it mean for the 'debt based system' to break?
I can see some companies going out of business and job losses, are you suggesting some kind of foundation change to how the financial system operates? 
Could you be more specific?

I would argue at worst there could be recession before the markets pick up again...

The world went onto a “temporary new international monetary system” exact words on August 15th 1971. Here we are 49 yrs later still the entire world using the temporary system

this is what is meant by the end of the temporary debt based system and have another new international monetary system to replace the old one

It’s not the pandemic that is the biggest problem it is the panic 

https://youtu.be/nhasaUDJSO8