I'm still going to continue to expect some kind of crash (maybe in the vicinity of 15-30%). If very high inflation mutes further falls, which is what is needed to get rid of a significant part of the debt overhang, it won't mean, or I doubt it will mean, prices taking off to to the upside (unless hyperinflation), it will mean more everything catching up to house prices, so I'm still going to wait at this point. PM's still seem like the best bet for now. It's going to be difficult to navigate the next few years, though, that's for sure. That is my current estimation of the situation only. Subject to change upon new information. You are right though, fairness was thrown out the window a long time ago in this country. Socialism always favours those in the centre over everyone else. More and more money flows to the centre where the politicians and their cronies are, resulting in the gap between rich and poor becoming greater and greater. Soviet Union is example taken to extremes but you can see the process in US (Washington and Wall Street richer than ever), UK, pretty much anywhere.
I don't think you understand what he is pointing out... say a guy down the road has 1m in debt and you have $0 in debt and everyone gets 200k. He gets to pay down his debt to 800k and you get to Invest 200k where you want. There is no win win solution to this issue, but the above strategy is to ensure is is not a lose lose collapse
If you give everyone 200k... You understand the principles of supply and demand, inflation etc? If I got 200k though, it would end up in PMs so quick your head would spin because national inflation would (literally) sky rocket on all commodities, goods and services for the time it would take to flush the cash from the system. Look what happened when the gubmint handed out a grand to everyone in 2008... and that was just a single grand. Could you imagine what would happen with 200k? For a start, your average Australian house price would literally go to the fucking moon with the magic fractional reserve banking could do on 200k per person! ANYONE who didn't 'qualify' for the 200k hand out would be royally screwed... It would be utter bloody insanity and a national disaster.
not me.. it was his (Steve's) idea.... BUT paying off debts is DEFLATIONARY + printing money is inflationary equals the hope that it ends up around about even. The key is that the money HAS to be used to pay off debt IF it exists
I was a bit hasty to comment...I'd only gotten to 12min in the vid, got all wound up, made a coffee, came back and began typing.... Yes, give everyone 200k...if you have debt you must pay it down.... yes i do understand the principles of supply and demand and that'd sure cause some serious inflation...that incidentally would erode peoples' debt.......BUT...as I point out to my dad, it's not the only thing...For example, supply and demand will not continue to inflate house prices...They are restrained by lack of access to debt...
Yeah, Steve was WAY WAY WAY off base with this one. It was a completely stupid way of looking at it IMHO. WHY the amnesty for debtors? What bloody planet did he come from to even think that would be a good idea? What he is proposing would have rammifications (especially in the social spectrum) that would be felt for years through this country. Rather than a bail out, the focus should be on enforcement of the punishment for poor investment decisions. If you reward bad and irresponsible behaviour you'll simply encourage more risk in the system. What he's proposing is outright market manipulation to counter market manipulation. A a core economic fundamentalist, he should really know better than to make such a suggestion. Let the free market regulate and flush the system on it's own. It doesn't need 'help', it needs people to STOP trying to 'help'!!!
Thats right it creates a moral hazard. Also hwere is all that money going to come from? It will just explode the public debt burden which is just a tax on future generations. So when the next generation looks back and sees that everyone got bailed out and that they are paying for it, they will be pretty pissed off
As well, for the free market to quickly flush the system, the interest rate should be at it's natural rate rather than it's central bank manipulated rate. Maybe even higher like in the earlier 80's for a short period. Then you get a short period of pain and and after that prosperity. If the IR was left alone, or artificially put at or close to the rate it would naturally be it would be time to sell PM's. Artificially low IR's just encourage speculation via debt. If IR's had been allowed to find their natural levels all along we wouldn't have had these problems in the first place. Now we are trying to solve the problems we have created by potentially creating bigger problems and possibly leading to a complete loss of faith in the currency. If everyone knows the govt is willing and able to print money at will, ultimately what value does it have?
Take a deep breath there, auspm. The point he's making is that in the event of his idea comign to fruition far more stringent lending practices would be imposed. It is merely a thought experiment anyway, but his point is that a transition could be achieved far more gracefully for the country with the above-mentioned method. You say it would be a disaster. He believes that's coming anyway if we sit on our collective hands. If you disagree and believe we'll muddle through then you probably need to wait a while. If you do agree but believe his idea is floored then propose a better one for an elegant transition. And don't say gold standard.
Becuase it's not a magic wand either. It too would be a complex process which would disadvantage many and would arguably be a "disaster".
Really??? :lol: The only ones it would disadvantage are the thieving banking elite and governments and central bankers who'd no longer be able to steal the wealth of the middle class via inflation. you just crack me up mate! :lol: Lemme guess - you have an economics degree right? That would certainly explain you being clueless :lol:
I agree gold standard from where we are now is like trying to put out a pot of burning oil by dumping water into it... there would be blood running in the streets
I like to listen to Steve Keen. He might be right about this debt jubilee. Debt reaching a critical point will see to it, and blind everyone from anything else. When it hits, rest assured our Government will instantly fire up the printing press no matter what the consequences. Banksters will give the green light and bury their snouts in the trough. Government and banks are in the markets up to their eyeballs and this will threaten their existence and the very notion of big Government. To give it legitimacy, the sheeple shall beg for it thinking they are on a winner. Those who can physically hear the dollar crashing and the whooshing of inflation; agree or disagree; must take this idea as a serious possibility. And when the day comes... and everyone is getting this 100-200k... where will the incentive to work be?
I think you've completely misunderstood the notion of the debt jubilee if that's a serious question. The idea is not without historical precedent, even if it it would be different this time round. Did everyone stop working previously? No. Re. the printing press and inflation ... if your expectations are right why aren't the EU just doing exactly that? They are not and they will not print trllions of euros to cover all the unpaid liabilities. There is no whooshing, it's more the sound of an engine seizing up.
What notion? The Goverment already ran a test that exceeded its aims. Any handout affects the motivation to work. Ben Shalom Bernanke already did. EU would if it could and will as soon as it can. Forget the Weimar excuse, Merkel has greater fears/plays on her mind.
To be honest, a 'disaster' is what the market needs to flush the bad money. No bail out, no hand holding, no amnesty. Shielding the poor investment choices lies at the core of the market problems we have today. The intelligent investors will survive without help, the crap will be flushed where it belongs. I really don't understand why people are more frightened of the cure in the current climate than the disease. Actually I do - normalcy bias. There's really no other realistic solution to this problem. They keep trying to prop up bad money with more bad money and the same problems keep coming around again with the same economic boffins standing around wondering why it's not working. It's economics, not rocket science.
How much did Ben "print". A few trillion? That's chick feed when there is more than $500 in debt floating about. It is nowhere near enough to cause repiad inflation. As regards the EU, I look forward to the printing mania. Just keep the following in mind from John Carney: It's easy to miss the contraction of the money supply because it involves a destruction of financial assets that we do not usually think of as "money" but that, in fact, operate as money or did until relatively recently. The fundamental characteristic of modern fiat money as opposed to commodity-based money under a gold standard is that it serves as a medium of exchange. This means dollars or euros, for example. Basically, the local currency. Within the banking system, however, other financial assets also serve as money. These assets can be used to meet margin calls, collateralize obligations, and make payments. U.S. Treasury bonds are the most obvious example of this kind of money-equivalent financial asset. The U.S. government recognizes the equivalence of Treasury bonds and dollars within the banking system by not requiring banks to hold any reserves against the bonds. They are counted as "cash or cash equivalents" on balance sheets of U.S. public companies. Over in Europe, sovereign debt issued by euro zone nations also served as a money-equivalent inside the banking system. Banks were not required to hold reserves against sovereign debt. They used them as collateral for obligations, and made inter-bank payments with sovereign bonds. The bonds were, in short, as good as euros. When the markets turned against nations like Greece and Italy, the cash-equivalency of their bonds came into doubt. It was obvious that they could lose value, and quite rapidly. The debt could no longer be used as collateral, except at extreme discounts. The discounting of sovereign debt, then, meant that there was less money in the European banking system. If a one million euro bond previously held as a money-equivalent is now worth just 600,000 euros, the holder has lost 400,000 euros. Multiply that across the banking system, and you have millions of euros of money-equivalents simply vanishing. It is exactly as if some paper-eating plague just started rotting physical euros. The money supply of Europe is vanishing. And this from a recent interview with Ann Barnhardt: Well, if anybody out there understands fourth grade arithmetic you know from metaphysical certitude that Europe is done. Europe is mathematically impossible. It cannot be saved. You want to make a start. You even want to make a start at trying to bail out Europe we are talking $25 trillion just to start. And it would then - if you were going to bail out the entirety of Europe - you would now be talking about hundreds of trillions of dollars. Okay, people, there isn't that much wealth or money on the surface of the earth. The total gross domestic product of the entire planet earth is I think just under $70 trillion. And we are talking about in excess of $100 trillion to bail out Europe? This is now mathematically impossible. It's not a matter of if the global financial system is going to collapse. Oh, it's going to collapse. You better trust and understand that. It's just a matter of when. And these piddling little maneuvers that these people are making, that the Fed is doing. Oh, we are going to give Europe some money. Okay. What I saw this morning, what the Fed is getting ready to do in terms of Europe, is keep Europe going for another seven days. Well, fantastic. Thanks for that. That is literally the brain dead mindset of these politicians. All they are doing is looking to kick the can down the road. At first it was kick the can down another 10, 12 years. Then it is kick the can down the road for another year. And then it was well, let's kick the can down the road for another few months. Now we're literally to the point where all we can do is kick the can down the road for a matter of a few days. It's not going to make it. I will be very surprised if we make it until Christmas.
