Posted on 07/19/2011 3:19:05 AM PDT by lbryce
Can you smell it? There is blood in the water. Global financial markets are in turmoil. Banking stocks are getting slaughtered right now. European bond yields are absolutely soaring. Major corporations are announcing huge layoffs. The entire global financial system appears to be racing toward another major crisis. So could we potentially see a repeat of 2008? Sadly, when the next big financial crisis happens it might be worse than 2008. Back in the middle of 2008, the U.S. national debt was less than 10 trillion dollars. Today it is over 14 trillion dollars. Back in 2008, none of the countries in the EU were on the verge of financial collapse. Today, several of them are. This time if the global financial system starts falling apart the big governments around the world are not going to be able to do nearly as much to support it. That is why what is happening right now is so alarming. As signs of weakness spread, the short sellers and the speculators are starting to circle. They can smell the money.
Back in 2008, bank stocks led the decline. Today, that appears to be happening again. The "too big to fail" banks are getting absolutely pummeled right now. Most people don't have much sympathy for the banksters, but if we do see a repeat of 2008 they are going to be cutting off credit and begging for massive bailouts once again, and that would not be good news for the economy.
In Europe, the EU sovereign debt crisis just seems to get worse by the day. Bond yields for the PIIGS are going haywire. The higher the yields go, the worse the crisis is going to get.
(Excerpt) Read more at theeconomiccollapseblog.com ...
Another meltdown. Baraq and Bernanke inspire zero confidence. They seem to be floundering around cluelessly.
they just need to hear the right music.
but lately the band has really sucked...
It’s becoming obvious that they will print more money. This will bolster the stock market. Investors would prefer the stock market rise without QE but they would also prefer that the stock market rise due to QE as opposed to sliding backwards because of no QE. Worst case scenario, it slides backwards anyways despite another dose of QE. Gold remains the best investment IMO. It covers your butt pretty well no matter what happens. also, keep in mind, there are going to be big winners and big losers coming out of this global crisis.
>> It covers your butt pretty well no matter what happens.
If a depression is what happens and you paid top dollar for your gold before prices slide, it loses your butt.
Just sayin’.
the chaos that will ensue from such a depression will make gold look like the only life boat left on a sinking ship full of people. the utter failure of unfunded currency? think about it.
Better a horrible ending than horrors without end.
The government has been pumping up bubbles for too long and it may be way past time for a soft landing, at the risk of mixing a metaphor.
The utter failure of unfunded currency and depression do not necessarily go hand-in-hand.
Anyway, the real lifeboats will be the things people need to live: food being #1, followed by a roof over your head, energy, and medicine/medical care.
Gold will be a shiny, pretty metal that some (not all) who have the above to trade will value.
there will be two classes of people in such a scenario, those who scrounge for necessities and those who buy and sell gold. There will ALWAYS be a buyer for your gold somewhere. don’t kid yourself, gold is still the world’s real reserve currency no matter what Ben Bernanke says.
Umberto Calvini:
"The government bankers want to control the debt,
And whoever controls the debt, controls everything.
This is the essence of the banking industry,
to make us all slaves to debt."
When everybody and his grandmom knows that the markets are going to tank, that’s when the markets rally. 1440 by December.
>> there will be two classes of people in such a scenario, those who scrounge for necessities and those who buy and sell gold.
There must also — and will also — be a third class of people in that scenario: those with the foresight to store *true* value in useful things, like for example land, tractors, fuel, biodiesel-making capability, antibiotics, roofing tools, ...
I’m not a big believer in a “WTSHTF” scenario, although I acknowledge that it *could* happen. But let’s assume it *does* happen. I envision a scenario like the following:
YOU: I’m hungry. I want to buy a chicken from you.
ME: “Buy”? What does that mean? There’s no such thing as money anymore.
YOU: Okay, sorry, I want to trade with you.
ME: What do you have to trade?
YOU: I’ll give you a tiny sliver of gold shaved off this coin.
ME: Ha ha ha ha ha. What good is that to me?
YOU: Then what do you want?
ME: I need a quart of lube oil and a fan belt for my tractor.
YOU: [blank look]
ME: OK, I’ll take pity on you. Give me that gold coin...
YOU: DUDE! I paid FIVE THOUSAND DOLLARS for that coin!
ME: What’s a dollar?
... you get the picture.
“It was horrible. Horrible! Like lightning it struck. No one was prepared. The shelves in the grocery stores were empty.You could buy nothing with your paper money.
– Harvard University law professor Friedrich Kessler on on the Weimar Republic hyperinflation (1993 interview)”
http://www.webofdebt.com/articles/hyperinflation.php
The interesting thing is, people in the country did OK.
It’s the urban dwellers that were suddenly and viciously screwed.
It’s all about the *necessities* of life.
If I were a provider of food, housing, energy or medical care I would want to be paid.
Gold and Silver would be acceptable, because they have the attributes of money. Mere currency and barter might become plausible alternative forms of payment, but would carry frictional costs which would tend to up the price.
E.g. A doctor wouldn’t want to be paid in beets or baby-clothes, and he would look askance at a rapidly-depreciating sheaf of Ben Bernanke Clown-Bux. But in 2014 a single oz of Silver will definitely get his attention.
Inflation is seen quickly in stocks
Why speak of going back to 2008, we are still in the depression of 2008, there was never a recovery, just an artificial boost that shot the whole wad before it was necessary, now we have nothing to bail us out.
Obama’s job has been done, he has destroyed our economy and he is still attacking us.
Good plan, until you meet someone who needs what you have, can't pay for it, but has a gun.
If the SHTF in a major way, the population of any urban area will go feral as quickly as after missing ones days food. Once it starts, it will snowball rapidly. No matter how far from urban areas you live, you will be found. The further out you live, the more resourceful and skilled will be the hunters. Darwin and all.
That's a fair description of the Federal Government.
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