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View Full Version : Is the World heading for Financial Meltdown...?



MB_Avro_UK
03-17-2008, 06:06 PM
Hi all,

Been watching the News today and they are very downbeat for the world economy. Events in the USA appear to predict a 1930s style slump.

I'm in the UK and I'll put my spare cash in Northern Rock as it's now guaranteed by the Bank of England http://forums.ubi.com/groupee_common/emoticons/icon_wink.gif

But on a far, far more serious note, will the Gloster Meteor jet ever be modelled by Oleg and crew http://forums.ubi.com/groupee_common/emoticons/icon_cool.gif

Can anyone lend me a Pound please?

Best Regards,
MB_Avro.

Charos
03-17-2008, 06:37 PM
I cant see a problem with the system since the general premise of the world economy is based on infinite creation of tender to feed infinite interest accrual
to support infinite economic growth to maintain infinite population growth with unlimited natural resources in a continuous feedback loop, seems completely rational.



The banks are continually making new loans and retiring old ones as they are repaid. In the aggregate, the debts owed to banks are increasing with the mere passage of time, because interest accrues over time. The money available to repay those debts, however, can be created only by the banks as they make additional loans.

The net requirement, then, is that banks must make new loans faster than they retire old loans, that is, there must be a continual expansion of bank credit money. If there is not, the result is depression"”increasing numbers of defaulted loans, greater numbers of bankruptcies, expanding unemployment"”and all the human misery that comes with it.

Thomas Greco
Source: Money: Understanding and Creating Alternatives to Legal Tender

Airmail109
03-17-2008, 06:41 PM
People are silly, theyre saving their money which is making the depression worse and money becomes worthless in a massive recession. Buy more, personally I have sod all in my bank at the moment. Thought screw it this recession has given me an excuse to buy all the usefull stuff I'll ever need....and which will last (steel framed mountainbike, Buffalo outdoor gear, climbing equipment, etc). You can trade goods if you need to.

BoCfuss
03-17-2008, 06:52 PM
Yes, but not as bad as the 1930's. I'm off to the bank as we speak http://forums.ubi.com/images/smilies/16x16_smiley-wink.gif

We may be seeing the last of the dollar. Its only a matter of time until China, India, etc. drop the dollar, look out, its going to be a bumpy ride.

VW-IceFire
03-17-2008, 09:05 PM
The 1930s slump was mostly a big bubble followed by a significant crash. I'm not a financial analyst but the thing is that the world economy is allot larger with quite a few more engines driving it than back in the 30s. We have big economies in Asia now that weren't a major factor in the 30s.

Despite all of the doom and gloom in the states...so far...*touch wood* in Canada the hit has been somewhat small and with our new found more valuable dollar and increased buying power Canadians seem to be hunting for cross border shopping opportunities.

But what this recession might do is shift the balance of economic power back to Europe or possibly to Asia. I'd be interested to see if that happens. If that happens the US will be in for some trouble with its diminished manufacturing capacity. Might be a good thing and bring new cleaner/more efficient industry to the US. No idea...going to be interesting to see it play out but I realize allot of people are hurting over this one.

BoCfuss
03-17-2008, 09:51 PM
Originally posted by VW-IceFire:
The 1930s slump was mostly a big bubble followed by a significant crash. I'm not a financial analyst but the thing is that the world economy is allot larger with quite a few more engines driving it than back in the 30s. We have big economies in Asia now that weren't a major factor in the 30s.

Despite all of the doom and gloom in the states...so far...*touch wood* in Canada the hit has been somewhat small and with our new found more valuable dollar and increased buying power Canadians seem to be hunting for cross border shopping opportunities.

But what this recession might do is shift the balance of economic power back to Europe or possibly to Asia. I'd be interested to see if that happens. If that happens the US will be in for some trouble with its diminished manufacturing capacity. Might be a good thing and bring new cleaner/more efficient industry to the US. No idea...going to be interesting to see it play out but I realize allot of people are hurting over this one.

It kind of feels like the rest of the world is laughing themselves to the bank. Thats gratitude for you. The only good I see coming out of this is the U.S. will become more self-sufficient. Meaning we will finally tap into these endless oil reserves we have, and get our fuel prices back down. If it gets bad enough, I hope we tell the rest of the world to go screw themselves.

That said, this is all our fault, we wanted to join the world, stupid policy after stupid policy dating back to the Clinton era, followed by stupid decisions by Bush and an inept Congress. You reap what you sow.

All we need now is Obama to win in November to usher in the New New Deal and we'll be set to lag behind the world until another world war breaks out.

Messaschnitzel
03-17-2008, 09:55 PM
I had a conversation with an investment broker back in 2005. I asked that if the value of the Dollar would hypothetically fall so low that the countries that propped it up decided to drop it in favor of another more valued currency, what would it likely be?

He replied that that would never happen because the rest of the world was so intertwined with the U.S., they would always use the Dollar as the standard. It was to their benefit to do so. This was an axiom as far as he was concerned. I said that if the Dollar ever devalued to the point that it was more economical for another currency to replace it, they would definitely do just that. I went on to say that if the U.S. economy did fall into a serious depression, the other nations would finally drop the Dollar and focus on other, even larger potential customers such as the rising economies of China and India. Their populations(read potential, upwardly mobile customers) dwarf the U.S. They would be trading with another currency in place of the Dollar, and the U.S. would be put on the 2nd string bench. Even though the U.S. is the #1 economy at the moment, it didn't mean that it will stay on top forever at the pace the deficit was going in 2005. I got the wave off for that philosophy at the time. http://forums.ubi.com/images/smilies/shady.gif

Currently, I have read that some businesses here in the U.S. have been gladly accepting Euros in lieu of Dollars. Couple that with the Dollar's decline, and there may be an unofficial, parallel economy going on in the future where you get more bang for your money, including discounts for goods if you pay in Euros or other currencies instead of Dollars.

BoCfuss
03-17-2008, 10:03 PM
That is what is going to happen Messaschnitzelhiemlnosenhofferbel. At the moment China and India are doing the U.S. a favor, just holding on for the moment. When gas prices in the U.S. reach 5.00 Dollars a gallon, it will all but be over. Banks are failing right now and no one is willing to buy, not China, not Dubai, no one. People are losing their houses(they never should have bought them, they couldn't afford them to begin with) and inflation has already started.

Why did they have to name it the Euro? It is going to be our next currency, man what a stupid name.