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Inevitable Crash

  • 26-11-2017 10:35am
    #1
    Registered Users Posts: 785 ✭✭✭ Zenify


    This isn't a post where I'm telling people something is going to happen - just want some feedback on my thoughts. I'm no expert but there's a sense in my head that something isn't right.

    I never expected the economy (irish and world) to take off again in the last few years and it doesn't feel "real" to me. The growth all has some sort of a fake feeling to it. Nobody is explaining where this new wealth is coming from.

    Central banks have low interest rates and are in essence printing money with quntative easing. This means that the pubic are spening borrowed money and this in turn is powering growth, creating more jobs thus further increasing spending. Eventually the top of the pyramid will stop spending money due to amount of dept and the whole thing will collapse.

    I'm only in my 20s so haven't been around that long to experience other times if they felt "real" or "fake"....

    Thoughts?


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Comments

  • Registered Users Posts: 1,099 ✭✭✭ UsBus


    Zenify wrote: »
    This isn't a post where I'm telling people something is going to happen - just want some feedback on my thoughts. I'm no expert but there's a sense in my head that something isn't right.

    I never expected the economy (irish and world) to take off again in the last few years and it doesn't feel "real" to me. The growth all has some sort of a fake feeling to it. Nobody is explaining where this new wealth is coming from.

    Central banks have low interest rates and are in essence printing money with quntative easing. This means that the pubic are spening borrowed money and this in turn is powering growth, creating more jobs thus further increasing spending. Eventually the top of the pyramid will stop spending money due to amount of dept and the whole thing will collapse.

    I'm only in my 20s so haven't been around that long to experience other times if they felt "real" or "fake"....

    Thoughts?

    My thoughts are in terms of Ireland are that we've been winging it as a country for a fair number of years with our corporate tax structure. Outside of that we're not going that we'll. It feels like Brexit will turn out to be a disaster for us and our government is arguing over an email.. Expect an Irish election right at the most crucial European/Brexit juncture..

    Internationally, it feels like Trump is supercharging the stock market right over the edge of a cliff... He has never worried about bankruptcy in his past ventures..

    All opinion of course, but we know the market has to correct itself at some point.. whatever happens there will not be a soft landing.


  • Registered Users Posts: 17,263 ✭✭✭✭ dxhound2005


    I did a search for "Crash" remembering a thread like this a while back. I didn't find that one but I see all the discussions about a crash recently have been about a crash in BitCoin.

    A new crash/recession/depression is inevitable. That is how capitalism works. In America since people started measuring such things there have been about 45 of them.

    The thing which I can never understand is how we are supposed to reach some state of "recovery" from each crash. The last one came when some people borrowed too much money for property speculation, making everyone with property a lot richer for a while. I don't want to "recover" to that scenario. Nor can I remember any golden age in our past that I want to recover to either. Certainly not mortgage rates and unemployment rates of 18% which I lived through.


  • Closed Accounts Posts: 503 JonDoe


    https://www.financialsense.com/contributors/christopher-quigley/kondratieff-waves-and-the-greater-depression-of-2013-2020

    The last 10 years have been a fake recovery, the central banks were not positioned to save themselves back in 2007-8. The collapse has been stalled by worldwide QE, there has been no taper, hell they're running out of things to buy. Banking regulations were changed back in 2012, a depositor is no longer a depositor but a low graded creditor, the ECB is currently talking about dropping deposit protection. Ireland is toast, selling each other damp houses again won't cut it. We can export all the food but that didn't work so well back in the 1840's. Multinationals will leave in droves once this kicks in. The illusion could fracture tomorrow for all I know, but it will and in the next year or so.
    I'm looking to move to Malta, at least I can sleep rough without freezing to death.
    Good Luck


  • Registered Users Posts: 3,740 ✭✭✭ Arthur Daley


    Or Cyprus. Seeing how they've already seen the theft of some of their deposits by the Central banking cabal.


  • Registered Users Posts: 1,073 ✭✭✭ trixiebust


    The idea that IDA jobs are good - to a certain extent yes. But Ireland & multinationals currently have a warped love affair going on.


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  • Registered Users Posts: 3,258 ✭✭✭ lmimmfn


    trixiebust wrote: »
    The idea that IDA jobs are good - to a certain extent yes. But Ireland & multinationals currently have a warped love affair going on.
    Ireland seems to base its economy on one trick ponies most of the time, at least in recent decades, the whole multinational dependence and non taxation of their profits will only last so long, the next recession will be the worst because we're still taxed to the hilt from the last recession and a lot of income tax revenue is based on multinationals employing people. We're dependent on the US now more than ever which is very dangerous coupled with brexit and meat exports which helped us export our way to restoring some form of economy.

    The multinational situation isint sustainable, funny thing is that everyone in Ireland knew in 2004 that the housing bubble was going to crash hard.

    *Disclaimer* I'm obviously no expert, I found the thread interesting and have been thinking the same thing recently. At least I'll be somewhat prepared for the next one.


  • Registered Users Posts: 17,263 ✭✭✭✭ dxhound2005


    lmimmfn wrote: »

    The multinational situation isint sustainable, funny thing is that everyone in Ireland knew in 2004 that the housing bubble was going to crash hard.

    Not the way I remember it. Nor had the word got through to most of the people on Boards when this thread was started in 2006.

    https://www.boards.ie/vbulletin/showthread.php?p=50839557


  • Registered Users Posts: 17,290 ✭✭✭✭ Thargor


    The debt explosion in China is probably the most toxic financial event ever created, it might have years left to run but theres literally no upper limit on how badly it could go for them and how much damage it could do globally, its hard to wrap your head around how big it is, accurate figures are hard to come by.
    Then again the ageing population in the West combined with upcoming pension crises is just as bad, lots to be pessimistic about.


  • Registered Users Posts: 5,440 ✭✭✭ daheff


    I didn't find that one but I see all the discussions about a crash recently have been about a crash in BitCoin.

    to me, BitCoin has all the hallmarks of a bubble. Its rising fast, plenty of people who know nothing about it are looking to buy in.....can see this ending in tears.
    Or Cyprus. Seeing how they've already seen the theft of some of their deposits by the Central banking cabal.

    Ireland was the first attempt at a bail-in (remember the pension fund plundering?)

    Cyprus took it to another level. But now that both of these have happened, its the defacto way to survive another crash. Its already happened and to little complaint.


  • Registered Users Posts: 894 ✭✭✭ Deub


    The problem with bitcoin is it is not attached to anything like stocks that are attached to companies and the market they are in.

    China is definitely a risk. They injected a lot of money in their economy in recent years. They plan to decrease this policy and that is the reason why they are opening their market to foreign investment.

    I read an article about US retail shops not going well. They may see a retail crash next year. It started with toy'r'us. Apparently there was this year almost as much shops closed as at the peak of the crash in 2008.

    2018 will be an interesting year.


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  • Registered Users Posts: 2,285 ✭✭✭ Underground


    JP Morgan reckon the next crash will happen next year when the Fed starts to unwind it's balance sheet. Time will tell.


  • Registered Users Posts: 1,259 alb


    Deub wrote: »
    The problem advantage with bitcoin is it is not attached to anything like stocks that are attached to companies and the market they are in.

    FTFY


  • Registered Users Posts: 349 ✭✭ deathtocaptcha


    We're in uncharted territory because there's more money / debt than ever before. A bubble can't pop if you keep supply more money for people to buy in to it... it will just keep getting bigger.

    It only starts to pop when you stop supplying money and / or start calling for people to pay debts - at which stage they need to stop spending / investing and start selling.

    Raising interest rates, reducing quantitative easing & governments selling assets they've bought during the recession are all signs we've topped out but we won't get a reversal overnight, it could run on for another couple of years before some black swan event kick starts a reversal.

    The question is what happens during the next global recession... do we continue to raise debt, lower interest rates and print more money? Something something Einstein insanity...

    I believe that cryptocurrency will eventually prosper during the next global recession (probably not immediately) as we'll see more examples of hyperinflation and more confidence / trust in math and the idea of a fixed supply of currency / currency transparency in which no one entity or small group of individuals control. It's going to become a real pain the ass for governments and banks to the extent they'll be forced to embrace it or face losing massive amounts of business to more crypto-friendly jurisdictions.


  • Registered Users Posts: 11,179 ✭✭✭✭ Geuze


    Zenify wrote: »

    Central banks have low interest rates and are in essence printing money with quntative easing. This means that the pubic are spening borrowed money and this in turn is powering growth, creating more jobs thus further increasing spending.

    Households save some of their income.

    They spend less than they earn.

    Clearly many consumers have debts, yes, but overall the hh sector is a saver.


  • Registered Users Posts: 785 ✭✭✭ Zenify


    Geuze wrote: »
    Households save some of their income.

    They spend less than they earn.

    Clearly many consumers have debts, yes, but overall the hh sector is a saver.

    Yes, but my question isn't just about saving or spending for households. Where is this income coming from? The economic growth which is paying them is being powered by the free money policies of the Central Banks. Somebody, somewhere is eventually going to have to pay it back.

    I'm just not sure if I'm thinking like this because I like drama or if it is looming.


  • Registered Users Posts: 17,263 ✭✭✭✭ dxhound2005


    Zenify wrote: »
    Yes, but my question isn't just about saving or spending for households. Where is this income coming from? The economic growth which is paying them is being powered by the free money policies of the Central Banks. Somebody, somewhere is eventually going to have to pay it back.

    I'm just not sure if I'm thinking like this because I like drama or if it is looming.

    There is no need to worry about paying off debt. Unless someone can tell me different, I believe that every country in the world is in debt. So if it is called in, they will just be paying some money out and getting some back.

    https://www.nationaldebtclocks.org/

    http://www.usdebtclock.org/


  • Registered Users Posts: 15,298 ✭✭✭✭ Francie Barrett


    Thargor wrote: »
    The debt explosion in China is probably the most toxic financial event ever created, it might have years left to run but theres literally no upper limit on how badly it could go for them and how much damage it could do globally, its hard to wrap your head around how big it is, accurate figures are hard to come by.
    Then again the ageing population in the West combined with upcoming pension crises is just as bad, lots to be pessimistic about.
    Did you not create a thread a year ago saying you were so worried about a crash you couldn't invest? I am not being smart, but was that a winning strategy for you?


  • Registered Users Posts: 17,290 ✭✭✭✭ Thargor


    Yeah and things were nearly as shaky looking back then, better analysts than you or I were saying the exact same things then as they are now regarding insane equity valuations, debt, global housing bubbles etc but now everything is even worse. I still think something has to give.

    On a personal level seeing as you're obviously worried about my investment strategy... :D

    In the last year Ive been about 25% Lithium/10% crypto/65% cash (Prizebonds and State Savings) and have seen very good returns (apart from the State Savings but I wouldn't be comfortable risking more), I also maxed out my pension even though Im pessimistic about those aswell. Wish Id been braver but hindsight is always wonderful. Anyway what I have invested has done surprisingly well and Im nearly at my personal goal of securing a 3 bedroom house close to work that I plan on living in with a couple of tenants to eliminate the rent I currently pay and take advantage of the 14k tax free rent a room scheme. That plus saving 50% of my salary will let me be more of a risk-taker and Ill be gunning for even better returns.


  • Registered Users Posts: 712 soirish


    St. Nikolai Velimirovic - About the World Crisis


  • Registered Users Posts: 2,991 ✭✭✭ Taylor365


    Thargor wrote: »
    Yeah and things were nearly as shaky looking back then, better analysts than you or I were saying the exact same things then as they are now regarding insane equity valuations, debt, global housing bubbles etc but now everything is even worse. I still think something has to give.

    On a personal level seeing as you're obviously worried about my investment strategy... :D

    In the last year Ive been about 25% Lithium/10% crypto/65% cash (Prizebonds and State Savings) and have seen very good returns (apart from the State Savings but I wouldn't be comfortable risking more), I also maxed out my pension even though Im pessimistic about those aswell. Wish Id been braver but hindsight is always wonderful. Anyway what I have invested has done surprisingly well and Im nearly at my personal goal of securing a 3 bedroom house close to work that I plan on living in with a couple of tenants to eliminate the rent I currently pay and take advantage of the 14k tax free rent a room scheme. That plus saving 50% of my salary will let me be more of a risk-taker and Ill be gunning for even better returns.

    That's been my plan too for the last 2 years, except i'm in 100% cash (making 1% per year).

    Only now am I getting setup on degiro and throwing 30-40% into some US domiciled etfs. Pick a few indexes and come back to it in 3-5 years.

    I don't see a crash for another 15-20 years. If there is before then, happy days - BUY BUY BUY! :pac:


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  • Registered Users Posts: 785 ✭✭✭ Zenify


    Anyone like to update on their thoughts here?


  • Closed Accounts Posts: 503 JonDoe


    The crash has been happening all year to anyone "woke". It's only the poster boy's Dow and S&P that have had the pig lipstick applied. The smart money is now out, the MSM have lately been saying we see a recession in 2020, well they're lying to you again it's here now.
    Ireland is screwed, the increase in GDP over the last few years has been a combination of increasing our national debt from 90Bn to 210Bn and that's after bailing out all the big boys with NAMA etc (which increased out debt from 45 to 90BN), so it's government spending borrowed money and some increased business in the IFSC, some entity bought 400Bn of US treasuries there when the taper began.
    Watch out below for DBK come the 27th, shares are down 60% on the year and currently hovering at €7 a close below that mark is disaster. GE bank stateside too is on it's way out. Bail ins coming, those of you in cash, I hope it's under your mattress. Buy things that you will need and use now, keep some cash, it will be king for a short time, then there's metals in your physical possession and a speculative punt 1-5% in crypto off exchange, cold storage paper wallet.

    Best of Irish luck to you all!


  • Registered Users Posts: 61 ✭✭ michealkc


    JonDoe wrote: »
    The crash has been happening all year to anyone "woke". It's only the poster boy's Dow and S&P that have had the pig lipstick applied. The smart money is now out, the MSM have lately been saying we see a recession in 2020, well they're lying to you again it's here now.
    Ireland is screwed, the increase in GDP over the last few years has been a combination of increasing our national debt from 90Bn to 210Bn and that's after bailing out all the big boys with NAMA etc (which increased out debt from 45 to 90BN), so it's government spending borrowed money and some increased business in the IFSC, some entity bought 400Bn of US treasuries there when the taper began.
    Watch out below for DBK come the 27th, shares are down 60% on the year and currently hovering at €7 a close below that mark is disaster. GE bank stateside too is on it's way out. Bail ins coming, those of you in cash, I hope it's under your mattress. Buy things that you will need and use now, keep some cash, it will be king for a short time, then there's metals in your physical possession and a speculative punt 1-5% in crypto off exchange, cold storage paper wallet.

    Best of Irish luck to you all!

    "Buy things that you will need and use now".

    How about buying a house right now? Prices are at a high again, I don't know if they will soon drop away. The dollar looks like it will be in trouble. I dont know if the Euro is strong enough to stand on its own 2 feet unaffected. House prices may not collapse due to the fact that the supply is low here.


  • Registered Users Posts: 2,928 ✭✭✭ NSAman


    There is obviously a crash coming.

    I live in the States but come home a lot and travel through Europe extensively.

    The last bubble was unreal for me. I worked and saved through the whole thing. Never taking holidays, not purchasing a house (mainly luck as the price went up 150% over night while trying to buy it, that for me was the indicator of madness).

    Currently, there are some with money. There is still that feeling that all the “advancement” is not real. The general populace is not seeing massive benefits. The taxing to pay back previous debts, the house price being used as an indicator above all else... to me means that there is certain doom ahead again and probably worse than ever.

    I have since that first foray into the housing market purchased the same house for 25% of the original figure thats a saving of 300K on the sale price that some eeejit paid for it and for cash.

    My debts have all been paid apart from my mortgage in the US. I can honestly say I am very wary of the future, Not because of Trump but due to European policy.

    I am no expert in International finance, but something does NOT feel right about the near future to me and I have taken steps to protect myself as much as possible.


  • Closed Accounts Posts: 503 JonDoe


    Don't buy a house, unless that is you've just won the lottery and have all the cash and you're sure this is the place I'm going to die in. The housing market is totally fake. NAMA and Vulture fund supply was kept off the market and is now being drip fed into a "CRISIS" market. I've friends that have just come out of negative equity and have had the opportunity to switch to fixed rate for 7 years.
    There's a huge liquidity crisis coming, housing will drop like a stone, things that you consume on the other hand will explode in price. Good book to read "When Money Dies", study of what happened in Germany, the Middle Classes got ****'d, still had their big villa's, professional jobs but no fire wood, furniture or funds to pay the help, plumber, carpenter, builder, TAXES.
    Think "When your assets become liabilities", there's a minimal property tax right now but now it's there it will get ramped up in next crisis as you're trapped, easily plucked. Look at property taxes stateside, €1000 a month is common enough.


  • Registered Users Posts: 7,494 ✭✭✭ BrokenArrows


    JonDoe wrote: »
    There's a huge liquidity crisis coming, housing will drop Look at property taxes stateside, €1000 a month is common enough.

    You can't compare something like that.

    US income tax for the average person is much lower so they pay taxes in other ways such as high property tax.


  • Registered Users Posts: 1,099 ✭✭✭ UsBus


    UsBus wrote: »
    My thoughts are in terms of Ireland are that we've been winging it as a country for a fair number of years with our corporate tax structure. Outside of that we're not going that we'll. It feels like Brexit will turn out to be a disaster for us and our government is arguing over an email.. Expect an Irish election right at the most crucial European/Brexit juncture..

    Internationally, it feels like Trump is supercharging the stock market right over the edge of a cliff... He has never worried about bankruptcy in his past ventures..

    All opinion of course, but we know the market has to correct itself at some point.. whatever happens there will not be a soft landing.

    Interesting to look back at my thoughts on this just over a year ago.
    I still feel our corporate tax take will take a turn for the worse. I hope we don't have to bargain with it to get us out of the Brexit mess.

    The Irish election is on hold for the moment but for how long if the housing health crisis worsens..?

    As expected, Trump's policies are coming to a head, the stock market is in the middle of a correction, how much, early next year will tell..

    I've seen a number of posts stating the lack of supply in housing will keep the cost of buying from crashing. I just don't understand that logic. If global economies get into trouble, Ireland won't avoid the effects of a downturn. There will be an exodus from property, whether that be investment or 1 off landlords as people try to get out in time.
    It will be different to the crisis of 08, but it could be much worse this time.. I'm waiting to purchase but I'm saving like mad in the meantime for what will hopefully be a cash purchase of property..


  • Registered Users Posts: 5,151 ✭✭✭ jimbobaloobob


    Is there any truth in looking at who are affording mortgages at the current time?

    I remember watching a movie about the last crash and a group of people in New York were profiling professions there. They saw that a lot of the people coming to them for financial advice were in jobs like dancing, waiting etc. Then reckoned this was a warning sign based on their income.
    Not off topic i hope.


  • Registered Users Posts: 1,099 ✭✭✭ UsBus


    Is there any truth in looking at who are affording mortgages at the current time?

    I remember watching a movie about the last crash and a group of people in New York were profiling professions there. They saw that a lot of the people coming to them for financial advice were in jobs like dancing, waiting etc. Then reckoned this was a warning sign based on their income.
    Not off topic i hope.

    Think this was 'the big short' iirc. I had a similar feeling about Bitcoin this time last year when your average Sunday newspaper columnist was discussing the pros and cons of cryptocurrency...


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  • Closed Accounts Posts: 2,472 EdgeCase


    The housing market in Ireland at best in a temporary glitch that will eventually see supply ramp up again and prices fall to medium levels (that's the ideal scenario).

    At worst it's in a bubble that will crash dramatically.

    Either way, I would not be so foolish as to pin my hopes on a rising Irish house price. It's insane, shows no understanding of recent economic history (from barely a few years ago).

    Even without a crash, the current house price level is a social disaster and is rightfully politically unsustainable and needs to be regulated. Even in a good economic outcome anyone seriously jumping on speculating on Irish residential property is flogging a dead horse.


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