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Inevitable Crash

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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Geuze

jimbobaloobob wrote: »

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.

Due to the CBI macroprudential rules, mortgage lending is much more responsible now.

BrokenArrows

Geuze wrote: »

Due to the CBI macroprudential rules, mortgage lending is much more responsible now.

Yes it much more responsible. But that isn't that much saying much comparing to what it was before the last crash which was "hey take our money".

If the price of any house is significantly above its actual value and they are still giving mortgages then it's irresponsible.

Jim2007

BrokenArrows wrote: »

If the price of any house is significantly above its actual value and they are still giving mortgages then it's irresponsible.

How would you determine this so called actual value?

If as a lender I ensure that I have been provided with a valuation from a reputable firm, the loan is well below the valuation provided, the borrower has a sound employment record and they have obtained income protection, who am I being irresponsible.

Kidkinobe

Inevitable crash indeed, but then there will be an inevitable boom followed by an inevitable crash followed by an inevitable boom...and every one of them will be said to worse/greater than the last one...1000 years from now, people will still be talking about crashes and booms.
Life goes on, Im in the process of buying a house right now, no mortgage, but I can safely say, no matter what the economy does over the next few years, in 10 years time, the house will be worth twice what I am paying for it. Thats the nature of the cyclical beast. crash boom crash boom crash boom.
And as for Brexit, pffffftttttt....people will be running around like headless chickens for a year or two whether it be a 'deal or no deal' exit...sensational headlines will be the norm in the papers 'we are all going to die' type thing..but then one day people will wake up and realise they are not actually dying and that everything is just like it was before Brexit...Same with China and their sensationalised debt, you can read all the doom and gloom stories in the papers till the cows come home, but the simple fact is, life will go on and the boom/bust cycle will continue.

EdgeCase

Ireland is a boom-bust cycle economy, like most of the anglophone countries. We are in the Eurozone but we still follow a similar cycle to the UK and US, not Germany and central Europe.

That may eventually even out but you can see the exact same mentality here as you see in most of the US, Canada, Australia and the UK. Asset bubbles and speculation on housing followed by slow downs and busts.

badboyblast

Kidkinobe wrote: »

Inevitable crash indeed, but then there will be an inevitable boom followed by an inevitable crash followed by an inevitable boom...and every one of them will be said to worse/greater than the last one...1000 years from now, people will still be talking about crashes and booms.
Life goes on, Im in the process of buying a house right now, no mortgage, but I can safely say, no matter what the economy does over the next few years, in 10 years time, the house will be worth twice what I am paying for it. Thats the nature of the cyclical beast. crash boom crash boom crash boom.
And as for Brexit, pffffftttttt....people will be running around like headless chickens for a year or two whether it be a 'deal or no deal' exit...sensational headlines will be the norm in the papers 'we are all going to die' type thing..but then one day people will wake up and realise they are not actually dying and that everything is just like it was before Brexit...Same with China and their sensationalised debt, you can read all the doom and gloom stories in the papers till the cows come home, but the simple fact is, life will go on and the boom/bust cycle will continue.

Twice , do you really believe that ?

UsBus

JonDoe wrote: »

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.

DBK closed at 6.75 today, reaching a 52 week low of 6.68
Yesterday's rise could well have been shorters covering themselves. Dow Jones back on a losing streak again today. I have one stock in the green right now, very tempted to sell it off in case things worsen in the new year..

greenfield21

https://mobile.twitter.com/RayDalio/status/1078005348265615366

soirish

So a year ago, everything was too expensive; now everything is too scary.

ArnieSilvia

I've been watching some independent sources and what becomes clear is that indeed, "this time it's different":rolleyes:

This time the debt mountain was not created by individual banks lending to households to purchase mortgages. It was created by central banks supplying cheap credit to big corpo allowing them to borrow money to buy back shares, artificially increasing share prices and giving impression that all is great. It also allowed smart money to buy whole companies and flip them later at inflated price. It all works until there is enough supply of cheap money and until the interest rates are low.

There's mountain of debt worldwide but US situation is particularly bad, as the debt levels increased much much faster than the GDP. They can't increase the interest rates because it would mean increased cost of servicing their debt which they can't afford.

Meanwhile, the wages did not increase much in the last decade, I certainly can't see the "recovery" among people I know. All this "recovery" is virtual money that was channelled to the 1%.

I've been watching the share prices in the last 6 months and the picture is bleak, property developers (ie.Cairn, Glenview) plummeted, banks plummeted, seems that DB operated just like Lehman Brothers did - totally reckless stuff

A lot laughed at me at the property market forum that I mentioned bitcoin but I watch it closely as an indicator of sentiment towards extreme risk. The moment it fell off the cliff few weeks back, I started getting worried.

One of the things preceding the Big Depression in US was that ordinary Joe was into shares, people who had no clue would be invested in something they don't understand. This time even teachers at my son's school were buying bitcoin.

In my opinion we are already 6 months into big downturn.

This time my worry is that the crisis will be so big that it might cause civil unrest. I presume that Chinese that hold lots of US debt won't be impressed at losing their money due to devaluation of $, high inflation or high interest rates.
US might try to pull the stunt of inflation to wipe their debt off but not a hope to pull this with Chinese.
Some commentator said that US was credited by poorer countries buying their bonds but no more because everything evened out and these countries don't want to lend any more to US.

Also, I was in US recently and what hit me was that it was so terribly run down and just poor (NYC, NJ state). Roads, infrastructure, shops - old, ugly and in bits ???
I draw a direct comparison with my home town in Poland where it's unrecognisable from 1990. It's back to it's full glory, everything done up etc. You can see where the money went, and Poland has only caught the wind few years back after a period of pure robbery, facilitated by politicians hired by western (UK in particular) investment banks. Same happened in few other countries so this source of money to the West has dried up. There was a failed attempt to pull the same stunt with Ukraine which failed, however I saw parallel situation in countries that joined EU recently.

In anticipation of change, we cashed out of housing market here (bought in 2012-13 sold 2018) and probably will move somewhere where we could buy for cash. It is possible, because my personal goal over last 10 years was to build a skill set that is transferable to any country hence I can move where the work is and don't need to rely on local economy.

My biggest worry is that I have cash in the banks that I don't trust at all (BOI) and unfortunately Santander bought the bank I had my account in in Poland.
I think that the only thing I could do is to spread the risk, maybe keep money in a basket of different currencies as well.

Investing in shares is not for me, maybe in raising market but not now, too much volatility. And I learned my lesson that there's no logic these days and the share market, which should have not risen to this levels did (should level out in early 2010's) only because of QE which was a total robbery and transfer of even more wealth to the 1%.

So yeah, it is too scary to invest anywhere but to keep cash in banks is even more scary.

JonDoe

ArnieSilvia wrote: »

So yeah, it is too scary to invest anywhere but to keep cash in banks is even more scary.

Think it was 2014 the bail in doctrine was finally pushed into law amongst G20 nations, no longer a depositor but a creditor to the banks when you lodge your hard earned cash. You're a low end creditor too ranked well below derivative bets.
Cash will be good to have on hand but if left in a bank you'll be out of pocket when things kick off.
Metals finally look to have turned, COMEX lost control of Palladium in the last few years so it's possible you could have shiny future with Gold and Silver.
https://www.silver-to-go.com/en/silver-coins/

ArnieSilvia

While watching one of German documentaries I heard that wealthy Germans are withdrawing cash (physical notes) from the bank and locking it in the same bank's individual lockers (the ones used for jewellery etc). It might be just a hearsay but nevertheless, it's one of the methods to avoid bailing in the bank.

I also noticed that quite a lot of people predicting downturn suggest Gold, however they have invested in it as well (Peter Shiff for example) and are brokers for same so this limits their own credibility and making all their doomsday predictions corrupt (they benefit from like minded people who buy gold through them).

I got burnt with gold a while back, the dynamics of gold price drops in 2013 was equivalent to bitcoin in the early 2018 - maybe there is a correlation between those scenarios?

Gentleman Off The Pitch

ArnieSilvia wrote: »

I've been watching ..

In anticipation of change, we cashed out of housing market here (bought in 2012-13 sold 2018) and probably will move somewhere where we could buy for cash. It is possible, because my personal goal over last 10 years was to build a skill set that is transferable to any country hence I can move where the work is and don't need to rely on local economy.

...

It would be interesting to hear more about the skill set, although I'd understand if you'd prefer to keep that to yourself

JonDoe

Burnt in Gold... I've been through all that entire Market cycle not just the run up an pop. Right now feels like it's were I entered the cycle. Happy I'm still there...
At least empty a spare wardrobe and fill it with food for a few months, cost you 1k and you'll never have to run to the shops when you run out of tea, sugar.... peas.. rice.. ever again, less stress it's a win.
Try look at wealth as what you have and not a number on a screen. The metals aren't for a speculation, they're a store of value, if everything goes to Sh1* then they will conserve your lifes effort for whatever comes next.
Best of Luck

pearcider

Gold is like an insurance policy , very effective hedge against both deflation and inflation. It’s not an investment in the sense of making a return. But it will protect you from bail ins and devaluations. Worth having 10% of your cash savings in physical gold and silver in my opinion.

Postit

Kidkinobe wrote: »

Im in the process of buying a house right now, no mortgage, but I can safely say, no matter what the economy does over the next few years, in 10 years time, the house will be worth twice what I am paying for it.

So by your logic, a house that costs €250,000 today will be worth €500,000 in December 2028. That means the average capital return on a €250,000 outlay is ~7.2% per annum.

Furthermore, charging a conservative figure of €500 per month rent, means this property is yielding a ~9.6% total return in year one alone.

So a ~10% average return per annum no matter the prevailing economic conditions? Fair play to you. It seems like you’ve got it all sussed out!

PS - You should get in touch with some of the major investment banks. With a claim like this, I’m quite sure they will offer you a six-figure base salary job on the spot.

Amirani

JonDoe wrote: »

Think it was 2014 the bail in doctrine was finally pushed into law amongst G20 nations, no longer a depositor but a creditor to the banks when you lodge your hard earned cash. You're a low end creditor too ranked well below derivative bets.
Cash will be good to have on hand but if left in a bank you'll be out of pocket when things kick off.
Metals finally look to have turned, COMEX lost control of

That's completely false. You haven't the slightest clue what you're talking about, and your "thoughts" are dangerous to genuine savers and investors on here.

JonDoe

Amirani wrote: »

That's completely false. You haven't the slightest clue what you're talking about, and your "thoughts" are dangerous to genuine savers and investors on here.

Think I hit a nerve. Go ahead if you can prove my "Dangerous" thoughts incorrect, come up with the necessary documentation.

4068ac1elhodqr

Isn't the single biggest factor (for 'Westerners') the on-going wealth shift to the East?

e.g. Just this week China announced it was aiming to replace it's stock of about 5/6,000 planes,
with it's own national brand. Bad news for Boeing/BAE.

Chi build x13 more skyscrapers than the US in 2018.

Some suggest that by 2060 China GDP will be more than the USA+EU combined.
Then put Chi+Ind+Rus together and that's 50% of total global GDP circa 2055-60.

Reckon the EU(unbrexit) +Tur+WB6 & the NAFTA area will have to merge into one single union of sorts sooner than later.

Live at Three

Alicia Incalculable Wallpaper wrote: »

Isn't the single biggest factor (for 'Westerners') the on-going wealth shift to the East?

e.g. Just this week China announced it was aiming to replace it's stock of about 5/6,000 planes,
with it's own national brand. Bad news for Boeing/BAE.

Chi build x13 more skyscrapers than the US in 2018.

Some suggest that by 2060 China GDP will be more than the USA+EU combined.
Then put Chi+Ind+Rus together and that's 50% of total global GDP circa 2055-60.

Reckon the EU(unbrexit) +Tur+WB6 & the NAFTA area will have to merge into one single union of sorts sooner than later.

What are you going to do with all the spare time you saved by typing 'Chi' instead of 'China'?

Sorry couldn't resist...

4068ac1elhodqr

Even shorter: 中国 (or 中國).

Postit

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?

Hey. Sounds like you’re really thinking about this. However, from your post I’m guessing that you haven’t much of a background in academic economics? If so, I highly recommend that you get a good grounding in basic economics. It will serve you well, and give you a certain degree of clarity in this area.

I’d recommend a book called ‘Economics: The Users Guide’ by Ha-Joon Chang. It’s pretty accessible.

Postit

JonDoe wrote: »

Think it was 2014 the bail in doctrine was finally pushed into law amongst G20 nations, no longer a depositor but a creditor to the banks when you lodge your hard earned cash.

Oh wow. This really is quite concerning. If you don’t mind, can you cite a link to this legislation?

JonDoe

Postit wrote: »

Oh wow. This really is quite concerning. If you don’t mind, can you cite a link to this legislation?

I think you should go to your bank and get this in writing, don't take my word for it go to your own bank and get someone to write down that the money is still yours and get them to sign it. Don't take my word for it.

JonDoe

Postit wrote: »

Hey. Sounds like you’re really thinking about this. However, from your post I’m guessing that you haven’t much of a background in academic economics? If so, I highly recommend that you get a good grounding in basic economics. It will serve you well, and give you a certain degree of clarity in this area.

I’d recommend a book called ‘Economics: The Users Guide’ by Ha-Joon Chang. It’s pretty accessible.

Can you tell me what is money? Where does it come from?

Bubbaclaus

JonDoe wrote: »

I think you should go to your bank and get this in writing, don't take my word for it go to your own bank and get someone to write down that the money is still yours and get them to sign it. Don't take my word for it.

You should stop spreading hysterical ****e

JonDoe

https://www.globalresearch.ca/g20-governments-all-agreed-to-cyprus-style-theft-of-bank-deposits-in-2010/5335567?utm_campaign=magnet&utm_source=article_page&utm_medium=related_articles

Can't find the exact document right now that states "we are going to steal your savings" but here's an article that points in that direction. I think if you want 100% clarification you should go to your bank and get an agreement in writing that they will not take your savings.

Postit

JonDoe wrote: »

I think you should go to your bank and get this in writing, don't take my word for it go to your own bank and get someone to write down that the money is still yours and get them to sign it. Don't take my word for it.

Good advice, thanks. I’ll definitely do that. However in the meantime, your exact words were “Think it was 2014 the bail in doctrine was finally pushed into law amongst G20 nations, no longer a depositor but a creditor to the banks when you lodge your hard earned cash.”

I’m merely asking you to cite the legislation you maintain is now law?

JonDoe

Postit wrote: »

Good advice, thanks. I’ll definitely do that. However in the meantime, your exact words were “Think it was 2014 the bail in doctrine was finally pushed into law amongst G20 nations, no longer a depositor but a creditor to the banks when you lodge your hard earned cash.”

I’m merely asking you to cite the legislation you maintain is now law?

Hey postit I don't have to answer any more of your questioning, who do you think you are?
What is Money? Where does it come from? Why is there more money now than there ever was before? Who gets to create it? Who gets it first? What do they do with it?

JonDoe

https://www.bis.org/review/r131001b.pdf

By redistributing the risk between tax-payers, depositors and debt holders, bail-in rules can
reduce the overall risk in the system.

BIS 2013 review, to be implemented no later than Jan 1st 2014 G20 nations

The legislation is out there somewhere but I'm not ****d digging it out and I don't do legalese, banks do.