[Deleted User] wrote: » Germany was in techical recession before Covid.https://www.cnbc.com/2019/11/14/germany-q3-gdp-2019.html The most common problem in 2019 in Ireland was shortage of loans to SME and first signs of recessionshttps://www.centralbank.ie/docs/default-source/publications/sme-market-reports/sme-market-report-2019.pdf?sfvrsn=9 I can not understand were "growth" coming from Zombi which had die in 2019 got some support ? The most common problem that people has serious problems with memory
Mongfinder General wrote: » Perhaps the regulation of Crowdfunding can help with SME loans. I understand that Crowdfunding platforms will be able operate cross border from November under the new Crowdfunding Regulation.
Revolution 1917 wrote: Let's start from understanding that loan are not growth.
Wanderer78 wrote: » If loans aren't created, we got no money supply, which means we get no growth, which means, we d be in deep sh1t
theguzman wrote: » We should move away from FIAT Currency back to the Gold standard or to a Dogecoin like system of finite supply. Printing money ad-infinitum forever is debt slavery and is responsible for the current boom in asset prices like property and land, people want something which is fixed and permanent, not something which is being constantly printed off and duplicated ad-infinitum, a true measure of wealth is something rare and in short supply, almost 50% of all cash and money in banks has been created out of thin air "printed" since March of 2020 at the start of the Pandemic. Inflation is starting to bite badly now and has started already in Construction and will soon filter down to groceries and other essentials.
Wanderer78 wrote: » all money is created from thin air, it always has been, long before 2020 polices where implemented, we ve in recent times, just become overly reliant on private sector created money, i.e. credit, which in turn has just created credit fueled asset booms, and subsequent busts, i.e. 08. the majority of the money supply has in fact been, and for a long time, coming from private sector financial institutions, or banks, hence the term 'credit crisis'. but since we ve been lubing the pathways to asset markets, over the last few decades, anytime money is created in either the public or private domains, its flooding straight towards these markets, driving up asset prices. private debt has in fact been causing far more significant crashes, again, 08 was primarily due to private debt accumulations globally, including here in ireland, which of course was flooding into asset markets, primarily property and land. its also important to remember, the paying off of debt, is in fact the destruction of money itself, due to the nature of its creation, commonly called 'double-entry bookkeeping' one of the main reasons why we moved from the gold standard was to expand our economies, without which, we would have been screwed, i.e. we had to move off the gold standard, it had run its course. going back isnt possible now, you cant make debts just disappear without causing problems, and there just isnt enough gold, it would cause catastrophic economic crashes globally. its also one of the main reasons why it would be virtually impossible for a country to leave the euro group, having debts based in what would be a foreign currency upon leaving, leaving would probably lead to that countries economy crashing, potentially crashing the eu along with it, i.e. we re all stuck in this dance. some inflation is actually required, and urgently, as we ve been also living in a low wage inflation environment for too long now, along side high asset price inflation, hence our current housing train wreck. if we dont create this inflation, all our debts become highly problematic, as we may not be able to service them, and we all know what happens when debts become unserviceable, i.e. 08! so careful what you wish for!
Revolution 1917 wrote: When loan taken we also dont have money supply. Person who bought car taking loan spend less When hi spending less the less people around getting money When they getting less money the government getting less taxes When government getting less taxes has take loan We are in deep ,.. because we have pay more taxes when we already getting less income because person which took the loan spend less We all alive just because government still can take loan
Revolution 1917 wrote: Simply the economy model are dead If we take country as company we will see that country does not create enough profit and has to take loan to survive and pay wages! When company has same situation she simply meet bankruptcy procedure because any bank will not give loan to the company which not creating any profit ! By real name and situation Ireland bankrupt in 2009 and all her finance system collapsed because stopped creating any profit and still not creating any
Wanderer78 wrote: » Debt is the money supply, this process is called 'monetisation of debt', and the two main methods of doing so is when governments run deficits, the public entity, or when banks create loans, the private sector entity. This is why governments are nothing like households, I.e. Households cannot create money, but governments can, but since we ve been living in an era of balanced budgets, governments have been significantly curtailed in doing so, forcing the money supply out into the private sector, creating credit fuelled booms and busts. Yes, we ve become over reliant on the credit supply, resulting in heavily indebted nations, but this is the private sector supply, we must move into a more public sector supply, I.e. Perpetual deficits, in order to try break away from this. Noting, the Irish state wasn't bankrupt in 08, it was the private sector banks that over supplied credit that lead to the crash, I.e. It was primarily a private sector problem, but you d be surprised af the amount that believe otherwise!
coolshannagh28 wrote: » There is an argument that the private sector may have triggered the crash but the real pain thereafter was caused by the govts need to borrow approximately 50 billion to maintain the standard of living of the public service.
Nearly 3 years since the thread started and no one could have predicted the covid recession non recession.
Still a lot of tax payer supports out there at the moment though.
such predictions are impossible, humans dont have these capabilities, we may never have
tax payer supports have been critical in maintaining functionality of our economies, since there was a dramatic drop in the demand for private sector money, i.e. credit. we need to maintain running deficits for the foreseeable, to try reduce, ideally prevent, excess credit creation, i.e. pre 08 period
How have countries fared where there were no tax payer supports? Have their economies been devestated? Or were they pretty bad to start with.
great question, not sure, but i suspect, not too good. i know people have been dying outside the entrances of Indian hospitals throughout this, unsure if theyve been receiving state aid, welfare etc, oxygen has also been in serious short supply in such countries, industrial oxygen been used in many cases, and a major black market of oxygen supplies is under way, so god knows whats been bought and sold there. parts of Africa have been experiencing major civil unrest, riots, looting etc etc, they probably dont receive government aid
if you are referring to the civil unrest in South Africa a few months back this was orchestrated and allowed to put pressure on the government for prosecuting Zuma for corruption.
A lot lot of emerging markets have been insulted by the increase in demand for commodities from fiscal spending in more developed countries.
it ll be interesting to see if the collapse of chinas evergrande have much effect in this neck of the woods!
any issues can be overcome by central banks printing more money
any inflation as a result is entirely transitory apparently
there is no downside, welcome to the new crash free world!
im not so sure about that, we still have the global financial system very complexly intertwined, it ll be an interesting one to watch
The world will be watching how china handles the crisis.
Will they protect the domestic market at the expense of offshore bond holders?
Will the step in and guarantee household deposits because if they don't the crisis will spread to all other property developers in china as the pre-sales funding model would no longer be deemed viable model.
They will need to take action and how they handle this will determine whether investors run away or stick with china.
Been a while since I saw this much talk of contagion. The first ripples?
I've enjoyed catching up on the posts over the last few days here, interesting times ahead!
A bull in a China shop has always ended in tears...
These budgets are unsustainable. We added over 5bn in permanent spending last budget and more this budget. There's no money tree but government are acting like it!
If the money is being spent on capital investments then issuing bonds to pay for it makes a lot of sense especially with rates so low at the moment.
completely agree, theres no better time to do these investments than now, rock on with it, it ll create jobs, and kick start the economy after all of this, bonds are the magical money tree, plough on
Capital investments are not annual recurring spends.
Capital investments are not permanent annual spending though...that's the problem.
Borrowing 10bn for capital projects is one thing. Adding 5bn to your annual permanent spending is a problem and is going to hurt us.
The ECB need to raise rates ASAP. The longer and higher inflation goes, the harder the fall.
Imagine you're earning a wage and your groceries and energy and transport costs are all soaring. You'll start cutting back on the luxury spends like going to pubs and cafes and takeaways...then these jobs will go.
ECB are gambling on the prosperity of Europeans.
raising rates too fast and by too much can and does cause economic slow down, as meeting debt obligations becomes more difficult, especially private based debts, raising rates also causes people to reduce spending due to rising difficulties servicing these debts, in turn this reduces economic activities. we ve been experiencing a very low rate environment for very long now, and central banks are now effectively stuck with this, largely due to the accumulation of debt, particularly private debt, inflationary pressures are more than likely due to supply side issues, and less so on the increase of the money supply
