Why the Meltdown Should Have Surprised No One

[matt0611]

Anyone with a decent grasp of basic mathematics new the meltdown was coming.

Our central bank chairman has no decent grasp of mathematics?

We are so screwed lol.

 

[Darwin333]

I understand that, just saying all those who were so certain of the impending implosion should have been able to profit handsomely. Perhaps not to the tune of billions like the real crooks, but certainly a lot of money. Yet most did not. Everyone "saw it coming", but not many were certain enough of the when and how to really put their money in it and make a boatload.

It is the "when" that will literally make you a fortune or lose you one and that is damn near impossible to guess in an irrational market.

Some big banks are to this day bankrupt by pretty much every definition (except the govs) and have been for quite some time. If you bet on that when you first knew it using basic math you would be broke right now.

 

[Darwin333]

Our central bank chairman has no decent grasp of mathematics?

We are so screwed lol.

The same guy said that he was absolutely certain that there was no housing bubble right before it crashed.

Yes we are screwed.

 

[Thump553]

Peter Schiff is a one note charley. He was predicting the meltdown for years before it happened, and ever since it happened he has been predicting another one any day now.

He ran for the GOP candidacy for Senate here the last election, and even in the GOP primarily he was only able to get a tiny fraction of the wingnut vote.

 

[Svnla]

..

 

[IGBT]

what's next after QE #? fails??

 

[Cerb]

hi, this is a video by peter schiff and in it he explains why the economic meltdown should have surprised no one. Its from the perspective of an Austrian economist and I found it very informative.

Video: http://www.youtube.com/watch?v=EgMclXX5msc

Check out 'peter schiff was right' if you haven't already seen it.

http://www.youtube.com/watch?v=2I0QN-FYkpw

It only surprised people who had their heads in the sand. Timing it would be another matter entirely, but I saw it coming from just HS econ, well over 10 years before it happened--and I'm no prophet, special unique snowflake, nor did I have any great deal of formal economic study.

It was all very simple: wealth no created by trade of desirable physical goods, creation of new desirable physical goods made from the first category, nor direct personal services*, is not sustainable. Momentum from its use may allow for sustainable wealth creation (money from 'fake' wealth is as good as money from 'real' wealth, once it's in your hands), but by itself, it only serves to inflate bubbles. Throw lack of healthy gambling regulations in there (every trading market), and you are bound to see this kind of outcome.

But, what happens? "The good times will go on, chicken little. You can't possibly believe this will come to crash!"

* See, here's where more formal study would come in handy. There is bound to be a specific term used in the field of economics for what I mean to say.

 

[titan131]

Awesome vids.

Which would be a better book to start?

How an Economy Grows and Why It Crashes

or

Crash Proof 2.0: How to Profit From the Economic Collapse

I haven't read 'How an Economy Grows and Why It Crashes' but i've get Crash Proof (the first) and it was awesome!

But I suspect How an Economy Grows and Why It Crashes is just as good.

The reason I thought that the video was so interesting was because, not only did he see it coming, but because he also predicts a currency crisis down the road if the US keeps printing money which is why he recommends gold and silver as an investment.

Simply put, the US imports way more than they export, which is an imbalance that needs to be corrected with a serious recession; this would involve a massive shift from service sector jobs to jobs in production and manufacturing, otherwise we are going to be printing money indefinitely, eventually destroying the dollar.

I guess the main point is, an economy which imports more than they export bleeds their wealth away and is completely unsustainable in the long run.

 

[Cerb]

However, gold and silver are worth as much as they are in part by the clear lack of confidence in the fiat currency they are valued with. The prices for them have proven volatile over history, and we are due, any year now, for a good gold crash.

Producing more than consuming is the only way to make our economy sustainable.

this would involve a massive shift from service sector jobs to jobs in production and manufacturing

No, this would a massive shift from businesses making cheap crap everywhere else, to building production infrastructure here in the US. There are plenty of people not in service jobs, that would gladly work to make useful products (15-20% of the potential labor pool in the US).

 

[titan131]

However, gold and silver are worth as much as they are in part by the clear lack of confidence in the fiat currency they are valued with. The prices for them have proven volatile over history, and we are due, any year now, for a good gold crash.

With that being said and with confidence being lost in fiat currencies all around the world like never before, why would there be a gold crash?

Producing more than consuming is the only way to make our economy sustainable.

Surely producing as much as we consume would be sustainable? or did you mean sustainable growth?

No, this would a massive shift from businesses making cheap crap everywhere else, to building production infrastructure here in the US. There are plenty of people not in service jobs, that would gladly work to make useful products (15-20% of the potential labor pool in the US).

If the US can't borrow the money it needs to sustain its service sector economy there are going to be massive job losses and the only way America is going to build back its wealth is by exporting goods or services because that's where the money is i.e. creditor nations.

 

[Double Trouble]

....which is why he recommends gold and silver as an investment.

Oh, another one of those gold & silver nuts.

With that being said and with confidence being lost in fiat currencies all around the world like never before, why would there be a gold crash?

Because gold is not particularly useful in many ways, it's only worth as much as people are willing to pay to have an alternative to other kinds of money. Without a strong intrinsic value, gold is just not as much of a 'safe harbor' as the gold nuts would have you think. In the spirit of this thread, I'm gonna say I'm seeing it coming, gold is due for a major crash.

 

[titan131]

In the spirit of this thread, I'm gonna say I'm seeing it coming, gold is due for a major crash.

Well, some people do think gold is expensive right now and there might be a correction but with central banks printing money all around the world the long term trend is going to be up. Mining stocks are still cheap which indicates there really isn't a bubble as of yet.

 

[bamacre]

Oh, another one of those gold & silver nuts.

You do realize that silver had an incredible year last year? Did well this month too.

It's very bubbly though. I sold a majority of my silver yesterday when it hit $34. We are very much due for a significant correction, silver could lose half it's value. It's a very small market, and very volatile. In '08, silver lost about double what gold did. These are not markets for people to just jump into without doing some homework. And those in it for the long haul, better buy the real thing.

In the spirit of this thread, I'm gonna say I'm seeing it coming, gold is due for a major crash.

I don't know about "major," but lots of things are due for a crash. If gold "crashes," believe me, it won't be alone.

 

[Cerb]

With that being said and with confidence being lost in fiat currencies all around the world like never before, why would there be a gold crash?

Can gold build a house? Can gold feed you? If people are willing to pay a higher price, the price is higher. Gold is only worth what people trading think it is, which in the end, is not much different than fiat currencies. What truly separates them is that one can be diluted by adding supply. If it were high just because there is a ton of true industrial demand for it, that would be different. While that is a factor, I haven't see any evidence that it can account for most of gold's rising prices.

Nothing wrong with buying some gold, silver, or for that matter, more useful metals, but there is a history of rising and falling. It would be at least as risky as the stock market, for putting most of your money into.

Surely producing as much as we consume would be sustainable? or did you mean sustainable growth?

Yes, it would be sustainable, but only after decades of producing significantly more, to a point where we don't need that extra production to use for debt.

If the US can't borrow the money it needs to sustain its service sector economy there are going to be massive job losses and the only way America is going to build back its wealth is by exporting goods or services because that's where the money is i.e. creditor nations.

No doubt. And, we will get to start almost from square one.