I never doubted anything could happen to the US. Its just the grab you guns and head for the hills possibility isnt so hard to believe..
Nothing more, nothing less.
The yanks arent perfect like them Greeks...
Would you riot if your country was up the *****?
- Thread starter lizzie
- Start date
I never doubted anything could happen to the US. Its just the grab you guns and head for the hills possibility isnt so hard to believe..
Nothing more, nothing less.
The yanks arent perfect like them Greeks...
people are so pessimistic and/or apathetic and/or both they could realise the dangers, expect it, yet carry on like it'll fix itself.
this has all happened before - what we have seen recently is akin to the 1907 panic - which signals more desperate times to follow.
wow. how was the old bloke saying that during one happy period greece was a lender not a borrower. When they were occupied by Germany!
I would not agree with the premise though that the banks lending the money to greece are parasites, they were just trying to make a quid like we all do, but ultimately they made a mistake and one they are likely to regret.
The banks within greece the government bailed out well perhaps they should not have but Australia is no different in that regard. The Federal government have already put themselves on the hook for banks deposit liabilities and now with covered bonds even other swathes of bank liabilities.
Better expand your reading then Equitymate. It has been known for a decade that the US is in a death spiral. What isn't known is when they will run out of ammunition defending their status or when the rest of the world simply ignores them. Neither will happen next week.
Anyone taking a classic middle-class stance of being "comfortable" while having all their assets in the domestic currency might realise the folly of this too late. I don't know this for sure but I'm not taking the risk.
Anyone taking a classic middle-class stance of being "comfortable" while having all their assets in the domestic currency might realise the folly of this too late. I don't know this for sure but I'm not taking the risk.
The trouble is many come across as wanting it to happen when they are only suggesting what might happen. For me I would prefer them to remain the policeman over the world compared to the alternatives but can see this will not necessarily be the case in as few as 10 maybe 15 years...
While their domestic production and productivity per person in most industries while shitting all over ours it is gradually waning compared to Chinas and other countries.
They are still an industrial powerhouse and compared to less industrialised countries like Australia and most of europe so the US is always going to be able to afford a better standard of living in aggregate (they just distribute it more to the wealthy and have less progressive rates of taxation!), and are still a technologically advanced society. They will always be able to feed themselves and have a relatively high standard of living due to their output. We dropped the ball on productivity years ago prefering to focus now on tinkering at the edges of economic reform rather than hard work.
The point for me is more whether the USA can afford to continue to have such a global dominant role.
If they cut back in that area (politically a hard one to pick which way they would go when the screws are on?) they are likely to be able to provide well for the average american.
I suspect the alliance the US has with countries like Australia will become more important through our lifetimes out of necessity. In 20 years the USA may not be the power it once was but the west will still be able to exert influence collectively. Probably not a bad thing.
Their currency situation for me is secondary, productivity and production per person will govern a societies well being long term far more even if their currency was debased. They cannot lead the lifestyle funded with debt but at least they make stuff. I am more worried about Australia... If we don't do some hard yard now we will not be able to afford to when things start hitting the fan.
quite agree Tom.
I use who will be the biggest looser, if trade barriers are errected again. Everyone will loose at the margin, but some more than others.
The other test i use, is where do the wealthy emmigrate to, so far the only country in the whole of Asia that passes this test is Singapore.
Dont see many wealthy renouncing their overseas citizenships for a Chinese passport, but i do see plenty of wealthy Chinese trying to get overseas citizenship.
I use who will be the biggest looser, if trade barriers are errected again. Everyone will loose at the margin, but some more than others.
The other test i use, is where do the wealthy emmigrate to, so far the only country in the whole of Asia that passes this test is Singapore.
Dont see many wealthy renouncing their overseas citizenships for a Chinese passport, but i do see plenty of wealthy Chinese trying to get overseas citizenship.
Not possible to get Chinese citizenship unless you are Chinese.
These days, wealthy Chinese simply need to get HK SAR 3-star status to be immune from China's laws. No need for overseas citizenships. Though they don't mind getting residency status overseas. Not sure if you know the difference between the two...
Sounds easy huh? Here's the problem...
If you print more money, demand > supply --> US$ currency deflation (perhaps A$0.01 for US$10) --> meaning it'll still take just as long to pay the debt back
In the mean time you have just created an inflation problem since your China imports and Australian thermal coal imports oh and Japanese and German car imports suddenly cost a lot more... hyperinflation, just like Zimbabwe. Before we know it Obama will impose martial law and might start shooting oppositions' wives.
And... in the meantime since your currency is so worthless you'll never be able to afford to go to any country on a holiday. Indonesians will be going to get America for cheap foot massages too... and tip them used chewing gum, since Americans generally would not be able to afford Made in Indonesia chewing gum anymore given such a worthless currency.
Though if that happened, the US can always change tactics and be a basket case third-world country and start exporting stuff and doing slave labour. All the countries revert back to that at some point.
Reality is they obviously do print money, but only in small doses. Try print an amount equivalent to your debt, your currency won't be worth my effort in typing the last word in this sentence.
http://www.usagold.com/germannightmare.html
Re printing money, maybe USA will initiate WW3 when they get angry because they can only afford used chewing gum.
Re printing money, maybe USA will initiate WW3 when they get angry because they can only afford used chewing gum.
This is what the New World Order is all about. But if one posts on it you become a conspiracy theorist.
I am far more optimistic than that on the USA.
1. Their debts are priced especially government debt exclusively in US dollars.
IF you look at countries that have suffered hyperinflation when paying off debts they are using their own currency to pay off a debt in another currency. Look at weimar Germany, they printed out tonnes of marks only to see them right back in their own economy pushing down their marks value and increasing the amount of debt valued in marks so needing to back 2 trucks up next time then three then four then five etc etc to pay the ever increasing debt priced in marks.
The USA has a debt valued in US dollars whatever they print it will still be in US dollars. Of course it is the end of the US currency being the world currency but I think this is a given anyway.
2. They are an industrial powerhouse.
per person compared to nearly any other nation they make more stuff per person. Whether it be tonnes of steel, highways, computer chips, whatever believe it or not they make an awfull lot of stuff including food. Productivity in the long term drives a nations prosperity vs other nations. USA is one of the most productive in the world, even if it is a bit harsh on its worker citizens to achieve this.
3. Poor countries are just poor its not just about debt / currency value, does not matter if they have to pay with a million US dollars for a burger or 5 they are still a wealthy nation relatively speaking.
Why countries are really poor is they have no roads, power, natural endowment (food minerals etc etc. In the long term a poor country either has to develop like China has started post a brief hiatas after the farmer revolution, now they have for the last 2 decades developed. Invested in eduation, infrastructure, research and even land improvement while countries like Australia hand out cash and build school halls, hand out free insulation then wonder why we are falling behind...
There are other reasons but I am conscious of my habit to create wall of texts at every opportunity... I will say this though, Swan was quizzed the other day why it is we continue to slide on the productivity stakes v countries like the USA when it was one of his mantras at the 07 election, the libs dropped the ball on productivity.
I agree the libs did not do the hard yards on infrastructure which in fairness to Labor they have historically championed, Sydney Harbour bridge; Lang, Snowy River Hydroelectric Scheme ; Chifley
The current labor government seems to think a broadband scheme allowing us to download porn quicker and costing 5 times in todays dollars the cost of the snowy river hydro, that scheme which provides water security for around 40% of our food production is worth comparing!
The USA will be OK in the long run I am more worried about Australia... If we don't wake up and start developing we are the ones who are going to be left behind. A strong terms of trade is masking our otherwise weak as **** economy in my opinion. I know when the terms of trade revert back to long term numbers what the likes of Swan will say too. An unprecedented and unexpected shift in the terms of trade when any economist, hell even mining bosses are warning them they cannot drop the ball on the greater economy ex mining.
Edited: spacing and formatting
Really good post, Tom.
I'd have to disagree with your scepticism about the NBN's prospective contribution to productivity (but that's always the right concern with investing in the future), but you utterly nailed the productivity point as the front and centre issue we face as a country. Kudos!
So how is the massive EU loan going to help solve the core problem, then? The rich people, like the doctors, will keep evading tax, and the poor people will be slugged.
1. Never argued for the loan?
2. Rationalised market theory would say that EU loans bad full stop, let them rot.
3. Why do you think the EU is trying to 'help' the Greeks? Loans are made to benefit the lender. Kick the can down the road just enough to liquidate the Greek assets, scrape back as much as possible, build up cash reserves and then let them flop. Risk minimisation.
The Greeks have to accept this as the only other option is to default and live on their own domestic economy. They don't have a domestic economy which can be self sufficient. Down to the basics, there is only so much oil and olives that can be traded internally. The Greek standard of living would be devastated even further than under bail out.
2. Rationalised market theory would say that EU loans bad full stop, let them rot.
3. Why do you think the EU is trying to 'help' the Greeks? Loans are made to benefit the lender. Kick the can down the road just enough to liquidate the Greek assets, scrape back as much as possible, build up cash reserves and then let them flop. Risk minimisation.
The Greeks have to accept this as the only other option is to default and live on their own domestic economy. They don't have a domestic economy which can be self sufficient. Down to the basics, there is only so much oil and olives that can be traded internally. The Greek standard of living would be devastated even further than under bail out.
My understanding is that it not so much the loans as the Credit Default Swaps.
I feel no shame in not understanding how they really work because very few do but you can "take out insurance" against the default of corporate and state borrowers. Funny thing is you don't need to actually have any exposure, that's like me insuring your house. Why would I care if it burnt down? More to the point, if I was a bad B, why wouldn't I light the fire?
The dollars here dwarf the actual debt and "insurers" of these CDSs don't have to meet any reserves standards and they would be unable to meet their obligations in the case of a default so the problem would quickly resurface in Wall St. That would never do!
That's what I hear anyway.
I feel no shame in not understanding how they really work because very few do but you can "take out insurance" against the default of corporate and state borrowers. Funny thing is you don't need to actually have any exposure, that's like me insuring your house. Why would I care if it burnt down? More to the point, if I was a bad B, why wouldn't I light the fire?
The dollars here dwarf the actual debt and "insurers" of these CDSs don't have to meet any reserves standards and they would be unable to meet their obligations in the case of a default so the problem would quickly resurface in Wall St. That would never do!
That's what I hear anyway.
i see a worrying trend.
we start with this attitude of "too bad so sad" for a reasonably developed (i say reasonably because the sewer system is 2000 years old and you cant even put paper in it) country with 11mil people.
we then get a domino effect across the already indebted parts of the EU, so Ireland (4.5m), Portugal (10m), Spain (46m) and Italy (60m).
that's 130m+ people affected (incl Greece) and still most folks sit here and say "too bad so sad". It's even worse that these countries are probably the most culture rich in the whole EU - so they'l have to homogenise as they take on FTAs and allow further rampant institutional investment and infrastructure.
where does the attitude stop?
do we say "F.U" to France (62m) and Germany (82m) as well; for making loans and/or trying to help out, even thought it's high risk to do both nothing or something?
Lets not forget the UK which is already faltering/faltered (62m), smaller nations like Denmark (5m) and Austria (8m) will be wiped out if these larger nations fail.
Scandanvia which relies on the Central EU for it's meals with Norway (5m), Sweden (9m) and Finland (5m). how do they pay for Russain oil in Euro's, if the Euro fails to exist?
so if it all goes to hell in a handbasket and we end up with a portion of the 230mil people affected just from these countries alone, i wonder if it wil still be "too bad so sad" as they all turn up on Aussie shores with skilled riggers and fitters from Scandanvia, skilled manufacturers and efficient business owners from Germany/Austria, farmhands from France, viticulturists (sp?) from Italy......
i guess....as long as they don't arrive by boat, because then they'd just be "illegal".
i see a bit of a ploy. As China and Russia pull away from the USD, driving down demand for it, how convenient that the EU should fracture and dissolve ....
.....on the back of the debt that 11m people cant pay back.
does anyone else see the stupidity in that fact?
y'know what would be even funnier? that after all that, Russia accept the Renminbi as payment and China accept Rubles....
we start with this attitude of "too bad so sad" for a reasonably developed (i say reasonably because the sewer system is 2000 years old and you cant even put paper in it) country with 11mil people.
we then get a domino effect across the already indebted parts of the EU, so Ireland (4.5m), Portugal (10m), Spain (46m) and Italy (60m).
that's 130m+ people affected (incl Greece) and still most folks sit here and say "too bad so sad". It's even worse that these countries are probably the most culture rich in the whole EU - so they'l have to homogenise as they take on FTAs and allow further rampant institutional investment and infrastructure.
where does the attitude stop?
do we say "F.U" to France (62m) and Germany (82m) as well; for making loans and/or trying to help out, even thought it's high risk to do both nothing or something?
Lets not forget the UK which is already faltering/faltered (62m), smaller nations like Denmark (5m) and Austria (8m) will be wiped out if these larger nations fail.
Scandanvia which relies on the Central EU for it's meals with Norway (5m), Sweden (9m) and Finland (5m). how do they pay for Russain oil in Euro's, if the Euro fails to exist?
so if it all goes to hell in a handbasket and we end up with a portion of the 230mil people affected just from these countries alone, i wonder if it wil still be "too bad so sad" as they all turn up on Aussie shores with skilled riggers and fitters from Scandanvia, skilled manufacturers and efficient business owners from Germany/Austria, farmhands from France, viticulturists (sp?) from Italy......
i guess....as long as they don't arrive by boat, because then they'd just be "illegal".
i see a bit of a ploy. As China and Russia pull away from the USD, driving down demand for it, how convenient that the EU should fracture and dissolve ....
.....on the back of the debt that 11m people cant pay back.
does anyone else see the stupidity in that fact?
y'know what would be even funnier? that after all that, Russia accept the Renminbi as payment and China accept Rubles....
First world economic refugees is an interesting concept Aaron. A recently phenomenon I have noticed is previously unheard 'yank' accents in the retail and hospitality trade, perhaps the combination of cheap flights accross the pacific and menial jobs paying twenty bucks an hour is an attractive option compared to the alternatives.
I'm tired of Australians making comments along the lines of 'Oh well, the Greeks had it coming'. It's easy to be arrogant from afar. There are Greek workers who haven't been paid in one or two years, both in the public and private sectors. It amazes me that anyone would go to work day after day without being paid, not knowing if they ever will again. But it's easier to tar all Greeks with the 'corrupt and lazy public servant' brush than acknowledge that perhaps the wrong people are being penalised for the country's mismanagement.
If Australia were to find herself in a similar situation, foreigners would say 'Oh well, it's their own fault' and they'd think us rather stupid for rioting. Personally, I wouldn't riot (I don't like crowds and pushing) but would 100% understand the motivation for doing so.
If Australia were to find herself in a similar situation, foreigners would say 'Oh well, it's their own fault' and they'd think us rather stupid for rioting. Personally, I wouldn't riot (I don't like crowds and pushing) but would 100% understand the motivation for doing so.
