Debt Rattle November 4 2014
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DPC Looking south on Fifth Avenue at East 56th Street, NYC 1905 • Dollar Smashes Through Resistance As Mega-Rally Gathers Pace (AEP) • WTI Falls to 3-
[See the full post at: Debt Rattle November 4 2014]Who’s in mom’s basement?
The 2.5 kids
The 2.5 gran kids
The 1.25 spouses ( 50% divorced)
The 1.25 lovers
The 2 pet dogs and 1/2 cat
Mom’s ex and a current loverand
nobody is paying rent
Everybody loves their mom, (if she’s lucky enough to have a basement)
“There are indications that some of the money coming from Asia is leveraged tenfold and falsely designated as cash, but this is chiefly a problem for banks in Hong Kong or China rather than for British regulators.”
So, what, these guys are borrowing in the East and then buying with so-called “all cash”? What happens when deflation sends asset prices falling? Do these investors just renege on the loan in China, yet own the asset elsewhere because they paid “cash”, or do the Chinese and Hong Kong banks come looking to claim the property?
The Chinese were using copper, gold, silver, aluminum, iron ore as collateral (many times over) to get loans from banks. They are now buying up crude oil. Does anyone think they’re not using this crude oil as collateral many times over to get loans as well? From one commodity to the other. Or have the Chinese and Hong Kong banks tightened up enough to stop this behavior? I doubt it; bribe money talks. “I’ll buy you a house in Portugal or Chicago, good loan officer, if you’ll kindly use this collateral that I’ve used only once (wink).”
What bothers me is that the Chinese have been buying up properties in most major cities, all cash (ha!), pushing house prices to the moon, and yet, in reality, they have next to nothing down at these Chinese and Hong Kong banks, except some collateral they keep using over and over again.
Why are our countries allowing this behavior? I guess the real estate lobby is too strong, stronger than the kid who now can’t afford to even live on the outskirts of the city he was born in, unless he wants to live in Mom’s basement.
China has pumped out trillions of cheap credit, and the end result is our children are pushed out by people who could care less about your country, except it’s a good place to park their corrupt money or gain some capital appreciation. Sick.
Heh, I had the same thought when I read about Tsipras. Sad but inevitable.
I do NOT know how we get around nothing but millionaires running for office in the USA?! We had 7-8 people eying the Gov of Penna job, then Tom Wolf jumped in. I don’t think he’s a bad guy actually. But when someone can say “Gee, lets buy advertising, do you think $10M will be enough?” and then pulls it out of his own back pocket, who can compete? Everyone else gave up and went home. Takes the point out of voting.
I only have one question about the “inevitable crash” and that’s the date.
We’ve been talking about it for 2 years+, here and everywhere.
What if it just crumbles sloooooowly over the next decade?No need to worry – according to this fellow, because the US cannot afford higher interest rates they simply will not go up:
https://www.zerohedge.com/news/2014-11-04/interest-rates-cannot-rise-heres-why
Perhaps I should try that argument the next time my landlord asks for a rent increase – I cannot afford higher rent, thus my rent will stay the same. Make it so, Mr. Landlord!
Sigh. I’m getting pretty tired of non-collapse and all the BS I find myself reading every day. I just hope the collapse comes soon… and that the Canadian housing market goes belly-up before the world goes down in flames so I can at least try to get a nice little piece of land in the middle of nowhere and Houdini-on-out of the big city…
Cheers,
GBVWhen looking at Australian unemployment statistics, the fact that a person who works for one hour per week is considered “employed” should be kept in mind.
“not working more than one hour in the reference week”
https://www.abs.gov.au/ausstats/[email protected]/products/FBE517ECA9B07F63CA257D0E001AC7D4?OpenDocumentIf they dollar has a long term bull run, does that mean gold will collapse to 500-700? Has the dollar and gold rallied or could they at the same time? Raul? Anyone?
Saying NO to the poor is easy.
Vote for anyone who can say NO to the rich and powerfull.
If the politicians could say NO then you would have a balanced budget with no deficit.
So looking at Japan’s debt being over 1 quadrillion and its gdp sloping towards 4.5 trillion. Meaning, if Japan could afford to spend 10% of GDP in an interest payment you could receive 45 cents for every $1000.
Remember GDP is the total of everything so if you collected all of that in a payment it would be the only payment because the country would have nothing left to continue.
Venezuela needs to go back to pre school. There is a book everything I ever needed to know I learnt in kindergarden. At under $100 a barrel it is simply not your turn right now. Yes you are playing musical chairs and the music just stopped. For your country oil is money in the bank and you are making withdrawls. But there is this thing called banking hours and for you its simply not open for you today
I am afraid not many are making a connection. China is not purchasing oil which has caused the surplus in the market forcing prices down. China is now not purchasing raw steel and I suspect a number of other purchases as well. They had a vast amount of gold and threatened to corner that market. What would cause the price to head downward when one player has purchased any spare capacity throttling the world’s market? I believe they are quietly currently dumping their gold in a desparate move to stabilize.
In a long though process I have developed a model of what I believe is going on. We have hit the resource problem that I predicted in my model, although somewhat later than I thought. Resouces and manufacturing play a game together. One needs the other and price reflects both need of resources and cost to get that resource. Unstable pricing forces a new realization.
I can’t believe how few get this – what it like in that funny little brain of yours. Low oil pricing reflects a massive slowdown in manufacturing yet unrealized. Once realsized resource sector will adjust (permentately shut down sites). Once manufacturing gains momentum the resource sector will not have the capacity supply need. It is going to rock back and forth. Starting in 2008, now 2014 and next between 2017 – 2019. Basing this cycle loosely on the hubberts curve.
William, you believe that China is selling their gold reserves to stabilize what, the Yuan? Why wouldn’t they sell off some of their USD reserves instead? Why would they dump the gold that they have been strategically accumulating for more than a decade? If they were running low on USD reserves I would understand your reasoning, but if anything they have too many USD reserves, don’t they?
Variable81, collapse is definitely coming, but the elites are determined to make sure it happens slowly. If it happens suddenly, there is a risk of chaos and instability, and if there is anything the elites fear, it is chaos and instability. If it happens slowly, they hope that they can use propaganda to gradually pare down expectations and grind everyone into servitude.
If the collapse were allowed to happen suddenly, I think it could be short lived. We could reset the monetary system, wipe away all the debt, wipe away all the imbalances and find real price discovery. I think there would be chaos for 3-6 months, but the world would find its footing again. Does this mean a return to growth and everything like it was before? No, not at all. Living standards would definitely fall. But at least we would be able to get rid of the yoke of all that debt.
Of course this is what the elites fear the most. That’s why Hank Paulson warned of the abyss. Fear mongering at it finest. You miserable serfs! If the financial system collapses, terrible things will happen. Unspeakable things might happen. Like what, you ask? You might lose your subsistence job and …. well, then what? Do they really think all economic activity will suddenly grind to a halt, the earth will stop spinning, and there will be no tomorrow?
A sudden collapse would be painful for almost everyone in the short run, and better for almost everyone in the long run. That’s why they’re determined to drag it out as a slow grind. And only feet in the street will change the direction of history.
@ Boogaloo – 5 November 2014 – #16356
A question: And just how is this going to work out in a population inflicted with cultural, historical and intellectual Alzheimer’s dementia?
Economic chaos runs its course and stabilizes fairly quickly. Having said that, we know how the government expects this to play out. The national guard is armed to the teeth with enough firepower to kill everyone 10x over. Even so, policy will only change for the better when we start to see mass protests.
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