Finance Dispatch 23MAY2016 Anno Domini

The people that come out ahead after the bust are the people who saved up their cash and are bidding for everyone else's property (at sheriff's auctions and the like) that was seized for non-payment of debts. All of the prices of goods that are currently being propped up by the availability of loans/credit will collapse to fire-sale levels.

That's what I'm hoping for, anyways. To each his own.

Not everywhere. Harper had to hide Alward in Boston when the natives caught on.

The big problem with that approach is that one of the bubbles that's going to burst in the event of a crash is the US dollar.

There's nothing wrong with your idea in principle, but there are too many ways it can go wrong:

1. Cash withdrawal limits like we saw in Greece - you can have a big pile of money sitting in the bank and be completely unable to do anything with it.
2. Bail-ins to prevent bank failure - you might have 30-50% of your deposit shaved off to keep the bank propped up.
3. Collapse in the value of the US dollar - a financial bust could force the government to devalue dollars held in the domestic USA in order to appease international creditors, causing you to lose a big chunk of purchasing power even if you kept your cash under the mattress instead of in a bank.

Good idea in principle, but there are plenty of ways it could fail. I personally hold a bunch of cash and think that you should have a big chunk of physical currency because there'll be a period where cash is king - but it's not going to last forever, and you'll get much better returns from other assets.

I meant that they were the winners of the oil hedges. When you get to sell oil for a hundred bucks and the market price is twenty you've got a very sweet deal (or at least you would have if you were making much of a profit even at 80).

I can take a stab at explaining why this is:

China's economy has been experiencing wild, wild, Will Smith Wild Wild West growth for the past 20+ years, like 8-14% year-over-year. Most of this growth has come from industrialization, the transformation of China from a nation of subsistence farmers into a manufacturing center. China takes in raw resources, processes them, and then sells them to the world, the same trick (sort of) that Britain used with her empire during the Industrial Revolution. Anyway, the Communist Party of China likes this growth, because, well, not only does it mean China Will Grow Larger, but because a wealthy people is a happy and loyal people.

Ever since about 2011, however, the growth has been slowing down, slowly but surely. We're approaching *only* 6% now (keep in mind this kind of growth would be considered an economic boom in any Western country, but in China, it's shamefur dispray.) In my view, this is because of two factors:

i. China's population is getting old - in hindsight, the whole One-Child policy had some bad side effects - increasing the number of grandmas and grandpas each worker has to support economically.

ii. China's becoming sufficiently 'modern', running out of areas it can un-fuck itself in (building modern factories and ports), which was a major source of growth.

This is unacceptable to the CPC. If the economy stops growing, people will become shiftless, China's off track to becoming a superpower and fucking up the US, economists might even lose their jobs. So, the CPC tried to keep growth high by flooding the country with cheap, cheap, cheap capital (loans!), and giving it to their industries, to keep them growing and growing in the short-term. The problem is that those industries really had no new opportunities to De-Fuck China, and gain revenue, to pay back those loans. And now it's the long-term, and all those loans are coming due.

This is one of the nice things you can do in a state-run economy. When Wall Street flooded homebuyers with cheap capital in 2006-7, it was the actions of a few greedy bankers, and so people pointed the fingers at them and also maybe said "Washington, tighten your fucking laws please". It was a "rein our bankers in" thing. When China flooded its manufacturers with cheap capital, *now*, it was a matter of government policy. People will say - if they can - "Beijing, you fucked us over. You did this."

Also, housing is important, but not what America's economy was based on. Our economy got fucked mostly because investments (by people, pension funds, corporations with no real business investing, like GE) in housing got fucked. China's economy is built on manufacturing, the sector that now cannot pay its denbts. What will you do, if all the factories go bankrupt?

For more: archive.is/k9Otn

You could be right, but in #3 you have the problem that the international creditors would be paid back in devalued dollars, whereas they lent (puchased debt) with strong dollars. They would pressure for #1 and #2, however, which are indeed very real threats, even when deposit guarantees like FDIC are considered.

As far as income producing assets go, if you have them, then you're doing better than most. If they are resistant to changes in the debt/credit/monetary landscape, then so much the better. A small business like an auto-repair shop would be my ideal choice for IRL income producing assets, but in the financial world it would show up as a preference for Consumer Staples/Energy/Telecom/Utilities (more deflation resistant) over sectors/industries that rely more heavily on discretionary spending.

A pile of real cash is still a winner in my view. Those auctions are on the way. They are the natural result to a highly leveraged, or over-leveraged, consumer.

What could possibly go wrong?

Business Loan Delinquencies Spike to Lehman Moment Level

wolfstreet.com/2016/05/19/delinquencies-of-commercial-industrial-loans-spike/

I mentioned that they'd be devaluing dollars in the domestic USA - a "new dollar" type of deal where the currency would be split. A dollar devaluation could happen without the split anyway though, but there'd probably be some kind of remuneration/sweetheart deal provided to the external creditors (allowing the chinese to buy up massive amounts of american real estate/businesses, for instance). As for FDIC, don't make me laugh. Look at how much cash they have on hand, and how much they'd have to pay out - you'd get pennies on the dollar if there was no corruption or funny accounting (lol if you think that would actually happen).

As for income producing assets - depends on the asset. If you can brew your own beer and don't need to rely on any foreign imports/external supply chains, you're probably going to be in a good place when things come down. A big pile of cash is going to be good for a certain period of time, but it carries other risks as well. It's really hard to figure out exactly what's going to be worthwhile in the future, which is why it's so important to diversify instead of going all-in on one type of asset.

Still, it doesn't hurt to have some silver and ammunition on hand. Silver to cash in on the spike and ammo if shit hits the fan, as seems inevitable, eventually.

For instance, recall when the government 'shut down' in Oct 2013? Some states had no EBT for 1-2 weeks and the chimps were on the brink of chimp out.

Now, imagine no EBT for 1-3 months. In a nation where 1/5 of the people in it rely on EBT. EBT=food stamps for non-burgers

The nigger will absolve student loans, car loans, and agricultural loans. Problem solved.

An American can live without beer, not not without a car. Auto-repair is one of the most recession resistant businesses. There are no suburbs without automobiles.

Creditors are big campaign contributors, and they've prevented the devaluation of the dollar to this point. The chances of seeing money in the hands of the average working man in the future are slim. Cash will be king. Real assets will be cheap.

This is the other sort of collapse, the happening-tier one. It's certainly just as important to have supplies on hand for the doomsday scenario as well as for the grinding debt de-leveraging scenario. I just think that the orderly collapse is more likely, if only because it gives the largest benefit to the Jew for it to go down that way.

Yeah, they can live without a car - but who's to say that there won't be oil rationing? If the fracking industry goes under and there's a dollar devaluation, America is going to have a hell of a lot of trouble importing oil for domestic usage. You're right when you say that there are no suburbs without automobiles, but suburbs aren't a guaranteed, constant presence in the universe.

Non-ecofag here, but genuinely interested in these threads.
Question: what are interest rates? Is it the rates of the central banks or of the banks ? What's the point of negative int rates?

A++, very good post user.

Interest rates are exactly what they sound like - the rate of interest charged on a loan. Because our financial system is run by jews who like to overcomplicate things, there are a whole galaxy of different interest rates on different products and loans which are related to different things., but people generally use the term to refer to the interest rate on government debt, because government debt is considered the safest asset around and hence used as the benchmark to determine the yield/interest rate on a lot of other financial assets.

Negative interest rates mean that you actually have to pay the government to loan them money. Right now we have negative real interest rates (because real inflation outstrips the interest earned on a treasury bond), but not nominal negative interest rates (nominal here meaning "without taking inflation into account"). What this means for the economy is that it highly encourages borrowing money, and highly discourages saving (because when you put your money into a bank account you lose purchasing power when you go to access it a year later). This has a whole host of nasty side effects, like encouraging investment into riskier asset classes - but if the government wants to make the stock market go up, negative interest rates on savings mean that large players have a massive incentive to put lots and lots of money into the stock market and drive up prices.

So aren't (((they))) planing a crash late this year so they can blame it on Trump

What user explains here is important.
It's what also called derivatives, speculation, virtual money, etc. It's a double-edged sword.

The financial system right now is so unstable and so riddled with fraud, crime and unsustainable practices that a crash is a matter of when not if. (((They))) could trigger it right now, but so could a bunch of other players - it's just that nobody wants to be the one responsible, and people always find a way to kick the can down the road.

Raising interest rates would start the process, which is why I think they might actually raise interest rates when Trump gets in (and he's actually said as much already).

I know that but it seems like something they're going to time to late October
And they probably will try and blame it on Trump because there isn't a strategy that works against him Trump will find a way to use it to make him and America stronger

Thank you for this elaborated reply!
It's pretty fucking clear, now I just lack to see how losing money on govt debt is related to businesses being more encouraged to borrow money. I can't quite see how the 2 are linked.

crashing it just before the November election will only serve to aid Trump. They would have to wait to raise interest rates until after Trump.

But we need raised interest rates. And we need to default. We needed these things in 2008.

2020 will be a deeply depressed economy. Unlike the 30's Great Depression, most people don't have farm homes to retreat to. There will be famine in the cities. Death and decay everywhere.

And then we'll move that death and decay to a battleground somewhere

The interest rate of government debt determines the interest given to businesses, because the government has an almost limitless desire to borrow money and essentially zero risk. Businesses, on the other hand, can fail - so to compensate for the risk of lending them money, banks will charge them more interest than they'd earn on government debt. Of course, there are a bunch of other interest rates (overnight cash rate etc) that play a part, but it really boils down to "government debt has almost zero risk and pays this much, in order to compensate for the risk of lending to your business I'll need this much more interest".

Of course, this is only one of the factors encouraging businesses to borrow money. Right now interest rates are so low that corporations are borrowing money to buy their own stock - reducing dividend payments, increasing stock prices (and triggering executive bonus payouts) and saddling the company with debt instead of actually doing anything productive that would create jobs.

Where does this lead, user?

An over valued stock price. Eventually the market corrects itself.

I get it,thanks!

Also bump for quality thread..

It leads to companies wasting massive amounts of money, and then rewarding the executives for wasting that money while simultaneously making the stock market look better than the actual underlying economy, as well as masking poor performance. It doesn't involve any productive spending, either - which means that even as the share prices of these companies rise they aren't creating any new jobs (and in most cases are actually destroying them). If you buy back large amounts of stock then you can raise the price of that stock, even if the underlying fundamentals of the company have gotten worse. Obviously this will have to correct at some point in the future as fewer and fewer people actually want to purchase the stock due to the poor fundamentals, but the markets and banks are so corrupt that they can hold reality at bay for a while.

Ultimately, it leads to where we are now - where the stock market fails to serve as an adequate measure of the underlying economy. To use a car analogy, this is like noticing that your fuel tank is running low and deciding to permanently glue the indicator to full and disconnect the warning light in order to fix the problem.

Meant for

So which is it? And doesn't this also apply to the most debt-fueled market - housing? Which is the more solid borrower: the company that inflates it's stock price by issuing a 30 year bond at record low interest rates, or the consumer that inflates his apparent wealth by purchasing a home with a 30 year loan at record low interest rates? Or a 7 year loan to buy a luxury car?

Precious metals are dropping. This always happens in the weeks before a major Fed meeting over rates, when they're acting hawkish. Same thing happened in November/December.

I bet after Brexit vote (which will probably fail because we all know leftists and antifa will be out in full-force vote stuffing) and after the Fed meeting in June, precious metals will go the next leg upwards.

So it'll probably be a good time to buy more the next week or two. I bet the prices will get hammered down hard this Friday, just watch.

???

And of course the company is the more solid borrower. That's why poor people pay interest rates of 20-30 percent. And as for the consumer purchasing a massive home loan, the banks don't actually give a shit about what happens in a lot of cases. There are so many insurance schemes, government policies and various other perverse incentives that mean most of the time a bank actually profits when a mortgage defaults (or at least has already sold the mortgage off to some muppet's pension fund).

Vid related, that's how a market make a big correction.

What I'm getting at is that it's not consistent to argue that the government will step in to honor mortgage loans while arguing that it won't step in to protect depositors. It has much more to lose by screwing depositors than it does by screwing pension funds and the like.

No one pays this on a mortgage. Credit cards, yes, and they aren't used to carry balances by poor people, but by the middle class, who also pay mortgages, car loans, and student debt.

My argument is that the US is facing a protracted deflationary period, and those of us sitting on cash will profit. You'll profit most when buying real goods like homes or vehicles out of foreclosure/auction, because you get them lien free. If you buy stocks that have dropped in price, many of those companies are still going to be saddled with the debt that they incurred during this "boom" period of borrowing and buying back stock. Saving cash is the obvious move. It is also contrarian, because all we've heard from the talking heads for the last 10 years is how savers are being punished.

Was that movie any good?

Honestly it's really great, except the last sentence.
"A few outsiders and weirdos" clearly sound like he was talking of Holla Forumslacks.
It's actually all based on real events, and there is the dub guy in it, check him out:

Christian Bale is such a good actor. I hardly even recognized him.

polite sage for OT

I was referring more to payday loans there - regular mortgages pay a hell of a lot more in interest than US government debt does, but rising interest rates will make mortgage rates rise as well.

The government won't step in to protect depositors because it's fundamentally incapable of doing so. The underlying, real economics of the situation just don't allow it. Any attempt would have disastrous consequences like hyper-inflation, and would be cracked down on hard by external creditors.

I don't believe the government will step in to honor mortgage loans either - just that there are enough systems in place to allow the banks to get away with it scot-free. Plenty of dodgy loans were bundled up and sold to pension funds who were desperately seeking yield - but Goldman Sachs doesn't lose money when some pension fund goes under and can only pay out a quarter of what it promised the people who paid into it for decades of their working life.

As for deflation, I did say earlier in the thread that cash would be king - but the system will shudder and die with a sustained period of deflation, and the government would by far prefer to have the system die through inflation than deflation, and they have the ability to create inflation whenever they want (look at all the talk of helicopter money that's showed up recently). Ultimately, I think the only constant will be that the government will screw the little people over - look at what happened in Mexico, where the currency got devalued but home loans retained their full value in the old currency (so your saving account was divided by ten but your mortgage wasn't).

Trump could change that of course, but I'm not sure how much time and power he'd actually have when it comes to matters like these.

So Deutsche Bank is truly going the way of the Lehmans Brothers.
Too bad that's the most important bank in Europe.

To be honest, Trump will get a blank check to do anything he wants if the financial collapse comes. Only the Democrat retards will blame him for the crash.
What he will do with it is anybody's guess.

If he's the saviour he'll make a system that will be in the benefit of the people ala Hitler style.
If he turns out to be just another Rothschild puppet then nobody can help us from the jews bar general revolt.

The world economy will be in the hands of Trump and the globalist UN/IMF/WB on the other/same side. Whatever solution they come up with will set course for humanity. Sure hope the kikes don't win for the sake of my future children.