Financial Armageddon!!

[Commercial Dan]

I don't mean to be a doomsday merchant, but as I did a few years back, I called it right when things went kaput! However, there is a lot going for our economy now which people have rightly pointed out, but watch out for Deflation as this is a real possibility now particularly after the poor Fonterra payout. BTW don't speculate, something might happen within 1-2 years globally which could makes things tough, very very tough...box with caution and keep your debt levels under 70%.

[drelly]

I don't mean to be a doomsday merchant, but as I did a few years back, I called it right when things went kaput! However, there is a lot going for our economy now which people have rightly pointed out, but watch out for Deflation as this is a real possibility now particularly after the poor Fonterra payout. BTW don't speculate, something might happen within 1-2 years globally which could makes things tough, very very tough...box with caution and keep your debt levels under 70%.

Something specific? Are you expecting the US to implode?

[elguapo]

BTW don't speculate, something might happen within 1-2 years globally which could makes things tough, very very tough...box with caution and keep your debt levels under 70%.

But something might happen at any time globally, Black Swan events are regular things, why 1-2 years? All it needs is a blow up in China, a bank going bust in Iceland, a gas pipeline explode in Europe. The world is on the edge of disaster ever second of every day.

[Damap]

Reminds me of MIB
"K: There's always an Arquillian Battle Cruiser, or a Corillian Death Ray, or an intergalactic plague that is about to wipe out all life on this miserable little planet, and the only way these people can get on with their happy lives is that they DO NOT KNOW ABOUT IT!"

[Bluekiwi]

Reminds me of MIB
"K: There's always an Arquillian Battle Cruiser, or a Corillian Death Ray, or an intergalactic plague that is about to wipe out all life on this miserable little planet, and the only way these people can get on with their happy lives is that they DO NOT KNOW ABOUT IT!"

Yep no matter what I tell my wife about global financial risks and the warning bells of deflation she is still always going to want that next pair of shiny shoes because they are 50% off and she is saving money by buying them.

But remember it was only a couple of years ago that all the doomsayers were reckoning on wild global inflation due to all the money printing and QE going on.

But yep I get CD's drift, buy and buy more and more auckland property so in 2 years time my LVR's are back down to 70%.

[Commercial Dan]

Inflation in India today reported a large drop to a record low of 4.34%, this is significant for an emerging market country. Deflation has just been reported in Norway, oil is tanking, this could be the start of no growth for years. We will see, but I think prices won't go up for 10+ years. Auckland is obviously having a supply problem along with Christchurch so who knows how long that'll go for. But deflation is a different beast, so go on P & I mortgages if you can while we have low rates.

http://www.bloomberg.com/news/2013-11-24/norway-poised-to-relax-bank-rules-to-fight-house-price-deflation.html

http://www.cnbc.com/id/102263592?trknav=homestack:topnews:12

[eri]

mother russia, pathetic putin

discovering how hard a trick it is

to be just a little bit communist

Russian economy facing Soviet-style collapse

Russia has lost control of its economy and may be forced to impose Soviet-style exchange controls after "shock and awe" action by the central bank failed to stem the collapse of the rouble.

"The situation is critical," said the central bank's vice-chairman, Sergei Shvetsov. "What is happening is a nightmare that we could not even have imagined a year ago."

The currency crashed to 100 against the euro in the biggest one-day drop since the default crisis in 1998 as capital flight gathered pace, despite a drastic rise in interest rates to 17pc intended to crush speculators and show resolve.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11375623

the usa, oz + nz economies pretty well insulated from any collapse

not so the european banking system

[McDuck]

Inflation in India today... But deflation is a different beast, so go on P & I mortgages if you can while we have low rates.

This inflation idea of yours is interesting.
So I guess you mean an imbalance between the amount of money and the amount of goods/services.
With there being a higher amount of money compared to the amount of goods/services.
But what do you mean exactly?
Are there more dollars than yesterday, or did the goods and services all dry up (due to a breakdown in the production and training)?

As far as I can tell, you need to figure in immigration... because there are always three things in any equation,the volume of people, the volume of money and the volume of goods( &services).

And what about deflation. What do you mean by that...?

[eri]

HSBC warns that the potential trifecta of

- a yen crash
- a euro slide
- an emerging market crisis could lead to a dollar spike that the US authorities "would be powerless to prevent".

This would "destroy the world" as we know it. The report stressed that this is not a forecast but a tail-risk that cannot be ignored.

Japan cannot stabilise its debt ratio unless all elements align.
These are

- fiscal and pension reforms,
- higher taxes
- higher productivity growth
- an end to deflation
- and nominal GDP growth above 3.5 per cent.

http://www.nzherald.co.nz/business/n...ectid=11375839

[AMR]

Should we expect another contraction of the money supply as in 2008?
The answer is: NO. When we look at the graph of the Fed balance sheet below, we can see that total asset growth [red] is slowing. But bank deposits at the Fed — excess reserves that earn interest at 0.25% p.a. — are slowing at an even faster rate. That means that the actual amount of money flowing into the banking system is not contracting, but increasing.

http://goldstocksforex.com/2014/12/0...use-deflation/

[PTILoveYou]

That means that the actual amount of money flowing into the banking system is not contracting, but increasing.

http://goldstocksforex.com/2014/12/0...use-deflation/

With all the instability in Japan, Russia etc, no wonder everyone is putting their money on the US dollar.

[PTILoveYou]

Cold War II

Russia vs USA

USA won


Big nations don't use arms to fight now, it's the economy.

Currency + oil war = big win for USA

[Bluekiwi]

Inflation in India today reported a large drop to a record low of 4.34%, this is significant for an emerging market country. Deflation has just been reported in Norway, oil is tanking, this could be the start of no growth for years. We will see, but I think prices won't go up for 10+ years. Auckland is obviously having a supply problem along with Christchurch so who knows how long that'll go for. But deflation is a different beast, so go on P & I mortgages if you can while we have low rates.

http://www.bloomberg.com/news/2013-11-24/norway-poised-to-relax-bank-rules-to-fight-house-price-deflation.html

http://www.cnbc.com/id/102263592?trk...ack:topnews:12

Are you implying CD that the impact of general deflation is higher interest rates ?
If we go into a deflationary environment would interest rates be low to stimulate growth as they are trying in Japan.

[eri]

generally

deflation means dropping prices

so those who have money in the bank keep it there, as everyday it buys them more

but those with loans suffer as they locked in at the old price even as the new price drops

ie a 10 year loan for a 50 inch lcd tv bought in 2004 would have you paying a total of $20,000? for something you can now buy for $1,000?

same with most waiheke island sections

bare section bought for $200,000 in 2004, now selling for $150,000

but generally auckland house prices have been inflating quickly

so $500,000 borrowed in 2004 to buy an old bungalow on a large section in epsom was very well spent

you'll know when deflation affects you long before an economist on tv tells you

[McDuck]

generally

deflation means dropping prices

so those who have money in the bank keep it there, ...[/I]

Yea, that's true alright.. prices don't usually go down.
Funny point about this Russian thing-
People were wistfully looking through store front windows, all that stuff they wanted to buy,( for ages), sadly, all too expensive for their means.
Then some form of deflation occurs and suddenly they can make their wish come true. Of course they go for it.
You might say that, at the sheeple level, inflation rewards the materialistic and impulsive and (punishes the rest), while deflation reverses that process.
BTW, Levels above that of "sheeple" win, no matter what way the flow goes.