Where is the Collaspe?

[Mega]

Stocks still higher...........Gold falling..........10 years on where is the collaspe/hyper inflation etc?

[shiny!]

Re: Where is the Collaspe?

Stocks still higher...........Gold falling..........10 years on where is the collaspe/hyper inflation etc?

Right now? Argentina, Turkey...

[dcarrigg]

Re: Where is the Collaspe?

Right now? Argentina, Turkey...

The pound has taken something of a shellacking too.

Problem is, even though the US is the last best hope, corporate debts at home are through the roof too. The big corporate tax cut provides some immediate monthly income to paper over the reality. But there's a lot of zombies and scams mascarading as brilliant new companies and operating purely due to cheap and abundant corporate credit. It's not just Tesla, even if they're a poster child. The bubble this time is in public companies. It's smaller than the 08 one, but it's more directly tied to stock markets. That tax cut a few months back was like a guy showing up at a college party at 2am with a crate of booze. Party goes well. But hangovers will be worse. Meanwhile the lightweights are already starting to pass out. And the crime that happen when everybody's sauced won't come out for years.

[Mega]

Re: Where is the Collaspe?

House prices are not going up any more in UK, debt piled high!
The gov of the Bank of England has been "asked" to stay on after 2019...............makes me think he try House price rocket 2.0

But there is hope..........

[touchring]

Re: Where is the Collaspe?

The pound has taken something of a shellacking too.

Problem is, even though the US is the last best hope, corporate debts at home are through the roof too. The big corporate tax cut provides some immediate monthly income to paper over the reality. But there's a lot of zombies and scams mascarading as brilliant new companies and operating purely due to cheap and abundant corporate credit. It's not just Tesla, even if they're a poster child. The bubble this time is in public companies. It's smaller than the 08 one, but it's more directly tied to stock markets. That tax cut a few months back was like a guy showing up at a college party at 2am with a crate of booze. Party goes well. But hangovers will be worse. Meanwhile the lightweights are already starting to pass out. And the crime that happen when everybody's sauced won't come out for years.

The problem some of the em are facing is not just debt but corruption and politics. It's a repeat of the 1997 where most debt incurred has disappeared into private pockets.

This is serious and more serious than socialism because at least with socialism, some of the cash has been distributed to the population, while in this case, the banks have been plundered - yes, plundered by the kleptocracy.

All the money the US and EU has printed has gone to corrupted officials and businessmen. China's one belt, one road, you can bet, at least 30% of the money loaned out has gone into the pockets of politicians. Before the projects are built, 30% of the cash is gone, so you can see how all the projects will end up.

To give an idea of the scale of corruption, here's a report for a small unknown Malaysian minister.

https://sg.news.yahoo.com/jamaluddin...045446297.html

The em and china will never be able to compete with the US, not in a 100 years as long as their political and legal system remains the same.

[charliebrown]

Re: Where is the Collaspe?

Hi shiny, nice to hear from you

I see cracks in the foundation. Look at usdebtclock.org, and look at the interest on the debt. It is rocketing upward. 20% yoy. I assume it is a result of rapidly rising interest rates, and trillion dollar annual deficits. As the boomers really start retiring, Trillion dollar debts will be the norm, as the treasury will have to issue new notes to retire/cash-in the notes held by the SS trust fund.

Another phenomenon as DC points out with corporate debt is that this is the first time in a long time where rolling over debt does not result in a lower interest rate.
7-8 years ago (which is about the average maturity of all debt in the us) the rate was around 3.5% for investment grade corporate debt, now it is about 4.00%
With the Fed's dot plot still showing an upward trajectory, I don't see rates moving down in the near future unless something unexpected occurs.

[GRG55]

Re: Where is the Collaspe?

Hi shiny, nice to hear from you

I see cracks in the foundation. Look at usdebtclock.org, and look at the interest on the debt. It is rocketing upward. 20% yoy. I assume it is a result of rapidly rising interest rates, and trillion dollar annual deficits. As the boomers really start retiring, Trillion dollar debts will be the norm, as the treasury will have to issue new notes to retire/cash-in the notes held by the SS trust fund.

Another phenomenon as DC points out with corporate debt is that this is the first time in a long time where rolling over debt does not result in a lower interest rate.
7-8 years ago (which is about the average maturity of all debt in the us) the rate was around 3.5% for investment grade corporate debt, now it is about 4.00%
With the Fed's dot plot still showing an upward trajectory, I don't see rates moving down in the near future unless something unexpected occurs.

sure looks like the debt market's are becoming toxic

[shiny!]

Re: Where is the Collaspe?

Thank you for chiming in, charliebrown and GRG55. I always appreciate your insights.