Economic update

The most pressing problem on the planet right now is the European sovereign debt crisis. It is a gigantic highly leveraged mess caused by greedy reckless bankers. It was nurtured with the help of regulators who turned a blind eye and allowed the problem to mushroom into an uncontrollable financial cancer. The European Union is struggling to come up with a plan or bailout fund big enough to truly end the crisis, but there is none in sight. Every time there is a plan, it is shot down or falls apart
(this is very similar to what happened in 1931 which led to the Great Depression)

http://usawatchdog.com/european-sovereign-debt-crisis/

http://www.jsmineset.com/wp-content/..._image0041.jpg

I never understood how people/governments spend money they don't have. If bailouts happen and the actual problem rooted in how people spend money and how people feel they are entitled to money are not fixed, we'll simply be in another crisis within years.

Bailouts = BandAid fix

Perhaps we do need a meltdown and then rebuild from scratch (hopefully after learning from our previous booboos).

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Originally Posted by ashedfc

(this is very similar to what happened in 1931 which led to the Great Depression)

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or even 1929....but hey 2 years is nothing in history....

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Originally Posted by Darth Penguin

or even 1929....but hey 2 years is nothing in history....

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Yes True, 2yrs is nothing in history
But 2008 Lehman Brothers collapse can be equated to 1929, after 1929 there was a recovery than markets tanked in 1931 much like we had in 2009-10
& early 2011
& Now the coming 2012 can be equated to the fall of Credit-Anstaldt (Austria's largest bank) in 1931 which triggered the real collapse leading to Great Depression.

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Originally Posted by sotsuguyou

I never understood how people/governments spend money they don't have. If bailouts happen and the actual problem rooted in how people spend money and how people feel they are entitled to money are not fixed, we'll simply be in another crisis within years.

Bailouts = BandAid fix

Perhaps we do need a meltdown and then rebuild from scratch (hopefully after learning from our previous booboos).

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People /Govt spend money they don't have by borrowing...
Like
People take credit card, student loan, car loan, mortgage,, its all spending money they don't have...
Govt's borrow from the Bond market by selling bonds paying certain interests for a certain time frame. Its this bond market which is the tradable as securities; & this is the epicenter of the entire problem. Technically its the Govt. debt (also called as Sovereign debt) which is the real problem.. Govt's have borrowed more than their ability to repay (or even pay interest)...

Quote:

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Originally Posted by ashedfc

Yes True, 2yrs is nothing in history
But 2008 Lehman Brothers collapse can be equated to 1929, after 1929 there was a recovery than markets tanked in 1931 much like we had in 2009-10
& early 2011
& Now the coming 2012 can be equated to the fall of Credit-Anstaldt (Austria's largest bank) in 1931 which triggered the real collapse leading to Great Depression.

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Gee all we need now is a dustbowl or other global natural disaster to really put us over the edge.....and it took a war to get us out last time...

This is all about saving government...... (Now the Govt's are bankrupt).. http://www.martinarmstrong.org/files...11-09-2011.pdf

In my opinion: They will create massive inflation &/or Go for a Major War (maybe World War 3) to reboot the financial system..

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Originally Posted by ashedfc

This is all about saving government...... (Now the Govt's are bankrupt).. http://www.martinarmstrong.org/files...11-09-2011.pdf

In my opinion: They will create massive inflation &/or Go for a Major War (maybe World War 3) to reboot the financial system..

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WW3 is a scary option!:shock:

PRICE OF A BARREL OF OIL 1978 – $14.00
PRICE OF A BARREL OF BRENT OIL 2011 – $114.00

Energy Independence: The Big Lie http://www.theburningplatform.com/?p=24633

.

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Originally Posted by ashedfc

10 Reasons to own Gold (as it hits all time high today). Its all about protecting wealth from currency devaluation happening in all major economies.

http://www.sprott.com/docs/Reports/r...o_own_gold.pdf

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Too late to buy gold. Canadian funds - Canada is one of the strongest economies right now.

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Originally Posted by escher7

Too late to buy gold. Canadian funds - Canada is one of the strongest economies right now.

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True, Canada is one of the strongest right now.. only because Canada has hidden its biggest bubble under the carpet right now. CMHC is the mega-bubble (its exposure in sub-prime mortgage is worse than what Fannie Mae & Fredie Mac was in 2008 for US)..
And any investment decision should be based on "What's coming in the future" not "right now"..
For future, the Sovereign debts are already imploding, latest one is Greece with its 50% haircut, these debts are held by banks, insurance companies, pension funds, How are they adjusting their losses, writedowns, its all coming in the not too distant future..
Gold is the only place where there is no default risk, rest everything has a component of counterparty risk associated.

This news of Canada will give you some insights on how strong Canada is right now.. http://www.investmentexecutive.com/-...s-in-september

Crisis of generations – younger Americans moving back home in large numbers.

http://www.mybudget360.com/wp-conten...ng-at-home.png

Student loan default rates surging largely due to for-profit college expansion.
http://www.mybudget360.com/crisis-of...e-for-profits/

If you look at the crisis in Europe, the key questions to ask are clear: Will this crisis continue to spread? And will the United States get singed by the fallout?

In both cases, the answer is a very clear "Yes."

European Bond traders going for the "Jugular"
http://moneymorning.com/2011/11/17/e...r-the-jugular/

More hope: listened to a radio program today stating that while we started out like Japans lost decade (going on 19yrs. now) we reacted differently to the situation...this deleveraging of debt will take at least 7 yrs. of which we`re 2 yrs. into. So we have 5 or more yrs. to go. The other point brought up was that to pay off these debts (personal and govn`t) we used the money that would of gone to other spending bringing the economy down with it. Much of it was over my head, but those are the 2 points that stuck out for me.

Obviously these were opinions.