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| Economy | |
| City fears of 'Great Depression Mark II' | |
| 2010-05-21 | |
| Leading City experts have started raising the prospect of "Great Depression II" amid worries that the European economic crisis could trigger a deeper bout of chaos. Markets on both sides of the Atlantic dipped to fresh lows as fears surrounding the fate of the euro project transmuted into worries about the wider global economic system. Bill Gross of bond fund Pimco said that hedge funds were starting to liquidate their positions in a bid to preserve their capital -- a worrying "mini relapse" towards 2008 territory. Andrew Roberts, head of European rates strategy at RBS, said "Great Depression II" could now be approaching, adding: "It now has potential to speed toward its conclusion; a European $1trn package which does little and political panic tells you we are about to reach the end of the road. The world should be discussing deflation, not inflation." In the US there was a surprise 25,000 increase in jobless claims to 471,000 in the week ending May 15.
Mr Gross said investors were now being frightened off by worldwide "fiscal tightening momentum", adding that markets were facing "a mini-relapse of a flight to liquidity as hedge funds and other leveraged positions are liquidated to preserve capital". One worry is that European leaders are not sufficiently behind the $1 trillion bail-out fund they announced, in collaboration with the International Monetary Fund, last week. A second fear is that other indebted countries could soon be exposed. | |
| Posted by:lotp |
| #12 Woody Allen and others want to give genius O dicktator powers. What a farce, history and events have come and gone with some of the best people leading the way. I can think of no other less qualified leadership at the helm. |
| Posted by: Dale 2010-05-21 21:57 |
| #11 Except shutting off your flow of inanity. |
| Posted by: Pappy 2010-05-21 21:40 |
| #10 There's nothing better than gold. You can eat it, drink it and plow a field with it. It will hold off colds, flu, ague and despesia. Old men stand up with an ounce in their pockets, gray haired womens dance like maidens. There is absolutely nothing this fine metal can't do. |
| Posted by: Shipman 2010-05-21 17:35 |
| #9 Ifthey want to stop the gold trade one day they don't have to physically confiscate it (hard) they just put a compulsory tax on buying/selling it. Like most things I suspect that would spawn a active black market in gold. |
| Posted by: JohnQC 2010-05-21 16:38 |
| #8 Manipulation of the gold market is definitely the job of the Soros's of the world. |
| Posted by: Anguper Hupomosing9418 2010-05-21 11:27 |
| #7 Glenn Beck is on the sh*t list at the WH anyway, but his advocacy of gold with lots of on-air and on-line ads has come under attack. Gold must just be for the Soros' of the world, who has also stockpiled it. |
| Posted by: Lumpy Elmoluck5091 2010-05-21 11:09 |
| #6 If they want to stop the gold trade one day they don't have to physically confiscate it (hard) they just put a compulsory tax on buying/selling it. and ratchet it up as needed. |
| Posted by: anon1 2010-05-21 07:45 |
| #5 I suspect an amnesty period would be established whereas anyone selling after a certain date would be liable for prosecution. Our friends in Washington would set the Gov't approved USD exchange rate and conditions which might well be entirely different from the current or future exchange rate [imagine that]. All of this would come only after international currency melt-downs. No Nostradomus effect here, it's simply a scenario what has played out previously and bears close watching. Other preliminary measures might include a mandetory IRS annual filing declaration to include licensing of the private ownership, value, appreciation, sale or trade of "precious metals" declared "essential to national defense." Evil gold hoarder tax loopholes.... they must be stopped! |
| Posted by: Besoeker 2010-05-21 06:55 |
| #4 Do you have to register to buy gold, or would The 0ne rely on our good faith to turn it in? Or arrest us if we tried to cash it in anyplace? |
| Posted by: Bobby 2010-05-21 06:29 |
| #3 Gold has spiked though to A$1400 per ounce. If my savings in the bank were gold, my capital would be preserved. i still want more gold. Posted by: anon1 None of this rush to gold has been missed by Barry. Take a look at history and the actions FDR initiated with regard to private ownership of gold. |
| Posted by: Besoeker 2010-05-21 06:07 |
| #2 Agreed, Lex, except about gold. Gold can be good even in a deflation. I've been a fan since 2003. It's had a 10 year bull run but i think it isn't over. With countries printing fiat currency like nothing else, Gold is no man's liability. A$ dropped 10c in the last couple of weeks - that means my net worth in US$ terms just dropped more than 10% not even counting the share market plunge here. Gold has spiked though to A$1400 per ounce. If my savings in the bank were gold, my capital would be preserved. i still want more gold. |
| Posted by: anon1 2010-05-21 05:21 |
| #1 It always seemed obvious to me that this latest market runup, ie since Barry took over in March '09, was yet another liquidity-fueled, Fed-engineered market mirage. Consider: if the US economy is the engine of world growth, and of recovery from recession now, AND if that economic engine is still ca. 70% dependent on the US consumer, ie, on millions of households buying stuff they DON'T NEED with money they DON'T HAVE, then the world's in deep $hit. Because, aside from purchases of iPhones, laptops, alcohol, porn, and other forms of cheap stimulation, the US consumption engine is exhausted. Households are cutting back. And cutting out a huge hole in the US consumer, hence the US, and the world, economy. So there's no alternative to a reset at a significantly lower level of wealth and income and economic activity as US households move from their recent negative savings rate to a positive savings one. Bottom line, the market's runup since March 2009 was a mirage. Stocks are way overvalued. Probably gold, too, for that matter. The only safe haven, really, is US treasurys, and that for a limited time. |
| Posted by: lex 2010-05-21 01:51 |