Doomsday clock for global market crash strikes one minute to midnight as central banks lose control

China currency devaluation signals endgame leaving equity markets free to collapse under the weight of impossible expectations

When the banking crisis crippled global markets seven years ago, central bankers stepped in as lenders of last resort. Profligate private-sector loans were moved on to the public-sector balance sheet and vast money-printing gave the global economy room to heal.

Time is now rapidly running out. From China to Brazil, the central banks have lost control and at the same time the global economy is grinding to a halt. It is only a matter of time before stock markets collapse under the weight of their lofty expectations and record valuations.

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when economic collapse comes avoid the grocery store- they are the death traps

B. make sure you are friends with the ritziest restaurant and start work there. I'm sure blackwater will be protecting it soon.

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There is no more Blackwater.  

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Yes, that's correct.
No really, the only simple answer is: it depends. You can be in a LOT of trouble if you have debt when the economy collapses.. or you can benefit a LOT.  It depends on so many things its just a very complex situation with a very broad spectrum. I'll give you real, actual examples. I borrow USD in Argentina (or lets say you borrow money and buy gold in USA, a few days before the collapse). You borrow 100.000 USD and buy 100.000 USD worth of gold. Dollar start looking bad, dollar devaluates. Now you still have to repay 100.000 plus interest but your gold is now worth 500.000. Congratulations you just made 400.000. This is exactly what happened to a lot of people that borrowed USD in Argentina, or borrowed to buy precious metals, etc.
Same thing but with a slight variant. You borrowed usd but you have a contract that is inflation adjustable/devaluation adjustable, in that case you're screwed. Or maybe you borrowed money for your business (debt is good right?) you invested that money, maybe bought machinery, but because the economy went down there's no clients, and you're still stuck with the debt that you have to repay.
We tend to want simple easy answered but often the relaity is a lot more complex than that.

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The average american lives a fairly precarious financial existence, and doesn't know it.  He has a job, makes money, and it all looks pretty job by international standards.  We have homes, cars, and take vacations.  The problem is this:  His lifestyle is very much dependent on a few different factors.  One is debt.  Its a 'buy today, pay tomorrow' life.  And his spending power is dependent on cheap imported crap, low energy and food prices, and a fairly weak and vulnerable economic system.  

Here's how it works.  Joe Main Street buys a home.  It isn't a 900 sq footer with one bath like grandpa, grandma and the six kids bought in 1948.  Its a 2800 sq footer with two living rooms and three and a half baths.  Of course, its all financed.  and it isn't financed so its easy to pay off quickly.  Its "how big a house can I get for how small a payment", which means adjustable rates and 30 years.  He can pay for this.............. if rates stay low and he doesn't loose his job.  Any little economic bump, and its in foreclosure.  Of course, those bumps hit neighbors too, so 4 out of 10 houses on the street will have a for sale sign out on the lawn, and housing prices fall.  Its the housing market collapse from a half dozen years ago all over.

Given that many americans have NO net worth, and of those that do have net worth, most is tied up in housing , this means that a housing market bump burns up any accumulated wealth for many americans...

Americans also live fairly well because our actual hardcore costs for living are cheap.  We don't spend much on food and energy.  Sure, it seems like we do.  However, I bet most americans food budgets account for what, maybe 5-10% of their wages.  Compared to other countries,where food can be 20-30-40% or more of a budget, our food is cheap.  Same for energy.  We drive Suburbans, and Tahoes, and F250's and the like.  A family vehicle in most of the world is something much, much smaller.  Again, gas and energy seem expensive, but as a percent of our income, its small.

This stuff is cheap because we have a fairly strong dollar.  So far.  Relative to other currencies, ours is strong.  We can but foreign good cheap.  In the event of an economic crisis, out dollar can take a huge hit.  If and when our dollar tanks (which is getting likelier by the day, thanks to rampant spending by republicans, democrats and the Fed Reserve Bank), the cost of everything skyrockets.  What do youthink life will be like if the food budget for a family goes from 7% or income to , say 37%???  Given that most americans have NO extra money, this means something is going to collapse.  Again, we have a parallel.  Economies in post WW1 Germany, Brazil, Argentina, Zimbabwe and now Greece are feeling this. For that matter, ask grand dad about live during the Great Depression.  There were an awful lot of very skinny Americans back then.

Our whole supply and distribution systems is fragile and dependent.  It depends on just in time deliveries of everything from toilet paper and tampons to food, oil, and auto parts.  If there are price hikes in transportation costs its becomes fragile.  If economy weakens and the govt stops spending money on minimal infrastructure, things like bridges and ports start going downhill fast.As highways break down, its harder and more expensive to move stuff.  Most of our supplies  -food, groceries, etc -  moves through some reply impressive central distribution systems.  And these hubs are running right at the very edge of hyper efficiency.  We are talking 400-600 semi vans simultaneously unloading, and loading, moving product to shelves that will be sold 18 hours later.  There is NO back stock, no reserve.  When the economy takes a hit, or there is a dislocation, this system can fall in a hurry.  

What you'll likely get is a shortage of many goods, combined with severe price hikes  It will hit places and populations unevenly.  Got a place where everyone is dependent on social assistance?  Its going to get REALLY ugly fast.  These people arnet known as great planners, so I doubt they've got any r eserves squirreled away.  They've got the latest running shoes and proper athletic team sportswear and a great TV system but no food set aside.  When the shortages come, and prices spike, the welfare bums will find the checks done go far enough,.

Middle class america will get hit hard too.  It's hard to accept that you cannot take a family vacation this year.  And most won't want to sell the boat, or downsize the car. Most hang on to the lifestyle and debt and ride it right into foreclosure.  Its hard to feel like you are living  middle class life when the banks have foreclosed and there isn't money enough left over for food.  (remember the ladies in Jaguars and BMW's lined up at food closets during the housing crisis).

A lot of goods and services are going to go away.  And with it a lot of jobs.  Given we live in a service economy, unemployment will skyrocket.   Just look hard at the Great Depression, and you'll see some areas and populations got hit harder than others.  And very very few prospered.  I suspect that a coming economic downfall could easily outpace the Depression for severity and length.  I really don't think our current population is equipped to handle it.  Rather than buckling down and dealing with it, we'll get far more denial and more whining for someone else to fix it.  Combined with FAR more anger and social unrest.  Which of course will further feed the downward spiral.  Need proof?  Explain why our black communities feel the need to vent anger over police shootings by burning black owned businesses in predominantly black neighborhoods?  Or explain why American steel a need to riot, loot, and burn when their favorite sports team looses the Stanley Cup?

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Well yes, goes up in value, you make money. The think is, if you're getting into debt to play this game you may end up losing, that's why there's no easy answers. Folks that go "oh, I'll borrow to buy gold and preps, the dollar is going to collapse anyway and paper money will be wothless" are making a pretty risky bet.

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No, I think I will comment on the detritus that is quickly filling is forum.
How many "economic collapse" threads is enough? 5, 10?
we don't need 3 threads about the same thing.

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No, I think I will comment on the detritus that is quickly filling is forum.
How many "economic collapse" threads is enough? 5, 10?
we don't need 3 threads about the same thing.

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It's pretty amazing so many are frothing at the mouth about our economic conditions...

[incl me a lot of the time]


Yet the REAL Danger we are facing...

That will destroy OUR ability to change things [economic, social, etc...]

Nobody is talking abt.

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Regarding debt during a crisis...

It is entirely true that if you borrow now, and have a fixed payment and fixed interest rate, then your payment actually decreases (in terms of spending power) as money inflates.  That $500 payment that is "big" now seems small in the future when the value of $500 has decreased.  This is a 'truth".

There is a really, really BIG problem with any plan that counts on taking advantage of this 'truth".  The whole "inflation makes tomorrows payment seem smaller" theory only works if your income also increases.  If you make $50,000 a year today, and your payment is $500 per month, then you see your wages rise with inflation, then in a few years your income is $70,000 while your payment is $500 per month.  You win!!!  

Unfortunately,  this lottery doesn't always pay....  In many cases, your income DOESNT increase as inflationary pressures pound the economy.  In a true hard economic crisis, the common situation looks something more like this:  I USED to make $50,000 a year.  However, I got laid off, or the plant closed entirely, or my hours were cut.  Now My annual income is $20,000.  The payment is still $500 a month, but on my reduced income its actually a larger percentage of my income.  And the price of food has tripled, gas is $8.00 a gallon, and i no longer have health insurance....  End result is that payment might be mathematically 'reduced' by inflation, but I still cannot pay it because all the other expenses in my life have increased exponentially with inflation.

Don't take my word for this.  Do your own research.  During the stagflation period of the early 80's we had a stagnant economy and higher inflation.  Mortgage rates went 10,12,16, 18%.  Heck, at one time you could buy a bank certificate of deposit that PAID YOU 14,15%!  Take a close look at the numbers.  There were scads of families who had fixed debt (that did not increase in terms of monthly payment), but couldn't make the payments.  The cost of everything else went up so much, there wasn't enough income to cover all expenses.  And God help you if you were an idiot and locked into an adjustable rate or had to refinance to cover a balloon payment.  And most people who carry mortgages tend to carry credit cards, where rates went far north of 20%...

Debt is always a gamble.  You are taking money today, and gambling that your income will cover the payment and interest tomorrow.  And as most of us know, our crystal balls and Ouiji boards regularly fail us.  Life, the economy, our politicians, whatever have a pretty good track record of fucking up our economy

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I've been rude by doubting the relatedness of this thread to SF topics. My apologies OP. No excuse on my part for letting GD crap in here. ( Not kidding.)

I will excuse myself stage left.

Carry on.

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I've been rude by doubting the relatedness of this thread to SF topics. My apologies OP. No excuse on my part for letting GD crap in here. ( Not kidding.)

I will excuse myself stage left.

Carry on.

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I went to the Dominican Republic for vacation last month.  There couldn't be a bigger contrast between the resorts and the rest of the country.  Yeah, it was pretty third world.  Lots of trash, crappy houses, under development, and adults who had nothing better to do than stand around.  It would take something pretty drastic for the United States to fall as far as the Dominican Republic.  And yet, if THOSE people can have a functioning society under those conditions, so could we.  Like I said, I REALLY don't think we'll fall that far.

That being said, to answer the OP, I can sum up my expectations of the worst to come in one word-  "scarcity".  Items and services that we take for granted today will suddenly be much harder to get.  Power outtages would be a little more common, pharmaceuticals might cost a lot more, that kind of thing.

I don't see America descending into some Mad Max style hell that "alpha predators" who make their own suit of armors dream about.  That being said, the so-called "Ferguson effect" is absolutely in full swing, and I experience it on a weekly basis.  Whether the spike in lawlessness is related to the media whipping certain communities into a frenzy and will continue to get worse, of its just the usual cycle we go through is up for debate.

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The poorer nations will fare better as they're accustomed to abject poverty.

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I'm more worried about what happens when EBT is only paid 50% of what used to be "normal" because .gov can't charge up all the cards.

Same deal with SS and disability payouts.

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Folks think an economic collapse is the issue to be sweating today.





It's worth worrying abt -for sure...
But the greater danger no one seems to be talking abt.





Really have to wonder why folks don't recognize this...

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Folks think an economic collapse is the issue to be sweating today.

It's worth worrying abt -for sure...


But the greater danger no one seems to be talking abt.

Really have to wonder why folks don't recognize this...

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Folks think an economic collapse is the issue to be sweating today.

It's worth worrying abt -for sure...


But the greater danger no one seems to be talking abt.

Really have to wonder why folks don't recognize this...