More economic doomsday predictions

James_Newman · Jun 14, 2007

http://www.globalresearch.ca/index.php?context=va&aid=5964

In language remarkably alarmist for the usually ultra-bland pages of the Post, Pearlstein wrote, “It is impossible to predict when the magic moment will be reached and everyone finally realizes that the prices being paid for these companies, and the debt taken on to support the acquisitions, are unsustainable. When that happens, it won't be pretty. Across the board, stock prices and company valuations will fall. Banks will announce painful write-offs, some hedge funds will close their doors, and private-equity funds will report disappointing returns. Some companies will be forced into bankruptcy or restructuring.”

Further, “Falling stock prices will cause companies to reduce their hiring and capital spending while governments will be forced to raise taxes or reduce services, as revenue from capital gains taxes declines. And the combination of reduced wealth and higher interest rates will finally cause consumers to pull back on their debt-financed consumption. It happened after the junk-bond and savings-and-loan collapses of the late 1980s. It happened after the tech and telecom bust of the late '90s. And it will happen this time.”
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Should I be buying gold?

Rufus_1611 · Jun 14, 2007

James_Newman said:

http://www.globalresearch.ca/index.php?context=va&aid=5964
Should I be buying gold?
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As long as you feel you can hold onto it when the gov't tries to confiscate it.

Gold Confiscation: Will it happen again?

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People who scoff at the suggestion that the government might restrict private gold ownership should remember that many other countries have restrictions on (or absolute prohibitions against) private gold ownership. They should also remember that, in 1933, Franklin Delano Roosevelt dealt with a monetary and banking crisis by confiscating all privately owned gold; paying for the gold at $20.67 per ounce; immediately devaluing the dollar by 40 percent; and setting the price of gold at $35.00 per ounce. At a single stroke, Roosevelt increased the government's gold assets, stabilized the monetary system and increased wholesale prices by more than 33 percent. However, he also inflicted losses of 40 percent on gold owners and stripped them of the gold that they saved to insure their financial futures.
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Bro. Curtis · Jun 14, 2007

Didn't he also arrange it so European banks would benefit from the interest earned on S.S. accounts ?

The late '90's incident Mr. Newman references in his post killed the electronics industry in Massachusetts, and is the reason I moved to Montana. I hated it, at the time, but it has turned into quite a blessing.

God is in control. Praise him. Amen.

billwald · Jun 14, 2007

Interest on SS accounts? Don't believe that rubbish. SS money has always gone into the general fund and paid for current expenses. The SS law requires it.

As in previous crashes, people who have not gambled on the stock market and who have not borrowed money to buy toys and who have not bought more house than they can afford and who have kept a cash emergancy fund will do OK.

Hope of Glory · Jun 14, 2007

Even those with money in stocks will be OK, if a) the invest in sound companies and don't jump on any bubbling bandwagons, such as the tech bubble of the 90's and b) hold onto it and weather out the downturn.

Rufus_1611 · Jun 25, 2007

Global economy faces 'chaos' - World Economic Forum

Global economy faces 'chaos' - World Economic Forum

The international community faces a real risk of 'economic chaos' arising from major imbalances in the global financial system, the World Economic Forum on East Asia was told Sunday.

Complacency has set in after years of uninterrupted global growth and there is no evidence to suggest a self-correcting mechanism is in place to avert a major shock to the global financial system, delegates to the two-day forum were told.

Tharman Shanmugaratnam, Singapore's Second Minister for Finance, warned the financial contagion will hit when it is least expected and bring about a 'vicious' aftermath.

'You can't predict when it's going to come. You can't predict the scale but there's a feeling that when it comes, it's going to be a pretty large impact and going to be very difficult to manage,' said Shanmugaratnam, 10 years after a financial crisis shook the region's economies.

Thailand's Minister of Finance Chalongphob Sussangkarn said that 'unfortunately we cannot see any self-correcting mechanism' when looking at the global economic imbalance.

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billwald · Jun 25, 2007

How can a company with no record of profits be an "investment?"

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