[Gothos]

hahahaha "buy gold" yeah right! Such. Total. Bullshit. Or borderline stupidity.
Buy guns, ammo and food. Gold won't mean more than money in the case of a total collapse.

[Shinrei]

Cold Iron, on 21 June 2010 - 06:45 AM, said:

Nicodimas, on 18 June 2010 - 06:31 PM, said:

One of the best post on Zerohedge went up.I really suggest you all check it out:

http://www.zerohedge...tional-security

I think everyone here will enjoy the insights and points this articles gives.

Absolute rubbish. He starts out saying he has no political agenda. Then he says all parties are socialist, then he says these socialist parties are running the economy into the ground. Then he says buy actual gold coins and bars now before the government start taxing and confiscating gold.

How the fuck am i getting any insights from this rubbish? I can only see 2 points to this: right wing political agenda and a sad attempt to drive up gold price. I regret the waste of my time.

Rubbish that he has not agenda - agree.

All parties are socialist- didn't see that.

Socialist policies are running economy into the ground - agree.

Gold - Whatever.

Right Wing Political Agenda - No republican would write this.

[Cold Iron]

Shinrei, on 21 June 2010 - 01:20 PM, said:

Rubbish that he has not agenda - agree.

All parties are socialist- didn't see that.

Socialist policies are running economy into the ground - agree.

Gold - Whatever.

Right Wing Political Agenda - No republican would write this.

Sorry I should have said "he claims both major parties are socialist" not all parties. But if he is comfortable calling the republicans socialist I'm loathe to think that you may be suggesting there are a number of minor parties significantly right of the republicans. You seem not to be saying this though because you say he's no republican, which I agree with. He seems to be, like Nico (funnily enough) so far to the right he's almost anarchist (if that is the result of having no government at all).

It's a classic sign of failing empires to trend towards larger and larger bureaucracies, but it's not the fault of the government per se, more a result of resource depletion. The source of our wealth is no longer secure and there is no way to sustain our way of life. We can't go backwards because there's just too many of us now, so we employ ourselves and watch it fall apart. Don't worry, the rest of the world is going down with us.

Ultimately nobody benefits from economic collapse, there is no grand conspiracy of the super rich plotting our downfall. Yes the super rich are greedy, and yes they went too far. But at the end of the day we were never getting out of this alive, oil is oil, when you burn it, it's gone.

This post has been edited by Cold Iron: 21 June 2010 - 11:16 PM

[Nicodimas]

Quote

Ultimately nobody benefits from economic collapse, there is no grand conspiracy of the super rich plotting our downfall. Yes the super rich are greedy, and yes they went too far. But at the end of the day we were never getting out of this alive, oil is oil, when you burn it, it's gone.

Most likely the rich will go to there islands, or massive ranches they own in other countries that just happen to be resource rich and start agian. I agree there is no evil "plot" in those words. However, evil exists and if it does go down, I will happily watch them tear each other to pieces as it falls apart.

I more of a micro-anarachist really. I just want goverment to have as little of a effect in my life as possible. A non goverment society<utopian> would be great if people weren't so shitty to one another, but they are.

Btw I am not beliver in the gold/silver pumping that goes on with doomers. If it comes down to this mad max level of society: Food and Security will be a priority. Your not trading your gold for bullets/food, just like if gold goes to XX,XXX a ounce. It's going to be hard to find a buyer for that gold, as people will probably want something more tangible then that. Maybe 15 years later, but that doesn't help you in the meanwhile.

Quote

It's a classic sign of failing empires to trend towards larger and larger bureaucracies, but it's not the fault of the government per se

Yea the fault lies squarely at the people's <citizens> feet throughout history. Resource expansion? Maybe entitlement is the main issue in fact countries feel they are better going to use those resources for it's people then those guys.

[Shinrei]

The idea that we'll find ourselves in a Mad Max type aftermath from a major economic fallout is quite ridiculous IMO. Science fiction stories should not inform our ideas about what society will be like in a post-inflated-growth bubble world.

Just put things into the perspective of world history. It doesn't make sense to say gold will have no value in MadMax land. I can't believe that any economic collapse will put humanity back to the dark ages. No, wait, even in the DARK AGES gold was currency and was used as an exchange unit for goods. Is an economic collapse really going to force society into a position more backwards than the 1800's? The 1700's? The 1500's? All of those times long ago had currency and a functioning trade society.

We'd have to go back to being nomadic hunter-gatherers for gold to have no value. And even if there is a period of "WTF is going on/panic" just post the collapse, do you (looks at nico and gothos) really think people won't pull themselves back into a semblence of society after a year or two? The idea that in the 21st century we will become less civilized than Europe in 1600, or America in 1750, is absurd.

This post has been edited by Shinrei: 25 June 2010 - 03:40 AM

[maro]

Whilst I don't think we'll get to Mad Max levels, collapse will be sudden.

We rely so much on things that we can't fix. It will take proportionally longer to claw our way back up now than if a collapse happened 60 years ago.

[worry]

It's gonna be less less like Mad Max and more like A Boy and His Dog, so gather as many dogs around you as you can. You'll have post-collapse companionship and you can always eat the ones that aren't telepathic.

[Cobbles]

Cobbles, on 13 January 2010 - 10:17 PM, said:

I'm particularly intrigued by the situation in Iceland.

First, what happened in a few words:

For reasons I don't want to get into, Iceland had a high interest rate in the recent past. Icelandic banks thought to profit from that by opening branches mainly in the UK, the Netherlands and Germany to attract capital from small investors. Basically they could offer high interest rates on deposits. Since the banks were Icelandic, deposits were subject to Iceland's deposit insurance similar to the FDIC. When all the three main banks in Iceland collapsed (after an enormous growth spurt, the three banks corresponded to about 80% of the Icelandic stock exchange) the sh!t hit the fan.

For starters, Iceland's version of the FDIC did not have the reserves to pay out deposit insurance. The UK and the Netherlands had to step in and loan the money to Iceland so they could pay out the deposit insurance to depositors in the UK and the Netherlands. In essence it's a socialization of losses (after years of privatization of profits by the bank). Now the Netherlands and the UK require Iceland to pay back the loans and set pretty tough conditions. The Icelandic crown is pretty much trashed and will likely never recover as a freely convertible currency. It now has a status similar to the old Soviet ruble with strict supervision of who can exchange when and how much of it against, say, euro and dollar. Iceland's best hope is to join the EU (and euro zone) while the UK and the Netherlands threaten to block that unless they get favorable conditions for their loan repayment.

Iceland's main resource is fish and Iceland has clashed with the UK before, concerning fishing rights. Iceland has no military. The populist movement easily has a majority of votes to reject the most unfavorable repayment conditions, hence the Icelandic president has refused to sign the corresponding bill. The IMF and other countries will not loan money to Iceland unless the repayment conditions for the UK/Netherlands loan are agreed upon. So, Iceland is really caught between a rock and a hard place.

My thoughts:

1) Obviously, Iceland's financial regulatory agency was asleep. They should have required the banks to contribute more to the FDIC which likely would have put a stop to the irresponsible growth of the banks. Then again, that growth fueled the growth of the Icelandic stock exchange, so it probably would have been pretty unpopular. I guess they were amateurs at work who only saw the growth, never the risk.

2) Once the banks collapsed and it was clear that the Icelandic FDIC was overwhelmed, Iceland was practically bankrupt. Whatever is going on now, is just prolonging the pain. The effort which is going on by the UK, Netherlands, the IMF etc. is to extract as much wealth as possible. There's practically no chance to avoid total bankruptcy. Iceland could have gone that route in 2008 by trashing their valuta (say devaluate to 1% of its value) a short burst of hyperinflation together with a trashing of their credit rating (they're one notch shy of junk right now anyway, so no big deal) and then start anew. I think the option was unpopular inside and outside of Iceland because of the precedent it sets. Western, capitalist nations must not go bankrupt! It would undermine the system.

3) Lack of leverage (military, natural resources, market size) will screw you. It makes you a punching bag of larger nations. With quite a bit less than half a million inhabitants, Iceland has no leverage whatsoever. Even its importance as a Northern base in the cold war is gone. They're not in the EU and have few friends left. Not a good situation.

4) It's interesting where it goes from there. With the UK/Netherlands request, Iceland will be a people of debt slaves for one or two generations to come. However, 'the system' meaning the IMF etc. won't allow a Western, capitalist democracy to go bankrupt. It would destroy all confidence. Then again, the government, under strong pressure from the populace, might just decide not to play along.

5) What can we learn from it? Well, beside the obvious, that competent oversight is required? Would it have been possible to let Citybank, BoA, AIG collapse? Does for instance our FDIC have sufficient resources to cover for such? If not, no foreign country would step in to bail out our FDIC which could be a good or a bad thing. How much debt can we run up before everything comes tumbling down? Iceland, in some sense is a model of what could have happened here. It's not a 1:1 model, some aspects are similar, some not, but it's interesting.

Your thoughts?

My post from a while past.

Iceland has rejected, for a second time, via referendum, to socialize debt from the collapsed banks.

[Tapper]

Yup, and can you blame them? I for one can't.

The options IceSave (which was the main problem in the Netherlands) was offering conditions to their customers in the Netherlands which were all generally too good to be true except during a hausse, as you stated in your earlier post.

Now, we have a national bank guarantee but an Icelandic bank has different rules to play by, as Cobbles illustrates. So, if one were to be a Dutch citizen and were to read the fine print, one would know that additional research into the banks financial situation and Icelandic bank coverage was required. That's individual responsibility for your own money. If you fail to do this research, your right to moan is diminished by a fair margin. If you did your research (a really small minority, I bet) and relied on the Dutch national financial institutions to warn you in time, well... see below.

I think what was way more serious, is that the Dutch financial institutions should have policed Icesave more thoroughly to protect dutch citizens and their interests. Basically, they let a bank that played by different rules and with unsound foundations unto the Dutch market and continuously allowed it to get into more and more precarious situations. In hindsight, the writing was on the wall.
I don't know the British situation, but any dutch watchdog institution should have barked instead of keeping quiet and if anything, any barking being done was too soft or too late to make a difference.

So, if such a bank collapses while you have money there, it is on your own head, because your own money and the risks you take with it when saving or investing are primarily your own responsibility. If a certain bank offers a much higher return on investment/ rent than domestics do, there's something they're doing differently. As a rule of thumb, higher interest/return of investment equates more risks being taken by said bank in their attempt to make a profit themselves.
A failure to recognize this basic principle is a complete misunderstanding of basic economics that everyone smart enough to compare percentages should have.

As such, I do not think there is a need to make the Icelandic population voluntarily bleed for those dutch people gambling and wanting the best of both worlds (greater financial gain without risks). Especially not when so much was going wrong within our own institutions.
That's not to say that Iceland's government and financial institutions themselves are not to be (partly) blamed for the collapse, and of course the Icelandic state is an extension of the Icelandic people. However, redirecting the bill to Iceland and thereby endangering some part of the european economic zone just to mask one's own failings in this case is just Public Relations and populism.

On the plus side, if the country goes bankrupt, we may buy it and rename it to Malaz island. If that's impossible, I for one wouldn't mind having a geyser named after me. Or a body slave, preferably early twenties and female.

This post has been edited by Tapper: 11 April 2011 - 08:51 AM

[Cobbles]

Yes, no matter how you turn it, you screw some of the 'little guys'.

Dutch investors should have known and read the fine print? As you point out, no one really does, and if you try, you'd need a business and law degree to make heads and tails out of it anyway. That's where financial regulation should step up. Either don't allow these products to be sold to 'small investors', or at least force the seller to slap on the front with large letters the amount up to which the investment is guaranteed.

To blame Icelandic politicians is also a bit wrong. It's a country with maybe 250,000 people. Their politicians are probably as sophisticated as a rural province government. Hardly the guys to set up an effective regulation and oversight scheme for international finance.

There's no good way out of it.

What I find interesting is that it might be a model for future events. At one point citizens of a country in debt will vote to default on their obligations, which is when everything will come tumbling down. Why? Because on the one hand, this country is supposed to get 'punished' by international finance. On the other hand, it's likely too good an opportunity to pass on an investment. Citizens of other countries will see that the sky isn't falling after all and they might follow suit. So, what to do when a significant fraction of industrialized, 'rich' countries all decide to default on their debt? At that point, finance will be revealed as what it really is. A con game based on a pyramid scheme. Of course Wall Street and all the big donors don't want that to happen (as we saw clearly in 2008).

[McLovin]

Default? Nah. There's a better option - print more money and magically inflate your debt away.

[Adjutant Stormy~]

My more policy-minded friends (and enemies) and I have talked about this at some length. It's not the debts that actually matter, it's the currency values. Well, that's not to say that they're meaningless, but they matter significantly less to the house of cards that is our financial systems than currency valuation and inflation rates.

At some point the cash stockpiles of countries will start looking either weak, or weapony. At which point someone's going to start a cash-dumping war.

[Tavvar]

I think your right Adjutant. It seems to me a lot of these crises are caused by investors and speculators fearing a country will collapse, causing them to pull their money out which in turn causes the country to collapse, fulfilling their initial fears. At a basic level this is what happened in the Asian Crisis in the 1990's, I think the Latin American ones, and the recent European collapses.

[Cobbles]

Sure, those are basically two sides of the same coin. We could, in principle, print a single multi-trillion $ bill, put it in an envelope, slap a stamp on it and send it to China to pay our entire debt. Or, we could decide that for the next 20 years or so we'll only pay 90 cents on the dollar on our debt. The consequences will be pretty similar. In either case, any new debt would come with correspondingly much higher interest rates. It will also drive inflation.

If it's a small country like Iceland, their currency has to be heavily regulated in such a case (to avoid capital flight and hyperinflation). The Icelandic crown is (or at least was for a time) not freely convertible, kind of like Eastern European currencies before 1989. I wonder what such a step would do to a large currency such as Yen, Euro or US$. Since the global economy is so dependent on the free flow of goods and capital, it might have to work out differently. Interesting to speculate.

And Tavvar: the latest EU crises are different in the sense that the currency value WAS fixed (by Germany and the other economies), so the countries could NOT inflate their way out of it. These crises ARE true debt crises. Except for Iceland, of course, which had retained their own currency.

This post has been edited by Cobbles: 21 April 2011 - 03:46 AM