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Investment Talk We're now living in a world of challenging global economy where changes take place at a rapid pace. Investment Talk offers concerned Malaysians the opportunity to express their opinion on the performance of our country's economy in various sectors -- market watch, property talk, money market and others like unit trusts, bonds, bonus, dividends etc.

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  #1  
Old 19-02-2012, 02:48 PM
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Default Impending doom [will affect the rest of the world]

Friday, February 17th, 2012 | Posted by Editor


A monumental change is coming, and for most Americans, it will be

painful, especially for the unprepared. [Let me explain just what is happening, why it can not go on as is and what we can likely expect in the future.]

In the last week or so, I have noticed an unusual amount of really well written and researched articles warning of impending doom and financial horror. These articles are not written by a bunch of angry uneducated bloggers but by money managers, investors and financial writers. All are people who got it right leading up to the meltdown of 2008, and my bet is they are right again. The mainstream media (MSM) told you after the 2008 crash that “nobody saw that coming,” which is a bold faced lie that will not work again.

Jim Quinn of TheBurningPlatform.com wrote a tour de force of troubling realities (Click here to read this very long but very good Jim Quinn post) you will never hear on the MSM. Quinn lays out the case for coming ruin with stats, charts and razor sharp logic in a post called “Illusion of Recovery–Feelings vs. Facts”. [I edited and abridged Quinn's article for the sake of clarity and brevity to provide a fast and easy read and titled it (with opening paragraph) as follows:

Are You A Sucker? If Not, Here’s The Reality About America’s “Recovery”!


What passes for journalism at CNBC and the rest of the mainstream print and TV media is beyond laughable. Their America is all about feelings. Are we confident? Are we bullish? Are we optimistic about the future? America has turned into a giant confidence game. The governing elite spend their time spinning stories about recovery and manipulating public opinion so people will feel good and spend money. Facts are inconvenient to their storyline. The truth is for suckers. They know what is best for us and will tell us what to do and when to do it.]

In his summation, Quinn says, “there is no avoiding the final collapse of a boom created solely by credit expansion. Those in power will never voluntarily relinquish their grand game of pillaging the wealth of the nation, so economic collapse will be the ultimate result. They will continue to use propaganda, printing presses, and half-truths to further their agenda but those who examine the facts will come to a logical conclusion that we are being sold a great lie.”
Other headlines read:

1. Get Ready for Financial Crisis 2.0 in 2012 – It’s Inevitable! Here’s Why


This analyst sees the perfect storm of converging criteria almost perfectly timed and aligned with the 2012 election cycle. When the moment arrives, the financial earthquake will rapidly demolish the existing highly precarious financial system. Government will stand by helpless, unable to shield itself, much less its vulnerable citizens or private financial institutions from the tsunami of debt and currency destruction. 2012 is shaping up to be the blockbuster main event of the ongoing financial crisis. Massive amounts of new debt, vast quantities of additional digital dollars and the spark of higher interest rates will set off version 2.0 of the credit-driven financial implosion.

2. U.S. Fiscal Situation MUCH Worse Than Government Lets On!


I believe our fiscal situation is much worse than most people realize. True, the situation might be resolvable with a hard-nosed turnaround specialist in charge [Romney?] but, even here, the emphasis is on “might”! In a political context, where citizens have been conditioned to believe they are entitled to live at the expense of government (i.e other citizens because, after all, government has nothing that it first does not take from someone else), the situation is beyond hopeless. Let me address the true economic situation of the U.S. by way of an email I received from a regular reader recently.

3. U.S. Can NOT Avoid Coming Economic Collapse – No Matter What! Here’s Why


The U.S. government is spending more than a trillion dollars more than it takes in every year…[which] all gets into the pockets of ordinary Americans [who,] in turn,…use that money to pay the mortgage, buy food, shop at the mall, etc. – creating a “false prosperity” bubble that is not real. It may feel real to you right now, but it is unsustainable…We are living in the greatest debt bubble the world has ever seen and, as such, a devastating economic collapse is on the horizon no matter what we do [so] don’t let this false prosperity and this “calm before the storm” fool you…There is going to be a massive amount of pain so you might want to get yourself and your family prepared for that.

4. The Financial Crisis Of 2008 Was Just A Warm Up Act For The Economic Horror Show That Is Coming.”

Each of the above articles – and there were several more I left out for the sake of brevity – all feature sound analysis…[but] only talk about the facts and fundamentals of the economy.

War in the Middle East is not mentioned in any article and when you consider hostilities featuring Syria, Iran, Israel, China, Russia and the United States, the mind boggles. War would bring collapse, chaos, and financial calamity in very short order. Oh, and by all means, let’s throw the European debt crisis into the mix for good measure.

Wall Street insider and financial expert James Rickards thinks the most likely scenario coming is “chaos” that will come from the collapse of the U.S. dollar. In an interview this week, Rickards said: “There is still time to pull back from the brink, but it requires a specific set of policies:
  • breaking up big banks,
  • banning derivatives,
  • raising interest rates to make the US a magnet for capital,
  • cutting government spending,
  • eliminating capital gains and corporate income taxes,
  • going to a personal flat tax, and reducing regulation on job-creating businesses.
However, the likelihood of these policies being put in place seems remote – so the dollar collapse scenario must be considered.”

Rickards thinks things will get so bad that: ”The U.S. government will resort to emergency economic powers. Few Americans are aware of the International Economic Emergency Powers Act (IEEPA)… it gives any US president dictatorial powers to:
  • freeze accounts,
  • seize assets,
  • nationalize banks, and
  • take other radical steps to fight economic collapse in the name of national security.
Given these powers, one could see a set of actions including seizure of the 6,000 tons of foreign gold stored at the Federal Reserve Bank of New York which, when combined with Washington’s existing hoard of 8,000 tons, would leave the US as a gold superpower in a position to dictate the shape of the international monetary system going forward, as it did at Bretton Woods in 1944.” (Click here for the complete Rickards interview.) [Also read Bock and Rickards Agree: Governments Want Gold to Go Higher!]

The financial collapse is already in progress no matter the MSM happy news spin.
  • Real estate prices continue to decline despite a 30-year mortgage rate at or below 4%.
  • Millions more homes will be foreclosed on in the next few years.
  • The true unemployment and underemployment rate is 22.5%, and there is little hope of turning things around quickly with American manufacturing gutted and shipped to China.
  • A record 46 million people are on food stamps.
  • At least 90% of all mortgages are supplied by the government.
  • The Fed is holding a key interest rate at 0% through 2014 and is starting a new round of money printing (QE)…
  • Vehicle sales have been propped up with a new round of subprime financing.
  • America’s debt to GDP is 100% or more, and another debt ceiling increase will probably be necessary before the November election.
  • The banks are allowed to use government accounting fraud to make them look solvent.
  • Most U.S. states are not only flat broke but underwater with massive debt loads.
  • Bankers who created this mess with trillions of dollars of fraud are not prosecuted for fear of speeding up the coming collapse.
  • Fuel and food prices are rising, and inflation is running at 11% (if it were calculated the way the government did it in 1980).
  • As the dollar is debased, inflation will spike.
The above are just a few signs of an unfolding tragedy.

The biggest problem America has is crushing debt that it will never pay back. Dollars are loaned into existence, and many have been created to prop up the banks and the economy. You cannot fight a debt crisis with never-ending bailouts and currency creation. That’s like fighting fire with gasoline.

A monumental change is coming, and for most Americans, it will be painful—especially for the unprepared.


* http://usawatchdog.com/dollar-and-america-on-the-road-to-ruin
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  #2  
Old 19-02-2012, 03:03 PM
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Old 19-02-2012, 03:11 PM
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Japan slowly wakes up to doomsday debt risk

Feb 18, 2012

Tokyo: Capital flight, soaring borrowing costs, tanking currency and stocks and a central bank forced to pump vast amounts of cash into local banks — that is what Japan may have to contend with if it fails to tackle its snowballing debt.

Not long ago such doomsday scenarios would be dismissed in Tokyo as fantasies of ill-informed foreigners sitting on loss-making bets “shorting Japan”.

Today this is what is on bureaucrats’ minds in Japan’s centre of political and economic power.

“It’s scary when you think what could happen if there’s triple-selling of bonds, stocks and the yen. The chance of this happening is bigger than markets think,” says a senior official.

cont

http://www.firstpost.com/fwire/japan...sk-217763.html
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Old 19-02-2012, 03:15 PM
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February 19, 2012
More and More Koreans Locked in Debt Cycle

The number of indebted people is increasing across all age groups in Korea, from young couples struggling to start their own family and people with mortgages to middle-aged parents burdened with exorbitant education costs for their children and even elderly people with little money for their later life.

The most worrying aspect is that thousands of middle-aged people in the prime of their professional careers are struggling under mountains of debt.

cont

http://english.chosun.com/site/data/...021800387.html
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Old 19-02-2012, 03:19 PM
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China Cuts Bank Reserve Reqs; Exports ’Grim’


By Bloomberg News - Feb 19, 2012 12:13 AM GMT+0800

China cut the amount of cash that banks must set aside as reserves for the second time in three months to spur lending as Europe’s debt crisis curbs exports and the housing market cools.

Reserve ratios will fall 50 basis points, effective Feb. 24, the People’s Bank of China said on its website yesterday evening. The level for the nation’s largest lenders will decline to 20.5 percent, based on previous statements.

China follows Japan in expanding monetary easing even as global equity markets are buoyed by signs of strength in the U.S. economy and optimism that Europe’s fiscal crisis will be contained. Governor Zhou Xiaochuan’s officials moved on the same day that a report showed home prices slid in most of the nation’s biggest cities in January.

“Chinese policy makers are very much concerned about a possible deeper slowdown in domestic growth,” said Yao Wei, a Hong Kong-based economist with Societe Generale SA.

cont

http://www.bloomberg.com/news/2012-0...ns-growth.html
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