Potential Big GFC Discussion Thread

[Resurrection]

Not GFC1 or GFC2. We are heading for a depression. Don't worry about house prices. Worry about putting food on the table people!

EDIT: Farnsworth title change - less Y2K'ish

[XRGhia]

For real, or just want the attention?


Until there's proof, I call ********

[Resurrection]

Originally Posted by xrghiawagon

For real, or just want the attention?


Until there's proof, I call ********

For real junior.

[JC]

Originally Posted by xrghiawagon

For real, or just want the attention?


Until there's proof, I call ********

Could be for real. American economy is fragile (and that's being kind), and while we are a fair way away geographically, we rely on the US for a lot (all those crate engines to power the "Australian" car, for example) - but seriously, the US economy the way it is can't last, and the impact will be felt around this globe of ours.

So....shop at Aldi, Coles, Woolies, the local butcher, or wherever is cheapest!

[fmc351]

Cash can be worthless in a DEPRESSION. Havent you seen the photos of Germans during the Great Depression walking around pushing a wheelbarrow full of money, and not enough to buy a loaf of bread. There were other reasons why German money was so worthless, but it was a large part the Depression that did it.

Guns and ammo is where its at. Im only half joking. Oh, and baked beans lots of canned goods like baked beans.

Originally Posted by JC

Could be for real. American economy is fragile (and that's being kind), and while we are a fair way away geographically, we rely on the US for a lot (all those crate engines to power the "Australian" car, for example) - but seriously, the US economy the way it is can't last, and the impact will be felt around this globe of ours.

So....shop at Aldi, Coles, Woolies, the local butcher, or wherever is cheapest!

Seriously, their Debt to GDP ratio is no worse than ours. Sure its high, but sustainable, the rest is just politicians staking a claim to their jobs and using the fear of doom and gloom to get there. All this talk about depression and recession is what will do us in, consumer confidence is dodgey enough now, if we keep it up it will become a self fulfilling prophesy.

Originally Posted by Spudz27

...christ countries like pakistan get handouts, why?.

Well theres humanitarian reasons but if they dont float your boat, then theres it being in our best interests given its a hotbed for extremists and they have a nuke. Its cheaper than another war we cant win.

Originally Posted by Scott

The country at the greatest risk [direct exposure] of the US failing is China, then there is China's worrying inflation and seemingly growing stock of empty commercial premises.

The US is a big buyer of Chinese exports, as is the rest of the world and there would be no hiding from a Chinese fart at the moment.

The problem that faces the troubled economies (which realistically is most of them) is that the biggest numbers in the Euro Zone, US and Japan are all in a lot more trouble than they can hope to fix without epic change.

China has one thing up its sleeve, its barely brought 10% of its population into the economy. Without trade to the US it will suffer and obviously we will too, but it can turn its attention to growing its economy within its borders and sustain a growing economy. Instead of the record growth it has now in terms of GDP, it could reflect a more normal level of growth of say 3% by focusing on internal growth. Make good use of all that empty building space too. Maybe, just maybe they know what they are doing.

[Scott]

Originally Posted by fmc351

Maybe, just maybe they know what they are doing.

That I have no doubt of.

[trippytaka]

NZ futures open 2% lower... a crystal bakll into the fate of the markets, as NZ is the first market to open

http://www.abc.net.au/news/2011-08-0...rading/2828800

The New Zealand stock market opened more than 2 per cent lower and the US futures index plunged this morning as investors reacted to the global financial turmoil.

Futures trading for the Dow Jones Industrial Average, the S&P 500 and the Nasdaq all fell more than 2.5 per cent this morning after Standard and Poor's decision to downgrade the US's credit rating.

The fall suggests some sharp losses when the physical market opens in the US tonight (Australian time).

In Australian futures trading, the ASX Share Price Index 200 is down five points to 4,045, indicating losses of just 0.1 per cent when the Australian market opens this morning.

Twin debt crises in Europe and the United States are causing global market turmoil and stoking fears of the rich world sliding back into recession.

[JC]

How many 1/4s of negative growth does it take to make a depression? I remember years ago Keating saying it was the "recession we had to have" - so what's the difference between a recession and a depression (or is it just the words???).

[FGII-XR6]

Originally Posted by JC

How many 1/4s of negative growth does it take to make a depression? I remember years ago Keating saying it was the "recession we had to have" - so what's the difference between a recession and a depression (or is it just the words???).

one common methed used by the US to determine a depression is
"(1) a decline in real GDP exceeding 10%, or (2) a recession lasting 2 or more years"

[Road_Warrior]

Originally Posted by au3xr6

one common methed used by the US to determine a depression is
"(1) a decline in real GDP exceeding 10%, or (2) a recession lasting 2 or more years"

Australia uses different criteria to gauge the presence of a recession.

[Road_Warrior]

Also, I don't think we are in for a depression, but a global recession as strong as or a bit worse than 2008 because of the level of sovereign debt in the euro zone and the US which is causing problems. Governments this time around (including Australia) do not have access to the same amount of cash to throw around for stimulus packages to stave off the worst effects of a recession. So the next 6 months are going to be interesting.

Certainly consumer spending is subdued at the moment and there is a general reluctance amongst consumers to enter into more (material) debt, but unfortunately the damage has already been done and wasn't fully dealt with during the GFC. Economic crises in Europe and the US will of course have a flow on effect to China whose economy depends on providing consumer goods to the western world. With shriveled demand for consumer goods, the Chinese will fall on hard times as well which in turn may (emphasis on the word may) impact on Australia's resources sector, a prime mover of our economy.

[FGII-XR6]

Originally Posted by Road_Warrior

Australia uses different criteria to gauge the presence of a recession.

read again, it says depression not recession

[Dr Jekkyl]

Did anybody seriously believe that the economic climate of the 90's-00's could continue forever?

Unfortunately many people were coerced into believing that this was the case and made their financial plans (or made plans for others via managed investments) accordingly.

Perhaps this is the real beginning of a 'Global Financial Correction'?

[mr smith]

Holding onto your wealth and paying of debt (especially as most asset classes are going backwards) shoud be the game. I like cash and have had all my super (no losses) and investments in cash for the last 3 years.
Lots of friends and advisors suggested this was foolish and I was at risk of missing out on big gains when the market turns, well that seems to have happened, only it has turned down.
There is no GFC 2, GFC 1 hasnt finished yet. Artificial stimulus hasnt worked and has only driven most countries (and people) into more debt.

[V8 6I]

Originally Posted by JC

How many 1/4s of negative growth does it take to make a depression? I remember years ago Keating saying it was the "recession we had to have" - so what's the difference between a recession and a depression (or is it just the words???).

A recession is when your neighbor losses his job a depression is when you loose yours.

[Scott]

It's pretty ordinary that's for sure. Could be worse though...

[Spudz27]

My issue is countries borrowing money to give to countries that can't afford to pay it back. As harsh as it sounds, at the very least halve the money given out to 3rd world countries, christ countries like pakistan get handouts, why?. There is going to be a big shift in the world, china and india are about to become number one. To be honest the U.S have no one else to blame but themselves, it is sad that their inability to control their finances etc can cause grief for so many around the world. The same applies in the euro zone, what **** wit gives a country loan after loan and never bothers to check if said country can repay the debt. I am not sure australia will be massively affected due to our mining industry and china being the main player.

[Scott]

Originally Posted by Spudz27

I am not sure australia will be massively affected due to our mining industry and china being the main player.

The country at the greatest risk [direct exposure] of the US failing is China, then there is China's worrying inflation and seemingly growing stock of empty commercial premises.

The US is a big buyer of Chinese exports, as is the rest of the world and there would be no hiding from a Chinese fart at the moment.

The problem that faces the troubled economies (which realistically is most of them) is that the biggest numbers in the Euro Zone, US and Japan are all in a lot more trouble than they can hope to fix without epic change.

[Falc'man]

By design.

[Bobman]

Future isn't very bright - yet whenever you say that to people, they say you're just being negative and it doesn't affect them.

Well, the 1990s was most definitely the best recent decade as life was great then.

[Professor Farnsworth]

Originally Posted by Bobman

Future isn't very bright - yet whenever you say that to people, they say you're just being negative and it doesn't affect them.

Well, the 1990s was most definitely the best recent decade as life was great then.

sums it up nicely really. I've been watching the decline for quite a long time now and i can say those who are 'only' tipping a recession may be in for a shock. Depression is the more likely outcome here. Also those implying that cash is the way to go, i'd disagree there too. Gold and silver would be my choice. Cash is rather worthless when countries are forced to devalue their currencies overnight. There won't be any warning for it either. You won't be seeing treasurers globally giving news conferences announcing the depression to start may 1st 2012 etc. You will know on the morning news that it has happened already.

EDIT: i will say though the severity of the 'recession' will depend on how the US acts, as at the moment they've purely raised the debt ceiling and selected a committee to make 'hard decisions' on how to cut costs. There are bad and slightly less bad ways for it all to happen.

[dave289]

There is a hell of a lot riding on whats happens to the us stock market overnight. We will know by 6.00 am tommorow morning .

This is I believe the first time the US has had their credit rating downgraded (but I dont know this as fact ) and come midnight tonight we will see how their markets take to this .

If the US markets get a major thumping overnight ,which is looking highly possible , it could make fridays loses look measley , there is a lot more riding on what happens tonight that ever before .

Conclusion : not looking good.

[crakrz]

Originally Posted by Resurrection

Not GFC1 or GFC2. We are heading for a depression. Don't worry about house prices. Worry about putting food on the table people!

Geez bloke, keep ya chin up.

[Yellow_Festiva]

Serious question. If there is a depression where is the best place to keep your cash? In your loan, under your mattress or if you had loans that could be paid off should you to get full ownership?

[Scott]

Originally Posted by Yellow_Festiva

Serious question. If there is a depression where is the best place to keep your cash? In your loan, under your mattress or if you had loans that could be paid off should you to get full ownership?

In my opinion, cash is king right now.

[|||]

economic downtowns can be a great time for investing if you're well prepared. the first great depression created some of the wealthiest people of all time

[mcnews]

People talking up depression and the negative everything attitude that Abbott and his minions are talking about will be the main thing that drives this country into recession, they will take us into one even if we shouldn't be in one with their scare tactics. They don't care, only power is important to them, same as all modern day politicians, it is not about what is good for the country, only what is good for them.

[ltd]

Originally Posted by mcnews

People talking up depression and the negative everything attitude that Abbott and his minions are talking about will be the main thing that drives this country into recession, they will take us into one even if we shouldn't be in one with their scare tactics. They don't care, only power is important to them, same as all modern day politicians, it is not about what is good for the country, only what is good for them.

So what you're saying is Tony Abbott spent the 20 billion surplus, borrowed over 250 billion from China to waste on stupid projects like pink batts, BER, NBN and other non necessities? So it's also Abbott threatening the only booming part of our economy with a new resources rent tax, and scaring the populace with an all encompassing consumption tax?

Hmm. I thought the idiots in power now who pork barrelled and made deals with anyone desperate to cling to power were responsible. I suppose we've found one of the 26% of Aussies who would vote for more of the same waste, mismanagement, erosion of rights; standard of living and lies.

[G6E Turbo 2]

Originally Posted by mcnews

People talking up depression and the negative everything attitude that Abbott and his minions are talking about will be the main thing that drives this country into recession, they will take us into one even if we shouldn't be in one with their scare tactics. They don't care, only power is important to them, same as all modern day politicians, it is not about what is good for the country, only what is good for them.

That is THE most truthful sensible thing written herein

[302 XC]

Originally Posted by |||

economic downtowns can be a great time for investing if you're well prepared. the first great depression created some of the wealthiest people of all time

The main issue is , those who have the cash will weather the storm
Or
Those who can afford to have their cash in stocks/shares and again sit it out
But, too many are worried about this, hence the sell,sell,sell of shares
There was alot of people who had alot tied up in shares,in the GFC
The companies went broke and the shares dissapeared

If i had loans that had money owing, id be looking at ways to own the debt

But, people need to chill a bit and dont panic

If your in huge debt, well whos fault is that ???
Yours