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artu
Promising
Undefeatable Hero
My BS sensor is tingling again
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posted June 29, 2016 11:32 AM |
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Salamandre said:
artu said:
If you think Trump and his political circle, where he's coming from will bring peaceful foreign politics to the US, you don't know much
I don't have your crystal ball, indeed. All I can, at my modest level, is to read what he is saying, now.
That's also what I'm doing. What I read is not much different from "weapons of mass destruction." Trump won't significantly change anything about traditional politics of the conservative wing of the U.S., he'll just be more extreme and populist about the backfiring results such as immigrants. There is not a single thing that indicates he will be different, if different does not mean potentially even more radical on foreign politics because of his obvious populism and chauvinism.
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Are you pretty? This is my occasion. - Ghost
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Ebonheart
Famous Hero
Rush the rush
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posted June 29, 2016 11:37 AM |
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Sigh. Please, end this blasted topic. All we do is pulling knifes between the ribs.
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Minion
Legendary Hero
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posted June 29, 2016 11:43 AM |
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Cheer up mr doom and gloom. 
Besides Sal hasn't even attacked me personally yet. Shouldn't be long tho 
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"These friends probably started using condoms after having produced the most optimum amount of offsprings. Kudos to them for showing at least some restraint" - Tsar-ivor
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Ebonheart
Famous Hero
Rush the rush
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posted June 29, 2016 11:44 AM |
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Minion said:
Cheer up mr doom and gloom.
Besides Sal hasn't even attacked me personally yet. Shouldn't be long tho
Hard to cheer up when you realise millions are going to default.
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JollyJoker
Honorable
Undefeatable Hero
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posted June 29, 2016 11:49 AM |
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Look, DEBT as such is actually no problem whaisoever in today's economies, because it has always been debt that creates growth.
Simply spoken, if you wanted to keep debts LOW you'd have a high interest rate, because interest rate is the obstacle for making debts. High interest rates also means, people are well advised to save their money.
Now, people SAVING their money means, that they don't spend it - this entails the risk of deflation: prices are decreased in order to get things sold, which is something we actually are at risk of; people want things to get CHEAP, because they also want A LOT.
If the interest rate is LOW - and it has been consistently lowered over the last decades - then saving doesn't gain. Instead, it makes more sense to go into debt which is good for investing money. However, here the problem is INFLATION. Prices RISE, everything gets more expensive - which in itself makes repaying debt easy enough.
The problem here is to CONTROL the brew, to keep in check, so that inflation doesn't skyrocket (like in Brazil) which is just too destructive a process.
So A CERTAIN AMOUNT of debt is actually necessary: surplus money MUST be lend to be invested, otherwise surplus money is just worthless paper (or a stock of gold).
Say you have an interest rate of 0.2% and a debt of 1 trillion with an annual clearance of 1%. That means, you have to repay 10 billion each year - plus .2% Intereset rate which is just a meagre further 2 billion, so your payment is 12 billion.
With a tax income and budget of 100 billion you can now simply take a new debt of 12 billion, raising your debt only by 2 billion, which is marginal.
However - if you have a 5% interest rate, your interest isn't 2 billion, but 50 billion, and if you have to pay half your budget as interest rate you have a problem.
In reality, the OLD, but much lower debts, have of course a much higher intetest rate, but new debts will come with extremely low ones.
As I wrote in another post, the ECB has a NEGATIVE interest rate for deposits of other banks - which is why some banks offer towns and communities debts with slightly negative interest rates. ECBs is at -.4%, and some towns in Germany now could secure debts with an interest rate of -.16% - they will repay LESS than they actually leased.
So DEBT isn't doom or anything, but something like an engine, that mist not run too many rounds per minute.
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Salamandre
Admirable
Omnipresent Hero
Wog refugee
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posted June 29, 2016 11:56 AM |
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Minion said:
Cheer up mr doom and gloom. Besides Sal hasn't even attacked me personally yet. Shouldn't be long tho
But thats your style, not mine.
Beside, I don't much care about Trump. If I was american I would feel like cursed, for having such candidates as him or Hillary. But I care when "the righteous" are insulting the people based on their votes, while themselves support way more harmful leaders, and living in denial and blindness.
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Era II mods and utilities
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Ebonheart
Famous Hero
Rush the rush
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posted June 29, 2016 11:57 AM |
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JollyJoker said:
So DEBT isn't doom or anything, but something like an engine, that mist not run too many rounds per minute.
/Sigh. Here you go Jollyjoker, please watch this: https://www.youtube.com/watch?v=PHe0bXAIuk0
And pay attention to 14.00 and forward.
My point is: If the amount of credit is handled with care, the economic ups and downs won't be so extreme. But in our case, we have taken the levels beyond the limit of the sky. Which means you are about to enjoy a free fall tour into concrete.
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Minion
Legendary Hero
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posted June 29, 2016 12:12 PM |
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Edited by Minion at 12:25, 29 Jun 2016.
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After eight Benghazi investigations have cleared Hillary Clinton of wrongdoing, the final report has come in. People of America should hold the Republican congress accountable for spending 7 million dollars in tax payer money to the rigged Benghazi investigations. The Committee’s chief goal was to politicize the deaths of four Americans in order to try to attack the Obama administration and hurt Hillary Clinton’s campaign. They said it on camera themselves. That is just wrong on many levels.
Eight investigations. 4 years wasted. Millions of dollars spent. Corrupt Republican held Congress needs to go.
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"These friends probably started using condoms after having produced the most optimum amount of offsprings. Kudos to them for showing at least some restraint" - Tsar-ivor
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JollyJoker
Honorable
Undefeatable Hero
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posted June 29, 2016 12:38 PM |
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Ebonheart said:
JollyJoker said:
So DEBT isn't doom or anything, but something like an engine, that mist not run too many rounds per minute.
/Sigh. Here you go Jollyjoker, please watch this: https://www.youtube.com/watch?v=PHe0bXAIuk0
And pay attention to 14.00 and forward.
My point is: If the amount of credit is handled with care, the economic ups and downs won't be so extreme. But in our case, we have taken the levels beyond the limit of the sky. Which means you are about to enjoy a free fall tour into concrete.
I did watch it, and it's half an hour well spent. However, if you watched things to the end, then you know what the key is, and the key is not the amount of debt as such, but keeping a balance of debt, productivity and Inflation.
There is also the part missing where GOVERNMENT debt is explained, because government debts work differently.
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Zenofex
Responsible
Legendary Hero
Kreegan-atheist
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posted June 29, 2016 01:02 PM |
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JollyJoker said:
Zenofex said:
Frankly I see Trump as the safer option on that point.
Right, because Trump will only go on a crusade to kill terrorists's families, while Hillary will lead the US into a war with Russia?
Do you think, in these times the American voters would react kindly to Hillary saying, "sorry, people, but if Russia decides to support an independence movement in one of the former republics of the USSR, then this isn't worth to risk the next world war over; we simply cannot rattle with the sabre, because we don't have one that would be large enough. The only thing we can do is showing Putin that we do care and react in certain ways (Russia has been hit hard by the cheap oil price - do you think that's happenstance? Russian athletes barred from the Olympics?)"?
OF COURSE she has to show some muscles in these times, demonstrating to everyone that she will be no pushover. That doesn't mean she'll fall back to Cold War tactics.
Actually many of these Cold War tactics are already being used by both Russia and the US, where have you been sleeping for the past two years? Tension between them has never been that high since the collapse of the USSR and there are no signs of improvement. You seriously think that any of the US voters - excluding some emigrants from the former Eastern Bloc - gives a rat's arse about some bankrupt, corrupt, almost failed state thousands of kilometers away, which among other things has chauvinistic government that drives it further and further way from anything resembling democracy? Ukraine is no vote-gathering material, playing tough against Russia is and that's where the whole danger is. Trump might be an obnoxious cretin but he doesn't use the "Russian monster" scarecrow. Ultimately however, like I already said, both candidates are terrible and should be boycotted.
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Ebonheart
Famous Hero
Rush the rush
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posted June 29, 2016 01:04 PM |
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JollyJoker said:
I did watch it, and it's half an hour well spent. However, if you watched things to the end, then you know what the key is, and the key is not the amount of debt as such, but keeping a balance of debt, productivity and Inflation.
There is also the part missing where GOVERNMENT debt is explained, because government debts work differently.
Glad you liked it, and yes the balance is the key. However that is what I am getting worked up about, for the longer one allows the bubble to blow up, the harder it will be to balance later. We also don't fully know what will happen this time when most money is in the form of digits (air).
I know the government debt is different, but at least in my country's case, Sweden, it's the private debts that are high and thus the situation becomes more complicated to solve.
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JollyJoker
Honorable
Undefeatable Hero
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posted June 29, 2016 01:33 PM |
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Ebonheart said:
JollyJoker said:
I did watch it, and it's half an hour well spent. However, if you watched things to the end, then you know what the key is, and the key is not the amount of debt as such, but keeping a balance of debt, productivity and Inflation.
There is also the part missing where GOVERNMENT debt is explained, because government debts work differently.
Glad you liked it, and yes the balance is the key. However that is what I am getting worked up about, for the longer one allows the bubble to blow up, the harder it will be to balance later. We also don't fully know what will happen this time when most money is in the form of digits (air).
I know the government debt is different, but at least in my country's case, Sweden, it's the private debts that are high and thus the situation becomes more complicated to solve.
Well, while I like the video, it's also very simplistic, and it doesn't mean I'm in agreement with everything.
The biggest flaw is, that there isn't any automatism.
I mean, we can easily destroy everything by simply stopping to buy consumer goods. This would lead to a lot of people going broke which in turn would decrease productivity reducing the amount of transactions (this would lead to a decrease of prices there). Or we might decide to avoid eateries and cook live vegan, killing a lot of businesses.
The economy depends on SPENDING money, because spent money is earned money. That is the alpha and the omega. "Debts" is spending money that not the spender earned, but someone else and because that money has been earned already by someone else it MUST be spent otherwise it's lost for the economy. I mean, that's actually the reason why capitalism is now working better than 100 years ago - the rich were just rich and didn't spend enough money for others to earn. As Dean Musk said, you start by making a few high-price items for the richs to get the money to mass-produce the afordable.
It has a lot to do with TRUST as well. As long as people think everything is great - it is.
I wouldn't mind high government debt at all. In Germany we have a debt of roundabout 2 billion Euros now - however, the richest 10 % own over SIX billion - so what?
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Ebonheart
Famous Hero
Rush the rush
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posted June 29, 2016 01:55 PM |
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Indeed you are right, the video is just taking care of the basics. And you are also right that spending drives the economy.
However, when the debts pass a certain point they must stop or the fall becomes too severe.
You also point on the foundation of it all - trust. When trust can take the economy this far in terms of good time levels, mistrust can do just the opposite. That is what I fear will happen.
In the case of your Germany debt example, I am not all that read up on how Germany looks like in terms of debts and assets.
But I want to point out a very typical misstake a lot of people make when they talk about debt to assets. I'll use Sweden as an example.
We have about 5000 billion kronor in government debt + private debts.
We have assets worth 12000 billion kronor.
Sounds swell does it not? Just 12000-5000 = 7000, voila! No problemo!
Alas, it does not work like that simple mathematic example. There are several key differences in the real world and those key differences changes everything.
The first problem is actual value : The schematic for the assets was made using the top notch values. This means that the reports may say that the assets are worth 12000 billion kronor, but in bad times and when it truly matters, they might only be worth half of that, or even less.
Second problem is multisellers: A country seldomly crashes alone. This means that one country selling off assets won't be the only country to do so. This will lower the value because the market gets flooded. It also means there might be less buyers because everyone is trying to lick their own wounds.
Next point is time: Sure we may have 12000 billion kronor worth of assets, but how fast can those actually be sold off? Big business and trading is not done in one day and the more assets it regards, the longer the process. During the time period this is done, things can change and during bad times, change fast. The money might be needed almost instantly.
Last point is effects: 12000 billion kronor in assets means something. It means that they are connected to the country, and if one is to sell them off then bravo, the debts are gone - now what? It is easy to say "oh we just sell X asset" without thinking, what will happen to eg Y town without X asset? Selling off the assets might solve one problem, but at the same time creature two more problems somewhere else.
You mentioned that the rich own a lot. But perhaps you should give it a second thought, why would they want to pay or allow to be drained because of someone else messing up? They are likely to have their money moved in a flash or move out before the crash is even happening or because of higher taxes, like for example in France.
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JollyJoker
Honorable
Undefeatable Hero
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posted June 29, 2016 02:30 PM |
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Countries don't "crash" - they just make a currency reform. Basically, if they cannot pay their clearance and interest anymore - like it happened in Greece - if they have their own currency, they can declare everything null and void and restart.
Avoiding that, they may sell government-owned real estate or sell licenses and so on. (Greece would have to leave the EU and go back to Drachme again.)
Now, the bad thing here is, that while this works for the country in question (since the dawn of time), it doesn't work for the international banks that did lend the money - they would simply have lost it (a regular occurence in earlier times), which is a bad thing for those banks (and could lead to a withdrawal frenzy for that bank, resulting in a breakdown and even a chain reaction.
For a country like the US that won't happen, though, because they can always make use of the printing press, like they did 2009, and simply keep banks from breaking down. The higher up in the foodchain an entity is - private person, company, country - the less likely a breakdown is, simply because it would initiate a chain reaction: if a market like the USA crashes - everything else comes toppling down as well.
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Ebonheart
Famous Hero
Rush the rush
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posted June 29, 2016 02:45 PM |
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I am really sorry Jolly but you jolly left me speachless, and not in the convinced way. In fact I feel so drained I am not even able to do a facepalm.
I wish you the best of luck in the future and pray you won't be burned by this crash, that is all I can truly say.
Sal, be my guest and carry on, but I am out. I just grow sad seeing all this.
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Salamandre
Admirable
Omnipresent Hero
Wog refugee
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posted June 29, 2016 03:40 PM |
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I know nothing about bucks and economy, so won't start an argue.
However Greece problems are in first place dues to corruption and people not paying their taxes. Then Europe kept Greece under perfusion, which means working people pay taxes to "help" other people who don't want to pay taxes. Thus I am not sure Greece would have survived if EU officials didn't literally steal from their citizens to give away, without any guaranty of return. Some of french ministers and EU officials even proposed to partially erase Greece bills.
This is why, if all Greece has to do is declare anything null and restart to make it again, we can understand the growing discontent of EU citizens toward EU officials doubtful practices, because that means everyone is giving away for ever its hard worked income. And for what as result?
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JollyJoker
Honorable
Undefeatable Hero
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posted June 29, 2016 03:57 PM |
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It's pretty easy, actually.
Greece (as well as Italy, mind you) have their debts with international banks. If they had abandoned Greece, they would have left the EU (A), declared state bankruptcy (B), banned the Euro (C), and reintroduced the Drachme (D).
In this case the money would have been lost COMPLETELY for the banks in question - which would have been very bad for them. If big banks have big losses - for example, the German Commerzbank has a lot of Greek bonds -, people lose trust, withdraw their money from the banks, maybe eliminating one, causing a panic, a drop of the Euro and FEAR. IF a big bank goes bankrupt, MORE people lose their money - all the people who have money deposited there - a chain reaction becomes likely. A crisis IS always the result of a chain reaction: if you declare your personal bankruptcy - no problem. The bigger the fish, though, the more likely a chain starts.
That's why the other big fish don't drop one of their own (and insurance comnpanies have an insurance company as well), because they understand this NOW (as opposed to 1929). The politic part is to negotiate the conditions. Generally spoken, Greece could be quite sure they would be saved - the question was, how high would the cost be for them.
There is absolutely no reason whatsoever for discontent.
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Ebonheart
Famous Hero
Rush the rush
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posted June 29, 2016 04:14 PM |
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JollyJoker said:
There is absolutely no reason whatsoever for discontent.
https://youtu.be/R7dG9UlzeFM?t=196
And with those words I sneak away and into the H3 forums.
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JollyJoker
Honorable
Undefeatable Hero
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posted June 29, 2016 04:22 PM |
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artu
Promising
Undefeatable Hero
My BS sensor is tingling again
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posted June 29, 2016 04:37 PM |
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So, who's gonna raise this one with a black hole...
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Are you pretty? This is my occasion. - Ghost
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