i said the dollar would crash when it was no longer the currency of last resort (the safe haven). it's not in danger anytime soon IMO.
we're the last and ugliest domino to fall.
OT: Brexit
- Thread starter Soda Popinski
- Start date
i said the dollar would crash when it was no longer the currency of last resort (the safe haven). it's not in danger anytime soon IMO.
we're the last and ugliest domino to fall.
If the EU/Euro fails, it will be replaced by individual nation currencies again. Welcome back the German Mark, The French Frank etc.
If anything, the dollar will strengthen during this period of uncertainty.
If anything, the dollar will strengthen during this period of uncertainty.
Now I agree with you here. If the EU falls and countries start bailing, we will have a major crisis. I just don't see this happening any time soon. I think the EU is way more likely to force countries out (if need be) and reform the system before Germany, France bail.
This was exponentially easier for the UK than it would be for any other country because they don't have to worry about reissuing currency. They have always had their own monetary policy anyway.
We will see. If you're into that, i'd bet on the us dollar in the short to medium term, oil gold and silver in the long term. if you're a smaller fish i'd just get out of debt sooner vs later. but what do i know?
If one twists their perspective slightly, one could argue that Germany is the EU. They conquered Europe after all. (via economics) The UK just won their independence. All without a bullet fired.
Asking for discussion, because I thought it was something else last go around?
Housing market bubble busts, defaults on (over-valued) mortgages happen, banks/investment firms close. I thought that was the recipe for the last big downturn. AIG is saved so investors at Goldman Sachs can get their money. Bear Stearns is fire-sale "saved" so that JPMorgan Chase could have their office building on Madison Ave. I had heard/read that shorting gold/silver at the absolute worst time was the last nail in Bear Stearns coffin. Others are left to burn-to-the-ground.
Fast forward to now. We're gonna be going into the downside of the real estate cycle. Oil has been in the $40 to $50 range (energy sector).The interest rates are already low (no wrench for the fed to turn). We really need our economy to keep churning at this point in time (independent of stock market volatility).
So "shit's bad because of foreigners and liberals" basically?
There are a ton of legitimate issues right now with a collapsing middle class, immigration, political corruption, but I can promise you that increasing isolationism and nationalism is not the answer in an increasingly connected and interdependent global economy.
We papered over a problem. We've been papering it over for years. You could go back as far as 1981-82 when we decided to start lowering interest rates and reagan loosened the regulations on the banks and basically started a quiet economic war with the soviet union that caused the eventual fall of an empire. that loosening of banking regulations along with several others (glass steagal comes to mind) eventually culminated in 2007/2008's crash.
our economic problems run so deep and has so many facets that you could write a book and not cover 1/3 of it.
heck, here's the rough deregulation timeline just for reference and because i can. it's not the whole problem but it's there just because :
http://cepr.net/documents/publications/dereg-timeline-2009-07.pdf (pages 2-4)
we've used lower interest rates (which is virtually identical in function if not format) to printing money for 35 years to paper over problems. there's a lot of buried crap in there.
in the end, when you paper over a problem, all you basically did was punt it down the road. you can sit there and ask which mechanics are going to set off the next crash but nobody really knows. brexit merely big enough that i thought it was worth pointing out the obvious.
and it should be said -- trust me, the fed isn't out of bullets. it cna't run out of bullets by definition -- all they have to do is print (or use negative interest rates which is the same damn thing with a different mechanism). things just get progressively uglier the more of them they use.
UK didn't win their "independence"... Mire like estrangement. They were still a sovereign nation as a part of the EU.
Nice link, I'll have to go back and read it again, quite a bit to read. And yes, I agree, the last crash didn't just happen because of what happened the day before. Could Brexit and ensuing negative results start a chain reaction (or continue it, depending on perspective), yes.
The day foreign entities quit investing in US securities, is the day the fed runs out of bullets.
That depends on your perspective.. they were of course their own country, but they also had to abide by EU laws, so they were not exactly completely sovereign.. it is semantics, but this was a good thing for them.
The real problem here and in the world is that wages are stagnant - lots of reasons for this and it all is not because some wealthy person is putting the screws to employees. So how do you have inflation without growing wages - the answer is you do not.
Housing is just the most visible area that people can see. They say house prices are too high yet no one seems to care that proportionately rental rates are even higher. So what does the Federal reserve do ? They buy 4.5 trillion dollars in mortgage backed securities to drive rate down to spur housing and it works. If they need to spur housing again they will just turn on the presses and buy more MBS and drive then even lower into the 2's
This is not a US problem - heck japan has a 100 year mortgage -The Federal Reserve will not let house prices go down again - the only unknown is the stupid regulators put in place by political forces they could kill housing and the economy again if left unchecked
The big growth in housing prices continues to be fuelled by foreign investment, mainly the Chinese. It is foreign investors that are driving real estate and rental prices higher.
Globalism isn't working...it's just redistributing money to rich people and poor countries at our expense.
Chinese are buying luxury real estate - at least on the coasts and basically using it as an escape hatch from china - their pollution and bad education system. The real buyers who own millions of homes are the REIT's like blackstone - If they ever dumped their homes took the money on table and stopped playing prices would go down. They are not as prone to panic however as individual investors so they would trickle their assets into the market place not to create downward pressure. Rental pressure is being driven by demand pure and simple and that construction is delayed due to lack of workers willing to do that work. It is estimated that 40% of the national housing stock is tied up in REIT, Limited equity or in mortgages with rates so low they cannot leave or would be hard pressed to leave. Basically almost half the real estate is not normal today
i disagree that you can't have inflation without wage growth. that assumes that all currencies cannot go down at once against physical assets -- which has pretty much been the case for a very long time now. it also assumes that there hasn't been market manipulation to keep down commodities by central banks and government entities since well... forever. there's a lot of other assumptions in there, but i'll throw some stats out to make my point and leave it at that.
compare to the year 2000. that's 16 years so not exactly overnight.
median income 2000 : 42000 and change
median income 2015 : 51,939 (call it 52)
so wages went up... 23% in 15 years. care to bet how much commodities have gone up since then (hint: much, much much more and that's well off their highs). sure there's a little growth... but in comparison? not much -- admittedly some, but not much -- which only highlights that it's VERY possible to have inflation without wage growth.
and you know food prices in stores sure as heck haven't gone up only 23% in that time -- and that's the most important purchases for most people.
it's never as simple as people want to make you think.
I think a big part of this is also from 'Globalism'. A little over a year ago, I took a trip to south east asia. I spent some of my time there really observing the differences in the ways people lived as compared to the US. I also took note of the prices, and what I found was interesting, at least to me.
For electronics (or other imports, ie. camera's, phones, computers, etc) Prices were the same as here. The prices I compared were almost exact after one did the exchange rate calculations.
So people in SE Asia are paying the equivalent of $600, (or one months wages) for new high end smart phones. (they don't have the subsidized 2 year contract model) This would be like spending 2 grand on a cell phone for us here.
So the big disparity of course is in the cost of labor.
Back to your analysis, when the cost of goods and services rise, or are inflated at a rate faster than wages, to me, it seems to be moving more toward an equilibrium with some of the rest of the world.
Some other differences I noticed was not the cost of real estate, but how it was utilized. It is not uncommon to have 4-7 people living in the same space that here in the US would be occupied by 1-3 persons. This effectively reduces their individual housing cost.
Transportation, mostly by small cc motorbikes, but also small cars, that are much cheaper (and also lack airbags, anti lock brakes, and other safety features). Bicycles, rickshaws, and other inexpensive transportation.
Markets, food is equally if not a tad more expensive than here.
So my best guess is while developing nations are seeing double digit growth, developed nations are actually seeing a contraction in their economies.
This contraction is being disguised by low interest rates and inflation so as to do everything possible to avoid the appearance of deflation.
I've always thought one of the greatest weaknesses of the EU is the fact that 28 countries control their own Fiscal Policy and the ECB controls Monetary Policy with no ability to control taxation. The Brits are somewhat insulated from that since they maintained the Pound. I'm a history nut, so I also think the entire concept of the EU, while noble and good intentioned, blatantly turns a blind eye to the litterally thousands of years of animosity between the different cultures and geographic regions of Europe. It dates from the fall of Rome all the way through WWII. It's only been since WWII that the European Nations finally came together and decided to stop killing each other over crowns and titles (obviously a drastic oversimplification of history, but it gets to the point). I don't think you cover over those deep rooted cultural and historical differences in a single generation by forming an economic alliance and essentially singing Kum ba yah around a conference table. Eventually, as with Brexit, National Interests will prevail.
Again with history, the downfall of the EU will be similar to the downfall of the Articles of Confederation here in the US. While I am a conservative and very much believe in the rights of State and Local governments, I do believe without a centralized form of power, regional interests will prevail. In the EU, Brexit is just the first. Greece has been considering it since their debt bomb went off last year so it wouldn't surprise me if they follow suit. I have a feeling Italy, Spain, Germany and France will eventually leave as well, and if so the EU may cease to exist.
Short Term this is going to hurt globally. The Fed just raised rates from near zero by a 25 basis points within the past 6 months. Now they're talking about going back to near zero next month. While not guaranteed, a global economic slowdown/recession is very much a real possibility
Long term it's impossible to tell what the impact of Brexit will have in Europe and globally. If the remaining countries stay in the EU then IMO the EU will remain, to a lesser extent, a viable economic factor globally. If not... Who knows...
Again with history, the downfall of the EU will be similar to the downfall of the Articles of Confederation here in the US. While I am a conservative and very much believe in the rights of State and Local governments, I do believe without a centralized form of power, regional interests will prevail. In the EU, Brexit is just the first. Greece has been considering it since their debt bomb went off last year so it wouldn't surprise me if they follow suit. I have a feeling Italy, Spain, Germany and France will eventually leave as well, and if so the EU may cease to exist.
Short Term this is going to hurt globally. The Fed just raised rates from near zero by a 25 basis points within the past 6 months. Now they're talking about going back to near zero next month. While not guaranteed, a global economic slowdown/recession is very much a real possibility
Long term it's impossible to tell what the impact of Brexit will have in Europe and globally. If the remaining countries stay in the EU then IMO the EU will remain, to a lesser extent, a viable economic factor globally. If not... Who knows...
Several of you guys have typed some really interesting stuff and I've enjoyed reading it.
The market didn't lose 610 points as so many would like to have you believe. The Dow rose for days in advance of the vote because everyone thought it was going to pass. From June 15-23 Dow went from 17,640-18,011, and the expected "stay" vote was one of the main drivers. When it dropped from the high of 18,011 down to 17,400 it seems like a lot, but when you factor where it was before it began the rise in anticipation of the "stay" vote (17,640) then in reality it lost only 361 points. In short, no big deal, at all. Now of course things could get worse, Monday might be a blood bath, but we're pretty selfish to suggest to another country they should stay in a deal that's horrible for them and live with being in the EU, just so we Americans can avoid losing 361 points in the Dow. This was an emotion based rise and fall and it will recover soon enough. The real question is, are all the politicians paying attention now? All over the world people are telling both sides we're sick of being crapped on, do what's best for us, or we'll take matters into our own hands. That is why somebody like our presumptive GOP nominee is so dang popular, question is, are the politicians listening yet? Do they take us serious now?
The market didn't lose 610 points as so many would like to have you believe. The Dow rose for days in advance of the vote because everyone thought it was going to pass. From June 15-23 Dow went from 17,640-18,011, and the expected "stay" vote was one of the main drivers. When it dropped from the high of 18,011 down to 17,400 it seems like a lot, but when you factor where it was before it began the rise in anticipation of the "stay" vote (17,640) then in reality it lost only 361 points. In short, no big deal, at all. Now of course things could get worse, Monday might be a blood bath, but we're pretty selfish to suggest to another country they should stay in a deal that's horrible for them and live with being in the EU, just so we Americans can avoid losing 361 points in the Dow. This was an emotion based rise and fall and it will recover soon enough. The real question is, are all the politicians paying attention now? All over the world people are telling both sides we're sick of being crapped on, do what's best for us, or we'll take matters into our own hands. That is why somebody like our presumptive GOP nominee is so dang popular, question is, are the politicians listening yet? Do they take us serious now?
Well that.is reassuring. Thanks for the promise. I can also promise importing poverty won't work either. Forcing Multiculturalosm has never worked either. Strange how Multiculturalism is only forced on certain countries, no?
This is a good point. The EU did a poor job of ensuring that as a condition of membership, a country needs to keep its own fiscal house in order - or at least not let it deteriorate to a laughable degree. I believe this is one of the reasons Norway twice declined to join - because while Norway is definitely a big-government nation, it actually collects the taxes necessary to pay for its programs. It shouldn't have taken this long for the more fiscally responsible EU members to say, "Hey Greece (and a few others), if you want your people to retire at 55 or 57, that's all well and good - but YOU need to pay for it."
Yep. Love the stories comparing the rest of the world. Great stuff.
That's another thing that needs to be said -- the rest of the world wants to live like us. That means more demand for resources and generally higher prices -- which dovetails back into what snohomish said about higher wages being needed for higher prices -- it's true to a certain extent, no doubt, but it's more of an amplifier than anything else. things will go up or down independent of wages to a certain extent -- it's not the entirety of the equation.
if you don't believe me, look at oil prices. more supply crushed prices -- when things were tight, prices went up. it had something to do with wages but it wasn't the reason things went up or down.
energy prices is probably the biggest cause of inflation or deflation in the end.
speaking of that... best way (probably the only way) to get out of this economic debt malaise? cheap, abundant energy. and i'm not talking the half-ass measures the government likes to take and tout as being either pro-energy or green energy and saying you're helping the economy either.
if we had enough energy globally, this brexit issue would be a fart in the wind. as-is, it's a major, major deal.
And if you want a point of reference at how much energy I'm talking about to break things up a bit... start with the US building 300 nuclear plants. and yes, that number is correct (we currently have 99). you don't screw around because to a certain extent this isn't about profit -- it's about national interests and the power grid is a public utility.
use 25-30 of those plants to change coal to oil (it was a process used in ww2 by the germans when they didn't have enough oil -- it's an electrical reaction, all you're essentially doing is changing the state of the energy from solid to liquid). all the tech is already invented. basically you're building a trifecta of a nuclear plant, coal-to-oil plant, and refinery all in one spot. any excess power goes to the grid, the rest makes us THE oil superpower.
it's been done in south africa for about $45-50/barrel which is well within the means of most americans.
http://www.mediaclubsouthafrica.com/component/content/article?id=123:liquid-fuel-from-coal
america is the saudi arabia of coal. we could do that for 100 years and not bat an eye and between that and bakken we'd blow saudi and russia out of the water as #1 in the world in oil production within 15 years. only catch is if you drop the price so low that bakken has problems financially -- i'm the first to admit that i don't know if there is a middle ground there.
having said that -- it's all about cheap energy in the end, like it or not. and an even deeper truth of the matter is that it's more about forcing certainty into an uncertain market -- you have to have a bloody plan that will work and people have to know it will work or you'll have price spikes. that's just how the real world works.
use 25-30 of those plants to change coal to oil (it was a process used in ww2 by the germans when they didn't have enough oil -- it's an electrical reaction, all you're essentially doing is changing the state of the energy from solid to liquid). all the tech is already invented. basically you're building a trifecta of a nuclear plant, coal-to-oil plant, and refinery all in one spot. any excess power goes to the grid, the rest makes us THE oil superpower.
it's been done in south africa for about $45-50/barrel which is well within the means of most americans.
http://www.mediaclubsouthafrica.com/component/content/article?id=123:liquid-fuel-from-coal
america is the saudi arabia of coal. we could do that for 100 years and not bat an eye and between that and bakken we'd blow saudi and russia out of the water as #1 in the world in oil production within 15 years. only catch is if you drop the price so low that bakken has problems financially -- i'm the first to admit that i don't know if there is a middle ground there.
having said that -- it's all about cheap energy in the end, like it or not. and an even deeper truth of the matter is that it's more about forcing certainty into an uncertain market -- you have to have a bloody plan that will work and people have to know it will work or you'll have price spikes. that's just how the real world works.
This is a good video about the bureaucracy in Brussels strangling England.
apparently it's not just about immigration.
apparently it's not just about immigration.
Immigration, while unsustainable, is a small part. Brussels was pretty much imposing its will with laws and regulation.
The Left will always scream "end of the world!" when they don't get their way. I like the call for a re-vote. What??? Can I call for a new Lottery Pull? My numbers didn't win. Best thing I heard the day after is the vote was suppressed due to heavy rain. This just in: Global Warming is the cause of Brexit!
Britain will soon be Great again....next: Denmark, Hungary, Italy(despite the Pope) then maybe the Frenchies.
The Left will always scream "end of the world!" when they don't get their way. I like the call for a re-vote. What??? Can I call for a new Lottery Pull? My numbers didn't win. Best thing I heard the day after is the vote was suppressed due to heavy rain. This just in: Global Warming is the cause of Brexit!
Britain will soon be Great again....next: Denmark, Hungary, Italy(despite the Pope) then maybe the Frenchies.
Good points here but I am so very tired of this Liberal vs conservative stuff - Why place everyone in a box is there not room in the middle on some or even most issues. We have crisis in my opinion and Brexit is just the latest manifestation of this. This crisis stems from politicians and and the elite or perceived elite ( in their own minds) attempting to gain control over everyone elses life. This is an age old struggle that has been going on for for thousands of years. This elite believes the normal person canot make good decision, on top of this they manipulate the media to a point where traditional news sources are not trusted and at best entertainment only. At worst the news sources could be called propaganda.
I think what you see in Brexit is that now the majority of the people are tired of being told what they have to do and how they should think. This controlling elite cant understand this because they are the ones attempting to tell everyone else what is right . This same thing is happening with Trump, the harder the controlling elite tries to tell you how bad he is the more many voters resist. The vvoters like that he is outside of the system and in fact I like this very thing. Put on top of this that Clinton is and has been so corrupt and we have a very interesting race this year
I think what you see in Brexit is that now the majority of the people are tired of being told what they have to do and how they should think. This controlling elite cant understand this because they are the ones attempting to tell everyone else what is right . This same thing is happening with Trump, the harder the controlling elite tries to tell you how bad he is the more many voters resist. The vvoters like that he is outside of the system and in fact I like this very thing. Put on top of this that Clinton is and has been so corrupt and we have a very interesting race this year
It's a pretty simple formula. You find people who are struggling, you remind them that they're struggling to get them good and pissed off, then you tell them whose fault it is. Wind 'em up and watch 'em go.
In the case of the UK, they ran a successful narrative of telling them the EU and open borders were to blame. It's not unfamiliar. "The reason you're poor? Well I'll tell you! It's because that Polish guy came here and he'll do your job for less!"
I recently saw a great explanation about jobs are not "stolen." That lets the boss off the hook. They have to make a choice to sell your job to the lowest bidder. "Steal" is not the right word. There will always be somebody more desperate who will do the work for less. That cow is not going back in the barn, we can't wish away the existence of countries where $2 an hour is a small fortune to their workers.
I'd like to follow that with "the answer" but I don't have it. Singularity is on the horizon and it will render enough humans obsolete that the labor market as we know it is forever broken. Once computers learn to write code and to build robots, it will never again make sense to have a person do much of anything by hand. What will we do with people once they no longer make fiscal sense?
Is it nothing more than the struggle between the have's vs. the have nots? The ageless struggle over resources & power.
I know some people that are pretty stupid. They will vote for a person just because they are female, or because they are black, or because they don't like how the other person laughs, or because that politician likes gummy bears, or any of a number of 'stupid' reasons. They will vote against their 'own' interests, their belief system is so skewed, they will vote for their continued bondage.
I think there is a valid point to be made regarding who should and who should not be making decisions for the good of the people.
When you allow the mob of people to vote, you are creating an environment for persuasion based on the mob's mentality. The lowest common denominator. This is why politics and the WWE resemble one another.
So if you really want to clean up the whole thing, then you can't let the morons vote. People will cry foul to that, so this is what we are left with.
I know some people that are pretty stupid. They will vote for a person just because they are female, or because they are black, or because they don't like how the other person laughs, or because that politician likes gummy bears, or any of a number of 'stupid' reasons. They will vote against their 'own' interests, their belief system is so skewed, they will vote for their continued bondage.
I think there is a valid point to be made regarding who should and who should not be making decisions for the good of the people.
When you allow the mob of people to vote, you are creating an environment for persuasion based on the mob's mentality. The lowest common denominator. This is why politics and the WWE resemble one another.
So if you really want to clean up the whole thing, then you can't let the morons vote. People will cry foul to that, so this is what we are left with.
Politicians use immigration as a way to buy votes, with devastating effect on the host country, if your not at full employment there is no need to bring in immigrants especially when the cultures and history or so different.
EU is a way for globalists to restrict competition, thru govt intervention, rules, regulations, lobbying efforts etc, they erect artificial barriers to entry to small and medium players who could do things much better. This gives them power over both pricing and wages, if not for this they couldnt just hire the cheapest they would have to compete for the best people. This allows these companies to make huge profits when the companies can still be poorly run.
EU is a way for globalists to restrict competition, thru govt intervention, rules, regulations, lobbying efforts etc, they erect artificial barriers to entry to small and medium players who could do things much better. This gives them power over both pricing and wages, if not for this they couldnt just hire the cheapest they would have to compete for the best people. This allows these companies to make huge profits when the companies can still be poorly run.
Glad to see the market rebound so quickly. Found it fascinating to read all the doom and gloom media about this vote. I am betting not a single person who twisted that into a situation that wasn't, won't post a single "My bad" today.
This prime minister is resigning. The Brits will be voting on this debacle again. History tells us that isolationism does not end well.
History tends to repeat itself with old people attempting to preserve and protect their capital while the young are attempting to accumulate capital.
The old are running out of time while the young have time on their side.
History tends to repeat itself with old people attempting to preserve and protect their capital while the young are attempting to accumulate capital.
The old are running out of time while the young have time on their side.
I predict it will not be voted on again. I think what you're seeing is some temper tantrum's by those who can't accept defeat.
The reality of the vote is hitting home so am sure a good number of staying out of the EU folks are having their ''oh shit" moment. The resignation of the PM and a little time will allow the Brits to absorb the ramifications of their vote. New PM throws the same issue out to the public again and we shall see.
It won't be voted on again. Way to many people voted for it, they won, and the winning vote will be carried out. People trying to talk themselves into this possibly getting a do over are acting like the people didn't know what they were doing. This was a long time coming, just as many people are celebrating their victory, as there are those throwing temper tantrums. It will stay as is.
it's blowing my mind the people trying to twist this into an isolationist thing.
switzerland isn't in the EU. switzerland does more trade than just about anybody.
switzerland is also richer than damn near everybody.
being able to make your own choices allows for success outside of the reach of bureaucracy. now, you might fail miserably but there are most definitely worse fates than being able to make your own choice and taking your shot at freedom.
there's obviously more people in britain who feel that outside the EU lies more opportunity. why is this suddenly "isolationism" and an "oh shit" moment that they get their chance to eliminate literally thousands of laws that were strangling their economy?
switzerland isn't in the EU. switzerland does more trade than just about anybody.
switzerland is also richer than damn near everybody.
being able to make your own choices allows for success outside of the reach of bureaucracy. now, you might fail miserably but there are most definitely worse fates than being able to make your own choice and taking your shot at freedom.
there's obviously more people in britain who feel that outside the EU lies more opportunity. why is this suddenly "isolationism" and an "oh shit" moment that they get their chance to eliminate literally thousands of laws that were strangling their economy?
