Speaking of things going pop! What do you think will pop first in world markets?

[YoYa]

Fup poll's and all that.....the timbers be a creakin! You can hear them, but as with all things old and wooden thar be no specs or load limits!

So what will go pop first? The Euro? Another currency pair or anything forex related? A treasury? Equities or an entire index even? Commodities? Gold go pop?

Or will all the people hoping to short the fuck out of the above simply get burned for hoping everyone else gets burned?

Say yer piece! Have at it!

[BoardGameCoin]

CNYUSD as china attempts to maintain current rates of inflation to keep their US treasuries a decent investment.

-bgc

[notme]

CNYUSD as china attempts to maintain current rates of inflation to keep their US treasuries a decent investment.

-bgc

So CNY will lose against the USD?  I guess that would also help them to eliminate their idling production capacity since Chinese goods would become even cheaper for USD holders (since US and Euro markets make up more Chinese demand than the Chinese).  I could buy that (not CNY obviously, just your speculation ).

[SgtSpike]

I honestly don't think anything will pop.  I think USD and perhaps the Euro will enter some seriously high inflation in the near future, but people will still use them, and life will go on.  Eventually, inflation will calm, and hopefully lessons will be learned from this whole experience.

Right now, many people are concentrating on paying only for necessities and paying off debt more than anything else.  Consumers using debt to make purchases is good for boosting economic growth in the short term, but that debt always has to be paid back one way or the other.  Hard times only cause people to remember that debt is bad, and makes them focus on paying it off instead of gaining more of it.  In that way, a recession continually compounds on itself until debt is paid back down to reasonable levels, at which point the economy turns around.  And because the FR has been printing so much money to keep the economy afloat in the meantime, once the economy finally does turn around, it'll swing wildly the other direction, into the realm of very high inflation, and eventually settle back into the less extreme 7 year boom/bust cycle.

Just my opinions on the matter.

[Spekulatius]

I think USD and perhaps the Euro will enter some serious hyperinflation in the near future,

I think people in this forum use the term "hyperinflation" too INFLATIONARY (pun intended). With hyperinflation there is no later use of that currency, as it has lost all its value and has to be replaced (Unless you force people to use it witch only works in North Korea). Maybe "high inflation" would be more appropriate.

[yogi]

I think we could see the failure of more banks and the respective governments being too strapped for cash to bail them out. This would cause numerous problems in the markets.

[SgtSpike]

I think USD and perhaps the Euro will enter some serious hyperinflation in the near future,

I think people in this forum use the term "hyperinflation" too INFLATIONARY (pun intended). With hyperinflation there is no later use of that currency, as it has lost all its value and has to be replaced (Unless you force people to use it witch only works in North Korea). Maybe "high inflation" would be more appropriate.

"Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is a situation where the price increases are so out of control that the concept of inflation is meaningless."
http://www.investopedia.com/terms/h/hyperinflation.asp

Ok, I think I can agree with you on that one.  I'll change it to "high inflation" then.

[thezerg]

But how are the banks going to survive 20% inflation with so much locked into 3% home loans?  Inflation is the pin that'll make the banks go pop.

[silverbox]

But how are the banks going to survive 20% inflation with so much locked into 3% home loans?  Inflation is the pin that'll make the banks go pop.

20% inflation is caused by money printing, which lowers rates..  3% home loans means that the banks are awash in 0% cash from the fed, which=inflation..

The only thing that will make the banks go pop is if the fed raises interest rates (by printing less money, which slows the rate of inflation), that ain't gonna happen anytime soon.

[hazek]

Answer to thread title question: Some big bank that will go bust cause of loses incurred in the bond market of some European country.

[SgtSpike]

But how are the banks going to survive 20% inflation with so much locked into 3% home loans?  Inflation is the pin that'll make the banks go pop.

20% inflation is caused by money printing, which lowers rates..  3% home loans means that the banks are awash in 0% cash from the fed, which=inflation..

The only thing that will make the banks go pop is if the fed raises interest rates (by printing less money, which slows the rate of inflation), that ain't gonna happen anytime soon.

As soon as the economy starts turning around though, the fed will stop printing all of that money.  We see low interest rates today because the money printing is what they are trying to use to turn things around.

Tis a good point about the banks, and I am not sure what measures they could take to prevent large losses in the event of high inflation.  But, we have had inflation rates in the 15-20% range before and the banks found ways to survive, so I am sure it could happen again.

[hazek]

But how are the banks going to survive 20% inflation with so much locked into 3% home loans?  Inflation is the pin that'll make the banks go pop.

20% inflation is caused by money printing, which lowers rates..  3% home loans means that the banks are awash in 0% cash from the fed, which=inflation..

The only thing that will make the banks go pop is if the fed raises interest rates (by printing less money, which slows the rate of inflation), that ain't gonna happen anytime soon.

As soon as the economy starts turning around though, the fed will stop printing all of that money.  We see low interest rates today because the money printing is what they are trying to use to turn things around.

Tis a good point about the banks, and I am not sure what measures they could take to prevent large losses in the event of high inflation.  But, we have had inflation rates in the 15-20% range before and the banks found ways to survive, so I am sure it could happen again.

Who says the economy is going to start turning around at all? Have you listened to Chris Martenson explaining this?: http://www.youtube.com/watch?v=8WBiTnBwSWc
You are making the classic mistake of thinking that what was normal for the past 40 years is what we are eventually going to return to while ignoring how abnormal the last 40years have been in terms of money printing and credit expansion and subsequent growth of the economy(more like numbers of GDP).

You also make the mistake of thinking that past crisis are similar to what big banks are going through today while being completely oblivious how starkly different the fundamentals are this time around where there's this huge mountain of debt hanging over everyone instead of having savings that could be tapped into and help survive the loses, have you listened to Peter Schiff at all explaining this?: http://www.youtube.com/watch?v=zdB9I79BQRI

[Vandroiy]

Hard to tell between the Spain/Italy pair and the ECB/EFSF getting cold feet.

A likely outcome in both cases is the ECB giving in though. So my guess would be that the most notable fundamental change might turn out to be EUR giving up on the inflation limit, marking the plan to create the world's #1 large and stable currency a failure.

[SgtSpike]

But how are the banks going to survive 20% inflation with so much locked into 3% home loans?  Inflation is the pin that'll make the banks go pop.

20% inflation is caused by money printing, which lowers rates..  3% home loans means that the banks are awash in 0% cash from the fed, which=inflation..

The only thing that will make the banks go pop is if the fed raises interest rates (by printing less money, which slows the rate of inflation), that ain't gonna happen anytime soon.

As soon as the economy starts turning around though, the fed will stop printing all of that money.  We see low interest rates today because the money printing is what they are trying to use to turn things around.

Tis a good point about the banks, and I am not sure what measures they could take to prevent large losses in the event of high inflation.  But, we have had inflation rates in the 15-20% range before and the banks found ways to survive, so I am sure it could happen again.

Who says the economy is going to start turning around at all? Have you listened to Chris Martenson explaining this?: http://www.youtube.com/watch?v=8WBiTnBwSWc
You are making the classic mistake of thinking that what was normal for the past 40 years is what we are eventually going to return to while ignoring how abnormal the last 40years have been in terms of money printing and credit expansion and subsequent growth of the economy(more like numbers of GDP).

You also make the mistake of thinking that past crisis are similar to what big banks are going through today while being completely oblivious how starkly different the fundamentals are this time around where there's this huge mountain of debt hanging over everyone instead of having savings that could be tapped into and help survive the loses, have you listened to Peter Schiff at all explaining this?: http://www.youtube.com/watch?v=zdB9I79BQRI

You do bring up a good point.  The extra debt taken on in the past decades have helped spur economic growth, but at the cost of future economic growth.  Even once we get past paying off that cost of future economic growth, we (hopefully) won't make the same mistakes again with regards to taking on debt, which will mean limited economic growth compared to the past.

[cypherdoc]

But how are the banks going to survive 20% inflation with so much locked into 3% home loans?  Inflation is the pin that'll make the banks go pop.

20% inflation is caused by money printing, which lowers rates..  3% home loans means that the banks are awash in 0% cash from the fed, which=inflation..

The only thing that will make the banks go pop is if the fed raises interest rates (by printing less money, which slows the rate of inflation), that ain't gonna happen anytime soon.

As soon as the economy starts turning around though, the fed will stop printing all of that money.  We see low interest rates today because the money printing is what they are trying to use to turn things around.

Tis a good point about the banks, and I am not sure what measures they could take to prevent large losses in the event of high inflation.  But, we have had inflation rates in the 15-20% range before and the banks found ways to survive, so I am sure it could happen again.

Who says the economy is going to start turning around at all? Have you listened to Chris Martenson explaining this?: http://www.youtube.com/watch?v=8WBiTnBwSWc
You are making the classic mistake of thinking that what was normal for the past 40 years is what we are eventually going to return to while ignoring how abnormal the last 40years have been in terms of money printing and credit expansion and subsequent growth of the economy(more like numbers of GDP).

You also make the mistake of thinking that past crisis are similar to what big banks are going through today while being completely oblivious how starkly different the fundamentals are this time around where there's this huge mountain of debt hanging over everyone instead of having savings that could be tapped into and help survive the loses, have you listened to Peter Schiff at all explaining this?: http://www.youtube.com/watch?v=zdB9I79BQRI

you've also made the point in the past about volatility and wild swings in markets.  i believe this to be so too and think that once we start heading down it will go down further and deeper than anyone here thinks is possible to the point where the stock bulls will PUKE up their shares before we hit the bottom.  there will be a great opportunity at that time.

[TraderTimm]

I think china goes *boom* and in a fit of panic - initiates their "Asian Prosperity Sphere" trading plan with their partners in defense of a rising dollar. The dollar will rise for a while, but not for the right reasons - all the way up to the point where the market finally can't be levitated anymore by FED-acronym program meddling.

Then the equities go *boom", treasuries become a 'safe haven' until that shoe drops, too. I suppose you could say the whole thing is like a 2D platformer game, where you have to stay just long enough to get enough speed on the step before it drops away into the lava, jumping to the next one.

Just my guess...

[Realpra]

I think we are in for bad times maybe two decades - until renewable energy is ramped up enough to offset soon-to-be dwindling energy.

Global warming will also flood a bunch of cities.


But yeah the elite can pretty much print money until infinity. The middle class will pay.

However if TOO much money/bailouts are given out the corrupt governments might well see a hyperinflation bomb go off. Heck BTC could play a nice role there.


Imagine this:
1. Lets say EUR/USD inflation hits 10% so normal-ish people start to catch on.
2. Money is moved to ALL sorts of perceived safe havens, yuan, gold, silver, german bonds AND btc.
3. The elite can't turn off the printing press because they forgot how to spend within their means and are idiots.
4. USD/EUR inflation escalates further, goto step 1.
5. China becomes a super power and yuan/BTC becomes known as a safe haven along with gold.
6. BTC wins, yuan and others may stay strong a long time too though.

There is NOTHING backing fiat, in fact its the opposite; plenty of capital controls and inflation abound. The second there is a mob mentality too flee fiat and BTC stands strong? Game over. Time bomb for the EU/US I tell you!

BTC is not only a safe haven, its probably the safe haven that is the EASIEST to get into. That is a sick advantage in panic times.

[TraderTimm]

What do you mean pop "first"? I think it's being timed to all go off at once when "they" tell it to pop.

• Greece and the GIIPS: yeah, kind-of defaulting... hang on, not just yet, wait a bit longer... any minute now...
• US of A itching for a war with Iran -- hang on, not quite ready, "tensions easing"... wait, oh no! They're building up again!... Nope, false alarm...
• In unrelated news, energy shortages in Japan and China are putting pressure on crude supplies. How long can they cope? Meanwhile, the Germans are thinking about getting rid of nuclear power. Gosh, what will they use instead?

True, the whole Euro mess is tempting to predict an actual date, but its been rambling along to destruction for a while now. I'm relieved in a way, as it gives me more time to prepare.

One note about China - I've read some interesting sources that indicate their electricity production is flat/declining, and those numbers may even be fudged and way lower. I don't think they really have a scarcity issue.

Japan, absolutely. They brought some more plants online, but honestly a good portion of the country is poisoned with no easy way out, and the remaining plants topping out with summer demand.

Interesting time to be alive, that's for sure.