Economic Collapse Headed for U.S. in 2015???

[pungopete468]

I feel sorry for those who don't see the inevitable...
I also feel sorry for the people who believe the dollar is getting stronger. It's not... Wealth distribution is widening faster than ever; who do you think backs the dollar anyways? It's not the top 1% of the population, of that I can assure you...

Oil is a great buy right now, I don't believe the dollar will fail this year, but I think bank bail-ins and economic crisis are damn likely within 12 months. That means another shake-out is likely before the final convulsion of a dying organism and the collapse of an entire economic system...

It's also alarming to see that the petrodollar system is so weak that Saudi Arabia is willing to hold oil production "no matter what" and crash the price of oil. The clock is ticking and it's almost midnight...

[1713529179]

1713529179

[tabnloz]

It is not going to happen. Every year we hear the same story of how bad the condition is, how much debt there is, and it still continues as before.
USD is in high demand and continue to remain so. As long as it stays the primary reserve currency of the world the economy will not collapse.

The US economy is actually doing somewhat well now, the issue is that it is being artificially inflated/propped up by QE which cannot last forever without causing high amounts of inflation. It is also suffering from bad economic and fiscal policies which will eventually blow up

The beauty of the system is once the QE stops working and the inflation kicks in then the debt the USA have been amassing will be reduced heavily via inflation. Even at current rates of "2%" inflation the debt burden will be 35% less in 30 years time. I agree with you though, I think they will keep this market buoyant for as long as they can but when it pops it could prove to be very heavy indeed.

I read this as inflation kicks in when QE stops, ie no money printing = inflation. This would follow the school of thought that says QE actually causes deflation. I think it is referred to as the neo-fisherite theory. I also seem to remember something that Bernanke had said in a speech that inflation has never really been a concern over the QE period.

[Morbid]

It is not going to happen. Every year we hear the same story of how bad the condition is, how much debt there is, and it still continues as before.
USD is in high demand and continue to remain so. As long as it stays the primary reserve currency of the world the economy will not collapse.

The US economy is actually doing somewhat well now, the issue is that it is being artificially inflated/propped up by QE which cannot last forever without causing high amounts of inflation. It is also suffering from bad economic and fiscal policies which will eventually blow up

The beauty of the system is once the QE stops working and the inflation kicks in then the debt the USA have been amassing will be reduced heavily via inflation. Even at current rates of "2%" inflation the debt burden will be 35% less in 30 years time. I agree with you though, I think they will keep this market buoyant for as long as they can but when it pops it could prove to be very heavy indeed.

I read this as inflation kicks in when QE stops, ie no money printing = inflation. This would follow the school of thought that says QE actually causes deflation. I think it is referred to as the neo-fisherite theory. I also seem to remember something that Bernanke had said in a speech that inflation has never really been a concern over the QE period.

well the thing is that hyperinflation is an attribute better applied for currencies at the lower tier of fiats, not the $ while enjoying a reserve status. hyperinflation happens all over the world just to prop up the reserve currency and give it another breath. the world is paying for usa to party. so all this manipulations we are seeing today, every aspect of every market is a total lie today, so deflation that will most probably happen would also be a manipulated lie to force all world's wealth into $ as a final solution.
expect alot of false flag events happening all over the world to create total chaos and make plebs fight all but the bankers responsible. once conflicts reach critical mass then they will dump this thing while msm blaming everyone else.

[Silverspoon]

all this manipulations we are seeing today, every aspect of every market is a total lie today, so deflation that will most probably happen would also be a manipulated lie to force all world's wealth into $ as a final solution.

[General_A]

It's also alarming to see that the petrodollar system is so weak that Saudi Arabia is willing to hold oil production "no matter what" and crash the price of oil. The clock is ticking and it's almost midnight...

I would have to disagree with you there. Saudis recent decisions regarding oil has likely got nothing to do with a weakening of the petrodollar. It's almost certainly quite the opposite actually. This current spell of oil dumping is probably playing to American wishes, thus indicating a strengthening of the petrodollar. This assumption would also help explain why the dollar has been rallying in recent months.  

[pungopete468]

It's also alarming to see that the petrodollar system is so weak that Saudi Arabia is willing to hold oil production "no matter what" and crash the price of oil. The clock is ticking and it's almost midnight...

I would have to disagree with you there. Saudis recent decisions regarding oil has likely got nothing to do with a weakening of the petrodollar. It's almost certainly quite the opposite actually. This current spell of oil dumping is probably playing to American wishes, thus indicating a strengthening of the petrodollar. This assumption would also help explain why the dollar has been rallying in recent months.  

I disagree because Saudi oil profits under the petrodollar system are reinvested into US stocks; therefore, by allowing the price of oil to crash which will further damage the rest of the market and cause further financial losses makes no sense to me. The only thing I can rationalize is that they believe they're better prepared to withstand the resulting damage of this than we are, it's just as likely they're attempting to get out of the petrodollar arrangement during a time when the US is in financial crisis.

The dollar has been rallying and yet the middle class is shrinking, wealth disparity is at record levels, full time employment is more scarce, college graduates can't afford their student loans, the cost of living is skyrocketing, one third of adult US households are now forced to live with a roommate, and the increased profits of the top 20% wealthiest families was large enough to offset the losses of the lower 80% resulting in the MSM shouting, "oh look how we've recovered!"

The dollar is rallying, but it's not the masses who are doing all the buying, because they're too busy worrying about how much more expensive the groceries are today than they were 5 years ago...

[General_A]

It's also alarming to see that the petrodollar system is so weak that Saudi Arabia is willing to hold oil production "no matter what" and crash the price of oil. The clock is ticking and it's almost midnight...

I would have to disagree with you there. Saudis recent decisions regarding oil has likely got nothing to do with a weakening of the petrodollar. It's almost certainly quite the opposite actually. This current spell of oil dumping is probably playing to American wishes, thus indicating a strengthening of the petrodollar. This assumption would also help explain why the dollar has been rallying in recent months.  

I disagree because Saudi oil profits under the petrodollar system are reinvested into US stocks; therefore, by allowing the price of oil to crash which will further damage the rest of the market and cause further financial losses makes no sense to me. The only thing I can rationalize is that they believe they're better prepared to withstand the resulting damage of this than we are, it's just as likely they're attempting to get out of the petrodollar arrangement during a time when the US is in financial crisis.

The dollar has been rallying and yet the middle class is shrinking, wealth disparity is at record levels, full time employment is more scarce, college graduates can't afford their student loans, the cost of living is skyrocketing, one third of adult US households are now forced to live with a roommate, and the increased profits of the top 20% wealthiest families was large enough to offset the losses of the lower 80% resulting in the MSM shouting, "oh look how we've recovered!"

The dollar is rallying, but it's not the masses who are doing all the buying, because they're too busy worrying about how much more expensive the groceries are today than they were 5 years ago...

Its playing to the USA's advantage though. Its having a ten fold greater impact on the Russian economy than theirs. Which is probably the name of the game, economic warfare.

The Saudis wanted the US to stop ISIS's approach towards its boarders and the US wanted to hurt Russia's economy. Both nations appear to have helped each other out, so I would theorize this is what happened. I could be totally wrong of course.

I most definitely don't think it indicates a weakening of the petrodollar. A weakening would be signified by a significantly weakening dollar and a subsequent oil price increase (& all commodities) as nations prepared exit plans. As regard to your second point yes I know. I do live in these times as well.

[bitbouillion]

The last thing Wall Street is thinking about is an economic collapse in 2015. After all, the stock markets are at record highs, unemployment is down, and inflation is in check. But the fact of the matter is that these same indicators were also in check before the markets crashed in 1987, 2000, and 2008/09. Back in 2008/09, everyone on Wall Street, save for Michael Lombardi and Peter Schiff, was absolutely certain that the U.S. economy was the envy of the world and that it was rock solid.

Credit creation, the lifeblood of the capitalist economy, is way too low. If this is not going up anytime soon, it will lead to a deflationary collapse.

[m3ta]

I care more for the Bitcoin economy than the USA's, tbh.

[General_A]

The last thing Wall Street is thinking about is an economic collapse in 2015. After all, the stock markets are at record highs, unemployment is down, and inflation is in check. But the fact of the matter is that these same indicators were also in check before the markets crashed in 1987, 2000, and 2008/09. Back in 2008/09, everyone on Wall Street, save for Michael Lombardi and Peter Schiff, was absolutely certain that the U.S. economy was the envy of the world and that it was rock solid.

Credit creation, the lifeblood of the capitalist economy, is way too low. If this is not going up anytime soon, it will lead to a deflationary collapse.

Only question remaining is will money come out of hiding?

[bitcasino]

China may have its own subprime crisis in 2015...

[bitbouillion]

Only question remaining is will money come out of hiding?

Money cannot hide. It is created by banks through loans (credit creation) and ends up as deposits. Deposits are a component of money supply and known.

[General_A]

Only question remaining is will money come out of hiding?

Money cannot hide. It is created by banks through loans (credit creation) and ends up as deposits. Deposits are a component of money supply and known.

What I really meant is because a lot of the money current been created is going straight from the central bank to the financial banks at 0% interest. And seeming though financial banks borrowing has increased whilst its lending has decreased, and stock markets and bond markets are near all time highs.

I would strongly argue that most of the money created in that US$ graph up there has found its way into financial assets as opposed to the real economy. The cheap money at 0% drives speculation crazy because money is "cheap" and the subsequent inflating of bubbles has lured money from the real economy into the speculative.

When this will end is any ones guess, but a serious correction on financial assets would cause money to drive out of the speculative market and placed into the real. This move is what I would argue will cause inflation at some point, but how much inflation will depend on the size of the money movements.   

[2dogs]

This is not news.

It is already happening....

http://beforeitsnews.com/economy/2015/01/dr-jim-willie-significant-events-coming-the-toxic-dollar-2688212.html

[Bit_Happy]

An economic collapse was widely predicted in 2008, 2010, 2014, and many other years. It is so over-due, that when it finally happens I probably will not be prepared. How do you prepare when money is tight and you don't have extra to spend?   

[Meuh6879]

buy a p90 ... and bullets.

[General_A]

This graph is also telling:

[tabnloz]

The last thing Wall Street is thinking about is an economic collapse in 2015. After all, the stock markets are at record highs, unemployment is down, and inflation is in check. But the fact of the matter is that these same indicators were also in check before the markets crashed in 1987, 2000, and 2008/09. Back in 2008/09, everyone on Wall Street, save for Michael Lombardi and Peter Schiff, was absolutely certain that the U.S. economy was the envy of the world and that it was rock solid.

Credit creation, the lifeblood of the capitalist economy, is way too low. If this is not going up anytime soon, it will lead to a deflationary collapse.

I'd say by mid march we'll see the direction a bit clearer. Could be reallly bad or it'll just muddle along completely out of touch with reality ala t2012-2014.

The two things in the distance that could really wreak havok are Greece leaving the Euro and / or the US raising interest rates.

Greece may happen; people are desperate and angry but will also depend on the nerve of Tsipras if elected.

The US will never be able to raise IR's.

[bitbouillion]

What I really meant is because a lot of the money current been created is going straight from the central bank to the financial banks at 0% interest.

QE did not create new money. If you sell a 30 year treasury to the FED and get cash, you are just more liquid, but your wealth is the same before and after ... aka the money in the public stays the same.

And seeming though financial banks borrowing has increased whilst its lending has decreased, and stock markets and bond markets are near all time highs.
I would strongly argue that most of the money created in that US$ graph up there has found its way into financial assets as opposed to the real economy. The cheap money at 0% drives speculation crazy because money is "cheap" and the subsequent inflating of bubbles has lured money from the real economy into the speculative.

Sure, you can put your lame cash into hot assets then.

When this will end is any ones guess, but a serious correction on financial assets would cause money to drive out of the speculative market and placed into the real. This move is what I would argue will cause inflation at some point, but how much inflation will depend on the size of the money movements.   

Again, QE does not increase overall amount of money, it can never be inflationary. QE is just to prevent a deflationary collapse by providing liquidity to prevent a liquidity crisis.

Inflation can only happen, if credit creation by banks to private is growing (home, consumer loans, businesses) or the system just breaks the rules like in Weimar.
 

[bitbouillion]

I'd say by mid march we'll see the direction a bit clearer.

If you look at Japan, they (central bank and government) can keep the status quo for a very, very long time.

The US will never be able to raise IR's.

Japan, UK and the Euro zone are in the same position too. If you as an entrepreneur  sell a product at a fixed rate for the next 30 years, but cost are rising in the future above, you will go bankrupt. It's suicide. Banks make 30 year loans at fixed low rates, they would lose money, if their refinance rate goes above that. The only way out is significant growth so they can average up, but the high debt load prevents growth. Low rates are a dead end. Yes, FED, ECB, BoJ and BoE will never be able to raise rates again.