Topic: Global Financial Crisis scenarios - page 12. (Read 15948 times)

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In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

You might have noticed that I didn't mean consumption financed by debt. Producers would have to take losses or see profits diminishing even if the decreasing consumption is directly financed by household earnings, right?

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In order to be able to consume you have to produce wealth first and you have to produce

Producing come before consuming, no production no consumption; consuming is not hard, everyone can do it, being able to produce is what matters and being able to trade your time and skills for money is what able to you consume

The good from production also need to be priced competitively and have demand from the market.

Planing before anyone else and predicting what the market want is no easy task. The window for good profit is also small (ie: Apple and Samsung competition on smart phone)

boumalo

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Quote from: tee-rex on July 07, 2014, 10:13:26 AM

Quote from: boumalo on July 07, 2014, 10:05:01 AM

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and.Technological.Bitcoin.Exchange

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

You might have noticed that I didn't mean consumption financed by debt. Producers would have to take losses or see profits diminishing even if the decreasing consumption is directly financed by household earnings, right?

_{_______________________________________________________________________________ __________}

฿.BitBull

HTTP://BBEXCH.COM.⟩

In order to be able to consume you have to produce wealth first and you have to produce

Producing come before consuming, no production no consumption; consuming is not hard, everyone can do it, being able to produce is what matters and being able to trade your time and skills for money is what able to you consume

tee-rex

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Quote from: boumalo on July 07, 2014, 10:05:01 AM

Quote from: hashman on July 07, 2014, 07:37:20 AM

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

You might have noticed that I didn't mean consumption financed by debt. Producers would have to take losses or see profits diminishing even if the decreasing consumption is directly financed by household earnings, right?

boumalo

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Quote from: CoinsCoinsEverywhere on July 06, 2014, 06:33:27 PM

The world absolutely can survive without the Dollar as the reserve currency. China and many other countries would eventually be fine without it. The US would eventually recover, too (although probably not to where we are today). The problem is that the transition would be very very painful.

I think the transition from everybody being continually robbed to everyone not being continually robbed will not be as painful as you think.

Good point Grin

Quote from: tee-rex on July 06, 2014, 10:45:07 AM

Quote from: CoinsCoinsEverywhere on July 06, 2014, 06:33:27 PM

tee-rex : savings are good, consuming on credit is bad

What about savings versus direct consumption? Which one is better? You won't get away with this question so easily.

Correct but you cannot have a healthy economy with increasing salaries (in real terms!) and increasing standard of living if you consume on credit but your industry is stable or decreasing, your taxes are going up, your trade&public deficit are going up, your unfunded liabilities is going up, the number of employed people compared to the total of the population is going down and the quality of the jobs is going way down (look at the last jobs reports : mostly part time jobs and full time jobs are destroyed at an alarming rate!)

You didn't answer my question... Cool

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

Am saying that going into debt to consume is extremely bad for the economy; nations that succeed like the USA before are nations of savers, producers, a stable country with a strong currency; you cannot consume with debt forever, it ends badly so the USA would fair better in long run if consumers were not going into debt to consume like it used to be; you use to save to buy something

tee-rex

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The world absolutely can survive without the Dollar as the reserve currency. China and many other countries would eventually be fine without it. The US would eventually recover, too (although probably not to where we are today). The problem is that the transition would be very very painful.

The world will survive ultimately (no doubt about it), but the standard of living will fall down dramatically, at least temporarily. And the more developed a country is, the more it is intertwined into the global economy, the stronger will the impact be on it.

hashman

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Quote from: CoinsCoinsEverywhere on July 06, 2014, 06:33:27 PM

The world absolutely can survive without the Dollar as the reserve currency. China and many other countries would eventually be fine without it. The US would eventually recover, too (although probably not to where we are today). The problem is that the transition would be very very painful.

I think the transition from everybody being continually robbed to everyone not being continually robbed will not be as painful as you think.

tee-rex

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Quote from: tee-rex on July 06, 2014, 10:45:07 AM

tee-rex : savings are good, consuming on credit is bad

What about savings versus direct consumption? Which one is better? You won't get away with this question so easily.

Correct but you cannot have a healthy economy with increasing salaries (in real terms!) and increasing standard of living if you consume on credit but your industry is stable or decreasing, your taxes are going up, your trade&public deficit are going up, your unfunded liabilities is going up, the number of employed people compared to the total of the population is going down and the quality of the jobs is going way down (look at the last jobs reports : mostly part time jobs and full time jobs are destroyed at an alarming rate!)

You didn't answer my question... Cool

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

So you are essentially saying that producers should bear losses or withstand profits shrinking (since people would spend less and save more), and that would serve the economy better in the long run, right?

CoinsCoinsEverywhere

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Quote from: CoinsCoinsEverywhere on July 04, 2014, 11:49:31 PM

Prices going down were the only good thing in the Great D, do you think prices going up would have been better for people having very limited ressources?

People have less money in depression times so it is good that prices are lower not higher

Sure it's beneficial for consumers for prices to be lower when they go to the store and buy things, but the lower prices don't make up for the lack of consumption due to the hard economic times. Aggregate consumption falls, even though prices are lower.

Quote from: Harley997 on July 06, 2014, 02:09:37 PM

China will fair well after the USD collapsed and the dust has settled

I guess it depends on how far in the future you look. They would almost certainly recover better and faster than the US, but a USD collapse would greatly hurt their economy. It would destroy a lot of US demand for their exports, and because of our close economic ties with Europe, the European financial system would also probably collapse, which would destroy their demand for Chinese exports as well. It's impossible to predict how bad it could get, but I could see a USD collapse leading to a global depression.

It is reasonable to make those assumptions; the collapse of the USD will have huge negative consequences for many but China will be able consume what they produce, the shifting will not be overnight but it will happen eventually; many other asian countries are on the right track and some European countries are strong as well
It is stupid to say the world economy cannot live without the USD, the world economy will be better off without the price to pay to have the USD as a world reserve currency and world payment currency

The world absolutely can survive without the Dollar as the reserve currency. China and many other countries would eventually be fine without it. The US would eventually recover, too (although probably not to where we are today). The problem is that the transition would be very very painful.

boumalo

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Quote from: arbitrage001 on July 06, 2014, 01:43:45 AM

Quote from: ShakyhandsBTCer on July 05, 2014, 08:50:48 PM

Quote from: CoinsCoinsEverywhere on July 05, 2014, 12:08:14 AM

Quote from: tee-rex on July 06, 2014, 10:45:07 AM

In order to see the price of bitcoin, gold and all commodities goes up, we need the dollar's price (or value) to go down. In other words : inflation. With QE infinity, the world is heading towards inflation !. So good news for US Cheesy

There is certainly a correlation (and sometimes a strong one) between the strength of the dollar and the price of commodities and other currencies, but it's not a perfect correlation. If the dollar weakens, that could help the price of bitcoin rise, but not necessarily. Ultimately, the price of bitcoin in USD is simply determined by how much USD people are willing to pay for it. The price of bitcoin in USD will only rise as a result of USD weakness if people believe that bitcoin will hold its value better than USD.

And btw, the US is still on course to continue tapering its bond purchases, so QE infinity is (theoretically) coming to an end. The Fed is also expected to start raising interest rates within another year or so (of course that prediction keeps getting moved back), which will remove the last of the stimulus.

This is true regarding the value of the dollar. However in times of economic (and geopolitical) crisis the dollar tends to rise as it is considered the least risky asset class.

Dollar has value because you can still buy oil with it.

In time of crisis, people and central banks usually flock to gold.

The dollar has value because it is the most widely accepted form of payment accepted throughout the world.

It doesn't mean they can create USD in any amount and it won't lose its value

Countries and companies can stop using USD

Quote from: arbitrage001 on July 06, 2014, 01:43:45 AM

tee-rex : savings are good, consuming on credit is bad

What about savings versus direct consumption? Which one is better? You won't get away with this question so easily.

Correct but you cannot have a healthy economy with increasing salaries (in real terms!) and increasing standard of living if you consume on credit but your industry is stable or decreasing, your taxes are going up, your trade&public deficit are going up, your unfunded liabilities is going up, the number of employed people compared to the total of the population is going down and the quality of the jobs is going way down (look at the last jobs reports : mostly part time jobs and full time jobs are destroyed at an alarming rate!)

You didn't answer my question... Cool

In the states it would be healthier and better for the economy in a long term perspective if consumers were saving more and consuming less

Harley997

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Quote from: ShakyhandsBTCer on July 05, 2014, 08:50:48 PM

Quote from: CoinsCoinsEverywhere on July 05, 2014, 12:08:14 AM

In order to see the price of bitcoin, gold and all commodities goes up, we need the dollar's price (or value) to go down. In other words : inflation. With QE infinity, the world is heading towards inflation !. So good news for US Cheesy

There is certainly a correlation (and sometimes a strong one) between the strength of the dollar and the price of commodities and other currencies, but it's not a perfect correlation. If the dollar weakens, that could help the price of bitcoin rise, but not necessarily. Ultimately, the price of bitcoin in USD is simply determined by how much USD people are willing to pay for it. The price of bitcoin in USD will only rise as a result of USD weakness if people believe that bitcoin will hold its value better than USD.

And btw, the US is still on course to continue tapering its bond purchases, so QE infinity is (theoretically) coming to an end. The Fed is also expected to start raising interest rates within another year or so (of course that prediction keeps getting moved back), which will remove the last of the stimulus.

This is true regarding the value of the dollar. However in times of economic (and geopolitical) crisis the dollar tends to rise as it is considered the least risky asset class.

Dollar has value because you can still buy oil with it.

In time of crisis, people and central banks usually flock to gold.

The dollar has value because it is the most widely accepted form of payment accepted throughout the world.

tee-rex

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Activity: 742

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tee-rex : savings are good, consuming on credit is bad

What about savings versus direct consumption? Which one is better? You won't get away with this question so easily.

Correct but you cannot have a healthy economy with increasing salaries (in real terms!) and increasing standard of living if you consume on credit but your industry is stable or decreasing, your taxes are going up, your trade&public deficit are going up, your unfunded liabilities is going up, the number of employed people compared to the total of the population is going down and the quality of the jobs is going way down (look at the last jobs reports : mostly part time jobs and full time jobs are destroyed at an alarming rate!)

You didn't answer my question... Cool

boumalo

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Quote from: CoinsCoinsEverywhere on July 04, 2014, 11:49:31 PM

tee-rex : savings are good, consuming on credit is bad

What about savings versus direct consumption? Which one is better? You won't get away with this question so easily.

Correct but you cannot have a healthy economy with increasing salaries (in real terms!) and increasing standard of living if you consume on credit but your industry is stable or decreasing, your taxes are going up, your trade&public deficit are going up, your unfunded liabilities is going up, the number of employed people compared to the total of the population is going down and the quality of the jobs is going way down (look at the last jobs reports : mostly part time jobs and full time jobs are destroyed at an alarming rate!)

Prices going down were the only good thing in the Great D, do you think prices going up would have been better for people having very limited ressources?

People have less money in depression times so it is good that prices are lower not higher

Sure it's beneficial for consumers for prices to be lower when they go to the store and buy things, but the lower prices don't make up for the lack of consumption due to the hard economic times. Aggregate consumption falls, even though prices are lower.

Quote from: ShakyhandsBTCer on July 05, 2014, 08:50:48 PM

China will fair well after the USD collapsed and the dust has settled

I guess it depends on how far in the future you look. They would almost certainly recover better and faster than the US, but a USD collapse would greatly hurt their economy. It would destroy a lot of US demand for their exports, and because of our close economic ties with Europe, the European financial system would also probably collapse, which would destroy their demand for Chinese exports as well. It's impossible to predict how bad it could get, but I could see a USD collapse leading to a global depression.

It is reasonable to make those assumptions; the collapse of the USD will have huge negative consequences for many but China will be able consume what they produce, the shifting will not be overnight but it will happen eventually; many other asian countries are on the right track and some European countries are strong as well
It is stupid to say the world economy cannot live without the USD, the world economy will be better off without the price to pay to have the USD as a world reserve currency and world payment currency

arbitrage001

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Quote from: CoinsCoinsEverywhere on July 05, 2014, 12:08:14 AM

Quote from: CoinsCoinsEverywhere on July 05, 2014, 12:08:14 AM

In order to see the price of bitcoin, gold and all commodities goes up, we need the dollar's price (or value) to go down. In other words : inflation. With QE infinity, the world is heading towards inflation !. So good news for US Cheesy

There is certainly a correlation (and sometimes a strong one) between the strength of the dollar and the price of commodities and other currencies, but it's not a perfect correlation. If the dollar weakens, that could help the price of bitcoin rise, but not necessarily. Ultimately, the price of bitcoin in USD is simply determined by how much USD people are willing to pay for it. The price of bitcoin in USD will only rise as a result of USD weakness if people believe that bitcoin will hold its value better than USD.

And btw, the US is still on course to continue tapering its bond purchases, so QE infinity is (theoretically) coming to an end. The Fed is also expected to start raising interest rates within another year or so (of course that prediction keeps getting moved back), which will remove the last of the stimulus.

This is true regarding the value of the dollar. However in times of economic (and geopolitical) crisis the dollar tends to rise as it is considered the least risky asset class.

Dollar has value because you can still buy oil with it.

In time of crisis, people and central banks usually flock to gold.

ShakyhandsBTCer

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It's Money 2.0| It’s gold for nerds | It's Bitcoin

Quote from: CoinsCoinsEverywhere on July 04, 2014, 11:49:31 PM

In order to see the price of bitcoin, gold and all commodities goes up, we need the dollar's price (or value) to go down. In other words : inflation. With QE infinity, the world is heading towards inflation !. So good news for US Cheesy

There is certainly a correlation (and sometimes a strong one) between the strength of the dollar and the price of commodities and other currencies, but it's not a perfect correlation. If the dollar weakens, that could help the price of bitcoin rise, but not necessarily. Ultimately, the price of bitcoin in USD is simply determined by how much USD people are willing to pay for it. The price of bitcoin in USD will only rise as a result of USD weakness if people believe that bitcoin will hold its value better than USD.

And btw, the US is still on course to continue tapering its bond purchases, so QE infinity is (theoretically) coming to an end. The Fed is also expected to start raising interest rates within another year or so (of course that prediction keeps getting moved back), which will remove the last of the stimulus.

This is true regarding the value of the dollar. However in times of economic (and geopolitical) crisis the dollar tends to rise as it is considered the least risky asset class.

twiifm

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Prices going down were the only good thing in the Great D, do you think prices going up would have been better for people having very limited ressources?

People have less money in depression times so it is good that prices are lower not higher

Sure it's beneficial for consumers for prices to be lower when they go to the store and buy things, but the lower prices don't make up for the lack of consumption due to the hard economic times. Aggregate consumption falls, even though prices are lower.

China will fair well after the USD collapsed and the dust has settled

I guess it depends on how far in the future you look. They would almost certainly recover better and faster than the US, but a USD collapse would greatly hurt their economy. It would destroy a lot of US demand for their exports, and because of our close economic ties with Europe, the European financial system would also probably collapse, which would destroy their demand for Chinese exports as well. It's impossible to predict how bad it could get, but I could see a USD collapse leading to a global depression.

Its pointless to discuss in macro terms when the guy can only think in micro terms. Just write anecdotes from consumers point of view so he understands

Price of gas drops so I'll just buy double the amount and store it in my garage. Same goes for food, clothes.

I just got laid off but cars are 20% less this year so I'll just buy a car instead of worrying how I'll pay my rent or feed myself until I find work again

Or

I just made bonus this year so I'll buy a new car, take a vacation, etc.. Cause I have some extra money

CoinsCoinsEverywhere

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In order to see the price of bitcoin, gold and all commodities goes up, we need the dollar's price (or value) to go down. In other words : inflation. With QE infinity, the world is heading towards inflation !. So good news for US Cheesy

There is certainly a correlation (and sometimes a strong one) between the strength of the dollar and the price of commodities and other currencies, but it's not a perfect correlation. If the dollar weakens, that could help the price of bitcoin rise, but not necessarily. Ultimately, the price of bitcoin in USD is simply determined by how much USD people are willing to pay for it. The price of bitcoin in USD will only rise as a result of USD weakness if people believe that bitcoin will hold its value better than USD.

And btw, the US is still on course to continue tapering its bond purchases, so QE infinity is (theoretically) coming to an end. The Fed is also expected to start raising interest rates within another year or so (of course that prediction keeps getting moved back), which will remove the last of the stimulus.

CoinsCoinsEverywhere

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Prices going down were the only good thing in the Great D, do you think prices going up would have been better for people having very limited ressources?

People have less money in depression times so it is good that prices are lower not higher

Sure it's beneficial for consumers for prices to be lower when they go to the store and buy things, but the lower prices don't make up for the lack of consumption due to the hard economic times. Aggregate consumption falls, even though prices are lower.

Quote from: Harley997 on July 04, 2014, 01:10:10 PM

China will fair well after the USD collapsed and the dust has settled

I guess it depends on how far in the future you look. They would almost certainly recover better and faster than the US, but a USD collapse would greatly hurt their economy. It would destroy a lot of US demand for their exports, and because of our close economic ties with Europe, the European financial system would also probably collapse, which would destroy their demand for Chinese exports as well. It's impossible to predict how bad it could get, but I could see a USD collapse leading to a global depression.

slimus

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Quote from: slimus on July 03, 2014, 08:03:43 PM

Quote from: boumalo on July 03, 2014, 09:51:58 AM

Quote from: slimus on July 03, 2014, 09:03:25 AM

Quote from: binks1 on June 17, 2014, 09:35:33 PM

Hi,

I have a question, but please direct me to a post if already asked:

In case of another GFC, would BTC bitcoin price:

a) stays on the same level Cool

b) skyrockets Grin

c) tumble down Cry

?

In a case of global financial crise, as the 2008 one, the price of each and every financial asset and commodities will go down (oil will go down, stocks, precious metal, and also bitcoin). In such a scenario the only safe haven will be cash and money market securities. (all the rest will crash)

However government will never let it happen, and they are ready to print even more in order to avoid this situation.

Gold went up from the dotcom bubble explosion to 2012; if we see hyper inflation most commodities will increase in nominal terms
The crisis that is coming will not destroy all wealth, it will redistribute the cards and some will come out on top

You re right, but this happened after the the dotcom bubble explosion, when the FED decided to decrease it's interest rates. However during the crises, Gold and commodities prices went down. It was the same scenario for the 2008 crises. During the 2008 crises all prices went down (deflationary process), after the FED lunched its QE, prices started going up (inflationary process).

It really depends on how bad the crisis is. If it is the scale of what we saw in 2008 (in the tens of trillions of dollars) then bitcoin price would likely fall. If it is a much more modest crisis then it could potentially rise.

In order to see the price of bitcoin, gold and all commodities goes up, we need the dollar's price (or value) to go down. In other words : inflation. With QE infinity, the world is heading towards inflation !. So good news for US Cheesy

Harley997

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Quote from: slimus on July 03, 2014, 08:03:43 PM

Quote from: boumalo on July 03, 2014, 09:51:58 AM

Quote from: slimus on July 03, 2014, 09:03:25 AM

Quote from: binks1 on June 17, 2014, 09:35:33 PM

Hi,

I have a question, but please direct me to a post if already asked:

In case of another GFC, would BTC bitcoin price:

a) stays on the same level Cool

b) skyrockets Grin

c) tumble down Cry

?

In a case of global financial crise, as the 2008 one, the price of each and every financial asset and commodities will go down (oil will go down, stocks, precious metal, and also bitcoin). In such a scenario the only safe haven will be cash and money market securities. (all the rest will crash)

However government will never let it happen, and they are ready to print even more in order to avoid this situation.

Gold went up from the dotcom bubble explosion to 2012; if we see hyper inflation most commodities will increase in nominal terms
The crisis that is coming will not destroy all wealth, it will redistribute the cards and some will come out on top

You re right, but this happened after the the dotcom bubble explosion, when the FED decided to decrease it's interest rates. However during the crises, Gold and commodities prices went down. It was the same scenario for the 2008 crises. During the 2008 crises all prices went down (deflationary process), after the FED lunched its QE, prices started going up (inflationary process).

It really depends on how bad the crisis is. If it is the scale of what we saw in 2008 (in the tens of trillions of dollars) then bitcoin price would likely fall. If it is a much more modest crisis then it could potentially rise.

tee-rex

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