Topic: Recession fears as bankers warn next global crash could arrive with a vengeance (Read 1028 times)

What's this about Einstein's relativity thing?  Don't know what you mean by that.

Wealth certainly can be destroyed, and it happens all the time.  This is not physical matter or particles or whatever.  There is no conservation of wealth.  lol
Look at any stock market crash and you'll see wealth destroyed in the blink of an eye.

Economists have been threatening recession crash for YEARS! I'm not saying it won't happen, only that it's not news.

Ever since the US started issuing Treasuries for the US and other Governments to buy in huge quantities, they started messing with the money supply in a way that's never been done before. It kept interest rates low. But at some point all those Treasuries need to be sold or retired and that floods the market with US-based instruments which can further devalue the currency and cause a recession.

The world has never done such a monumental monkeying with the money supply, particularly the world's reserve currency (yes, it's still the Dollar). As a result major Economists are fearful of what the longer term implications will be, hence the warnings.

Information to read up on: https://en.wikipedia.org/wiki/Quantitative_easing

There's always lots of discussion about the state of the economy.

My questions right now are: can wealth be created or destroyed(contrast with Einstein's theory of relativity).

Can recession/depression be defined as the negative outcome of a substantial portion of wealth being destroyed..

If the above definition is correct, then where did all the missing wealth go?

 

They believe a state can spend more than they collect in taxes forever and never be negatively affected.

If we follow your logic, then gold will also not be called wealth. It is not vital for us. Just not that easy. There are always people who have a greater number of essential goods than they need and they're willing to sell it or exchange it for something. It turns out that gold and money is also wealth

I think the OP was clear that he didn't mean money or Bitcoin

Obviously, wealth is everything that provides utility and is scarce at that. The last point (being scarce) is debatable but I added it specifically to prevent futile arguments, for example, whether air is wealth or not. Strictly speaking, money is also wealth since it provides utility too, but when there is a crash money tokens representing money simply stop being money, and thus cannot be considered as real wealth. So we could define wealth as anything providing utility and which doesn't lose this utility in case of a severe economic meltdown

If you look at most people in western countries everyone owns the same like a TV,Cellphone,Computer etc .....its a standard and has nothing to do with wealth since you need to "update" it every few years.Its funny that most people work just to keep them updated

The dogma of ‘increasing wants’ as an indispensible basis for further industrial progress. Instead of the duty to work, we now have the duty to consume. To ensure rapid absorbtion of its immense productivity, megatechnics resorts to a score of different devices: consumer credit, installment buying, multiple packaging, non-functional designs, meretricious novelties, shoddy materials, defective workmanship, built-in fragility.

The aim of industry is not primarily to satisfy essential human needs with a minimal productive effort, but to multiply the number of needs, factitious and fictitious, and accommodate them to the maximum mechanical capacity to produce profits. These are the sacred principle of the power complex. Not the least effort of this system is that of replacing selectivity and quantitative restriction by indiscriminate and incontinent consumption.

--Lewis Mumford

You should first define what wealth is.
Paper money and bitcoin is no wealth.It can mean today wealth but tomorrow nothing.Real assets mean wealth and since paper money is going to be destroyed in a crash most people won't be able to buy in into wealth since their fiat is worthless

Wealth is created by the production of goods and the providing of services

Apart from physical destruction of wealth (eg. by wars or natural catastrophes) it's not destroyed... it rather never existed in the first place.

You should first define what wealth is.
Paper money and bitcoin is no wealth.It can mean today wealth but tomorrow nothing.Real assets mean wealth and since paper money is going to be destroyed in a crash most people won't be able to buy in into wealth since their fiat is worthless.

You are right. Cash or gold will be the more odds on favorite assets to buy and hold onto especially for less sophisticated people. But will the casual Bitcoiners buy BTC and hold onto it in search for a safety net?

I don't think that would bode well for Bitcoin

Obviously, it largely depends on how many people are actually involved in Bitcoin in these countries and whether they will get affected by the crashes you are talking about (they certainly will). If people's wealth gets burned, for example, due to housing market meltdown, I don't think they will be inclined to invest in Bitcoin. As to me, they will most likely be looking into less volatile assets like the US dollar

Crashes are a problem for anyone expect wealthy folks of conspiracy theories. Today's economy is hardly based on services and most services need demand to keep up their services fast and reliable. In a crash story services would have less costumer and would be forced to shrink. Not good services would make riches lives worst. The only positive side is that rich would be able to collect bargain assets for future enrichment, but it is not the case for the rich, which have their wealth on markets.

Dont forget South Korea's household debt is in record highs too and its a sign that their economy is weakened by this. A small nudge of a Chinese recession will also make the Asian countries economies fall like dominoes.

How does this affect BTC? Will it be a currency to buy and hold on to making the price increase or will it also lose value in the recession?

Economic crashes don't affect elites and banks much. They're too big to fail and will likely be bailed out.

Russians losing their pensions after the economic collapse of the USSR & rising death tolls caused as a result however are a good indication of how the crashes you say are "not a problem" can mean life or death for anyone who isn't filthy rich.

Unless you're a millionaire/billionaire you don't get to say economic crashes aren't a problem.

Wealth is created by the production of goods and the providing of services

Apart from physical destruction of wealth (eg. by wars or natural catastrophes) it's not destroyed... it rather never existed in the first place.

I think it is news.  

Many have blind faith in the government. They believe a state can spend more than they collect in taxes forever and never be negatively affected.

Ten years ago economists said if spending isn't brought under control we'll eventually have a terrible crash.

The math has always been simple. What has been difficult is convincing people to take it seriously.

Economic crashes don't affect elites and banks much. They're too big to fail and will likely be bailed out.

Russians losing their pensions after the economic collapse of the USSR & rising death tolls caused as a result however are a good indication of how the crashes you say are "not a problem" can mean life or death for anyone who isn't filthy rich.

Unless you're a millionaire/billionaire you don't get to say economic crashes aren't a problem.

Excessive spending (i.e. running budget deficits) has never been a problem in the way you think. It may lead to severe inflation via exuberant and uncontrolled money printing but it can't lead to a crash in the sense you mean it.

I think it is news.   

Many have blind faith in the government. They believe a state can spend more than they collect in taxes forever and never be negatively affected.

Ten years ago economists said if spending isn't brought under control we'll eventually have a terrible crash

I think it is news.   

Many have blind faith in the government. They believe a state can spend more than they collect in taxes forever and never be negatively affected.

Ten years ago economists said if spending isn't brought under control we'll eventually have a terrible crash.

The math has always been simple. What has been difficult is convincing people to take it seriously.

Economists have been threatening recession crash for YEARS!

I'm not saying it won't happen, only that it's not news.

There's always lots of discussion about the state of the economy.

My questions right now are: can wealth be created or destroyed(contrast with Einstein's theory of relativity).

Can recession/depression be defined as the negative outcome of a substantial portion of wealth being destroyed..

If the above definition is correct, then where did all the missing wealth go?

There's always lots of discussion about the state of the economy.

My questions right now are: can wealth be created or destroyed(contrast with Einstein's theory of relativity).

Can recession/depression be defined as the negative outcome of a substantial portion of wealth being destroyed..

If the above definition is correct, then where did all the missing wealth go?

 

Great recession fears as bankers warn next global crash could arrive 'with a vengeance'

Next major recession could be brewing in countries like China, a new report warns

A new financial crisis is brewing in the emerging economies and it could hit “with a vengeance”, an influential group of central bankers has warned.

Emerging markets such as China are showing the same signs that their economies are overheating as the US and the UK demonstrated before the financial crisis of 2007-08, according to the annual report of the Bank for International Settlements (BIS).

Claudio Borio, the head of the BIS monetary and economic department, said a new recession could come “with a vengeance” and “the end may come to resemble more closely a financial boom gone wrong”.

The BIS, which is sometimes known as the central bank for central banks and counts Bank of England Governor Mark Carney among its members, warned of trouble ahead for the world economy.

It predicted that central banks would be forced to raise interest rates after years of record lows in order to combat inflation which will “smother” growth.

The group also warned about the threat poised by rising debt in countries like China and the rise in protectionism such as in the US under Donald Trump, City AM reported.

Chinese corporate debt has almost doubled since 2007, now reaching 166 per cent of GDP, while household debt rose to 44 per cent of GDP last year.

In May, Moody's cut China's credit rating for the first time since 1989 from A1 to Aa3 which could potentially raise the cost of borrowing for the Chinese government.

The BIS’s credit-to-GDP gap indicator also showed debt, which is seen as an “early warning indicator” for a country’s banking system, is rising far faster than growth in other Asian economies such as Thailand and Hong Kong.
 
The world economy is still recovering from the financial crisis and the euro crisis which followed it in 2010.

The UK is said to be experiencing a “lost decade” as productivity and wages have flatlined.

http://www.independent.co.uk/news/business/news/global-financial-crash-central-bankers-warn-back-with-a-vengeance-china-debt-gdp-ratio-a7807811.html