[Concerned1]

Sounds like we really are in trouble...


Failure to save East Europe will lead to worldwide meltdown
The unfolding debt drama in Russia, Ukraine, and the EU states of Eastern Europe has reached acute danger point

http://www.telegraph.co.uk/finance/comm ... tdown.html

[ReverseEngineer]

I read this article earlier in the day. The exposure the EU Banks have to bad debt in the old Soviet States is HUGE, bigger than the sub-prime fiasco. You can think of loaning money to all those old Soviet States like loaning money to a house buyer with no credit rating, except on a much larger scale. Money was loaned to these countries, they can't pay it back. So what to do now? How do you Foreclose on a COUNTRY? If the EU Banks have to write down all the bad loans to the old Soviet client states, their balance sheets will be toilet paper and the Euro as worthless as the Dollar. The reason the Dollar isn't depreciating against other currencies is that they are all being turned WORTHLESS at the same time!

Count Down to Armageddon folks! Something's gotta give here pretty soon.

Reverse Engineer

[perdition79]

I read this article earlier in the day. The exposure the EU Banks have to bad debt in the old Soviet States is HUGE, bigger than the sub-prime fiasco. You can think of loaning money to all those old Soviet States like loaning money to a house buyer with no credit rating, except on a much larger scale. Money was loaned to these countries, they can't pay it back. So what to do now? How do you Foreclose on a COUNTRY? If the EU Banks have to write down all the bad loans to the old Soviet client states, their balance sheets will be toilet paper and the Euro as worthless as the Dollar. The reason the Dollar isn't depreciating against other currencies is that they are all being turned WORTHLESS at the same time!

Count Down to Armageddon folks! Something's gotta give here pretty soon.

How difficult will the transition to mercantilism be, considering how many thermonuclear playthings are scattered about the world?

[joewp]

I read this article earlier in the day. The exposure the EU Banks have to bad debt in the old Soviet States is HUGE, bigger than the sub-prime fiasco. You can think of loaning money to all those old Soviet States like loaning money to a house buyer with no credit rating, except on a much larger scale. Money was loaned to these countries, they can't pay it back. So what to do now? How do you Foreclose on a COUNTRY? If the EU Banks have to write down all the bad loans to the old Soviet client states, their balance sheets will be toilet paper and the Euro as worthless as the Dollar. The reason the Dollar isn't depreciating against other currencies is that they are all being turned WORTHLESS at the same time!

Count Down to Armageddon folks! Something's gotta give here pretty soon.

Reverse Engineer

If you've read "The Creature from Jekyll Island", the answer is to restructure the loans and then use taxpayer money as aid payments to those countries so they can pay the new interest payments. Paying it back isn't the goal, the goal is to keep them paying the interest on the debts to fatten the wallets of the bankers.

Perhaps that game is coming to an end soon, then it's called "indentured servitude".

[ReverseEngineer]

Perhaps that game is coming to an end soon, then it's called "indentured servitude".

Actually, I think its called Sorry Charlie, we aren't paying, and you are stuck holding the bag.

Reverse Engineer

[RonMN]

Here's a somewhat disturbing article from JS Mineset.

Quote:
This communication is to inform you as of 2/13/09, "It is totally out of control." There is no longer any means of reversal of the beginning of the final phase of the downward spiral now solidly set in motion.
For your sake, protect yourselves immediately.
Be prepared for disruptions in distribution common to hyperinflation.
1. You should have already distanced yourself from your financial agents. If you haven’t you are headed for significant displeasure and strain.
2. Make sure you stay three months ahead on necessary items that could experience distribution delays such as prescribed medicine and preferred foods.
3. Even though real estate is far from a buy, if you can afford a second home outside of major cities it would serve a good purpose.
4. Own gold.

http://jsmineset.com/index.php/2009/02/15/officially-out-of-control/

[dorlomin]

Does anyone know if this lot is in Roubinis $3.7 trillion in total that he has been giving as a figure for total world losses? 10% of $1.7 trillion would only make a fraction of that.


Man have we screwed up in spectacular fashion. At times I get awed by what we have managed to do to the global economy.

[ReverseEngineer]

Does anyone know if this lot is in Roubinis $3.7 trillion in total that he has been giving as a figure for total world losses? 10% of $1.7 trillion would only make a fraction of that.

I'm pretty sure Roubini's calculations are only for debt on USA books, not every last debtor nation out there.

Which of course brings the inevitable question up, who extended all this credit to all these debtor nations? Far as I can tell, the only creditor nations here are the Chinese, the Japanese and the Saudis. They apparently leveraged at 10:1 or more extending credit to everyone else. So as everyone else can't pay their bills, they also are insolvent. The Japanese "recession" BTW is outpacing ours by a long shot, their prodcutivity has fallen off the map.

So we pretty much are looking at the same kind of economic collapse that preceeded WWII, just on a vastly larger scale this time, with no vast sources of Oil easily tapped to get the engine going again. Its really going to be interesting seeing how they attempt to cobble together some new kind of Bretton Woods agreement here to reboot. In the short term here, Goobermints are going to be falling about as fast as they are formed. It will be interesting also to see how long Obama can maintain control here.

Reverse Engineer

[dorlomin]

Does anyone know if this lot is in Roubinis $3.7 trillion in total that he has been giving as a figure for total world losses? 10% of $1.7 trillion would only make a fraction of that.

I'm pretty sure Roubini's calculations are only for debt on USA books, not every last debtor nation out there.

Which of course brings the inevitable question up, who extended all this credit to all these debtor nations? Far as I can tell, the only creditor nations here are the Chinese, the Japanese and the Saudis. They apparently leveraged at 10:1 or more extending credit to everyone else. So as everyone else can't pay their bills, they also are insolvent. The Japanese "recession" BTW is outpacing ours by a long shot, their prodcutivity has fallen off the map.

So we pretty much are looking at the same kind of economic collapse that preceeded WWII, just on a vastly larger scale this time, with no vast sources of Oil easily tapped to get the engine going again. Its really going to be interesting seeing how they attempt to cobble together some new kind of Bretton Woods agreement here to reboot. In the short term here, Goobermints are going to be falling about as fast as they are formed. It will be interesting also to see how long Obama can maintain control here.

Reverse Engineer

I hold the highly controversial idea that the best way out of this crisis is an international minimum wage for key industries like hard rock mining, metal smelting, car manufacturing and the like. If workers in those industries can get decent wages they can spend the money localy and become consumers localy. This whole crisis was preceded by a period of wage deflation in heavy industries as it all 'offshored' from the west. Deflation of cost of manufacturing and cheap credit papered over the cracks but eventualy the loss of purchasing power of the upper working and lower middle class told and people had no money to spend. Bretton Woods was a very specific solution to the global situation of 1945. The solution to our current problem is rather different (IMHO).

As for debtors, well our pensions are debtors to the US and other western Economies. Pension funds buy gilts, treasuries and all other manner of governement debt as do other institutions. Although states are in debt, they are in debt to our savings. I thin people have over analysed the foreign component of the debt.

[shortonoil]

dorlomin said:

Which of course brings the inevitable question up, who extended all this credit to all these debtor nations? Far as I can tell, the only creditor nations here are the Chinese, the Japanese and the Saudis.

With the Japanese GDP dropping 9% last quarter, Chinese exports dropping 28% and imports 43 % last month, and $40 oil putting the ME into a recession, I don’t think that there is much credit to be had anywhere.

Anyway there is not enough credit on the planet to solve the problem if this guy is only half right.

EU Banks Need $25 Trillion
John Mauldin