[KevO]

As we know, the UK is in BIG trouble. It had it's first proper bank collapse yesterday with a bail out refused
http://news.bbc.co.uk/1/hi/scotland/7970669.stm
The first of the rest?
Savers are to be reassured that their money is safe but it would be prudent now not to have any money in any bank.

The US thought their recession was on the way to being over when Obama said it looks good and oil was rising but we all know this is just psy ops on the US public. It hasn't even begun in the US yet. Just ripples that are getting rougher. The tsunami is ahead. The trillion, on top of the billions won't make a difference as it will simply be wiped off shares. The DJ index at 4000 points by July? or September? or December?

So all eyes are on the G20 meeting in London. This is the make or break meeting for the world's future. If it's the right news then the markets may rise again for a month or two. If it's the wrong news, the world economy could collapse the very next day.
However a few hours ago, Germany said how it's going to be (get your money out of the bank first thing tomorrow!!)

GORDON BROWN’S carefully laid plans for a G20 deal on worldwide tax cuts have been scuppered by an eve-of-summit ambush by European leaders.

Angela Merkel, the German chancellor, last night led the assault on the prime minister’s “global new deal” for a $2 trillion-plus fiscal stimulus to end the recession.

“I will not let anyone tell me that we must spend more money,” she said.

The Spanish finance minister, Pedro Solbes, also dismissed new cash being pledged at Thursday’s London summit.

Why? because it simply IS NOT there.

The assault by European Union leaders also represents a defeat for President Barack Obama, who is desperate for other big economies to copy his $800 billion stimulus plan.

http://www.timesonline.co.uk/tol/news/politics/G20/article5993184.ece

what does everybody else think?
Is this it? or will the pain last more months?

[NoWorries]

I don't know about Europe, but here's one thing I have learned: Every time I think the US economy is sunk, it rises back to the surface again. It's irrepressible. Warren Buffett was right when he said the US economy is the most resilient economy ever created.

So, while I think things will get worse, and will likely be very bad for the next couple of years, I would not plan on total collapse either.

It will probably continue to limp along, a la Japan in the 1990s. Stagflation type scenario (soaring inflation and shrinking GDP).


Oh, how I long for the US tech bubble economy of the 1990s!.....We won't see those days again.

[mos6507]

Oh, how I long for the US tech bubble economy of the 1990s!.....We won't see those days again.

Imagine being in your 20s and living through it as a web developer. I knew even when it was happening that it was a once in a lifetime deal. It was to geeky GenX/Yers what the summer of 69 was to boomers.

[FireJack]

I don't see much coming out of the G20 meeting, some vague promises and solutions that don't address the problem.

The most likely scenario I see coming is where the U.S. government keeps hemorrhaging money until it is forced to stop. Then it will be forced to cut loose all these banks and institutions it's taken and we'll have a bankrupt government and the a crashing financial system too. Are the European countries that close to collapse though? I am under the impression that were 1 major event away from a worldwide financial collapse and a major European bankruptcy (like the U.K. or Ireland) would set it off. Maybe I'm just crazy though.

[anarky321]

I don't know about Europe, but here's one thing I have learned: Every time I think the US economy is sunk, it rises back to the surface again. It's irrepressible. Warren Buffett was right when he said the US economy is the most resilient economy ever created.

are you serious?

it took over 2 trillion dollars in govt bailouts (just in the US) and a thick stack of new regulation just to create the impression that it was rising back to the surface, with the implied notion that more bailouts will be provided if it does not

thats not resiliency; thats called robbing the taxpayer and pushing national debt to the extreme just to keep the illusion of resiliency going; resiliency would be if noone got bailed out and the stock market recovered on its own; Fed is buying up a trillion dollars worth of treasuries just to prop up the system does that sound resilient to you?

[NoWorries]

I'm not denying that "bailouts are NOT the hallmark of a healthy economy", if I may paraphrase your statement. And yes, if it weren't for the bailouts, the US economy likely would resemble chaos right now.

All I'm saying is: If I had a dollar for every time the US economy was pronounced dead (eg--Kunstler, et al) I'd be richer for it.

Like I said: Things will be bad for some time to come. I'm not predicting sunshine and lollipops. But I would not bet on total collapse either.

[bratticus]

Dunfermline is the tip of the iceberg in the UK.

[section451]

The Dunfermerline is a Building Society, not a bank, an yet another Scottsh finanacial institution in trouble - this is a similar business to the Buildings and Loans in the US, albeit they are more tightly regulated than banks.
That said, they still seem to have managed to destroy even this tightly regulated business.

[deMolay]

At some time in the near future, I think some incident will trigger a Full Stop Event. These guys are playing Russian Roulet.

[timmatoil]

Given how often these days gold is touted as the ultimate “safe haven,” it’s not surprising that investors might feel less safe if they knew that the NYSE-Liffe futures exchanges seems to have run out of 1 kilogram gold bars. Futures contracts at NYSE are now backed by the promise of a one-third interest in a 100-ounce gold bar (about 3kgs). Not to worry, however, if you own three of these promises, you can take physical possession of 100 oz refined gold bar.

Via Stock Research Portal (http://www.stockresearchportal.com)

Could gold supply be running out? What do you think of gold in the face of a collapse?

[ReverseEngineer]

Could gold supply be running out? What do you think of gold in the face of a collapse?

The Gold supply is relatively fixed. A little more gets mined or panned up each year, but its a relatively insignificant amount. On a financial level, Gold is a betting game like all the rest of trading. As paper currency loses its value, people will bet on Gold and so its relative worth will increase, but it suffers the problem of not being very useful as currency. Simply not enough of it to go round in a owrld of 6 billion people.

If/when the financial system crashes, small gold items of jewelry might hold some trade value for you locally, however if you merely have a gold bar in your safe I don't think it will do you all that much good. Certainly, paper certificates you have in your safe that say you own some gold in somebody ELSE'S safe aren't worth any more than a Federal Reserve Note.

While the trading system holds up, for a while Gold might be a good investment as it is sure to go up here with Fiat money being printed by the bucketfull. However, soon enough I suspect people will grasp that they can't actually get hold of any of the gold they invest in, and that Ponzi scheme will collapse also. Call it a Gold Bubble if you like. People will invest in Gold thinking it a safe haven for their wealth, but then it becomes obvious the Gold they invested in isn't really THERE, it was leveraged up among many buyers of the same bar of gold. When they all try to get hold of it, they only get a small piece of it back.

Gold has always been a chimera, just like Fiat money is a chimera. Its a means to define wealth and assign values to different things, but in and of itself it doesn't hold much intrinsic value. A gold bar won't do you much good in an economic collapse.

Reverse Engineer

[SeaGypsy]

When is the rumour that paper gold is b/s going to get out into the mainstream? I think that will be it for the banks.