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Title: Pound, Dollar, Euro And Yen Will Be Worthless Within Five Years
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URL Source: https://goldswitzerland.com/pound-d ... e-worthless-within-five-years/
Published: Jan 29, 2017
Author: Egon von Greyerz
Post Date: 2017-01-29 11:08:56 by Ada
Keywords: None
Views: 638
Comments: 6
The new US Administration has taken over with the conviction that they will “make America great again”. I really wish they will succeed because a strong US would be good for the world. Sadly, the odds of achieving that admirable objective are totally stacked against them. At the end of the next 4 years, there is a risk that this Administration will be more hated than any government since Carter and possibly even more disliked than Hoover. Trump unlikely to reverse 100 years of mismanagement The coming unhappiness with Trump and his team will not arise because of the actions they take. They will clearly do everything in their might to make America great again. But the probabilities are totally against them to achieve this goal. They are taking over power at a time when debt has grown exponentially since the 1970s. They are also assuming power of a country that has not achieved a proper budget surplus for well over half a century. Even worse, the US has not had a positive trade balance since the early 1970s. So here we have a country that has been living above its means for decades and has no real chance of changing this vicious circle. Trade wars and import taxes are unlikely to improve the situation. The Federal debt is at $20 trillion and has been growing at the rate of 9% per year for the last 40 odd years. The forecast for the next four years is that the growth of the debt will accelerate. Total US debt is over $70 trillion or over 3.5x GDP. But that is just a fraction of the US liabilities. Unfunded liabilities are over $200 trillion. Add to that the real gross derivative position of US banks which probably at least $500 trillion. The success of a president in the US is closely linked to the performance of the stock market. Therefore, the best chance for a president to be loved by the American people and being re-elected is for the stocks to go up. P/E’s on the S&P index is now at 70% above its historical mean – hardly a position from which it is likely to surge. Corporate borrowings have surged since the Great Financial Crisis started. In 2006 US corporate debt was just over $2 trillion. Today it is more than 3x as high at $7 trillion. At the same time cash as a percentage of corporate debt is declining and is now 27%. Within this massive increase in debt, there are major defaults looming in many areas like car loans, student loans and the fracking sector where potential write offs could be in the $ trillions. US Corporate Debt has trebled since 2006
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#1. To: Ada (#0)
Can the economies of all these capitalist nations over turn the Kondratieff Cycle? ;)
Don't know. By that measure we should be half way through the Kondratiev "winter" or depression. Mebbe things ain't that bad. Watchu think? Kondratiev's analysis described how international capitalism had gone through many such "great depressions" and as such were a normal part of the international mercantile credit system. The long term business cycles that he identified through meticulous research are now called "Kondratieff" cycles or "K" waves. The K wave is a 60 year cycle (+/- a year or so) with internal phases that are sometimes characterized as seasons: spring, summer, autumn and winter: Spring phase: a new factor of production, good economic times, rising inflation Summer: hubristic 'peak' war followed by societal doubts and double digit inflation Autumn: the financial fix of inflation leads to a credit boom which creates a false plateau of prosperity that ends in a speculative bubble Winter: excess capacity worked off by massive debt repudiation, commodity deflation & economic depression. A 'trough' war breaks psychology of doom.
Where I live we lost a major supplier in the shop I work in. For years they were getting tens of thousands of pieces to rivet snap buttons and do spot welding. Trying to replace that lost work is near impossible. But there will be a few small air rivet jobs in the near future. We were sorting big bales of mixed plastics they got in from Colorado. The #1 they would keep and bale. The #2 and up they would send up the road a few blocks to be shredded and melted and used to make construction beams. Those beams are shipped across the country. ;)
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#3. To: BTP Holdings (#1)
Can the economies of all these capitalist nations over turn the Kondratieff Cycle?
#4. To: randge (#3)
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