Jump to content
Sign in to follow this  
bust

Investing In The Current Financial Climate

Recommended Posts

Hello Radioman,

One of the first things they taught us in business school is that no government or person or persons can stop economic cycles. Economies go up and down and when they are destined to go up, they go up and when they are destined to go down, they go down. A leader or government can enact policies that can shorten or lengthen a boom or bust and its always easier to end a boom than a bust. 

Basically, if the economic climate is destined to go down there is nothing anyone can do. They can soften it to some extent but they can't stop it. Banks, hedge funds, and the many other financial institutions are exposed. A combination of greed as well as a 'can't lose' environment, at least in the U.S. because they know they will be bailed out. 

I still maintain, the next impending crash will be comparable to the Great Depression. Why do I say that? Because the 2008 crash almost became a depression. America teetered on the edge of financial insolvency were it not for the Treasury Department and the Fed propping up the banks and the stock market with trillions of dollars of infusion buying shares, and supporting banks balance sheets. 

I don't see it happening again. The people were not happy with the ones that caused the problem being bailed out and the masses that suffered left broke. 

Share this post


Link to post
Share on other sites

There isn't a respected financier or economist or analyst of a major institution who doesn't think something negative is going to happen. The only variance is the term they use: "downturn", "recession" "crash" "collapse", etc. and those terms carry with it an inherent difference in the size and scope of a negative economic event. 

The only difference of opinion is if its going to be inflationary or deflationary. Either way, some things won't depart from history in such an event. Housing prices will become depressed, precious metal prices will go up, unemployment will rise. 

The new entry into the equation are how will cryptocurrencies react? The market is in the hundreds of billions globally and some think it will be included as gold as a storage of value. Its had a big run in 2019 so far, going from about $3,800 per bitcoin to presently hovering around $,10,000 each. About half off its historical high in December 2017. 

A lot of money will be made for those in a position to buy property, stocks, etc. 

 

Share this post


Link to post
Share on other sites

NZ just dropped it's interest rate  0.5%, or as they like to say, to confuse the proles, "because it's really complicated and you'll never understand, '50 basis points'  ".

Needless to say, several of the biggest banks passed on 0.45% of this cut to potential and existing lenders.

The missing 0.05% ? Bentley dealers will be busy this month...

Share this post


Link to post
Share on other sites
On 8/8/2019 at 11:01 PM, Coss said:

NZ just dropped it's interest rate  0.5%, or as they like to say, to confuse the proles, "because it's really complicated and you'll never understand, '50 basis points'  ".

Needless to say, several of the biggest banks passed on 0.45% of this cut to potential and existing lenders.

The missing 0.05% ? Bentley dealers will be busy this month...

I read that as well. On one of the financial podcasts I listen to the host didn't think it was a good move. But who knows?

Share this post


Link to post
Share on other sites

Gold prices have shot up over the last couple months. It was selling for roughly $1,275 not too long ago and is now around $1,500 an ounce more or less. Seems some people are expecting the economy to go bad fairly soon. Traditional hedge against a bad economy. 

Share this post


Link to post
Share on other sites

Please sign in to comment

You will be able to leave a comment after signing in



Sign In Now
Sign in to follow this  

×