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This chart pretty much tells the tale. Excessive debt is now being unwound in every asset class especially in failing assets that can no longer service debt. In other words the worldwide Ponzi scheme of borrowing more and more to service greater and greater debt is ending.
I've never seen those charts before but this is what Harry Dent Jr has been saying, he calls it deleveraging debt. He says real estate and gold are going to get clobbered. Local real estate markets will fall by varying levels but he sees a number going south by 40-50 percent.
It's quite clear that assets have been raised by borrowing and leveraging. One can take a position with oil with just 2% of the total positioning This mind of leveraging can wipe out positions rapidly forcing sale of other assets (eg stocks) to pay for margin calls.
Some of the biggest gamblers are in China and they have had tremendous losses in their markets (estimated at $5 trillion from peak). This means they have to unload stocks (purchased on margin) which drives stocks down further to create a downdraft effect. Housing, gold, and all assets are caught in the downdraft as gamblers are forced to liquidate.
It is absolutely foolhardy to create an economy based upon increasing debt but that is what the Fed has single handedly done. Other Central Banks just followed. Everytime the Fed has done this in the last two decades we've had bigger and bigger collapses. This one by necessity will be worldwide. Nothing to be done except be aware of the cause of what is happening, the Fed.
I've never seen those charts before but this is what Harry Dent Jr has been saying, he calls it deleveraging debt. He says real estate and gold are going to get clobbered. Local real estate markets will fall by varying levels but he sees a number going south by 40-50 percent.
I can only dream 40-50% drop in RE in my area. I would be buying. I dint think it's gonna happen. Maybe 10-20% tops.
I can only dream 40-50% drop in RE in my area. I would be buying. I dint think it's gonna happen. Maybe 10-20% tops.
Most probably Dent is referring to certain housing markets that have been targeted by speculators, NY, Toronto, Vancouver, San Francisco, etc. though the whole market will be necessarily affected since most everyone will be hit by the asset implosion.
Most probably Dent is referring to certain housing markets that have been targeted by speculators, NY, Toronto, Vancouver, San Francisco, etc. though the whole market will be necessarily affected since most everyone will be hit by the asset implosion.
"As the above data indicates, global demand is disintegrating; and the U.S. is a core driver.
The best way to sweep all these negative indicators under the rug is to fabricate some grand idea of outside threats and fiscal dominoes. It is much easier for Americans to believe our country is being battered from without rather than destroyed from within.
Does China have considerable fiscal issues including debt bubble issues? Absolutely. Is this a catalyst for global collapse? No. China’s problems are many but if there is a first “domino” in the chain, then the U.S. economy claims that distinction.
China is the largest exporter in the world, not the largest consumer. If anything, a crash in China’s economy is only a REFLECTION of an underlying collapse in U.S. demand for Chinese goods (among others). That is to say, the mainstream dullards have it backward; a crash in China is a herald of a larger collapse in U.S. markets. A crash in China is a symptom of the greater fiscal disease in America. The U.S. is the primary cause; it is not the victim of Chinese contagion. And the crisis in the U.S. will ultimately be far worse by comparison."
"As the above data indicates, global demand is disintegrating; and the U.S. is a core driver.
The best way to sweep all these negative indicators under the rug is to fabricate some grand idea of outside threats and fiscal dominoes. It is much easier for Americans to believe our country is being battered from without rather than destroyed from within.
Does China have considerable fiscal issues including debt bubble issues? Absolutely. Is this a catalyst for global collapse? No. China’s problems are many but if there is a first “domino” in the chain, then the U.S. economy claims that distinction.
China is the largest exporter in the world, not the largest consumer. If anything, a crash in China’s economy is only a REFLECTION of an underlying collapse in U.S. demand for Chinese goods (among others). That is to say, the mainstream dullards have it backward; a crash in China is a herald of a larger collapse in U.S. markets. A crash in China is a symptom of the greater fiscal disease in America. The U.S. is the primary cause; it is not the victim of Chinese contagion. And the crisis in the U.S. will ultimately be far worse by comparison."
Agreed. Already the pundits are pointing to b external causes for global economic problems when the problem is our own economic system which depends upon ballooning assets created by the Fed.
The first chart merely show the correlation between the NYSE and the S&P 500. The second chart shows downturns that correlate to recessions. No revelations there, the NYSE and S&P 500 are correlated and stocks fall in recessions.
The scary talk about global meltdowns reminds me of the book that Howard Ruff made famous in 1979, "How to Prosper During the Coming Bad Years - A Crash Course on Personal and Financial Survival." Everything in that book ended up being wrong. Ruff predicted that the high inflation in 1980 would bring an economic meltdown with stocks falling to terrible lows. Instead of a meltdown we had decades of solid economic growth with stocks increasing in value by over 20x. His book "How to Prosper During the Coming Bad Years in the 21st Century" is a rehash of the same wrong views and it's clear Ruff didn't learn anything about being wrong.
The first chart merely show the correlation between the NYSE and the S&P 500. The second chart shows downturns that correlate to recessions. No revelations there, the NYSE and S&P 500 are correlated and stocks fall in recessions.
The scary talk about global meltdowns reminds me of the book that Howard Ruff made famous in 1979, "How to Prosper During the Coming Bad Years - A Crash Course on Personal and Financial Survival." Everything in that book ended up being wrong. Ruff predicted that the high inflation in 1980 would bring an economic meltdown with stocks falling to terrible lows. Instead of a meltdown we had decades of solid economic growth with stocks increasing in value by over 20x. His book "How to Prosper During the Coming Bad Years in the 21st Century" is a rehash of the same wrong views and it's clear Ruff didn't learn anything about being wrong.
Most probably Dent is referring to certain housing markets that have been targeted by speculators, NY, Toronto, Vancouver, San Francisco, etc. though the whole market will be necessarily affected since most everyone will be hit by the asset implosion.
There is always someone betting the economy is or will be doing badly. And as far as I know people still need all the basics of food shelter. It's just that everything is gonna fall in value and nobody is going to put humpty dumpty back together this time. Or maybe they will try.
Either way housing drops 40% it's gonna drop 50% maybe more if it gains velocity. I think investors will step in if prices drop anyway. It's going to be another wealth grab. Well the investors who have actual cash in the bank not the leveraged investors.
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