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Answered Question
February 06, 2009 03:51 AM
When will the Financial crises end?
You could go with a date if you want to prove your psychic
Edit:
I know it's imposable but I thought it would be interesting to see how long people think it will go on for.
Edit:
I know it's imposable but I thought it would be interesting to see how long people think it will go on for.
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| February 06, 2009 04:21 AM |
At this point, we don't even know the identity of all the problems. Of the problems we have identified, we have only a very vague idea of how big they are.
All the "solutions" that are being implemented are going to cause future problems. Ask anyone who was an adult in the 1970s and '80s about inflation and high interest rates. The money that is being pumped into the economy today makes the '80s look conservative.
During the early '80s inflation was so bad that most prices in the grocery store changed daily. And believe me, that is NOT an exaggeration.
The prime rate soared to 21% and banks were paying up to 15% on CDs.
I personally attempted to buy a foreclosed home to fix up and try to make some money. The best mortgage I could find was 15 year adjustable at 16%. Fortunately I didn't buy it. I am afraid that all the people who are buying these foreclosed homes are in for more trouble than they bargained for.
I do not think they will allow mortgage rates to go that high this time but the only way to hold them down is to subsidize them. That will worsen the inflation problem.
That mess started in the late '70s and we were not competely out of it
until the early '90's.
That is as close as I would come to estimating an answer to your when question.
Example of what's coming.
I had a house foreclosed about 1984. I sold it twice for enough to pay off the loan but both sales busted out. Not because the buyer couldn't get a loan but because the lender was a closed S&L; that had been taken over by the FSLIC and they could not find my file.
They would not issue a payoff amount to the title company, nor would they issue a release so the title company could close the sale. It took me three years to get a payoff amount.
Source(s):
Personal experience - lived through it.
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Other Answers (3)
February 06, 2009 05:54 AM
When debt is reduced is the correct answer. When national debt levels drop to rational levels growth will resume. Countries must save money, get out debt, and produce products with demand. Jobs are wealth. Innovation that meets demand creates wealth. Trade balances need to be equal. The gold standard at one time regulated the trade imbalances by the amount of gold leaving or coming into a country.
The federalist argued that credit was necessary to build a prosperous economy for manufacturing and commerce . Credit became the new gold and derivatives the means to gain or loss in emerging countries. Derivatives worked like gold with a loser and a winner. The rich country is on the winning side.
The $500 trillion derivatives market creates money availablity in emerging markets. A financial mechanism with legal backing extends money to the emergy market and growth can resume.
Central banks help stablize the system and build confidence by injecting liquidity.
Source(s):
Trillion dollar meltdown
The Price of Liberty
Dollar Crisis
How to profit from Gold (The Coming Collapse of the Dollar and How to Profit from It )
How to Profit from the coming Real Estate Bust (sell short)
Blue Oceans
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February 08, 2009 02:18 AM
2010 middle of the year
Source(s):
http://www.mnlakeplace.com
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Also you have some good views there.
US bank stock is 45 dollar with 1.70 dividend. 11% payback. Why are the banks offering such a high dividend? Why don't banks want to loan money today? Are they betting on a long depression?
Why?
Because it will be paid off with the most insidious tax of all: Inflation.
They will borrow a dollar from you. The dollar will be worth 100 "cents" some time in the future, they will repay that dollar with a dollar that is worth only 50 of today's cents. ( it is called the invisible tax )
I quit too soon.
The dividend you mention is meaningless. It is what they paid in the past. The question is what will they pay in the future.
Why don't banks want to loan money today? Because they are afraid.
They are afraid of the economy.
They are afraid of inflation.
Thy don't even trust each other because they know large losses are yet to be uncovered but they don't know how large.
They are afraid of their customers, their consumers are quite likely to lose their jobs and their commercial customers can't sell their products.
They are not betting on a long depression or a short recession. That is the whole point. They are uncertain, worried, afraid. They are not lending money because they have the slimmest margin in the business world and they can't afford to take any discernable risk. ( Sounds crazy doesn't it. They lost all this money by taking too much risk. That was risk they assumed because it was hidden from them by the rating agencies.)
They are also not lending because their customers don't want to borrow. Would you want to buy a new car, or a second home, knowing you might be out of a job next week?