Global Economic Collapse?

[Cortina]

Have seen various posts on FB and reading similar in papers about USA eventually & inevitably going bankrupt which will apparently lead to a global economic collapse?

Looking for someone really to give a cheerier perspective that knows more about economics than me, not difficult :)

The poor are going to be shafted no matter what happens, we all know this and we all know that the rich will find themselves a way a out of it.

I agree that it's going to be hard but there HAS to be some good to come out of it, and that is the only thing I can think of. Maybe, just maybe....little things like luxuries that we all know are overpriced might just be bought down to a more reasonable price, granted, most of us still wont be able to afford it, but compaines in general have been taking the piss for too long now. In order for them to survive, they are going to HAVE to bring their prices down.

Look at the amount of people keeping chickens, growing fruit and veg, making thigns instaed of buying them...that's all good.

Learning to cook is growing in popularity as is dress making...the more people flood the market with cheaper alternatives, the more pressure there is on big companies to sit up and take notice.

I think putting the brakes on consumerism and materialism can be a good thing but I don't relish the poverty which will fall on those without work.

Interesting Cheryl. I'm wondering what the implications would be of a "system collapse and reset" and am thinking that the greatest amount of damage would be the most vulnerable sections of society, e.g. pensioners who suddenly see half their pension value disappear and have no way to replace it, anyone who's invested money for their kid's education in the future via child trust funds/ ISAs, anyone 16 - 25 who's trying to find a job can finds there's even fewer opportunities than at the moment... gosh, surprisingly, it won't just be those people who've got a bit too large a mortgage who're in trouble...

Personally I don't see there being a global economic collapse and there's a lot of different stuff going on which whilst linked are a bit separate. Potential US government default, for example, was more the result of partisan politics rather than them being unable to raise the debt ceiling (which happens not infrequently) or weak economic performance. The fall in stock markets over the last couple of weeks is as much about the equity markets catching up with economic reality and broader investor nervousness rather than company earnings collapsing. Guess the key question is how much systemic risk is left in the system and no-one knows but certainly some has been eradicated since 2008.

On the Euro collapse, I'm curious, what would actually happen? I honestly don't know and whilst it's not great I actually can't see it being terrible. Would it not end up just defaulting to being a quasi Deutschmark again (i.e. other currencies effectively pegged vs. the DM)? It used to be pretty much that way before the Euro and the German (and French) underwrites of the Eurobonds to help Greece etc. kind of suggests that's the way it would go.

An inflation obviously ain't great but Bank of England at least (even the hawks) view it as a short term problem caused by short term factors rather than structural... Don't know enough to say, but it feels like that - rise in VAT, increase in oil prices - the Bank is forecasting inflation being back below 2% in 24 months, as are most market commentators as far as I can tell.

Wow, that's blinkered alphabetty - how spiteful! I'm not attacking your lack of debt Cheryl, but the notion that because you feel your savings should be worth more, which in turn would increase others' debt.

things will be fairer, a sense of enitlement will be reduced, people will start to appreciate what they have and this can only be good a good thing for society in general

hmm

there will be people who previously could afford supermarket own brand food who will now have to haggle for dented cans. people who were poor before will really get the shaft now

is the sense of entitlement to not have to skip meals in order to afford to eat regularly the sense of entitlement you meant?

It's a very, very scary time. I can't see any way it won't be really difficult for quite a long time.

Sorry, OP

I'm not saying it will bounce back. To say that would would be ignorant.

I'm only talking about things on a smaller scale, things that people will have to do to survive, i cant get into politics or anything like that as I do not know enough to comment on them.

still, look on the bright side, some people have savings, so screw all those unemployed people/pensioners/poor people who will starve/freeze/lack adequate housing/live in the general misery that is precipitated by global economic collapse

wheeeeeeeee

or not.

The sense of entitlement I was refering to was for mainly materialistic things.

Surely the Global Economic collapse isn't about things like losing a few luxuries or having to buy dented tins? Isn't it about issues like difficulties of actually finding any food available to buy?

Quite a few people I know are already stockpiling food.

There are too many people in the world for it to be sustainable. We need to restrict breeding and place trade (and aid) embargos on countries that refuse to do the same.

No, economic collapse will not lead to a fairer system/people suddenly living within their means/a brighter day, it will principally result in job loss and unhappiness.

The people least affected will be the well off.

restrict 'breeding'? nice turn of phrase. barf.

so, a person who lives in poverty in the developing world, with intermittent access to electricity and other resources will be able to have the same number of children as a person in britain, who lives in a 1500 square foot house/flat, who has 2 cars per household, who buys beans airfreighted from kenya, who goes on 3 shorthaul city breaks per year etc etc etc

really?

can you explain how this is fair or even makes sense?

cestlavie.

Yes it's sad. Pensioners etc who do have personal pensions/savings in ISA's should be informed the best way to protect themselves against losing half their cash. Unfortunately it's in the interests of the people at the top not to do so.

Take it out of the control of the supposedly smart people who manage your money, and do it yourself.

You can take control. Self select ISA's and Self invested Pensions are available. You choose where to put your money.

Chibi - you are twisting people's words. Those of us who realise the theft that's going on are actually trying to make it better for everyone.

We do need to control population as a species, but force has never worked. People only stop having children when they become an economic burden rather than an asset. This largely happens when compulsory education comes into being.

The problem with everyone becoming less materialistic is that a lot of people's jobs rely on materialism- i.e. all the people making and selling this stuff., so "everybody spend less" doesn't actually work in terms of bringing about economic stability.

oh and cestlavie. Mervyn et al have been talking about inflation being a temporary problem for 2 years now, and most of the market commentators are simply reactionaries or bought and paid for by those with the biggest vested interests.

I'm not putting my trust in their words.

how is it twisting words? the poster wanted to restrict 'breeding'

i think it is highly relevant to mention that we are not all using the same amount of resources, so a simple across the board 'let's all stop having children' is a bit simplistic. it assumes an equivalency that just isn't there

the more i think about it the more impracticable it seems - in many countries, people do not have ready access to either birth control or family planning information, how would a global quota on reproduction deal with this?

i would like to see family planning encouraged, but i think a much greater priority should be put on getting westerners to reduce their levels of consumption

I wasn't talking about that one. I was talking about :

"still, look on the bright side, some people have savings, so screw all those unemployed people/pensioners/poor people who will starve/freeze/lack adequate housing/live in the general misery that is precipitated by global economic collapse"

your assumption that I want to win, and everyone else to lose. No, that's not it. The fact that I save already should indicate I don't have the level of consumption of most - which as you say is a much greater priority. I'm not a high earner - just someone who doesn't buy, buy, buy.

On a side note, I absolutely agree with the overpopulation argument too, but I'm not getting into that one!

Um, Cheryl, you can't protect yourself by investing yourself. It doesn't matter whether you, a fund manager or your pet dog are putting money into ISAs and pensions you're going to be exposed to market risk (unless you've got your money in a shoebox under the bed). I would love to know your investment strategy which takes out market risk as would, presumably, the rest of the world.

An in terms of inflation it's only been above 4.0% since March 010 and 3.0% since December 2009. Hardly long term, yes, higher than target but preferable to having higher interest rates (which bizarrely don't exist purely for 'savers' to make as much money as possible).

Sigh. Do you believe those inflation figures?

The fact that a flat screen telly is getting cheaper is not compensation for 50% increases in food prices. They'll include anything they can in the official basket of goods to supress the real rate.

My strategy is simple. Diversify. Different currencies, commodities, stocks, etc. Rebalance as is necessary. And go short too when necessary. It's doing quite well thank you very much. I'd prefer a simpler way to keep hold of the value of my savings, but because of the volatile environment that's been created, that's the only way to do so.

sorry, to clarify, i don't think that you have an oppositional view of savers vs everyone else, just find it a bit weird and naive that you seem to think careful saving will be of any use in the face of a global financial catastrophe

unless you are planning to become some sort of mountain dwelling stockpiling rifle toting survivalist, i don't see how you can be in a better position than anyone else.

in a recession, or global economic downturn, maybe

but a collapse? how?

What makes you think I'm not planning to become some sort of mountain dwelling stockpiling rifle toting survivalist ?

What makes you think I'm not planning to become some sort of mountain dwelling stockpiling rifle toting survivalist

it's interesting - US "post apocalyptic" fiction seems to have people alone in log cabins in the mountains, British tends to have small communities behind walls.

Agree with Cheryl that just managing your money yourself is a good plan, I think the big finance houses shaft the small person.

As well as gold, property has traditionally been a hedge gainst inflation.

The last Great Depression did not bring anything like equality (the opposite in fact) until the people voted in governments to force it.

I thought that prior to a collapse, you were meant to invest money (not that I have any) in silver and gold, not diversify?

What makes you think I don't have any precious metals ?

Going all in on precious metals on the other hand is as risky as anything else.

Property would be a good hedge against inflation, if the price wasn't already inflated. An unburst property bubble is one facet of the problem facing this country.