The End of the (Financial) World As We've Known It?

[lds2]

***Jim Rogers attended Yale and Oxford Universities and then co-founded the Quantum Fund which is a global-investment partnership. During the next ten years the portfolio did amazingly well and gained 4200%, while the S&P 500 rose less than 50%. At age 37 Mr. Rogers retired. Since then he has earned a reputation for candid and measured language regarding forecasts so his assessment of the future is weighted heavily in the investment community.

“. . . this year is going to look good and feel good, because Mr. Obama is going to give out a lot of good information,” Rogers said. “It may be manipulated information, but he’s going to put out a lot of good information. He’s going to spend a lot of money; he’s going to print a lot of money to get us through the election... But post-election, conditions will change, the data will change, and the financial turmoil that the markets have already enduring will accelerate appreciably, according to Rogers.

“Be very worried about 2013 and be very worried about 2014, because that’s when the next slowdown comes,” Rogers stated. “In 2002 we had a recession and in 2008, it was worse because the debt was so much higher.” He added, “The next time is going to be even worse because the debt is so staggeringly high now. So if you are not worried about 2013, please — get worried.”

Jim Rogers? Most Dire Warning, ?Please Get Worried? (NYSEARCA:GLD, NYSEARCA:SLV, NYSEARCA:TZA, NYSEARCA:FAZ, NYSEARCA:AGQ) | ETF DAILY NEWS

Longterm FOOD Will Get Much More Expensive he says and this is why he thinks so...

"All agricultural commodities are going to go much higher. We have serious problems developing in agriculture. The average age of farmers in America is 58, 66 in Japan, and 58 in Australia. The world is running out of farmers so unless price goes much higher we are going to have significant shortages in agriculture. So prices are going to go a lot higher because of the serious fundamental shortages that are developing." - in Economic Times

If you are a farmer this is good news...

"Agriculture is going to be the big thing in the next 20 years. The best thing you can do is to become a farmer, that is where the money is going to be made."

Edited July 14, 2012 by lds2

[lds2]

The HSBC Flash Purchasing Managers Index, slipped to 48.7 in May from 49.3 in April. That marks the seventh straight month that the index has been below 50, a level which indicates economic activity is contracting.

Edited July 14, 2012 by lds2

[lds2]

***Marc Faber's economic newsletter is called Boom, Gloom and Doom. He is widely followed since 1987 when he warned his clients to cash out right before "Black Monday." He says....

“I think we could have a global recession either in Q4 or early 2013." When asked what were the odds, Faber replied, "100%."

However, in the near term Faber also sees potential for a market rally.

Faber said the bullish catalyst would be Greece exiting the EU.

Edited July 14, 2012 by lds2

[lds2]

***Germany is the financial rock on the EU shore so this is very bad news.

***The bigger worry are the big investment banks (please read the derivative primer in post one) including Goldman Sachs and Morgan Stanley as they are expected to have their ratings downgraded soon by three notches which would increase funding costs and would require them to keep more collateral making it harder for them to keep the derivative "plates in the air all at the same time."

"Moody’s downgraded the ratings of seven German banks as well as Austria’s three largest lenders, saying the euro area debt crisis risked leading to new losses the banks might struggle to cover..."

Moody's cuts German bank ratings on fears of "limited" ability to deal with new losses - Telegraph

Edited July 14, 2012 by lds2

[lds2]

For those who are interested...this does come from some blog, but it gave me ideas on what I might need if something similar ever happened here.

10 Things That We Can Learn About Shortages And Preparation From The Economic Collapse In Greece

1. Food Shortages CAN actually happen.

2. Medicine Is One Of The First Things That Becomes Scarce During An Economic Collapse

3. When An Economy Collapses, So Might The Power Grid

4. During An Economic Collapse You Cannot Even Take Water (and especially clean water) For Granted

5. During An Economic Crisis Your Credit Cards And Debit Cards May Stop Working

6. Crime, Rioting And Looting Become Commonplace During An Economic Collapse

7. During A Financial Meltdown Many Average Citizens Will Start Bartering

8. Suicides Spike During An Economic Collapse

9. Your Currency May Rapidly Lose Value During An Economic Crisis

10. When Things Hit The Fan The Government Will Not Save You

Edited June 8, 2012 by lds2

[annewandering]

I keep seeing the title of this thread. Every single time I see it I think to myself 'if only' but we arent that lucky.

[lds2]

I think I'm ready for that "better world" that President Joseph Fielding Smith talked about, but then I think about how I like my hot showers, and internet, and eating out, and comfy warm bed and...

[annewandering]

we can have a financial collapse and still have civilization.

[lds2]

True. The question is what rules will be in place to be part of "civilization" and the new world economic system that will be put into place...and will we be able to follow the rules and still keep our integrity? I hope so, but I think our integrity will be tested to the limit. The reason why I think so is found here...

"This Church has before it many close places through which it will have to pass before the work of God is crowned with victory...

You will have all the persecution you want and more too, and all the opportunity to show your integrity to God and truth that you could desire...

Then, brethren, look out for the great sieve, for there will be a great sifting time, and many will fall; for I say unto you there is a test, a TEST, a TEST is coming, and who will be able to stand?...

All true Latter-day Saints will be tested to the limit; many will apostatize and others will stand still, not knowing what to do...The Saints will be put to tests that will try the integrity of the best of them. The pressure will become so great that the more righteous among them will cry unto the Lord day and night until deliverance comes.

The time will come when the government will stop the Saints from holding meetings. When this is done the Lord will pour out His judgments.

(Life of Heber C. Kimball, p.446-451, Orson F. Whitney)

Edited June 9, 2012 by lds2

[lds2]

Despite the "bailout" for Spain the DOW was down over 100 points today, perhaps because of this news...and that was from 2007 to 2010...how many people have "recovered" their losses since then or have they had to dip into savings even further, have the values of their homes gone up or continued to decline with double digit losses in most areas since then?

Americans’ wealth plummeted 40 percent from 2007 to 2010, Federal Reserve says - The Washington Post

.

Edited June 12, 2012 by lds2

[NeuroTypical]

how many people have "recovered" their losses since then or have they had to dip into savings even further, have the values of their homes gone up or continued to decline with double digit losses in most areas since then?

My meager portfolio has gone up in value 36.3% since Oct '07, the beginning of the slide. Factoring in my home value, and it's still in positive territory. I think one reason so many people are out of luck, is they followed the worst advice possible from doomsayers - buy high and sell low. So somewhere in '08 they thought the world was going to end, and they took huge losses and moved their investments into safer things. Then they did not experience the once-every-40-years explosion in the market that has occurred since the "black Monday" of March '09. My stuff has more than doubled since then: 115.6%. The people who got scared and dumped everything into insured CD's have made maybe 2%, and are still underwater overall.

I'm not the smartest guy in the world. But I have been paying attention for the last two decades. And I notice a recurring event in economics. Every time the dow drops a few percentage points or there's bad global news, folks like lds2 pour out of the woodwork and jump into the spotlight to prophecy doom. Back in '08, it was all about hyperinflation. Today it's about "The End of the (Financial) World As We've Known It" and how "the swirl of the toilet water is rapidly speeding up for an ultimate flush of our monetary system".

One thing that is true: If you are the sort of person who begins to make 'buy high and sell low' choices whenever the lds2's of the world are out starting melodramatic threads and shouting into their megaphones, then you never should have been in the stock market in the first place. You should have started with CD's or just stuck with a bank account.

I'm continuing to do what I've always done - invest a portion of each paycheck in risky investments (aka stocks and bonds). Take advantage of company match for 401k. Participate in my company's stock purchase plan. I stay out of debt and prepare against adversity, but I'm also saving for retirement and putting kids through college. I took flak in 2008-09 for this strategy by the doomsayers of those years, but here I am having gained all the short-term losses back and more.

Edited June 12, 2012 by Loudmouth_Mormon

[lds2]

LM M - I'd say we both have been more fortunate than most...

Right around 2008 my family moved partly because real estate was going down quickly. The house's highest value was $600,000 and we sold at ~$500,000 and were able to buy a farm in the Intermountain West that was mostly paid for. Since then the original house sold in foreclosure for $110,000. Many of our friends have suffered greatly being underwater on their mortgages and still have $2-3,000 payments each month.

We bought precious metals that have more than doubled in value since then. We completely got out of the stock market and have been very glad to not be part of that roller coaster as I don't believe that ride is going to end up anywhere where I want to be. We also have been fortunate to not currently be in debt and most of our children are in college.

In my opinion, increases in the stock market and gold reflect inflation more than profit lately. I think the stock market is much more likely to crash than precious metals...yet even though Goldman's commodities "guru" recently predicted gains between 20-40 percent I would not put the bulk of my money there either.

I would follow the counsel of the first presidency...treat debt as a "plague," buy a paid for modest home, have a financial reserve (not all of it in a bank), store food 3 months ahead of when you will need it and then have a longer-term supply of basics that will keep you alive if there were nothing else and additional storage that in case of adversity you can help your family, friends, neighbors, and help the bishop feed the poor and the needy.

Most of us aren't so fortunate as to work someplace long enough to retire as companies are going under, being sold, etc. anymore. You are VERY fortunate to work someplace that matches 401Ks as that is very rare in today's world. It is much easier to see significant net worth increases with such good fortune.

When we get to the "other side" we can compare and see who made the best financial decisions for the long-term...

but I'm sure we can agree that the best financial advice out there is from the First Presidency found here...https://www.lds.org/family/family-well-being

.

Edited June 13, 2012 by lds2

[NeuroTypical]

There are many such stories going around. At the blackest of '08, a full 10% of the homes in my neighborhood were in foreclosure.

Congrats on hitting it big in precious metals! I did a little of that myself (enough to buy a new front door with the profit).

In my opinion, increases in the stock market and gold reflect inflation more than profit lately. I think the stock market is much more likely to crash than precious metals...and food stored ahead for a time of need is always a solid investment as well, and even if it stays the same price you still have to eat.

I dunno. The difference between some precious metals skyrocketing and others not, tell me it isn't a purely inflationary thing. It tells me some folks (and institutions and governments) are flocking to safety, and it worries me about what that says about the dollar. Of course stocks are more volatile and prone to fail than metals - that's the nature of the game. Stocks historically have greater return on investment. The last 3-4 years have been an exception to a rule that has been true for 75 years.

I remember my parents getting all excited in the late '70's about silver. They scrimped and saved and invested. Then the stagflation ended and we had the golden Reagan years, and silver plummeted.

You are very fortunate to work for someplace that matches 401Ks as that is very rare in today's world.

Well, not that rare:

A survey by Towers Watson, the global consulting firm, found that only 17% of Fortune 100 companies still offer a direct-benefit plan, down from 67% in 1998. Those that offer direct-contribution plans, such as 401(k)'s, total 58%, up from 10%. Despite the decline, many of the country's best-known companies still offer pensions to at least some employees.

I still think the best financial advice out there is from the First Presidency found here...https://www.lds.org/family/family-well-being

Oh, I wholeheartedly agree. I've been quoting Pres. Hinckley's 1996 address through the 1-2 minor recessions and the major recession we've had since he gave it. Stay the heck out of debt, don't buy things you can't afford, store and prepare against hard times. I'm with them 100% too.

Isn't it interesting that you and I can be so in alignment with who we listen to, and yet come to such different conclusions about the amount of melodrama we should experience as a result?

[lds2]

"As these data show, if you have access to a defined contribution plan--and participate--you are among a select group."

How Does Your 401(k) Match Up?

There are a lot more employers offering 401K plans rather than retirement, but matching dollar for dollar is a whole 'nother kettle of fish...and many more people are working lower income/part-time jobs which do not provide such benefits and/or are considered out of the employee pool completely for statistical purposes. Of those who can and then do participate in 401(k) plans 1/3 of those plans match dollar for dollar which as the above article says encompasses "a select group."

***

Last week the Congressional Budget Office (CBO) issued its annual long-term budget outlook report and the 2012 numbers are not looking good at all.

In fact, the CBO said that the federal debt is going to rise to 70% of GDP by the end of this year...wow!!! that will be the highest percentage since World War II!!!

The report also paints a really scary picture of the future of entitlement spending, as the retiring Baby Boomers will cause government spending on health care, Social Security, and Medicare to go through the roof as a percentage of GDP in the coming years as they age and require more services that must be provided by the younger already struggling population. As most of us know SS has been something of a ponzi which can't be supported by a declining younger population.

(And this doesn't include the continual flow of people getting laid off each week and needing government assistance.)

Congressional Budget Office (CBO)

.

Edited July 14, 2012 by lds2

[lds2]

Fed’s Holdings of U.S. Debt Have Jumped 452%

By Terence P. Jeffrey, June 7, 2012

On Jan. 28, 2009, a week after the last nomination, the Fed owned $302 billion in U.S. Treasury securities. On April 25, 2012, the latest date reported, the Fed owned five and a half times that much in U.S. Treasury securities–$1.668 trillion.

(CNSNews.com)

Back in 2008 people were saying when the Fed starts buying US debt watch out that will be the end of our financial system as we have known it. But instead of a drop off the cliff we have seen a steady decline.

People were expecting a big drop or collapse of the dollar as those countries who buy our debt started selling to get some value before it was worthless, etc....the selling hasn't happened...at least not yet, BUT they have been diversifying and using their US dollars to buy assets around the globe, particularly mining operations and farmlands and foreign properties both private and publicly owned (even in the US), and major corporations and businesses. They have been buying companies and then taking the US technology and copying that for further copy-cat businesses in their own countries, etc. China is even currently buying major banks, and "bailing out" small countries, etc. Russia have also been buying and building up their military with the profit from their oil reserves, etc. China and Russia now have improved stealth technologies that we don't have. Russia also has control of the major oil pipelines and gas lines feeding much of Western Europe.

But countries who have bought our debt are not buying as much and are getting out of using the dollar for international trade agreements which continues to hurt our economy. For instance China is buying oil from Russia and Iran and has made a trade agreement with Japan without using the dollar. India is buying a huge amount of oil from Iran each day using gold, etc.

AND the FED is buying an ever increasing percentage of US debt rather than other countries. Money continues to be created out of thin air by the trillions to keep the international banks afloat, etc.

.

Edited July 14, 2012 by lds2

[bds4206]

China is even buying major banks, in some ways even small countries, properties both gov and private in the US, etc.

But countries who have bought our debt are not buying as much and are getting out of using the dollar for international trade agreements which continues to hurt our economy. For instance China is buying oil from Russia and Iran and has made a trade agreement with Japan without using the dollar. India is buying a huge amount of oil from Iran each day using gold, etc.

I'm not "the world is gonna end guy" but this is something everyone needs to worry about. As soon as oil stops being traded in the dollar we are done.

[NeuroTypical]

Could you explain a little about what "done" means to you?

[Traveler]

Some people express ideas better than I do. I really like a line from Shakespeare that went something like this:

Nothing is as good or as bad as it seems only that thinking makes it so.

The Traveler

[lds2]

"And so today in these strangely perilous times, in the true Church of Jesus Christ we teach and live the principles of His gospel...

The senior leaders of the Church will virtually always be seasoned by decades of preparation...

But we will stay on course. We will anchor ourselves as families and as a church to these principles and ordinances. Whatever tests lie ahead, and they will be many, we must remain faithful and true."

President Boyd K. Packer, "The Test", October 2008)

The Test - general-conference

Edited June 13, 2012 by lds2

[lds2]

Could you explain a little about what "done" means to you?

Some people express ideas better than I do. I really like a line from Shakespeare that went something like this: Nothing is as good or as bad as it seems only that thinking makes it so.

Not so different from "The Secret" Law of Attraction...The law claims that desirable outcomes such as health, wealth, and happiness can be attracted simply by changing one’s thoughts and feelings.

During the millennium something similar (but involving a lot more work) could work. But until then we are living in a telestial world where there are those living and not who would wish to control us and the world in every way.

What this "test" the prophets have been talking about will look like I can't say, I don't believe from what they have been saying that they can exactly either.

So how an ultimate end of the financial world as we've known it (dollar) collapse could happen is anyone's guess. It could be hyper-inflation or deflation, global banks failing, a devastating natural calamity in the US, a "black swan event," disease, famine, war...seriously just read Matthew 24 regarding what WILL happen in the last days and use your imagination. It could be organized or chaotic...or ??? It could be days or many years away.

.

Edited July 14, 2012 by lds2

[Guest]

For several months after 9/11, I become obsessed with watching the news for signs of another attack and economic collapse. I was frantic and miserable and had no peace in my life. I had to quit. I still work on food storage and other preparations, but it's out of obedience, not fear.

[lds2]

It makes me happy to hear of people that are prepared/preparing out of obedience. Wonderful!!!

Like you, there are some things in the news that really bother me and I stay away from those articles for my own happiness and wellbeing. For me it isn't the financial stuff so much, but it is the articles on torture, rape, and other horrendous acts particularly related to children and the other stuff that shows how depraved some people are becoming. I feel sick after just reading the headlines of such things.

But reading the financial stuff does make me think of my Sunbeams and other people I love and I just want to do all I can to help others get ready because, regardless of how much as I would like to, I can't help all the family, friends and aquaintances that have said, "I'm coming to your house."

.

Edited July 14, 2012 by lds2

[NeuroTypical]

Yeah, I've had "I'm coming to your house" said to me a few times too.

Top 10 responses to "Oh, if something bad happens, I'll just come to your house!"

10. Not without six months of your own supplies, you won't.

9. Yeah, your family means so little to you, I'll be sure to pick up your slack. Why don't you bring all your credit card debt while you're at it.

8. Sweet! We needed a decoy to walk the wire and be the first person shot!

7. Just be sure you show up with a ladder. Not sure how many corpses you'll have to climb over.

6. I may give you the shirt off my back, but try to take it, and I can only spare half a buck worth of subsonic copper hollow-points.

5. Hey, bring all the barter goods you want - I love to haggle. A roll of TP will get you past the dogs.

4. Be sure to bring some good boots, cuz you'll be up to your ankles in manure earning your keep.

3. Fine by me. I hear people taste like chicken.

2. Make sure you come early - the first five help me shoot the next fifty.

#1 is a tie:

1. "Don't do that, Mommy will just shoot you and make Daddy bury you in the backyard." (Are my kids great or what?)

1. "What, you thought I was gonna bunker down somewhere people can find me?" (Note found in my empty house)

[HEthePrimate]

It makes me happy to hear of people that are prepared/preparing out of obedience. Wonderful!!!

It makes me happy to hear of people who prepare themselves because it makes sense to prepare.

Like you, there are some things in the news that really bother me and I stay away from those articles for my own happiness and wellbeing. For me it isn't the financial stuff so much, but it is the articles on torture, rape, and other horrendous acts particularly related to children and the other stuff that shows how depraved some people are becoming. I feel sick after just reading the headlines of such things.

But reading the financial stuff does make me think of my Sunbeams and other people I love and I just want to do all I can to help others get ready because, regardless of how much as I would like to, I can't help all the family, friends and aquaintances that have said, "I'm coming to your house."

Sometimes I want to ignore the news and just live my life, because so many of those news stories are disturbing. But inevitably I go back to reading the news (I don't watch much TV) because I want to have some idea what's going on beyond my own little life. Plus, I figure that if I'm going to vote responsibly, I'll need to understand what the issues are.

But yea, it doesn't hurt to take a "news vacation" every once in a while, in order to keep one's sanity!

Peace to you.

[lds2]

$950 BILLION dollar Bailout about to be announced for Italy and Spain

Debt crisis: EU leaders set to announce €750bn Spain and Italy bailout deal - Telegraph

G20 warns US over deficit amid fears it is the next crisis to hit

America has been given a rare warning from G20 countries not to botch its own deficit-cutting measures amid fears that the world's biggest economy could fall off a "fiscal cliff" next year...While the world's most powerful economies urged European governments to do more to end their crisis, the rebuke to The White House reflects increasing concern that America's struggle with its own $15 trillion of debt will be the next to hit the world economy.

G20 warns US over deficit amid fears it is the next crisis to hit - Telegraph

Fitzpatrick, a 28 year veteran and top analyst at Citibank, which has $1.3 trillion in assets, also said, “the concern levels are still there, and if anything they are becoming elevated.”

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Richard Russell, DOW Theorist

“You can be sure that the bear market will try to make you believe that you should be in this market.” Russell also cautioned that “Money is rushing around the globe in a mad search for income and safety.”

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