Thread: Russia May Face Debt Crisis Like Greece

Originally Posted by socal

yeah, so why talk about a creditor nation being fucked ?

because it's only creditor if you have debtor on the other side

who they are going to export their shit when the debtor have no more cash,

that's right, they will be equally fucked

that's the beauty of it socal, you think like a right wing retard, that's why you always miss the other side of the equation

[quote=Butterfly;1794929]

Originally Posted by socal

yeah, so why talk about a creditor nation being fucked ?

because it's only creditor if you have debtor on the other side

That is total absolute bullshit. The US was the biggest creditor nation in the world. At the same time, it was the biggest EXPORT nation in the world. Learning some basic economics would go a long way.

who they are going to export their shit when the debtor have no more cash,

Who said only exporters only export to debtors ? Germany and Japan trade with each other.

that's right, they will be equally fucked

No, the easy money, debtor socialist douche bags are fucked and if the whole system comes crashing down, its only the amount of gold that matters. Russia has allot of that too.

that's the beauty of it socal, you think like a right wing retard, that's why you always miss the other side of the equation

knowledge of basic macro economics makes somebody a right wing retard eh...

I still cant believe, out of all the economic basket cases staring everyone in the face, along comes butterfly bashing a creditor nation like RUSSIA.

Originally Posted by socal

The US was the biggest creditor nation in the world. At the same time, it was the biggest EXPORT nation in the world. Learning some basic economics would go a long way.

you dummy, a net exporter will always be a creditor

the US was spreading his USD (lending to foreigners) worldwide as they become a bigger exporter, how do you think the USD became the world currency ?

you can't be an exporter or a creditor indefinitely, eventually you become a net importer.

[quote=Butterfly;1795364]

Originally Posted by socal

The US was the biggest creditor nation in the world. At the same time, it was the biggest EXPORT nation in the world. Learning some basic economics would go a long way.

you dummy, a net exporter will always be a creditor

To who ? The US demanded gold for their exports, that is how they amassed 20,000 tons. Gold is nobody's liability.

the US was spreading his USD (lending to foreigners) worldwide as they become a bigger exporter, how do you think the USD became the world currency ?

The only reason the USD became the world reserve currency is because it was redeemable in gold. In other words, redeemable in nobodies liability.

you can't be an exporter or a creditor indefinitely, eventually you become a net importer.

You can only be a net importer if the people you are buying from will accept your paper as payment. The US accepted nobodies paper as payment, only gold but for some reason, China and Japan mainly, have been accepting US paper for their exports since 1971.

Butterfly, have you forgotten debt in the equation? That's currency too and China's bought loads of it. Interesting times but I think the US $ will continue as reserve currency for quite a long time to come. Russia has a problem in that welfare will intrude significantly and balancing the books exporting gas and oil ain't going to cut it alone. They are heading for problems but not really of interest outside of energy horizons.
China is the biggie and I believe I said 2 years ago somewhere on this board that it will disintegrate under the weight of social pressures. That scenario seems to be approaching faster than I thought but then inflation is the greatest accelerator for change. Glad I'm not buying property at the top of the market here in Thailand.
The euro is dead but that will totter ever onwards ironically to be saved in the short term by the Chinese who seem to be buying Greek debt.
The £ is in for a roughish ride but will improve by next year - talk of a bankrupt country which makes nothing is as ever ill informed tosh but usually spouted by idiots of no consequence. Now financial services has decreased the manufacturing sector has assumed greater importance and probably accounts for 20 % of GDP - hardly an inconsequential sum nor indicative of a country in terminal decline.

I wish I could say the King is dead, Long live the King but that fat Bunteresque bastard isn't although one can always hope for an early coronary. Bung up those interest rates and improve the £ so thegent can improve his lot.

[quote=thegent;1795782]

Butterfly, have you forgotten debt in the equation? That's currency too and China's bought loads of it.

China also is the biggest producer of gold and the biggest importer of gold in the world. To put that into context, that is like Saudi arabia being the biggest importer of oil.

Interesting times but I think the US $ will continue as reserve currency for quite a long time to come.

2 to 5 years maybe....

Russia has a problem in that welfare will intrude significantly and balancing the books exporting gas and oil ain't going to cut it alone. They are heading for problems but not really of interest outside of energy horizons.

Russia is a creditor nation with huge forex reserves and natural resources they are willing to tap.

China is the biggie and I believe I said 2 years ago somewhere on this board that it will disintegrate under the weight of social pressures. That scenario seems to be approaching faster than I thought but then inflation is the greatest accelerator for change.

The only reason there is so much inflation in China is because they have the RMB pegged to the US dollar. When they stop pegging, the US dollar will fall and the RMB will rise. That is deflation in RMB and inflation in the dollar. China could export that inflation back to the US in 15 minutes if it wanted to.

The euro is dead but that will totter ever onwards ironically to be saved in the short term by the Chinese who seem to be buying Greek debt.

The Euro zone is a net creditor with no trade deficit(the dollar has the biggest trade deficit in history). The Euro zone is the first non nation state currency, it is China's biggest trading partner and it has more gold then the US(10,000 tons) The Euro is probably going to be the next reserve currency.

Out of the big 3 currencies, the USD, the Yen and the Euro, the USD is actually the worst of them.

Originally Posted by thegent

Butterfly, have you forgotten debt in the equation?

debt is money flowing into the system, part of the capital structure of a nation

you can't function without debt, and it's highly naive to think you could

however, it doesn't mean you should take massive amount of debt. The US and Japan are still at acceptable levels despite what many think. Comparing a multi-period borrowing with annual income doesn't mean much actually when that ratio is constant. It's like comparing your outstanding mortgage with your annual income.

Unemployment is a more worrisome statistics though,

Originally Posted by Begbie

High inflation until the currency is so devalued that those ridiculous house prices vanish in real terms,

unlikely to happen in such dramatic effects, more like housing price in England will collapse in nominal terms (and real terms in a lesser extend). Inflation will not be back to the 80s, England is a different country now. The lack of growth and opportunities in England will help stop running inflation.

Originally Posted by Butterfly

more like housing price in England will collapse in nominal terms (and real terms in a lesser extent).

Pardon?

Originally Posted by Butterfly

oh and you forgot whores, they have the best looking whores in the world

Yes, after they shave.

Originally Posted by The_Ghost_Of_The_Moog

Originally Posted by Butterfly

more like housing price in England will collapse in nominal terms (and real terms in a lesser extent).

Pardon?

yes

I suspect real rate in England will eventually go up which will crash the housing there in both nominal and real terms, an interesting phenomenon to witness

currently we can safely assume that real interest rates are negative (cash is safe but expensive to hold, cheaper to borrow), and that is not going to last forever though, and when it doesn't, it will negatively impact all kind of assets (like commodities) in nominal and real terms. Quite a bold prediction I know, but I don't see the current situation lasting forever when nominal interest rates are so low and inflation well above them.

The question is when,

Originally Posted by Neo

due to the shortage of housing stock

how is that possible with all the Brits leaving England ?

Originally Posted by Neo

The shortage of stock ensures that the price remains within 70% of it's pre 2008 high

which is still considerably high, crash didn't happen yet, when it's 30% of pre-2008 high, we will be close

Originally Posted by Neo

buying to rent will continue to give a good rate of return on the investment.

says who ? and how ? with Brits who can no longer afford rents, don't see how you will capitalized your 500,000 pound house with 1,000 pound a month rent

Originally Posted by Neo

So no, you're suspicions are unfounded.

I don't think they are, but I might be a bit optimistic about my expectations

Originally Posted by Neo

you can expect a steady 5% return on your investment.

is that net or gross ? I seriously doubt you could get 5% net on your investment, more like 4% gross if you are lucky and not including all kind of overhead and allowances

can you you get 2,000 GBP a month for a 500,000 GBP house ? you can't get much of a nice house in England these days for 500,000 GBP so paying 2,000 GBP a month for it sounds outrageous

Originally Posted by Neo

But yes a Greater London house in the suburbs, 3-4 bedrooms, cost £350-400k

that's actually quite cheap, how far is Greater London from the city ?

I am a bit suspicious of that 350-400k figure though,

Originally Posted by Neo

1% difference is splitting hairs really when investors are using company taxation benefits

over a 20 year term investment, it becomes quite a lot, and I am not including the different allowances and maintenance costs, I suspect that number is closer to 2% net than 5%, unless of course you are renting a dump to some Northern Chavs, so then, yes, it would be profitable, only if they pay the rents or don't destroy your place when they leave

properties however are a "safe investment" when you don't flip houses using leverage, so the low returns are to be expected.

It's not great, but it's not bad.

Returns are generally around 5%. There won't be a crash. Your suspicions are wrong. Do your homework.

Originally Posted by Neo

QED no housing collapse... it's already happened.

wait until Greece default next year, and interest rates go to the roof, then we can see

Originally Posted by Neo

Do your homework.

I did, but did you ?

negative interest rates are not going to be there forever, that's why housing price haven't crashed yet in England.

The 2008 crisis was just a warning.

Yeah... as usual you quick with the replies, but you don't really consider the answers to your questions.
It won't go lower, because it has already crashed and the mortgage defaults have already occured, the rest are simply in negative equity or would make a small profit if the intention was to sell them or are being bought up for investment.

If Greece goes down with a thump then we will all go down. But that is another matter. However people still need a roof over their heads.

Originally Posted by Neo

Returns are generally around 5%

gross if you are generous, not net, or are you one of those clueless individuals who keep confusing revenues with net profit ? oh wait

Originally Posted by Neo

If Greece goes down with a thump then we will all go down.

absolutely, property price in England won't be the only ones to crash

Originally Posted by Neo

However people still need a roof over their heads.

yes, but they won't be buying, hence no volume, property market fucked