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The financial system - it's completely fucked, isn't it?
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Edited Feb 16, 2009, 14:39
Re: The financial system - it's completely fucked, isn't it?
Feb 16, 2009, 14:39
PMM wrote:
Deflation? So if I put £100 in the bank and it attracts bugger all interest, it's purchasing power will increase anyway.


Yeah, pretty much, it'll be noticed first in the consumer market with large ticket luxury goods. People will put off buying things as they expect (probably correctly) that shops and producers will constantly mark stuff down in order to shift it.

Yep Bear, there is a good chance that more money will be pushed into the market as you say, which always leads to incredible inflation (Zimbabwe being the most recent example). However, rightly, every govt has said 'last resort' to that. Also, mechanically, it won't to me, work in any fashion. Maybe I'm missing something.

Good call on China, yep, was going to mention there in my post. There are a lot of possible outs that China could provide, which it will need to when it's customers (us) can't buy their products anymore.

China is very interesting as it has no real internal consumer market to speak of, well not as in relation to the size of foreign currency its sitting on anyroad. I have heard recently of layoffs at companies in China, but I haven't done any decent research into those reports yet. There is every chance of some major upheavals in China now its encouraged so many people into it's cities, trained them, and now there is a serious prospect of not being able to employ any of them. These are people well versed in revolutionary theory and self organising too (yep, sorry, simplification, it is THE 'crack down' country after all. Still, they do all know the political theory). Mind you, with the shit load of surplus foreign cash they have they could pay/bribe their own population for a few years I think.
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