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Skol

33,072 Posts.

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16/05/17

09:31

Post #: 24709041
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Originally posted by Crom Valen ↑

In fact central banks were invented because of crippling booms and busts but you haven't worked that out yet, the Federal Reserve was enacted because of a series of out-of-control manias , you're not a student of history.

LOL - and what a great job they did of preventing the GFC!! Worst bust out in 80 years and just about brought down the whole financial system!!

And what do we have now: a crippling bust followed by a crippling boom!! If you can get away from the reporting of housing crises which dominate our media, you've done very well!! Wait til it turns to a bust again!! Crippling will be an understatement!!

What could lie ahead? Well, I reckon it'll start with a credit crunch, and then we'll see a liquidity crisis, and then the collapse of those big inflated bubbles, the ones artificially inflated by the Central Banks.

https://www.canstar.com.au/home-loans/global-financial-crisis/

The credit crunch

The global financial crisis (GFC) or global economic crisis is commonly believed to have begun in July 2007 with the credit crunch, when a loss of confidence by US investors in the value of sub-prime mortgages caused a liquidity crisis. This, in turn, resulted in the US Federal Bank injecting a large amount of capital into financial markets. By September 2008, the crisis had worsened as stock markets around the globe crashed and became highly volatile. Consumer confidence hit rock bottom as everyone tightened their belts in fear of what could lie ahead.
The sub-prime crisis and housing bubble

The housing market in the United States suffered greatly as many home owners who had taken out sub-prime loans found they were unable to meet their mortgage repayments. As the value of homes plummeted, the borrowers found themselves with negative equity. With a large number of borrowers defaulting on loans, banks were faced with a situation where the repossessed house and land was worth less on today’s market than the bank had loaned out originally. The banks had a liquidity crisis on their hands, and giving and obtaining home loans became increasingly difficult as the fallout from the sub-prime lending bubble burst. This is commonly referred to as the credit crunch.
Although the housing collapse in the United States is commonly referred to as the trigger for the global financial crisis, some experts who have examined the events over the past few years, and indeed even politicians in the United States, may believe that the financial system was needed better regulation to discourage unscrupulous lending.

The global financial crisis entered a new phase

The collapse of Lehman Brothers on September 14, 2008 marked the beginning of a new phase in the global financial crisis. Governments around the world struggled to rescue giant financial institutions as the fallout from the housing and stock market collapse worsened. Many financial institutions continued to face serious liquidity issues. The Australian government announced the first of its stimulus packages aimed to jump-start the slowing economy.
The U.S. government proposed a $700 billion rescue plan, which subsequently failed to pass because some members of US Congress objected to the use of such a massive amount of taxpayer money being spent to bail out Wall Street investment bankers (who were believed by some to be one of the causes of the global financial crisis).
By September and October of 2008, people began investing heavily in gold, bonds and US dollar or Euro currency as it was seen as a safer alternative to the ailing housing or stock market.
In January of 2009 US President Obama proposed federal spending of around $1 trillion in an attempt to improve the state of the financial crisis. The Australian government also proposed another stimulus package, pledging to give cash handouts to tax payers, and spend more money on longer-term infrastructure projects.

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Hahaha, hunker down, actually the current economic expansion isn't a boom, it's an expansion, not like the 2011 gold mania. But you've been telling us the world economy's going down the toilet now you're telling us it's a boom, right?

I'd sooner listen to Warren Buffett than a perpetual chicken little like you, he's got credibility, you've got none.

Last edited by Skol: 16/05/17
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