Hi All
Talking about a World wide economic crash is ok, but if it did happen then no amount of planing on any ones part would save them.Here is a scenario for you to pounder over.
The World economy collapses 21st August 2007, stock market disintegrates: financial mayhem rules. People can’t pay there debt loss of millions of jobs, government goes broke and can’t pay welfare.
1st October 2007, you wake up to find that all banking has been frozen and the government has issued new currency and all the old currency is worthless. On the 30th September you had $3 million dollars in the bank because you had sold all your property and liquidated your assets. This has been for nothing because you are now a penniless bum like the rest of the population and your money is totally worthless.
Now! you may think this is total fantasy and can’t possibly happen: well think again because it has happened before.August 1991 the collapse of communism Russia, government stops paying all its wages to the population, economy in freefall, the government is broke.
October 1991, the population wakes up to find all the money in the banks worthless and a new currency has been issued. Riots in Moscow, army troops supported by tanks move in to Red square many people killed. For the next 18 months there are no wages paid by the government and people have to fend for themselves the best way they can.Sure this is a worse case scenario, but people on this tread are talking about total collapse of the World economy. So the above scenario is very likely to happen as history has a particular habit of repeating its self.
So no matter what you do you will fall with the rest of the population even if you do what Steve said in his post? The only thing you can do to protect yourself is to buy gold bullion as money would be worthless, but how would you convert it to cash? With millions of people homeless on the streets as has been stated in this tread the crime rate would be extremely high and you would most likely be killed for you money.Now I do not believe this will happen as I don’t subscribe to all the doom and gloom proficies. This is not the 1930s and since the great depression measures have been put in place so that can’t happen again. Also there are 2 new powerhouse economies starting to emerge in the World, India and most importantly China. These countries alone will continue economic world growth for the foreseeable future. There is also the emerging new Russia that has the biggest oil reserves on the planet that are basically untouched.
So I for one will not be losing any sleep, I will leave that to all you doom and gloomers out there.
Kerwyn.if it did happen then no amount of planing on any ones part would save them.Kerwyn, if somebody in the USSR had been quietly trading some of their paper money for gold during the 80s, secreting it under the pear tree in their back-yard, would they have been better off or worse off than average by the mid 90s?
F.[cowboy2]
Originally posted by melbdude26:A WHOPPING 80 per cent of Australians believe houses are overvalued and more than half expect prices to drop over the next quarter, according to a survey.
http://finance.news.com.au/story/0,10166,16053135-14302,00.html
yes I discussed this ‘survey’ on another site. it is total rot and is sad to see it is still being tossed around as serious research. Having done the survey I can say that some of the questions forced you to make inappropriate responses to continue to the next question.
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
Hi Foundation
I have a pretty good handle on the 1991 crash in Russia. My wife is a Russian doctor and lived through that period there. Her father was high in the communist party in his area and had lots of privileges that the normal Russian did not have: he lost absolutely everything he had in the bank.
To answer your question if he had his money in gold would it have made a difference: the answer is absolutely yes? The problem was that Russian people could not exchange there money for gold even if they wanted to. My wife had gold jewelry, ear rings with rubes set in them and a gold necklace. She tried to sell them but all they were worth was a couple loafs of bread and some caned food.
If it was gold bullion than that would have been a different matter, she could have sold that at a good profit.
As it was she continued to turn up for work every day for 18 months with no prospect of getting paid.
I have to ask would you?
KerwynWould I turn up to work every day for 18 months knowing I wouldn’t get paid??
[blink]
Well there’s one for the book! Never been asked that one before… no, I guess I wouldn’t. I’d go work on a remote farm in return for a couple of small meters in which to grow potatoes.
Potato is the fruit of the earth. You can barbecue it, boil it, broil it, bake it, sauté it. There’s uh, potato-kababs, potato creole, potato gumbo. Pan fried, deep fried, stir-fried. There’s pineapple potato, lemon potato, coconut potato, pepper potato, potato soup, potato stew, potato salad, potato and potatoes, potato burger, potato sandwich. That- that’s about it.
Of course, if I had any kind of allegiance to the communist cause I might think differently, but I’d rather be out there with my potatoes than working for a system where only the highest ranks were properly looked after.And besides – look over there [points vaguely in the direction of the topic] – is that.. what the… whoa, its a house price crash! It’s coming right at us! Quick Ma, grab the hoe, we’re headed for the farm.
F.[cowboy2]
Gold?
Governments have been known to confiscate that too.
The US did it in 1930 I think it was.
If you have it, make sure nobody else knows.
But then how do you spend it?…hmmmmmmmmmmm
Hi WayneL
That was exactly my point on buying Gold to protect your self. It would not do you any good in a total economic collapse as you have said, how would you spend it?I think we could all join Foundation and dig potatoes.
Hmmmmmm where did I leave my hoe?
KerwynI agree with you Foundation.
The best way to protect yourself against a doomsday scenario like this is to owna little bit of land somewhere and some agricultural implements etc.
You may also need a big shotgun to fend off other hungry citizens.
Now I have depressed myself, I am skipping off to another forum where there is less angst and more optimism. Lets all hope that the optimism is not without “foundation” (PUN INTENDED)Giddo
http://www.standrewsplace.com.auKNOWLEDGE IS POWER
Great Economic Collapses of the 20th Century:
German Mark
1914 – 4.20 to the US dollar
1916 – 4.80 to one US dollar
1919 – 42 marks to the US dollar
1923 – 4.2 trillion marks to the US dollarAgentine Peso:
1991 – 1.0 to the US dollar
2004 – roughly 10,000,000,000,000 to the US dollarSee also the Mexican peso in 1994, the Brazilian Real in 1999 etc…
Which is better in such a situation, gold or fiat currency notes?
Of course with the US dollar undergoing its own devaluation, it might not be such a good idea in the future to ‘count your chickens’ by how many USD you can buy, but by whichever economy would step into its shoes – the Euro, the Yuan etc.
These are examples of hyperinflationary currency collapse. Deflation is a whole different kettle of currency.
Without going into too much detail, its worth noting that while inflation is generally accepted to be a rise in the cost of goods, the genesis of these rising prices lies in the devaluation of currency. This can be caused by government spending (deficit spending particularly) or even a growth in consumer debt, above growth in domestic product. Looking to our own national balance sheets (and back to the subject of real estate!), our money supply including debt has been growing at well in excess of 10% per annum recently, mostly due to debt, mostly incurred in the persuit of residential real estate investment/purchase. Make no mistake, every time our money supply increases by 10%, the combined value of all previously existing monies is eroded by the same amount.
This raises 2 big questions – why isn’t the value of our dollar falling against other currencies, and why have prices of goods not been growing proportionately?
The answer to the first is largely because we don’t have a base currency to work from. Most western countries have also been inflating their currencies, cloaking our own lost value from view. The other big economies have fixed or partially fixed exchange rates, so these don’t help either.
As for prices, it would be naive to believe that this global inflation is not behind the rise in oil prices, coal, ores, gold, equities… and of course, house prices.
So where to next?
Time will tell, and I don’t have time to tell what I predict.Later, F.[cowboy2]
Foundation
You speak like you have the wisdom of someone who is 1000 years old, i’m not knocking just very impressed by your replys
Cheers Rick
Monopoly, my favourite game
Hi Voigtstr
Here is the link to the post “What type of vehicle do you have”
https://www.propertyinvesting.com/forum/topic/18815.html
Regards
Regrow
You are a fool for 5 seconds if you ask a question, but a fool for life if you don’t.
Originally posted by Regrow:Hi Voigtstr
Here is the link to the post “What type of vehicle do you have”
https://www.propertyinvesting.com/forum/topic/18815.html
Regards
Regrow
You are a fool for 5 seconds if you ask a question, but a fool for life if you don’t.
I found dazzlings post and added my Moto Guzzi to it, (and desire for a gibbs aquada or lamborghini)
Cheers
SimonEvery day I read economic research from the major Investment Banks (Merrill Lynch, JP Morgan, UBS etc) and there is a big focus on the property market given the number of securitised loans in the money market.
Without expception there are no concerns of a property market crash in any of the global markets.
Originally posted by Nat R:Every day I read economic research from the major Investment Banks (Merrill Lynch, JP Morgan
<snip>
Without expception there are no concerns of a property market crash in any of the global markets.By Turi Condon
September 03, 2005…
many who have borrowed in the past two years would be at risk of negative equity, according to Stephen Walters, chief economist with investment bank JPMorgan. The bank forecasts a 10 per cent fall in house prices nationally and regards Sydney and Melbourne as the most “overvalued” housing markets.“Negative equity doesn’t trigger selling. That’s interest rates and oil prices,” Mr Walters said.
Chief auctioneer in NSW for real estate agency Ray White, Tony Fountain, said the “McMansions belt” of western Sydney and inner, over-built suburbs such as Green Square would eventually take the brunt of housing price falls.“The number of people who have borrowed 100 per cent staggers me,” he said.
He said falling house prices relative to mortgages was putting pressures on young families, investors who owned multiple properties and empty nesters who had increased their mortgages.
“If the parents or families were involved as gaurantors, they could be in trouble too,” Mr Fountain said. “It’s the bleak side of the real estate bubble.”
Nick Dilles, principal of Century 21 in the western Sydney suburb of Fairfield, said there was more evidence of banks taking possession of homes.
“We do a lot of mortgagee sales. We’re probably doing 10 to 15 mortgagee sales a month,” he said. “All bought in 2003, 2004, can’t afford it, couldn’t get out and have been repossessed.”
He said those houses were selling “at least 10 to 20 percent” less than their purchase price
1) Yes, JP Morgan do have concerns over declining house prices.
2) What constitutes a “CRASH!!!!”? Investors losing BUYING COSTS + SELLING COSTS + 20% CAPITAL? Remember many of these people have bought with little equity, therefore their loss can be counted in multiples of their deposit.F.[cowboy2]
10% is not a crash…nowhere does the bloke from JP Morgan use the term…so please don’t misquote again.
Keep inmind that is less than 6mths gain in some recent years.
As for the comments from the white shoe real estate agents…who cares what some two-bit salesman says when all he is after is headline exposure.
Originally posted by Nat R:10% is not a crash…nowhere does the bloke from JP Morgan use the term…so please don’t misquote again.
- I errr… didn’t. I specifically stated “JP Morgan do have concerns over declining house prices.”
- “the bloke” is Chief economist of JP Morgan Australia!
- How did JP Morgan & Merril Lynch go with picking the tech-wreck, or did they continue to deny there was a problem as share values halved, quarter and evaporated?
- What constitutes a “CRASH!!!!” in your opinion? 10% declines in 12 months? 20 percent in 2 years? 20 percent in 12 months?
F.[cowboy2]
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