Credit shut down
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Started by wglassfo - Dec. 17, 2018, 9:16 a.m.

Not sure if this is NTR but anyway

Looks as if some types of credit in the world of high finance are locking up

In other words investors are gun shy about chasing high yield risky loans

 New loans have been cancelled  and banks are stuck with loans on their books that they normally move along to the next entity. Banks usually act as the middle man but seem to be stuck holding the bag

 zero activity could be concerning if investors move to high grade gov't bonds, etc and the Corp world seizes up

This could cause a ripple affect with your typical car loan, home mortgage,  restricted to customers who can provide more secure loans

This ripple effect might affect economic activity and cause a slow down as we all know our system mostly operates on consumer credit

Did the 2008 crisis start with some kind of credit problems

I forget exactly what happened but this reminded me of the early days of the previous crisis

Thoughts

Comments
By carlberky - Dec. 17, 2018, 10:58 a.m.
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" Banks usually act as the middle man but seem to be stuck holding the bag"

Not to worry, Wayne. If there is another meltdown, the Government  can come up with the third  eight hundred billion dollar bailout. AS you pointed out, it's only paper.

By wglassfo - Dec. 17, 2018, 4:35 p.m.
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The problem as I see it and I could be wrong

The world will soon be awash in paper

Did the EU not just finish their printing spree or are they still printing paper

China might let their currency slide in value as they print paper The USA certainly printed gobs of paper and called it QE 1 thru?? I forget how far the Fed went under Bernanke

Canada must be printing as our loonie is almost worthless

Somebody [I forget who] had printed so much money [was it Japan??] that there was virtually no assets left to buy. That is scary if true So: If everybody is printing in a race to the bottom {Trump still says the USD is too high]

At some point the world will revert to gold, silver, who knows as paper of any kind is worthless. World inflation with worthless paper is every bodies worst nite mare

That would guarantee a world depression

In the last depression money just disappeared

This time we might have too much paper

Instead of paying down debt the more debt you have the better as you repay with worthless paper.

Don't know?? . Just a wild arse guess

By carlberky - Dec. 17, 2018, 7:04 p.m.
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"Somebody [I forget who] had printed so much money [was it Japan??] that there was virtually no assets left to buy."

Wayne, you're probably thinking of Germany in the 1920's. The German people were so fed up with the Government that  it made it easy for a charismatic outsider like Hitler to gain control.