Market Outlook

What Happens When the Financial Bubble Pops

Comments (9)
  1. Brett Austin says:

    Congratulations: this is the very best article you have written re: debt and it’s insidious path.

    I applaud you for being the first (I follow many blogs/guru’s etc) to truly explain the serious issues concerning debt,
    leverage, etc.

    I am a US citizen living in the Peoples Republic of Kalifornia (misspell intentional).

    You, so to speak, hit the nail on the head. Interesting but pathetic is the national min. income idea – in my mind a simple way to control the masses. Call it dictatorship, communism, socialism, whatever. The key word is control. Just like in US today, it’s all about maintaining control of the masses. Of course, as usual, when the elite’s economy fails, the masses revolt. Think French Revolution.

    I am now focused on N. Korea and Iran as nuclear powers and the remedies. Perhaps this is a future opportunity for you since
    no individuals seems to have the guts or intelligence to solve the problem. Or maybe it’s not an issues since if everyone had a nuke, only the totally insane would use it , but that’s another story.
    Cheers for a great job
    Brett

  2. RJ Ferguson says:

    A very disjointed long and rambling article. Like most doom and gloom artricles, this article focuses on all the negatives and does not address any of the positives of our economy. The article asserts that personal and corporate debt are at danagerously high levels. It also asserts that when the bubble pops, people will be more receptive to UBI. All doom and gloom articles are good at fear mongering and this article is no different. The article does not provide solutions nor does it contrast the negatives in our economies with positives. The author appears to put a negative on the implementation of UBI when he states ” In other words, our next generation is not only going to be poorer, but they’re going to be left with little opportunity to expand their wealth. Think more people, less jobs”.

    My opinion is that our society is going through a monumental shfit due to the advances being made in big data analytics, artificial intelligence, and robotics. It is time for UBI. Stop requiring people to live to work and instead give them the opportunity to work to live. By implementing UBI in every country in the world, there will be world-wide improvement in standard of living. Why shouldn’t every individual on the planet have access to good shelter, food, healthcare, and education? Be it billionaire or beggar, these basic essentials should be avilable.

    There are a lot of challenges to address with the implementation of UBI however, it’s time has definitely come. Lets use some examples to explain why UBI is a must have:
    – The collapse of Enron in 2001 resulted in the loss of more than 94% of the value of the company’s penison plan.
    – Although Worldcom employees seemed to fare better than Enron, they definitely experienced tremendous losses to their defined pension funds.
    – In Canada, Nortel collapsed in 2009 and as a result by 2011, Nortel pensioners saw their pensions cut to 60 per cent of their original amount, with other benefits like health insurance eventually cut and it continued to worsen. As a result of years of litigation, in 2016, Nortel pensioners settled for 40 cents on the dollar. Other companies in Canada are also experiencing stressed penion funds.
    – In Canada, municipality, provincial or federal pension funds are stressed. According to a 2016 National Post article (Source: Kathryn May, https://goo.gl/giQqDw ) the public service pension plan shows a $4.4 billion shortfall.
    – finally, penions funds flush with cash are venturing into more riskier investments in an effort to ensure they can meet their obligations. However, what happens if the investments go south? In Canada management of pension funds are largely unregulated — what’s regulated is the payments to the beneficiaries. But what does that mean if the fund is broke?

    The time for UBI is here. It is not fair that every indivudual must either be good at the game of capitalism or lucky at landing a job with a good pension plan. The time is now for introducing on a world-wide basis, UBI for everyone. But implementation will require policies to ensure UBIs are used only for shelter, food, healthcare, and education, and not for purchasing things that fall outside of these basic essentials.

  3. Andy Luff says:

    Ivan:
    Interesting and thoughtful article. If we were to take your advice and take profits from our portfolios where should we put the money? Also what is happening with NXO stock?
    Yours truly,
    Andy Luff

    1. jrj90620 says:

      You would be amazed at how people can get by without working,if someone pays them to do that.Your UBI would cause a lot of people to stop working or doing a lot less work.Would really impoverish the countries that adopted it.

  4. Bob Drummond says:

    Unlike RJ FERGUSON, above, I think UBI will be a disaster.

    What is fair and who decides it. How much would the state decide a person needed and how would it be paid for. Would UBI be a floor or would it be variable.

    Again, the problem, who decides. I have seen no discussion that ties payment to actual cost of living, we already know how creative the government can be with figures. Would it be a fixed flat payment for the whole country or regionally variable. What would the rules be, would it be universal and who would decide who was entitled to receive it.

    “TANSTAAFL’ {There ain’t no such thing as a free lunch}

    If you are interested, you might want to look up the books of Mac Reynolds, a science fiction writer of the 70s. They may be hard to find but I think they will be well worth your attention on this subject.

    Tomorrow is coming, like it or not.

  5. jrj90620 says:

    Seems to me that all these debts,worldwide,aren’t real money debts.They are fiat currency debts.Govt can create unlimited fiat currency,to pay all debts.I don’t think the central banks want to end the party.If they accidentally cause a recession by raising interest rates,they can always reverse course.I believe the real disaster will happen when these 100% fiat currencies crash.Then the game is over.Don’t know when that will happen.

  6. Mike lowe says:

    Very true sadly most people dont see it coming and refuse to see it. They bury their heads in the sand.

  7. It may be in its infancy, but I see crowdfunding becoming a community development tool and providing small communities an opportunity to develop the innovations found in their community. In BC where I live 83% of the employment is from small business.

    Will we become slaves? I don’t agree with this conclusion. My feeling is that we will localize our financial activities and create a boom based on the commercialization of local innovations. As far as innovation goes, I have lived in numerous small towns and each of them have their share.

  8. Thierry says:

    The 0.00001%, Can choose whatever world they want to live in. Id have done exactly the same Given the opportunity.

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