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epicsurvivorThe Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.
“A very nasty period is soon to be upon us – be prepared,” said Bob Janjuah, the bank’s credit strategist.
A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.
I’m not sure how one can “brace for a full-fledged crash,” and RBS doesn’t offer any suggestions, other than “Cash is the key safe haven.” However, if inflation continues to be propelled toward double-digits, the value of a cah investment is steadily eroded.
The concluding statement in the article was somewhat cryptic: “the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.”
We all are experiencing the results of the oil price spike, and will continue to do so for the forseeable future. That this is a less powerful force than debt deflation is staggering. As the perceived value of debt instruments decrease (think sub-prime crisis on steroids), the resuting financial cascade will be historic.
Tags: Europe | Markets | Issues | stock | crash | inflation | bonds | research | report | global | World | Scotland | alert | September | Corporate | CHICKENS | Boom | emerging | CREDIT | CONTAGION | CLIENTS | brace | Index | points | months | warns | advised | spreading | equities | roost | excesses | full-fledged | paralyses
Filed under: News and politics
Hunh. Well, we’ll have to meet back here in September and see whether the stock market crashed by 300 points or not.
Sounds kinda like 1987.
As for the oil thing, I think it’s stupid to be sending money overseas that could be used and spent here. I heard another Democratic excuse for not drilling on the news earlier today “Well, if the oil companies started drilling today, there wouldn’t be increased oil for 5 more years and the prices wouldn’t get lower until then”.
WHAT a bunch of geniuses we have in government. Using that logic, why should we even send kids to school? I mean, it will be 12 YEARS (13, counting kindergarten) before they freakin’ graduate. And then what? More damn school or training! Why are we even wasting the effort for such a long-term goal?
Er, sorry, I got sidetracked.
From where I’m sitting, in a state where the foreclosure rate is pretty high, the real estate bubble hit very hard, construction is at a halt, and the state’s budget has gone on a severe monetarily-restricted diet, it ain’t that bad. Really.
If we really believe that the SWHTF and the end of the world as we know it is coming, perhaps paying off our debts is a piss poor way to prepare. Max out the credit cards for the stuff* we really need in an emergency.
*Making my list, checking it twice. Eliminating everything that goes above my $50 credit limit.
I don’t know what I think about the “S” hitting the fan. The only thing I have as a reference point is all of those EOTW movies. Or maybe Revelation.
If the technical traders are right, we are close to the legendary “Elliot Wave” — and the collapse will happen fast.
My guess is that we are in for a very choppy transition, and ultimately, a reduced standard of living.
Dang, I hate being pessimistic
I guess it is my life experience, and time in the military. I will prepare the best I can, then adapt, improvise, and overcome.
If there is a WW crash, it’s effects can’t be known before hand, too many variables.
Personally, I don’t think it will. 1987 was a sick and twisted year, but I continued to not only survive, but thrive. Business was booming, and I was able to buy a bunch of foreclosures, that I would have never been able to. They sold in a short period of time, with little or no improvements, the buyer’s got a good deal, and I made a nice profit.
If all the cash is made useless, then nothing else has any value, either.
I think we will be alright. It might be the call of the “Shrieker’s” on this report.
With many of the major players in OPEC saying that oil needs to be at or about $100, and are ramping up output, some of the inflationary problems will subside.
I refuse to accept a reduced standard of living.
I mean, damn, I have to get up early in the morning and take care of the livestock and shovel poop. How much lower can you get than that?
I could use some of that for my compost heap