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Subject: top issues of 2008!
usajoe    1/2/2008 4:38:12 PM
With the situation in Pakistan with the nukes and terrorism, and the same old stuff with Iran, the Kosovo independence with Russia and the West, the Iraq and Afghanistan and the whole mid. East issues. What do you guys think is going to be the biggest and most dangerous stories of 08.
 
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Armchair Private       1/2/2008 5:21:39 PM

With the situation in Pakistan with the nukes and terrorism,
and the same old stuff with Iran, the Kosovo independence
with Russia and the West, the Iraq and Afghanistan and the whole
mid. East issues. What do you guys think is going to be the
biggest and most dangerous stories of 08.

Impending, but temporary collapse of the western financial system.
 
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Alexis       1/3/2008 4:15:46 PM

1) The most important feature of Year 2008 will not be a war, a coup or an insurgency. The most important event this year will be a systemic crisis of the global financial system.

 

Predictions are dangerous, especially predictions about the future. On the other hand, one has to describe the most probable course of events, as one sees it? since it?s the very objective of this thread! By and large, the most probable course of events is as follows:

-           Around the beginning of the year, a series of failures of several major banks, first in the US, then in other countries

-           Continuation of downward trend in US housing market, leading to flattening of the housing bubble, with prices down ?30% to ?40% in real terms

-           Similar collapses of housing bubbles in several European countries, later in the year

-           Stock markets flattened, down ?20% or worse in real terms

-           US economy enters a period of recessflation: combination of contraction of economy and strong inflation. For this reason, stock market and housing bubble flattening may be far less impressive in dollar value than in  real value, because of rising prices and the collapsing value of the US dollar itself

-           Economic growth averaged on the whole year will be anaemic in China, close to zero in Europe and in Japan, starkly negative in the US

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Armchair Private       1/3/2008 5:23:47 PM
$ & £ nose dive (further).

China floats, or re-values the Yaun up against the dollar. (2009 maybe)

Inflation explodes everywhere as everyone realises that paper money is made only of paper (or bits) and there's too much chasing too little real resource .... or possibly deflation as everyone realises that the bad debts incurred everywhere are equal to or greater than the past few years global economic growth, and money is destroyed on a vast scale...... I guess inflation.... real asset prices (except property) go up in nominal terms anyway.

Jeff_F_F's post on the "worst enemy" thread on bird flu maybe the canary in the coal mine no one wanted to see.

Iran does not provide a causus belli.

Depending on how bad things get, Russia may flex it's energy muscle in Europe. Europe may begin to wake up from its end of history snooze.

Oil either at $175+ or much, much higher by this time next year.

Pakistan jumps to the head of the rest of the world's "list of nations to worry about."

 
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Jeff_F_F       1/3/2008 7:01:58 PM
That's a good call actually, it would have fit well here.
 
So here, I'll predict no Pandemic (fingers crossed) but that the total number of people killed by H5N1 will double again this year.
 
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Jeff_F_F    Any presidential candidates with degrees in economics?   1/3/2008 7:47:55 PM
I hope you are wrong about recessiflation/stagflation, especially combined with a Democrat president. Democrats don't understand that there are some times that only supply-side economic theory will work. That's why Jimmy Carter turned the oil embargo into such a mess, because he kept trying to use demand-side economic controls to remedy it.
 
In general demand-side controls work. The problem is that they move the economy up and down the demand curve, either reducing inflation (lowering price) by slowing the economy (reducing the quantiy of goods and services being purchased), or speeding the economy (increasing the amount of goods and services being purchased) at the expense of higher inflation (increased prices). With stagflation/recessiflation you have both a slow economy (few goods and services being purchased) and high inflation (high prices) which means that any attempt to help one part of the problem makes the other worse.
 
As much as we hate corporate wellfare, it is the only way to deal with this problem--by stimulating the economy  from the supply side. This moves the economy along the supply curve, which allows the economy to be stimulated (increasing the amount of goods and services being purchased) while reducing inflation (lowering prices).
 
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Armchair Private       9/24/2008 8:04:24 PM



With the situation in Pakistan with the nukes and terrorism,

and the same old stuff with Iran, the Kosovo independence

with Russia and the West, the Iraq and Afghanistan and the whole

mid. East issues. What do you guys think is going to be the

biggest and most dangerous stories of 08.


Impending, but temporary collapse of the western financial system.

Gulp.
 
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