Major European Bank Suggests Global Economic Collapse In Next Two Years

[Nachtengel]

Société Générale [based in Paris, and one of Europe's largest banks] has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction. In a report entitled "Worst-case debt scenario", the bank's asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems. Overall debt is still far too high in almost all rich economies as a share of GDP (350 percent in the US), whether public or private. It must be reduced by the hard slog of "deleveraging", for years.

Continued: http://www.telegraph.co.uk/finance/e...-collapse.html

[GroeneWolf]

The article does not say much new. However this deserves comment :

Inflating debt away might be seen by some governments as a lesser of evils.

This sentence is the core of why inflation is considered good. Thanks to inflation the relative burden of debt will decrease. Also thanks to all the money that the American FED and probably other central banks have printed to support all the bail-out programs you can be certain that could have a (strong) devaluing effect in a few years time. A report I have read said 2012 for America, because according to writer of it then the printed bail-out will slip in to the economy.

And I actually highly doubt that it only be some governments. Most likely many governments. Most likely a vast majority of governments would not only see it as a lesser evil, but as something good. Why? Because inflation is already established policy.

Also about buying gold. Could be a good thing, however during the Depression in the USA at least private gold supplies where seized by the government and handed over to the FED. So that is something to hold in the back of your mind if you go for investing in gold.

[SwordOfTheVistula]

Also about buying gold. Could be a good thing, however during the Depression in the USA at least private gold supplies where seized by the government and handed over to the FED. So that is something to hold in the back of your mind if you go for investing in gold.

Since most gold is sold on exchanges and not held in person, it would be even easier for them to do this today. I think an even more likely scenario would be for them to levy a high 'capital gains' tax on the appreciation of the gold, or any other investment, when you try to cash it out and make use of it.

[Jäger]

Since most gold is sold on exchanges and not held in person, it would be even easier for them to do this today.

Gold certificates are only used by professional speculators (which is of course the lion share of gold trade), anyone who buys gold for security reasons, and accepts that it is being stored in no immediate, or direct, access, is highly idiotic, and most even know this.

[SpearBrave]

Buying gold, silver, and other precious metals is always risky. I think if you do buy gold, buy it in the form of coins, bars, or other physical things. Do not buy it on paper.

I listen to the radio a lot and I hear adds to buy gold. They mean gold futures not real gold. I always question who is behind this market, it seems like the same people who are always behind such things. I will never trust adds like that or the people behind them.

There is no doubt that the global currency market will fold one day, just when is the big question. My Grandfather was very wise man and lived through the depression, He always said " never trust a banker or barrister they are mostly jews".

[Æmeric]

Since most gold is sold on exchanges and not held in person, it would be even easier for them to do this today. I think an even more likely scenario would be for them to levy a high 'capital gains' tax on the appreciation of the gold, or any other investment, when you try to cash it out and make use of it.

The capital gains tax on gold coins (they count as collectables) is 28% or 35% if owned for less then a year.

Gold certificates are only used by professional speculators (which is of course the lion share of gold trade), anyone who buys gold for security reasons, and accepts that it is being stored in no immediate, or direct, access, is highly idiotic, and most even know this.

Getting physical possession of the gold & keeping it in a home safe or a safe deposit box is the sanest way of investing in gold. Also, if you buy in smaller amounts - gold coins, troy ounce bars - & pay cash, there should be no record of your ownership.

[GroeneWolf]

I listen to the radio a lot and I hear adds to buy gold. They mean gold futures not real gold. I always question who is behind this market, it seems like the same people who are always behind such things. I will never trust adds like that or the people behind them.

From what I have read if anyone has bought any gold futures they can just as well use them as toilet paper. Because there is very little gold behind those futures. So if it comes done to it there is a large change those futures will be worthless.

[SaxonPagan]

I can also foresee a financial meltdown pretty soon. Central banks just can't keep printing money at the current rate and not expect hyperinflation to occur and it's all about knowing what assets to hold when this happens. I watched that video you posted, Groenewolf, about gold going to $5000 and it wouldn't surprise me because it's undervalued at present (deliberately suppressed by the Fed, I shouldn't wonder!) so gold is an interesting option but, as people are saying, it has to be the physical stuff.

Other good investments for when the fiat system finally collapses are tangible assets like houses, which have the extra utility value that precious metals do not. Even items like long-conservation food will rocket in value at some point so it's best to get plenty of this in. It sounds a bit like a Doomsday scenario but if a crash happens then all the supermarket shelves will be emptied within 24-36 hours and bear in mind that your advanced warning of this will be ZERO!!!

[rainman]

They take a $50 ounce of gold and turn it into a $500 gold coin. Never buy a gold coin they are just luxury items- collectables like baseball cards with little real value. Yeah buy like a bar of Gold. I would invest in everyday items which you would pick up at a hardware store. They are poised to go up in price, everybody needs them so better than gold. So long as it isn't something that will rust or go bad.

[GroeneWolf]

Never buy a gold coin they are just luxury items- collectables like baseball cards with little real value.

If i gona buy gold coins, it would be to add them to my coin-collection. However what you say is true also for jewelry. The price of them is usually much higher then what the gold and probably the working hours that went in it. So from an economic point of view not a good investment. However from an other point of view it could be.