Massive Capital Flight Out of Developing Countries is Fueling Real-Time Global Financial Collapse; Brazil, Argentina, Thailand, Turkey, Ukraine, Philippines, Indonesia (Etc.) Undergoing Steep Currency Devaluations Not Seen in Decades
63 2014-01-27 by [deleted]
I'm not sure why this isn't getting more attention in this forum, but the wheels of a major global financial collapse are in process this very moment. The tl;dr summary: credit is suddenly tightening due to slower economic growth in China and fears of Central Banks in Europe and the USA ending their "easy money" policies. The result? Massive capital flight by elites out of countless so-called "emerging markets" (read: poor countries) to supposedly safer countries such as Japan and the United States.
Here's the problem: currencies are dropping globally in these poorer countries, jacking up inflation and slowing economic growth as their populations cannot afford basic goods and services. Furthermore the countries are hamstrung since they must service outrageously high debts before implementing any temporary stop-gap spending to stimulate economic growth. The slower economic growth across billions of people across the world will likely fuel slower economic growth in the so-called "advanced economies" (that is, Europe, the USA, and the rest) as well as risk aversion by firms globally.
I've been following financial news (as a part-time adviser) for over a decade and this is looking bad, bad, bad. Argentina's currency is dropping more than it has in a decade; same for multiple other countries. The sheer scope of the capital flight is astounding: South Africa, Indonesia, Turkey, Argentina, Ukraine, Bulgaria, etc. This is going to make the 1998 Asian financial crisis look like a walk in the park.
The frustrating part? The easy credit policies of Central Banks are a chief culprit, since this has predictably fueled risky investments in the poorer countries of the world. Combined with zero capital controls (due to secret "free" trade deals), major firms can just yank capital out of these poorer countries, resulting in financial collapse.
It's going to be a CRAZY week ahead.
The icing on the cake? HSBC is massively overleveraged and looking more and more like Lehman Brothers Part Two (not to mention JP Morgan and Citibank).
Edit: grammar
35 comments
39 ribbonx 2014-01-27
I find global economics to be one of the most glaring weak spots on reddit in general. Not just in here.
-As an aside and it has nothing to do with reddit-
My neighbor a couple of years ago, late 30's working on a graduate degree, bought a car on credit. She gleefully exclaimed to me that she had no trouble financing the car and hadn't realized how wealthy she was until she discovered the easy willingness of lenders to give her the money to drive away the car.
I tried to explain to her that taking on debt was not wealth. It fell on deaf ears. She equated creditworthiness = wealth. The propaganda machine is working perfectly.
The serfs in here soldier on, still arguing about JFK and chemtrails while their lifetime earnings, and their ability to earn, is being stolen from them at every juicy opportunity.
You'll see some headlines in /r/conspiracy about Bilderbergs and Rothschilds and Jamie Dimon and HSBC, but they really don't seem to grasp in here the global banking/corporate takeover that is in the late stages of stealing the population of the world blind.
If you're stealing from all the people everywhere, everything they've got - you absolutely need mighty military power, a strong international propaganda machine, and absolute control over the media.
They focus on economics here in bits and pieces. Somehow the end result of economic servitude and penury on a global scale seems to elude them here, as they continue to flit from one catastrophe to another without seeing the big picture of total resource theft.
13 PaintChem 2014-01-27
The willfully ignorant do not understand that this is exactly what the US has become.
6 obnoxious_commenter 2014-01-27
Woah woah I am no serf. Not all of us have the knowledge of world financial markets. It is unfair to label all of us serfs for not investigating this.
Many do know thia problem but its hard to explain it when there is so much info. So instead of just calling us names, why not inform us about it.
I think many peoole see this problem but do not grasp how large the conspiracy goes. Some are working on their own research.
Inform us about this topic unless you want us to remain as serfs.
13 PaintChem 2014-01-27
Yes you are. You know it every time you make a transaction and every time you get paid.
When someone else makes a claim to your labor without your consent, you can be nothing else.
-8 obnoxious_commenter 2014-01-27
So the public claims my labor? They should! As I am a state worker.
I am not subject to the will of the people and the land I work on is public.
How are you using the word? I serve the public but I am not subject to their will.
Since I serve the public, I get paid for my services.
Please do explain.
-5 PaintChem 2014-01-27
Your salary is secured by force. I hope you feel good about that.
What a joke. Statists gonna state.
10 obnoxious_commenter 2014-01-27
I dont feel good or bad. Im part of the system and I am utilizing to better my community.
It does bother me. It sucks but I have to play the game to end it. I am not the one using this force. I wish to put a stop to it.
Personal attacks eh?
-4 PaintChem 2014-01-27
Just like every state sponsored employee says to themselves.
Cognitive dissonance is one helluva drug. - Rick James
3 left_one 2014-01-27
The guy is a serf because he has the same amount of political power in our modern economy. It's amusing that you can't make it past your own political preferences to get that point out.
-1 PaintChem 2014-01-27
I wish I could be a serf. They only got %25 taken from them.
2 left_one 2014-01-27
plebs gonna plead
2 WampaBill 2014-01-27
Slow your roll Mr. Dramatic
3 [deleted] 2014-01-27
Which is sad, because as cliche as it is, it all comes back to money.
2 oelsen 2014-01-27
The macabre part is that the lady also steals from everybody else by diluting the money supply and sucking out the interests into banking. She even steals from herself, but that is her business alone (not anymore if it becomes culture, then it is again our collective problem)
7 TheBelowIsFalse 2014-01-27
I've been thinking the same thing, especially after seeing the market's performance this last week. It just seems like it would be a perfect time, between the various scandals going on and revolutions occurring around the world, for the house of cards to give way.
5 Ambiguously_Ironic 2014-01-27
Yep. It's looking like this might be very, very bad.
2 Upholder_of_Logic 2014-01-27
" jacking up inflation and slowing economic growth as their populations cannot afford basic goods and services"
Brazil's inflation levels has reduced since 2011. Argentina's inflation level has risen by something like 1% since 2011 and Thailand's inflation has fallen significantly from 2012. Please don't post plainly wrong "facts" in future.
" jacking up inflation and slowing economic growth as their populations cannot afford basic goods and services..."
The majority of the countries you listed don't have a debt to GDP ratio that is that much worse than any of these supposed 'advanced economies' that you mentioned.
5 oscillat0r 2014-01-27
Argentinian here. The inflation here is EXTREME. Since 2011, the inflation we suffered is by more than 200%. Source.
Since the start of this year, we suffered the oscillation of dollar by more than 3 Argentinian Pesos.
This year's gonna be very difficult for us. The situation here is not catastrophic, but it almost is.
1 AVAtistar 2014-01-27
Give it some time. I'am pretty sure that it will become catastrophic very soon :-(
3 Moebiuzz 2014-01-27
Mate, Argentina has a 1% inflation every day.
1 AVAtistar 2014-01-27
Well no. We had 35% las year. And we are reachin 5% to 8% for the first month of 2014. So this year is gonna be very bad for us.
1 AVAtistar 2014-01-27
Well no. We had 35% las year. And we are reachin 5% to 8% for the first month of 2014. So this year is gonna be very bad for us.
2 [deleted] 2014-01-27
Source?
1 Upholder_of_Logic 2014-01-27
Data obtained from tradingeconomics.com, CIA world fact book and Eurostat.
2 proctor_of_the_Realm 2014-01-27
Ok, so I guess I'll be that guy. You seemed to be what your name says but then you posted where you got your facts from. Just joking, no hate.
2 funnymanisi 2014-01-27
This is an error. "Emerging" economies have lower debt-to-gdp ratios than the "developed" world. The "emerging" economies won't be hit as hard as the "developed" ones.
edit: If anything, this seems like an attack on the BRICS&Co. after Davos. I predict a huge rebound in these currencies, TPTB don't have enough 1's and 0's to keep these currencies suppressed, they're already failing with gold.
1 oelsen 2014-01-27
The problem is that the ratio also has to be compared to refinancing. If a emerging country can't refinance that easily, a money shock of any kind disrupts the flow of capital and makes it very difficult to serf äh, serve old debt.
The rebound will happen. The question is: does the average redditor hedging this?
1 [deleted] 2014-01-27
well here's a WSJ article on it http://online.wsj.com/news/articles/SB20001424052702303448204579338803161592252
1 Scoled321 2014-01-27
Not sure if these are relevant. Trying to dig up news on this, but I can't find much.
http://www.businessweek.com/ap/2014-01-27/asian-stocks-sink-on-global-economy-fears
http://abcnews.go.com/International/wireStory/asian-stocks-sink-global-economy-fears-22109177
1 AVAtistar 2014-01-27
About Argentina's criss. Is not a conspiracy. Is just a mix between incompetence, ingnorance and anti capitalism doctrines. Our economy minister is a 35y Marxist without any expirience nor in public or private management. And our president is insane and acts like if she is queen. Also the oficial party trys to modify the constitution so the "qeen" can hold the power till the year 2024 by allowing limitless reelections.
0 alllie 2014-01-27
If this was true surely people in these countries would be getting out of markets and going to gold and it would be going up and it's not.
10 [deleted] 2014-01-27
You would think that - except that TPTB is heavily manipulating gold as well.
They've been selling paper gold off to depress the price, and buying physical gold for at least all of last year.
The gold price is artificially low.
5 bardwick 2014-01-27
Jot down the spot price of 1 ounce of gold. Now go try and buy one physical ounce and let us know the cost difference...
1 oelsen 2014-01-27
this
It depends on what country you are in, though. Around here, the price difference is the same as the last 30 years: Mark up for the vendor, nothing more.
2 proctor_of_the_Realm 2014-01-27
Ok, so I guess I'll be that guy. You seemed to be what your name says but then you posted where you got your facts from. Just joking, no hate.