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18 Years Ago This Country Collapsed Almost Overnight. Is This Time Different?
Submitted by Simon Black via SovereignMan.com,
In late June 1997, eighteen years ago, this part of the world felt pretty normal.
People had jobs. Inflation was fairly low. The economy was growing. Confidence was high. Life was great.
For years, most of the economies across Asia had seen meteoric, credit-fueled growth. Capital was pouring in from all corners of the globe, feeding a construction boom and stock frenzy.
Property prices soared. Stock prices soared. It was a classic bubble.
My friends who have been living in the region for decades tell me stories about how people bought property with the expectation to flip it and make a 50% return in no time.
Or they’d invest in the stock market without the slightest bit of analysis, simply because ‘stocks go up.’
That was the prevailing attitude in Asia back then– this time is different, and the good times will last forever.
But it all unraveled, practically overnight.
Thailand was hit first when a nasty currency swing caused the economy to practically grind to a halt. And the pain quickly spread to the rest of the region.
The local currency here in Indonesia, the rupiah, plunged 83% from its pre-crisis levels.
Dozens of banks went under, credit dried up, and many depositors got wiped out.
Then something interesting happened: the Indonesian economy simultaneously experienced BOTH inflation AND deflation.
On one hand, asset prices collapsed. Stocks dropped like a rock, and people felt much more poor.
But as the currency fell, suddenly imports became MUCH more expensive. So retail prices actually increased as consumers paid more, especially for imported goods.
This is about the worst economic scenario imaginable– asset prices falling with retail prices rising. But it happened.
Three important lessons I’d like to highlight:
1) Perhaps the great financial debate of our time is whether the unprecedented monetary expansion over the last several years will result in inflation OR deflation.
There are many a brilliant mind firmly entrenched in one camp or the other.
And the point is, there could easily be BOTH.
2) No one can predict precisely WHEN a correction will occur. But when the great unraveling does unfold, history shows that it happens very quickly.
3) People allow themselves to believe impossible things.
They’ll believe that asset prices can, will, and SHOULD go up forever.
They’ll believe that conjuring trillions of dollars out of thin air is consequence-free.
But they refuse to believe in the possibility that something will go wrong.
This time is never different.
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The only problem being that nobody noticed, and nobody cared.
people did notice (for a while) but cared less as time goes by... time detroys everything, including the will to care: complacency
FOFOA had an article in 2010 describing the exact phenomenon of asset deflation and price inflation happening at the same time. It's an excellent "big picture" overview.
http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post-part-3.html
Overpopulated shitholes who rely on global trade in luxury products and debt to be able to feed themselves could use a gold standard and they'd be fucked just as much in the end ... taking in external debt in foreign currency was the cause of the crisis.
This is also why China isn't the same situation ... China is in the situation Japan was, massive internal bubble, no external debt.
"Overpopulated shitholes who rely on global trade in luxury products and debt to be able to feed themselves"
United States?
Too bad they didn't have a print button
They DID have a print button for Thai Baht. The problem was that as a result of US monetary ploicy, it was MUCH cheaper for Corporations to borrow in USD. That's all well and good until the local currency collapses. The same thing happened in many Asian countries and remains a potential problem now. High local interest rates attract foreign capital until a crisis results in a "Flee to safety" which, rightly or wrongly, means the USD and the foreign capital disappears over night. These countries also have learned nothing and it is never "Different this time'.
Fat finger. Apologies.
Hey! We're not overpopulated!
(That's my only complaint with the post.)
No, the USA has a different issue. It's got less that 5% of the world's population and consumes 70% of everything the planet produces...yet nothing from the country can seem to produce anything tangible or useful. I understand iphones, tv shows and movies are neat and all, but who the fuck cares. At this point to solve the problems of the world it would only require the erasure of one country to rebalance trade, global economies and create peace.
Just by dropping the rock on one country, a lot of things get fixed the same day.
As an Amerikan, +1 and totally agree. In 2016 here shortly i'll be living abroad for another year and take my wife and child. I cant wait.
Tell that to Californians who can't water their lawns or flush their toilets.
Nope genius they aren't in the same situation . Go figure .
They laugh at the fools who imagine this stuff "just happens". They make it happen and they profit from it all. And they make extra sure nobody can ever figure out what actually happened. http://www.thetruthaboutthelaw.com/they-promote-every-side-to-constantly...
Nice!
This is about the worst economic scenario imaginable– asset prices falling with retail prices rising. But it happened.
That is funny...Isn't that what has been happening in the USA since 2008?
There is simultaneous Deflation and Inflation...at the same time.
Whoduhthought?
It has been nice. But it is growing worse by the minute. And when the shitstorm hits and it really goes absolutely whacko instead of the whacko which we are currently experincing...
Ya really can't say that ya were not warned and nobody could see this coming. The signs are all around you...SPACE AVAILABLE anyone?
Depopulation first, humans don't belong in space due to gravitional effects on the bent spine and there is no beef besides.
LOL we all know its different THIS time. I mean come on China is stable, Russia is rock solid, Central Banks are completely trust. US couldn't be stronger with low credit and no political strife at all. What bad can happen? ;-)
Not the mention the master politician, Nobel Prize winner and statesman that we have as President. We are truly in the sweet spot!
http://m.youtube.com/watch?v=8R6DHjscPj8
I say find out where notable prognosticators have fled...i.e. Michael Panzner, etc.?? where's Jim Rickards' bug-out location?
"Or they’d invest in the stock market without the slightest bit of analysis, simply because ‘stocks go up.’"
Haha. Being honest with yourself- how do you invest? I'd venture to say 95%+ of the population invests this way. IE there is no underlying logical process that ensures a favorable outcome that allows for compounding over time should the rules of your plan be followed consistently.
After Soviet collapsed and Russian ruble was left to float in the free market in 1991(I think it was in 1991), Inflation went up by some 9000% and ruble lost 90% of its value, practically over night. If you were a billionaire one day, you'd woke up broke the next.
Isn't it wonderful. No armies are needed. Not even physical presence. Being in charge financially lets you exert unprecedented power over weaker nations. Unpeg the currency and let it float and then tear it apart. Acquire assets for pennies on the dollar. Once that is done, stabilize the economy, enrich a few oligarchs with money and political power and then reap the benefits.
I have this tiny hope that Grexit will be the first card in the house of cards that falls...
.
Grexit is like the workers on the Titanic bailing water while Soros goes around poking more holes.
i think the double post thing might be a site issue, its happened to me 3 times in the last week or so.
back in september when I got a new phone, I was using the ghostery app as my webbrowser, and it happened non stop, it did like 6 or 7 double posts a couple times, and I had to stop. It may just be what you are using. Ive had it happen with firefox very rarely, and never with Tor
Oh! I almost forgot..if Russians managed to overcome THAT inflation and THAT devaluation of their currency in a time where no sane person would ever venture into Russia as "tourist" then Greece will surely have no trouble at all boucing out of this shit that EU put them in by defaulting. Greece will attract capital like flies on honey.
Yeah, just like believing that perpetual growth on a finite planet is possible (just need more <capitalism|socialism|communism|technology-ism> to make it possible!).
Well sure...the government insists that the economy should grow by 3% every year...forever. That is baked into the public psyche as a necessity even though, to achieve it, inflation must also constantly rise at 2%.
Why would not an unthinking public believe impossible things?
It's not the sole domain of "govt," as it's pretty much been the case since the beginning: go forth and multiply! When "interest" came to be it provided a very powerful way to set up an even bigger game.
Money is just a medium of exchange. In a theoretical sense, any good or service could be priced in terms of any other good or service.
If some assets are overvalued because of various manipulations, then other assets must be undervalued. And the longer the manipulations continue, the greater becomes the downward pressure on the overvalued assets and the upward pressure on the undervalued assets.
Where eventual equilibrium will be established is impossible to predict.
I read a lot of Financial MSM (or should I say Bullshit-Media). Your statement might sound simple and yet this is the best explanation I have read this month. Well done Sir.
Why can't regular folks understand this?
Because the elites like to keep things in a "cloud" of mystery and hide the simple fact of stealing behind complicated words.
Hat off to you.
This is about the worst economic scenario imaginable– asset prices falling with...
asset prices going down is called capitalism, and yes, capitalism is terrible and hated by almost everyone so you needn't worry.
Well, fine, BUT, I'm pretty sure that "capitalism" expects things to go back UP. It all worked just fine as long as we were on the front side of the extraction curve.
"For years, most of the economies across Asia had seen meteoric, credit-fueled growth." >> Actually credit fueled growth is not capitalism, article clearly talk about effects of the credit bubble.
Just agents of The Great Red Dragon (Snakes In Suits) conducting financial live-test-studies. Thailand, old Soviet Union, Zimbabwe, Cyprus, Greece, etc. Mostly all Harvard-trained. Coming to your country soon.
It was horrible.
Actually it wasn't. It was nothing unless you owned emerging market stocks.
Which I didn't, so it was nothing.
The whole project is ego driven... no different to every war (hot, cold or financial) that has ever been fought... what amazes me is how the bullshit continues on in this Fiat currency, nothing is as it seems, upside down world.. Maybe the whole thing is a game/matrix of deception and the people are in a deeper sleep that we on ZH realise.
Regardless, I believe I woke from that sleep a year ago, got an alternative education on ZH and consequently got into gold bullion and now I want to give something back.
For those of you not actually in the physical metal .. I can highly recommend it.. because no matter what goes on in the EU Punch and Judy show... my stress levels reduced 90% knowing I have some bullion.
You might think I'm just spamming, but I'm not... I'm deadly serious! I got involved in a German company called Karatbars International who produce Gold Bullion in small weights and boy am I glad on various levels.
They developed an incredibly lucrative affiliate marketing system to get their product to market... Its free to join at the basic level although if you decided to go all in to earn the highest commissions the buy in price is essentially peanuts... FFS my day job Personal Indemnity insurance costs more per month!!
The downside is it's more a mass education programme than marketing,,, because aside from ZeroHedgers the financial IQ out there is well down the trickle down economic cascade and those people need to be educated to get some AU!
I know there are lots of you out there that would love to get your hands on bullion and get the money to acquire it from actually helping some of the lambs lined up for the slaughter - We could actually be doing something worthwhile.
Check out my website www.teamramgold.com its only a simple website to give a snapshot of the programme, but feel free to get in contact with me and I'll show you an incredible system. It could be the most lucrative email you will ever write..
And yes OK I am pitching (a bit) but if you get the programme you will understand why.. I'm a capitalist but with a social conscience.
Put a cock in it dude. We are all lead bugs here.
I think you might set a new record in 'down arrows'...
Nothing can go wrong. The Government is here to protect us.
See track records here:
"Real Dow & Real Homes & Personal Saving & Debt Burden"
http://showrealhist.com/RD_RJShomes_PSav.html
This is about the worst economic scenario imaginable– asset prices falling with retail prices rising. But it happened.
What the shit do you think happened to us here in the States after 2009 collapse?
We got fucked after Imperial Wars of Expansion which Failed.
Wars, much less Imperial wars, do not have a damn thing to do with this. You are watering down the point with another off topic point. This is 100% a result of the decisions our Federal Reserve and Congress have made since the LTCM event. Period! Imperial wars my?????????
It's the WARS, stupid! >>> https://biblicisminstitute.wordpress.com/2015/06/25/warmongering-vs-econ...
"Perhaps the great financial debate of our time is whether the unprecedented monetary expansion over the last several years will result in inflation OR deflation."
This is no conundrum if one can acknowledge the fact that the principle is false.
It has not been an expansion of money. It has been an expansion of counterfeit. The new currency which has caused the pool of currency to expand is the imitation of productive work and not the representation of productive work. Very little new value has been added relative to the amount of value that has been subtracted. Value is initially subtracted when the new currency is introduced as an exchange of no productive work for the products and services of productive work. That same currency is then used to maintain and add new values when it is used as the means to exchange the full value of productive work for productive work.
The conundrum is more complex when one considers that the scheme of introducing the new currency is not done directly but instead through the time delay of the debt that facilitates it. Value is subtracted 3 times. Immediately, when the proceeds of the new debt underwritten are exchanged into the economy of productive work. Over time, as purchasing power naturally falls. Lastly, upon the ides of April when everyone is commanded to pay off the bond holders who intitiated the theft.
So while one is befuddled over the nature of which way prices may rise or fall, they have already been swindled and robbed.
Defining terms correctly has the value of not falling into the traps of false principles. That the "greatest debate of our times" is based upon a false principle is not befuddling considering our times.
I remember 1997 a lil differently, we had inflation in gasoline, housing, electrical (peak Enron) medical care, unemployment, were experiencing mass invasion/immigration housing shortages and loan fraud all with factory closures and hyper environmentalism, 1997 blew as bad as 87.
We're way more fucked up now where half the states have a plurality of alien parasite voters.
I think he was referring to life in South East Asia, not in the states.
Indonesia and the USA are entirely different.
The U.S. has the (current) reserve currency, the Fed, a dominant military, DHS, Jade Helm, NSA, CIA, Wall St, the Exchange Stabilization Board & the Plunge Protection Team.
Indonesia has (no disrespect intended) a lot a people per sq mile, a stifling bureaucracy (yeah, even taking into account all other countries) & a bunch of active volcanoes.
No comparison. Don't compare Apples to Oranges.
Even if the U.S. wanes, it likely will still be a player at the table.
Many of the elite are U.S. based. The US has far more in the way of resources. Regardless if the bulk of U.S. fat ass clueless population gets culled over time, the remnant U.S. is likely to be central to the globalists vision of the future. There's just too much engineering,scientific and business talent to abandon. Of course, it won't be written off, just modified to the elites specifications. TPP is only the beginning.
So don't go comparing the past to the present. The past didn't have the technological base and it's ability to influence so many aspects of society.
Simon, you really think the upper crust in S.F. Bay area, Seattle, Denver, NYC or D.C.will feel the pain of collapse?
Simon, you think some Cayman account is a safe haven, that the Government of Chile or Cook Islands or where ever won't sell out to the globalists just like the U.S. did?
Why are you even still pitching your spiel? If the SHTF then a remote farming or otherwise relatively self sustaining hidely hole is the best option if one isn't in the 1% (assuming you can tolerate going galt ... many probably could not). Encouraging (note my word choice, I did not say "accepting") more Johnny come latelys to an ALT lifestyle is problematic.
Simon, please tell me you didn't piss away your prior earnings gambling in Macau.
Unless you're offering passage to another planet, you're offering no haven at all.
Love ya'all (well most of you anyway, lol), but I am taking a break. We all know this is going to collapse, we all know what to do (try to keep a little cash, pm's, grow own food, keep healthy, defense etc), but nobody knows really when it is going to happen..2 months? 2 years? All of these articles are simply getting ridiculous.
I do see much and take heed that it will happen before end of 2015, so I will prepare, but it could be another 3 years. It is all planned, and until they are ready to pull the plug, well, who knows when that will be.
Altho, this website does help a bit those who day trade and are trying to make a buck off the collpase, but I want nothing to do with it. Its a friggin casino in my opinion....
Anyway, thats all I got, but I have to get away from this stuff at least for awhile and focus on spirituality and nature....
p.s. There are alot of good comments on shtfplan.com informened people and no infighting. I just found about it today.
some calm music to relax your day and what I plan to do....today. Have a great weekend you all....love ya all, unless you are black....lol. what a friggin joke this racist crap is huh?
The only racism I see is against washington d.c. and its well deserved.
https://www.youtube.com/watch?v=Wt0nFwtQZGc
Let me start by saying that we obviously have no way of knowing just how this will play out.....
...but...
I fully expect to see the following:
1.) A simultaneous collapse in the US stock AND bond markets (catalyst TBD)
2.) Followed very closely by hyperinflation
3.) Asset grabs of every stripe and color by the US government. The framework is already being laid by FATCA and FINCEN. Prepare for an "asset tax" in the future...unless, of course, your assets are metals that were lost in the boating accident.
I know opinions are like assholes, but I don't see how else this can play out.
That's nothing.
In the Solomon Islands, the financial system collapsed completely & the government went with it.
The people reverted to headhunting.