Thoughts on credit bubble

THE THRIFT SAVINGS PLAN ALLOCATION GUIDE Forums Message Board Thoughts on credit bubble

This topic contains 6 replies, has 3 voices, and was last updated by  TS Paul 3 years, 3 months ago.

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  • #18382

    Aitrus
    Participant

    Hey Paul, I was wondering about something, and I’d like your take on it if you’ve got the time.

    I’ve been reading a little of Bill Bonner’s work, as well as watching some of his vids. He seems to think that the amount of credit that the average American has, as well as the Government and Fed have on the balance sheets, are creating a huge bubble. In short, he thinks that the total amount of actual paper dollars is so insufficient that there will be a massive contraction of the economy within the next few years, certainly within the decade, because we’re “past the point of no return”.

    He states that the best thing is for a quick, severe depression to happen over the span of a year or two to clean out the bad credit via letting businesses go bankrupt and get the amount of hard money and prices flowing back to normal levels. If the Government and Fed step in to “help”, then it’ll just prolong the problem by creating massive inflation followed by a long multi-year depression as we saw in the 1930s, except worse and for longer. He thinks we’re in the midst of a minor one now due to the 2008 recession that hasn’t actually recovered due to the overuse of credit covering up the true economic data. He thinks we almost went into the death spiral in 2008, which was only postponed by the government pumping money into the banks during the “too big to fail” months. He thinks that we should have done the correction then, and we’d be on more solid economic ground now. He seems to think that it would be very easy for everybody to suddenly lose access to credit, their bank accounts, etc.

    What’re your thoughts? Is there too much doom and gloom in his predictions? Or are there things to be justifiably concerned about?

    Thanks

    Aitrus

    #18383

    Anne
    Participant

    Aitrus,

    Have you subscribed to Bonner’s newsletter? His site seems to spell out major doom and gloom ahead but his premise/analysis seems plausible.

    Anne

    #18394

    Aitrus
    Participant

    Anne,

    No, I haven’t subscribed to his newsletter, but he does have some pamphlets and some youtube videos. I agree, he spells out some major gloom and doom but it seems at least plausible. That’s why I’m wondering what Paul’s take on it was.

    Aitrus

    #18413

    TS Paul
    Keymaster

    Nonsense doom porn. He has been predicting the credit meltdown since 1993.

    While his economic predictions are garbage, he is very good at email marketing – his publishing umbrella company made $500 million last year peddling biblical cures for cancer and other somewhat dubious products.

    The TSP Allocation Guide www.TSPallocation.com

    #18424

    Aitrus
    Participant

    That’s the honesty I was looking for, Paul. Thanks for the reality check. I thought it seemed too bad to be true.

    #18438

    Anne
    Participant

    What do you know about James Dale Davidson? Just another doom & gloom profit? Seems very similar to Bonner, trying to get people to sign up for their newsletter.

    Given your opinion above, I thought it was a little humorous when I was looking at the current update here & clicked on ad that said something re: 2016 Crash that took me to following site.
    http://pro.strategicinvestment.com/NDPCOL6/PNDPS202/?h=true

    #18468

    TS Paul
    Keymaster

    Ironically, Davidson was apparently the other founder of the umbrella company (Agora, Inc) which I referenced above when talking about Bonner. Birds of a feather as far as I can tell, they exist to sell newsletters and books, and they prey on investor’s fears to do so. Both have been preaching financial collapse for several decades now, a period during which the stock market has soared and anybody listening to them would have missed out on their investments doubling several times.

    It is funny that a Bonner ad came up on the website – it could be that the Google algorithm was influenced by the mention of him on the message board. I sometimes cringe when I see the ads which display on the TSP Allocation Guide website. It makes me happy when I see Vanguard pop up, or companies and products completely unrelated to investing. But some of the investing stuff looks a little questionable.

    The TSP Allocation Guide www.TSPallocation.com

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