Askreddit,
Can you give a specific metric(s) we could use to determine if there’s been a social collapse? What unemployment rate? What GDP? Keep in mind that “social collapse” is a pretty strong term.
Can you give a specific date by which the social collapse will have happened?
Hyperinflation isn’t inflation of the price of one type of good but of goods overall.
The $10 in assets, however, is the debt owed by Bank A. If that institution dissolves without consequences, then who is responsible for paying that debt? The answer is nobody, so it becomes a worthless debt and hence has to be written off, leaving Bank B with $0 in assets.
ETA: a loan has value as an asset only to the extent that someone is legally obligated to repay it and has the capacity to repay it. Bank balance sheets regularly have to be written down to account for impaired or uncollectible loans.
January 1st 2021 maybe? It is collapsing already, look at Chaz.
The concepts like gdp wont even exist probably. But parts of the UK had 70% unemployment in the 1930s and didn’t collapse so that must not be enough. And starvation happens at GDP per capita well below $1000 so that’s where it will be. Give it 5 years to be conservative. Probably 1 presidential term after this. Make that your date. At the rate of Weimar collapse it would take about that long.
Does this happen? I thought that GAAP required companies to treat bad debt differently than current paying assets. What you are talking about sounds like absolute fraud. I would go to prison if I tried to list as an “asset” some guy’s outstanding bill he hasn’t paid and isn’t going to pay. Is this really happening?
And it is GD, so I must be the asshole that asks for: cite? 
Understood, but the US is making a series of decisions in a range of areas, from taxation to monetary to trade, that are putting us on a path toward irreparable damage.
Who or what is “Chaz”?
Will you check back on January 1st, 2021 and see if the concept of GDP still exists?
CHAZ is the Capitol Hill Occupied Protest - Wikipedia I’m not sure why the OP thinks this represents some vanguard of societal collapse.
Thanks.
The only thing that shows is how easily police officers can get scared. Vacating a precinct because of a BLM party is unprofessional cowardice coming from cops.
Yes, this is what CLOs pretty much do. You take a bunch of bad debt, package them together into a new security, and then sell it as a AAA asset in traunches. Since it’s based on the idea of “diversification” no single default, or even group of defaults, effects the overall credit rating of the CLO and therefore has no impact on its supposed value. The traunches are also set up so that the lower traunch must fail before the upper traunch can fail - this is what gives it AAA rating despite more than half being B grade or worse, though in practice this means absolutely squat when the whole tower comes down. It’s also calculated on perfectly normal circumstances, that is, with the assumption that defaults are anti-correlated (more defaults is less probable) instead of correlated (that is, market circumstances - like, say, COVID-19 - can make all contracts more likely to default and thus correlate).
If this sounds suspiciously familiar to CDO’s and Mortgage Backed Securities… well, this is what happens when you don’t brutally and draconically punish every single bad actor and instead give them milk and cookies.
It might exist, it just wont mean anything if food prices continue to grow at absurd rates.
So, you’re freaked out by food prices, apprehensive at the idea that they’ll keep growing at the same rate? Is this at least one of the main aspects that concerns you?
Someone who knows more about economics than I might be able to explain why that’s unlikely.
Economics is a joke theres nothing to understand. The real problem is the hubbert curve and the fact that oil production is going straight down. This will mean liberals will be unable to survive without oil.
Food prices are increasing due to disruptions in production, distribution, and erratic consumption; it’s not a problem rooted in bad fiscal policy (at least not currently).
How is this related to flaws in the banking system? Or are you conflating this with flaws in the systems of production, distribution, consumption, and wealth distribution?
Eh… it’s complicated, but you can blame the fed at least in part for the price of imported food. It’s a knockon effect, though, and to their begrudging credit what they’re trying to avert would be a worse problem for the average consumer.
There is a huge shortage of dollars in the foreign markets right now, and the only way to get them sans the fed’s bailout (yes, the fed is bailing out foreign countries, see below) is to dump US denominated debt all at once onto the open market. This would nuke bond prices, which would cause interest rates to shoot through the roof, which would bankrupt the US government and any number of zombie corporations and cause… it’s the nuclear option, let’s just leave it at that. To stop that from happening at all costs, the fed is monetizing (buying with printed dollars) those assets with REPO and SWAP lines which is increasing the availability of the dollar in the foreign market. By increasing supply, they are decreasing value, and so the cost in dollars of foreign imports increases, which increases the imported food price.
I don’t think that is the number one factor here increasing food prices, but it is a factor. I think supply disruptions are far, far more impactful, but those same supply disruptions are leading to a permanent change in the supply chain - at higher cost. This inflated price isn’t going down any time… well, ever.
Oil production went down because demand and prices went down. (This is simple economics, which you do need to understand because supply and demand is a pretty fundamental principle.) The world experienced an oil glut for much of the past decade; we came out of that only for the Saudis and the Russians to get into a pissing contest, shortly followed by the precipitous drop in demand due to pandemic-related closings (don’t need to buy jet fuel if the planes aren’t flying, don’t need to buy gas for your car if you are quarantined at home). Right now, crude oil is generally running $35-40/barrel for benchmark grades (Brent, West Texas Intermediate, etc.), which is historically cheap. Production didn’t decline because the oil has run out; production declined because for many wells it wasn’t economically feasible to pump oil at current prices.
Banking doesn’t even matter, economics is.a.troll discipline, all rhat.matters is that resources are depleting and liberals won’t survive.
Based in the EIA, the remaining oil reserves in Wolfcamp are 70 billion barrels and 3 billion have been recovered. At a 10% recovery rate typical of shale fields that means the majority have already been consumed. Nobody will survive Permian depletion.
Oil depleted because of Physical reality. This is all following the government reserve estimates, there is nothing magical here. Disease and poverty are merely symptoms of the collapse, unless you subscribe to some conspiracy theory about Jews creating corona. As food prices continue to increase and poverty gets worse all of these problems will exponentially worsen.
I’m not sure what your fixation about “liberals” is; two-thirds of oil production is used in transportation, and spread-out rural America (not normally considered liberal) is more dependent upon cheap gasoline than the urban areas where more energy-efficient mass transit, bicycling, and walking are viable alternatives to a gas-guzzler.
Why not? The Wolfcamp Shale isn’t exactly the only oil field out there. Saudi Arabia’s proven recoverable oil reserves are probably something on the order of 260 billion barrels, while Venezuela’s are larger than that. The EIA estimates that the world’s proven crude oil reserves recoverable under existing economic and operating conditions are about 1659 billion barrels. Three or four billion barrels from the Wolfcamp is literally a drop in that bucket.
Moreover, recovery rate for shale depends heavily on price. What is recoverable at $75/barrel is more than is recoverable at $40/barrel (economics rears its head again). For example, one expert was quoted as saying 50 to 60 percent of the Wolfcamp oil is recoverable once the price moves into the $60-65 range.
Oil isn’t depleted yet; 2018 saw the highest oil production ever. Oil production will peak someday and then decline; it’s possible we are already at or near that peak point. However, Hubbert’s curve predicts that production will steadily rise to a peak and then steadily fall away in something like a mirror image of the rise. He did NOT envision a cataclysmic drop-off, which is what you seem to think will happen. Most predictions are that if we have hit peak oil now in 2020, then eighty years from now (i.e., AD 2100) oil production will be roughly the same as it was eighty years ago (1940). The era of cheap oil may be closing, but that is not at all the same thing as oil itself going away anytime soon.
Resource depletion is a real problem, but there are far more important resources to worry about than oil. In much of the less-developed world, for example, water shortages are going to be immeasurably more significant than oil depletion.
Venezuelan oil production is currently crap. Saudi is a small fraction of us consumption.
Let’s pretend your assumptions are correct, it simply allows liberals to survive slightly longer.
Your predictions are based on kerogen and other resources which are not real oil. The time needed to get those working is incredible, for example ghawar took decades. What matters is the immediate total collapse of society, which you will find any reason to doubt but the global proletariat would sooner consume Liberal flesh (no offense intended) than have you explain why more oil should exist than actually does.