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Old 04-28-2018, 05:03 AM
6,100 posts, read 2,516,047 times
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Originally Posted by aridon View Post
We are still a good bit away from the default stage. Defaults are the end game, kind of the last kick in the nuts "hey this is a really bad" type indicator. By the time the defaults start to really spike, the economy is already on the ground puking its guts out.

Currently we are in the, "everything is ok, don't worry!" stage but it probably isn't. Nothing bad is outright happening but the warning signs are there. Longer termed loans, lower demand for vehicles, more household (non mortgage) debt increasing. Most importantly, interest rates are rising and the yield curve is getting wonky again.

As interest rates rise, credit card debt really starts to become a drag on the economy.


You'll notice that credit card debt is at an all time high. This is obviously bad.

Why? Well obviously credit cards are bad when people carry debt on them. Everyone here should know that. Well fact is, debt being at an all time high and rising pretty rapidly indicates that people have been over spending to maintain lifestyles. This can not continue forever. Especially with rates rising.

Either way, even if nothing happens, we have a year or two before we start to see demand become an issue where it is obvious something is very wrong.

Once that happens, recession is right on the doorstep.

Now if the idiot in the White House does invoke a trade war, all bets are off. Any rapid inflation is going to be a death sentence to our economy for a good decade. It will be bad. Hopefully cooler heads prevail.

Otherwise you can expect the same trading rang we've seen for stocks. Volatility will be high and likely increase the closer we get to a demand issue. We'll see the long term rates continue to mostly hold fast and short term rates will rise. I shouldn't have to tell you that this is abnormal and bad.

The fed will over tighten and then end up having to knee jerk back down. The next recession will be longer lasting than what we saw from the housing crisis. We just dead cat bounced into a double peak and are likely starting a lost decade soon given the options for federal stimulus have all been exhausted for no economic benefit.
The only reason a trade war will take a decade to recover from is due to a breach of trust in our society and the rapid turn over of presidents due to a fickle population. In the long term a trade war would be great, the problem is new players will be weary to enter the market because as soon as the trade war is off they know they wont be able to compete with slave labor. The decade long suffering will be caused solely due to a lack of trust, new players will want to see that our relations with China (and any other nation that does not play fair) are cooked for good before they leverage themselves into a new business venture that could not survive competition with slaves, IP theft, currency manipulators and polluters.
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Old 04-28-2018, 09:26 AM
2,784 posts, read 1,515,862 times
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Originally Posted by pittsflyer View Post
What happens as these people start to die off with MASSIVE balances still on the books ... that debt has to be discharged ... obviously. So the bubble wont pop for a very long time, but when it does, man its going to be bad.
You are delusional. GED or community college degree?
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