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View Poll Results: Economic conditions in the United States in January 2022.
Expansion 56 54.37%
recession 24 23.30%
depression 23 22.33%
Voters: 103. You may not vote on this poll

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Old 05-29-2020, 11:39 AM
 
Location: Orange County, CA
2,765 posts, read 2,207,195 times
Reputation: 1493

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Quote:
Originally Posted by SkyDog77 View Post
On a more serious note though, Katie, your post is classic conspiracy theorist stuff. “I started noticing things don’t make sense, so the only conclusion i can come to is that there must be a vast conspiracy happening.” You really should read about this psychosis. It’s always this progression and it’s always wrong.

Just because something doesn’t make sense to you doesn’t mean that there isn’t a rational explanation.
It's called taking the Red Pill.

Maybe you should try it sometime
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Old 05-29-2020, 02:17 PM
 
Location: Washington Park, Denver
8,144 posts, read 7,560,613 times
Reputation: 9188
Quote:
Originally Posted by Lycanmaster View Post
It's called taking the Red Pill.

Maybe you should try it sometime
Too rational. I prefer shaving with Occam’s Razor to taking pills.
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Old 05-30-2020, 02:57 AM
 
3,523 posts, read 2,947,335 times
Reputation: 1850
Quote:
Originally Posted by SkyDog77 View Post
As I said before, this is your religion. It’s not supported by facts. All data available support strong central bank and government intervention during times of crisis. Every time we have had a crisis and there has been strong government action, the blow has been softened and all you antigovernment types forecast impending doom. Every time you tell us that this time is going to be different. You’re the same as the guy on the corner with the cardboard sign predicting the end of the world.

Show me a country without a strong central bank and I’ll show you a country that doesn’t do well in times of crisis.
I am not the person you are quoting, so I will start with mentioning that I do support government intervention and actions from the central bano during times of crisis. However, I think it should be done in moderation. If the government stimulate too much, then they risk getting high inflation and get forced to increase interest rates.

This time is indeed different. Take a look at the charts below.
Budget Deficit: https://d3fy651gv2fhd3.cloudfront.ne...05&d1=19200624
Real interest rates: Stephen Williamson: New Monetarist Economics: Low Real Interest Rates and Monetary Policy
Inflation: https://d3fy651gv2fhd3.cloudfront.ne...30&d2=20200501

1950 - 1970 had low budget deficits, high real interest rates and low inflation
1970 - 1980 had moderately high budget deficits, low real interest rates and high inflation
1980 - 1990 had moderately high budget deficits, high real interest rates and moderately high inflation
1990 - 2010 had low budget deficits, high real interest rates and low inflation
2010 - 2020 has high budget deficits, low real interest rates and low inflation.

Except for the last 10 years, inflation has correlated with budget deficits and real interest rates. Much of the inflation during the last 10 years was hidden with asset price inflation, and that certain goods such as TV, toys, computers got cheaper. Other items such as health care, education and child care have been rising much faster than offical CPI.

Now, US is expected to have 15% budget deficit, 20% unemplyment and interest rates is expected to stay at 0% even if inflation goes above 2%. In fact the effective interest rate is even lower due to massive QE. This is unprecedented in US history, but not in world history. There are generally two ways it can end depending on the ability/willingness for the government to provide the missing salary. Either you will see wages drop like in Greece, or you will see inflation like in Venezuela or Lebanon.

Last edited by Camlon; 05-30-2020 at 03:11 AM..
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Old 05-30-2020, 09:15 AM
 
Location: Washington Park, Denver
8,144 posts, read 7,560,613 times
Reputation: 9188
Quote:
Originally Posted by Camlon View Post
I am not the person you are quoting, so I will start with mentioning that I do support government intervention and actions from the central bano during times of crisis. However, I think it should be done in moderation. If the government stimulate too much, then they risk getting high inflation and get forced to increase interest rates.

This time is indeed different. Take a look at the charts below.
Budget Deficit: https://d3fy651gv2fhd3.cloudfront.ne...05&d1=19200624
Real interest rates: Stephen Williamson: New Monetarist Economics: Low Real Interest Rates and Monetary Policy
Inflation: https://d3fy651gv2fhd3.cloudfront.ne...30&d2=20200501

1950 - 1970 had low budget deficits, high real interest rates and low inflation
1970 - 1980 had moderately high budget deficits, low real interest rates and high inflation
1980 - 1990 had moderately high budget deficits, high real interest rates and moderately high inflation
1990 - 2010 had low budget deficits, high real interest rates and low inflation
2010 - 2020 has high budget deficits, low real interest rates and low inflation.

Except for the last 10 years, inflation has correlated with budget deficits and real interest rates. Much of the inflation during the last 10 years was hidden with asset price inflation, and that certain goods such as TV, toys, computers got cheaper. Other items such as health care, education and child care have been rising much faster than offical CPI.

Now, US is expected to have 15% budget deficit, 20% unemplyment and interest rates is expected to stay at 0% even if inflation goes above 2%. In fact the effective interest rate is even lower due to massive QE. This is unprecedented in US history, but not in world history. There are generally two ways it can end depending on the ability/willingness for the government to provide the missing salary. Either you will see wages drop like in Greece, or you will see inflation like in Venezuela or Lebanon.

Ergo there will be a complete collapse? That’s an awfully big leap and nothing you have provided supports that as the likely outcome.
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Old 05-30-2020, 12:33 PM
 
3,523 posts, read 2,947,335 times
Reputation: 1850
Quote:
Originally Posted by SkyDog77 View Post
Ergo there will be a complete collapse? That’s an awfully big leap and nothing you have provided supports that as the likely outcome.
I did not say complete collapse, those are your words.

I think a Greek style depression is coming for the US, but with more inflation and less wage reduction. Take a look at the unemployment, the budget deficit and the current unrest and you will know that tough times are coming.

America has never seen anything this bad in modern history. The only thing that could save the US economy would be a v-shaped recovery, but that is not realistic when the virus is not under control, the economy is very over-leveraged and there is civil unrest.
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Old 05-30-2020, 12:42 PM
 
Location: Washington Park, Denver
8,144 posts, read 7,560,613 times
Reputation: 9188
Quote:
Originally Posted by Camlon View Post
I did not say complete collapse, those are your words.

I think a Greek style depression is coming for the US, but with more inflation and less wage reduction. Take a look at the unemployment, the budget deficit and the current unrest and you will know that tough times are coming.

America has never seen anything this bad in modern history. The only thing that could save the US economy would be a v-shaped recovery, but that is not realistic when the virus is not under control, the economy is very over-leveraged and there is civil unrest.
Their unemployment situation was protracted. It remains to be seen if that is the case here. If it is, then certainly we are going to be in a very bad place. However, don’t forget that there is a big difference in being Greece where austerity measures can be forced on you by the EU, and being the US where you own your currency and it is the world’s currency.

Define over-leveraged quantitatively for me.

The Fed can stop inflation anytime they want. You think they’ll let it happen? Why?

Last edited by SkyDog77; 05-30-2020 at 12:59 PM..
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Old 05-30-2020, 01:08 PM
 
3,523 posts, read 2,947,335 times
Reputation: 1850
Quote:
Originally Posted by SkyDog77 View Post
Their unemployment situation was protracted. It remains to be seen if that is the case here. If it is, then certainly we are going to be in a very bad place. However, don’t forget that there is a big difference in being Greece where austerity measures can be forced on you by the EU, and being the US where you own your currency and it is the world’s currency.

Define over-leveraged quantitatively for me.

The Fed can stop inflation anytime they want. You think they’ll let it happen? Why?
When I am talking about over-leveraged, then I am talking about companies being deep in debt to finance rapid expansion and consumers living paycheck to paycheck with large debt. This makes US vulnerable to a downturn.

Fed can stop inflation any time they want, but at a huge cost. When your economy is addicted to cheap debt and money printing, then you cannot just take it away without serious consequences.
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Old 05-30-2020, 01:25 PM
 
Location: Washington Park, Denver
8,144 posts, read 7,560,613 times
Reputation: 9188
Quote:
Originally Posted by Camlon View Post
When I am talking about over-leveraged, then I am talking about companies being deep in debt to finance rapid expansion and consumers living paycheck to paycheck with large debt. This makes US vulnerable to a downturn.

Fed can stop inflation any time they want, but at a huge cost. When your economy is addicted to cheap debt and money printing, then you cannot just take it away without serious consequences.
This is a completely qualitative answer to a quantitative question.

You also seem to be intermingling government debt and corporate debt.
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Old 05-30-2020, 04:16 PM
 
Location: Boston
13,224 posts, read 3,811,137 times
Reputation: 9521
Quote:
Originally Posted by heart84 View Post
I think the unwind starts before the election. The Fed stepping off the pedal too early is going to be the fatal policy mistake and that is going to happen regardless of who is in office. I also think it is likely there will be another shutdown late next fall/winter and if the Fed has stepped off the pedal before that point in time watch out below.

Onshoring would certainly get more traction with Trump. The rhetoric would be that China tanked our economy when it was "the greatest economy ever." Easy scapegoat to justify onshoring to "Remake? (lol) America Great Again!" There will also be a push toward massive infrastructure spending to get out of the deflationary spiral. Trump wins and the US/China tensions will really start heating up. China will be labeled the boogeyman for everything.

I am confident we hit DOW 30-35K by the middle of August at the latest. I think we get about $2-$3 trillion more in Fed balance sheet expansion between now and the end of summer. Investors will start to get FOMO mentality as stocks climb back toward record highs. There will also be 1-2 more rounds of stimulus sent out, coupled with things opening back up and many people having the itch to spend out of lock-down.
so at the end of August you'll be here starting an "I was wrong thread" when that doesn't happen (30-35k) or will you be here rationalizing why it didn't happen?
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Old 06-26-2020, 02:29 PM
 
Location: Las Vegas, Nevada
1,232 posts, read 743,676 times
Reputation: 2996
UPDATE


I am going to post this article that just came out today on Marketwatch. I really hope all you pollyanna's that have attacked me for the last 5 years are very hungry, because you are going to be eating lot's of crow in the near future. This ship is going down!


The coronavirus-led economic recession may be over, but the depression has barely begun



Quote:
There’s no official definition of a depression. Still, today’s economy seems to be a close fit: Millions of workers are losing their jobs permanently. Thousands of small businesses are closed permanently or operating at only a fraction of profitable levels. Debts are mounting, and incomes are not growing fast enough. State and local governments are slashing jobs and services. And only massive, but temporary, federal support prevents millions of families from falling into poverty.

https://www.marketwatch.com/story/th...gun-2020-06-26



The blog that I follow has this to say.


Quote:
As I've been warning for the past two months, the establishment would deliberately soften the lockdown restrictions, allow people to start getting back to the normal flow of activity, and then infections would spike giving them a rationale for secondary lockdowns. This strategy of control, which I call "Wave Theory", is openly admitted to in globalist publications. My timeline for an announcement of renewed lockdowns still holds at sometime in July. I continue to believe that many states will attempt to cancel July 4th events and may even return to lockdowns before the holiday. This will of course infuriate many Americans. As far as the lockdowns are concerned, the next wave will be the final nail in the coffin of the US economy. You can take that to the bank...or don't because they might be closed. Small businesses in particular will be devastated, and I am hearing from multiple sources and even readers that the supply chain for many things including vital parts and components for manufacturing is broken, which means more shortages in the next couple of months. Whatever items you might need in the next year, I suggest you stock them now....
If don't know if he will be right on this. I think his estimates on the next shutdown's might be a little early. We will see.
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