An economic winter is coming

[Glostik91]

Dear Wondrous & Glorious Child,

One's 'two eyes and ears' are exactly what cannot be trusted, since all perception is mediated. And I would draw to your attention that your metaphors *eyes and ears* need to be expressed as *what you imagine to be so*. Eyes and ears are useful with what is directly in front of you. Everything beyond immediate sight and hearing occurs in *your imagined world*.

When we perceive, when we conclude, I am unsure we are really dealing with *reality*, but I rather think that we are dealing in loaded terms about reality which have been presented to us. This is especially true the further away from our own small sphere we move.

It is easier for a camel to go through the eye of a needle than it is to save an intellectual.

Lots of things are changing and the public debt has been high or rising steeper before. The meaning of this depends on how one calculates the size and growth of the complete economical space and growth. Debts always have been part of the larger credit space and crucial to most capitalist systems. The main question is of course is: how good is the credit and credibility. And that's why I wrote about fiat, it's about the interest of other large parties to maintain it or under which conditionals. And right now there is no reasons to assume anyone will allow larger instabilities any more (even while they should?)>

While I never visited China, and the US only a bit, I know many expats from many areas in the worlds, sort of comes with my job. And I don't see a valid reason to panic about economical systems. There are really more important things, as I tried to tell you, the economical systems only represent other exchanges and needs. They reflect general ideas about the world and our desires. This includes managing emotions inside a population, especially in democracies. And this is why it's good to examine fear & worries too. Who profits from that sentiment on a topic so complex that only a few can make faint predictions on the behavior of the Beast?

Admit you have no idea what's going on, and that you are clueless when it comes to the economy. After admitting this, believe me and stay out of dollars.

Can you be a bit more predictive on what time frame or scale of crisis would validate your warning? Because it's easy to warn for these kind of things (the oldest real trade in the world by far) as by the time it comes to pass or fails to, nobody is there bothering to demand your humble apologies or thank you for the warning with a bouquet of flowers...

Time frame is too difficult to predict. Be ready tomorrow, but at the latest you should be ready by November of this year. The crisis could come sooner though, so be prepared tomorrow. The scale of the crisis will be severe, and our only saving grace will be the ample amounts of fertile farmland we still enjoy (though that is dwindling at a rapid pace due to our farming practices and China has been buying up farms which will hinder the recovery). We will enter a recession or a depression, whatever they decide to call it. Unemployment will rise and inflation will rise simultaneously causing stagflation. Purchasing power of the dollar will drop like a stone. Democratic socialists will seize power and enforce policies that will serve to diminish the severity of the depression but instead lengthen it by years, maybe even a decade. This will all come to pass.

[Glostik91]

And make your own 9/11 conspiracy thread. I don't wish for this one to get off topic.

[jupiviv]

Remember that I march followed by the god of fortune and the god of war.

"Vieles lehrtest du, Mime,
und manches lernt’ ich von dir;
doch was du am liebsten mich lehrtest,
zu lernen gelang mir nie:
wie ich dich leiden könnt’."

[Diebert van Rhijn]

And make your own 9/11 conspiracy thread. I don't wish for this one to get off topic.

That's a reasonable request! There's now How hysteria manifests in the present and why for that and some posts have been moved.

[Santiago Odo]

Glostic, receive my sincerest blessing.

A couple of things.

You have only alluded in the vaguest of ways to an impending catastrophe. You are showing what an engagement with paranoid, projecting thinking is. The topic therefore is how that sort of thinking operates and why. All that you have is an ‘imagined scenario’ that you present with no substantial evidence. And you say “Just believe me!”

In my view this is the topic: how hysteria manifests in the present and why.

[Diebert van Rhijn]

Admit you have no idea what's going on, and that you are clueless when it comes to the economy. After admitting this, believe me and stay out of dollars.

On the contrary, I doubt the sanity of your power move when you assert this actionable knowledge, your particular gains in doing so, the gains of larger power structures providing you with the sense of authority or a least the sense of impending collapse. So after questioning this in your posts, I have outlined an alternative view to look at the economical systems, which I find way more enlightening when it comes to predicting and understanding the day by day realities. Of course I only made some introduction comments but they are pointing to something you can explore as it's connected to human experiences and drives, while not as much to entities behind the screens.

Time frame is too difficult to predict. Be ready tomorrow, but at the latest you should be ready by November of this year. ( ...) We will enter a recession or a depression, whatever they decide to call it. (...) lengthen it by years, maybe even a decade.

Lots of weasel words there! Let me flesh it out for you. You use the phrase "difficult to predict", after doing your easy sounding predictions, opening the door for changing the prediction as few times coming year, to postpone the deadline because of "new complication factors" Right? Ready by November meaning what? Ready for events the next year, or two, or three?

Then we have the phrase "a recession or a depression, whatever they decide to call it" which means any kind of economical downturn would quality? How does it differ from earlier recessions? For example from 1945 to 2001 there are 10 cycles and recessions lasted an average 10 months and expansions an average of 57 months (source). You have to understand the cycle is well understood and necessarily part of the current economical system although the potential severity of every swing is feared as there's some unpredictability (but so is life but nobody goes around warning for life). We could talk about the causes of the Great Depression (also globally) but lack of regulation, the iron grip of the gold standard, passivity and protectionism are likely have caused a particular recession to enter depression.

If you're warning for another recession, it's' unclear why you think this is going to be something else than the last ten times or in how far our response and preparations have to be different than the last decades.

[Glostik91]

You have only alluded in the vaguest of ways to an impending catastrophe. You are showing what an engagement with paranoid, projecting thinking is. The topic therefore is how that sort of thinking operates and why. All that you have is an ‘imagined scenario’ that you present with no substantial evidence. And you say “Just believe me!”

On the contrary, I doubt the sanity of your power move when you assert this actionable knowledge, your particular gains in doing so, the gains of larger power structures providing you with the sense of authority or a least the sense of impending collapse. So after questioning this in your posts, I have outlined an alternative view to look at the economical systems, which I find way more enlightening when it comes to predicting and understanding the day by day realities. Of course I only made some introduction comments but they are pointing to something you can explore as it's connected to human experiences and drives, while not as much to entities behind the screens.

If I warn a whitewater rafter that there is a giant waterfall downstream, does he ask for a doctoral dissertation providing detailed evidence supporting my assertion? No of course not. Instead he would quickly paddle to shore. Anything else would be insane.

This warning is for individuals who have not yet lost their capacity for simple truth. If this is not you, then ignore this warning.

Lots of weasel words there! Let me flesh it out for you. You use the phrase "difficult to predict", after doing your easy sounding predictions, opening the door for changing the prediction as few times coming year, to postpone the deadline because of "new complication factors" Right? Ready by November meaning what? Ready for events the next year, or two, or three?

Then we have the phrase "a recession or a depression, whatever they decide to call it" which means any kind of economical downturn would quality? How does it differ from earlier recessions? For example from 1945 to 2001 there are 10 cycles and recessions lasted an average 10 months and expansions an average of 57 months (source). You have to understand the cycle is well understood and necessarily part of the current economical system although the potential severity of every swing is feared as there's some unpredictability (but so is life but nobody goes around warning for life). We could talk about the causes of the Great Depression (also globally) but lack of regulation, the iron grip of the gold standard, passivity and protectionism are likely have caused a particular recession to enter depression.

If you're warning for another recession, it's' unclear why you think this is going to be something else than the last ten times or in how far our response and preparations have to be different than the last decades.

It honestly baffles me just how brainwashed you are. I thought you were wiser than this.

How will this differ from earlier recessions? Figure it out!

Well understood cycle. Brainwashing!

Necessary part of the current economical system. Brainwashing!

I know you are wiser than this. Destroy the illusion. Take all of the pieces and put them together.

[Glostik91]

Democratic socialists will seize power and enforce policies that will serve to diminish the severity of the depression but instead lengthen it by years, maybe even a decade. This will all come to pass.

This was not well communicated, so I'll add a footnote. The democratic socialists will seize power and enforce policies that will indeed diminish the severity of the depression. But in economics there is no free lunch. So instead of an incredibly painful short depression, there will be a long drawn out depression. Economists may even look back and view the coming era as a series of recessions.

Nevertheless the pain is coming, so do not let this dissuade you from your preparation.

[Diebert van Rhijn]

It honestly baffles me just how brainwashed you are. I thought you were wiser than this. How will this differ from earlier recessions? Figure it out! Well understood cycle. Brainwashing!

I know you are wiser than this. Destroy the illusion. Take all of the pieces and put them together.

Still no specifics on time frame, severity or mechanisms....

Instead, you go into referrals to unspecified authority and faith. In other words you have embraced one of the typical "modern" mass religions, without gods but with eschatology, emotion, holy writs and evangelicalism of the end and paths to save one self.

And yet you speak of brain washing to me! Come on Glostik, lets talk. Please understand I've been through many phases like that. So all you need is a bit of challenge and reason to cool down. That things have gone and are going to shit is not new. It's called history.

[Glostik91]

Still no specifics on time frame, severity or mechanisms....

Instead, you go into referrals to unspecified authority and faith. In other words you have embraced one of the typical "modern" mass religions, without gods but with eschatology, emotion, holy writs and evangelicalism of the end and paths to save one self.

And yet you speak of brain washing to me! Come on Glostik, lets talk. Please understand I've been through many phases like that. So all you need is a bit of challenge and reason to cool down. That things have gone and are going to shit is not new. It's called history.

I have given you everything you need in order to figure it out. Do you not find it humiliating to be spoonfed?

Why do you think the federal reserve has halted raising interest rates?

Why do you think the United States, public and private, has such an incredibly large amount of debt?

What's the production/consumption ratio for the United States and China?

Try to answer these questions. I don't wish to treat you like a baby.

[Diebert van Rhijn]

I have given you everything you need in order to figure it out. Do you not find it humiliating to be spoonfed?

Being able to provide clear arguments for your position is part of a discussion. Just providing warnings is a form of frothing at the mouth....

Why do you think the federal reserve has halted raising interest rates?

Rates averaged 5.69 percent from 1971-2019, reaching 20 percent in 1980 and a low of 0.25 percent in 2008.
They are 2.5 now after rising steadily from 0.5 in 2016. source

The pause expressed hesitation in light of global developments all increasing the uncertainty. It might hinge as well on the ability to make new deals between US and China, then US and Russia. In the sideline as well deals with North Korea and Iran. All in the balance right now.

Why do you think the United States, public and private, has such an incredibly large amount of debt?

Because the US think they are awesome and will be even more awesome in the future. They share that vision with many around the globe who trade in that debt (and inflated credit space) and together they slice the pie and divide it. It's a win-win for those involved.

What's the production/consumption ratio for the United States and China?

The discussion about the dangers of large prolonged trade imbalances is not new and pops up now and again around every crisis period. Or are you referring perhaps to reserves-to-production ratio?

In any case, the trade ratio is off since a long while for the US (but not for China vs the world). Likely China will solve the dispute on short term by importing more US oil and some other goods which will be in time for US election campaigns to claim to have "restored" some of the economy.

The reality of the issues you are describing can only be addressed by opening borders, increase immigration, changing the life style food print of the average "classical" US worker and create more division of income in society (unless socialism would be imposed). The same is happening in Europe with the difference that consumption never really grew that high post WW2 for many reasons.

The shifts occurring in the United States will have backlashes with various populist movements trying to seek alternative solutions. And perhaps some will be found but overall change and transition will not be stopped. One thing that will never be allowed is large scale panic and distrust as all major global players lose in that case.

And I think you are miscalculating the future with such grave warnings. Most of all, in worst case, you won't escape the changes buying food and moving away to sit it all out. The downturn your propose will not be short and it won't be that different wherever you move to in the US.

[Glostik91]

Rates averaged 5.69 percent from 1971-2019, reaching 20 percent in 1980 and a low of 0.25 percent in 2008.
They are 2.5 now after rising steadily from 0.5 in 2016. source

The pause expressed hesitation in light of global developments all increasing the uncertainty. It might hinge as well on the ability to make new deals between US and China, then US and Russia. In the sideline as well deals with North Korea and Iran. All in the balance right now.

So you listen to Powell and basically take what he says at face value, but you require me to provide you with heaps of evidence just in order to prove my sanity?

Look at the market reaction to the most recent rate hikes. Do you honestly believe the fed will be able to hike rates above 3%? The economy is slowing down. Go out and talk to people in the United States. I've spoken with long haul truckers. They say that their pay per mile has stagnated. Van rates have hit a 16 month low. Spot market loads are down over last year. https://www.dat.com/industry-trends/trendlines I've recently spoken with an Amazon corporate employee. He told me he's not surprised about the poor guidance Amazon gave in its latest earnings report. I've read articles saying the housing market has slowed considerably because the buyers are drying up. It's just so obvious. All you have to do is look around. Do your own research.

The discussion about the dangers of large prolonged trade imbalances is not new and pops up now and again around every crisis period. Or are you referring perhaps to reserves-to-production ratio?

In any case, the trade ratio is off since a long while for the US (but not for China vs the world). Likely China will solve the dispute on short term by importing more US oil and some other goods which will be in time for US election campaigns to claim to have "restored" some of the economy.
The reality of the issues you are describing can only be addressed by opening borders, increase immigration, changing the life style food print of the average "classical" US worker and create more division of income in society (unless socialism would be imposed). The same is happening in Europe with the difference that consumption never really grew that high post WW2 for many reasons.

The shifts occurring in the United States will have backlashes with various populist movements trying to seek alternative solutions. And perhaps some will be found but overall change and transition will not be stopped. One thing that will never be allowed is large scale panic and distrust as all major global players lose in that case.

Oil and some other goods. Like what? What happens when China and the world realize the fed can't raise interest rates past 3% and their dollar denominated 'assets' aren't worth what they thought? The prices of the few real assets the US has will inflate, and the dollar will drop like a stone.

A few years ago, a Chinese company (WH Group) purchased one of the biggest pork producers in the world, Smithfield Foods for 4.7 billion dollars in cash. And that was way over market value. They overpaid for it considerably. Just put the pieces together. I'm done spoonfeeding.

And I think you are miscalculating the future with such grave warnings. Most of all, in worst case, you won't escape the changes buying food and moving away to sit it all out. The downturn your propose will not be short and it won't be that different wherever you move to in the US.

It is far easier to weather these sorts of economic events when you live in a rural area and own real assets. My grandfather told me he didn't even realize there was a depression going on in the 1930s until he read about it after the fact. Granted, he was a child during the 30s, but it really says a lot about how you can insulate yourself. The reason is because the family lived in rural Iowa on farmland they owned outright. They also owned gold and silver, some of which my great great great grandfather dug out of the ground back in the 1800s.

[Diebert van Rhijn]

The economy is slowing down. Go out and talk to people in the United States. I've spoken with long haul truckers.

You don't need to ask truckers. The relevant institutions agree on global slowing down of all advanced economies. For 2020 the prognosis is 1.6%, down from 2.2% in 2018. Which by the way is one of the reasons the Fed hesitates to increase the rates.

Please notice the subject changed from the particular prediction on the US dollar to the global situation. Which is not the same topic in my view as a global downturn will effect all currencies, not just the dollar.

The prices of the few real assets the US has will inflate, and the dollar will drop like a stone.

Exactly the reason there will be little interest in that to happen from the many investors world wide tied to the dollar or tied to the state of the American economy, which is tied to the stability of the world economy in many ways.

A few years ago, a Chinese company (WH Group) purchased one of the biggest pork producers in the world, Smithfield Foods for 4.7 billion dollars in cash. And that was way over market value. They overpaid for it considerably. Just put the pieces together.

That transaction, while rare in its scale, is not that unusual. The value of a company is calculated nor only by market value but by projected value including the changes imagined (by the buyers) and available global market share which it can penetrate. In this case, the stated purpose is to expand from pork into many other types of meat. So they multiplied their target market and expect probably strong growth next ten years.

As for the Chines, yes a lot of investment comes from China and Korea these days. A noticeable shift from the markets dominated by American and European funds. For the strength on a single economy it doesn't mean as much. For the dependency on foreign policies, indeed it does.

It is far easier to weather these sorts of economic events when you live in a rural area and own real assets. ...it really says a lot about how you can insulate yourself.

It's always possible to hide and insulate oneself. No doubt about it! But you need to be clear on what is exactly achieved that way for yourself, as a person or for a larger economical entity. It seems to me mixing a personal, small scale tactic with the larger issues at stake.

[Glostik91]

You don't get it Diebert. Cheap money has blown the economy up to record proportions. This is the biggest bubble any of us have ever seen or likely will see. And it will all come crashing down on Trump. It seemed like things wouldn't break down under one Trump term, but now it's looking like it will break down before the next president takes office. Powell raised interest rates too quickly. There are a multitude of signs. You have to start getting ready now because things are looking truly dire.

[Diebert van Rhijn]

You don't get it Diebert. Cheap money has blown the economy up to record proportions. This is the biggest bubble any of us have ever seen or likely will see. And it will all come crashing down on Trump. It seemed like things wouldn't break down under one Trump term, but now it's looking like it will break down before the next president takes office. Powell raised interest rates too quickly. There are a multitude of signs. You have to start getting ready now because things are looking truly dire.

It's not like I was denying or trying to refute how money inflated the economy to overall record credit space or debt. Actually I was indicating that this is how it works instead of being a particular threat. Of course we can discuss the overall stability or outlook of such a system. But it can't be done by describing "record proportions", debt, spending or inflation. You need to understand that I disagree with your reasoning, the technicalities you refuse to address and not with overall doubts about the viability of such a system.

For now US forecasts seem okay after a surprising strong 2018, tripling for example the Euro zone while China had instead a 28-year low in 2018. Generally a mild recession is expected in 2020. Which is reasonable in the global context and the reason we see the cooling down of interest hike.

Considering the above, I'd urge you to think more globally with this. The larger picture will show you that even if the US would technically be ready to fail, nobody could let it happen on the short term as it would take everyone else with it. We live in a fiat-based economy, meaning it will only go down when the relevant rulers decide it will or how fast it's allowed to do that. In this case I think there's global pressure on the U.S. to change the military spending into more profitable endeavors but it needs also a transition of industry.

Now the human mind, that's a whole other story. A mind not ruled by fiat, medication or outside control frameworks. And that makes it the more interesting topic. And your particular fear or prediction fails to take it into account. Actually I think you're being played, a nice little consumer of fear which will make you buy the very things you probably shouldn't buy and enter a "bear" kind of lifestyle. Another product to buy into!

[jupiviv]

For now US forecasts seem okay after a surprising strong 2018, tripling for example the Euro zone while China had instead a 28-year low in 2018. Generally a mild recession is expected in 2020. Which is reasonable in the global context and the reason we see the cooling down of interest hike.

Actually 2018 was the worst year for stocks since the great depression. Europe is definitely much worse off than the US right now. India is probably the only large country still experiencing growth but how much of that is juked stats is hard to tell, and in any case it is evidently asymmetrical.

My guess is either great recession/depression 2.0 on a global scale later this year, triggered by Brexit and/or the inevitable extension of the trade war. It was put off since 2016 by simultaneously inflating every asset class bubble there is. The aftermath will be the next round of marginal borrowers consigned to oblivion, only this time closer to your home, as well as mine. China will probably be the worst hit, followed by Australia and other exporters to it.

[Glostik91]

It's not like I was denying or trying to refute how money inflated the economy to overall record credit space or debt. Actually I was indicating that this is how it works instead of being a particular threat. Of course we can discuss the overall stability or outlook of such a system. But it can't be done by describing "record proportions", debt, spending or inflation. You need to understand that I disagree with your reasoning, the technicalities you refuse to address and not with overall doubts about the viability of such a system.

For now US forecasts seem okay after a surprising strong 2018, tripling for example the Euro zone while China had instead a 28-year low in 2018. Generally a mild recession is expected in 2020. Which is reasonable in the global context and the reason we see the cooling down of interest hike.

Whose forcasting are you following? CNBC? Even CNBC is talking about gold etfs to hedge against a recession, which means one of two things. Either there will be no recession, or the recession will be so bad that buying gold etfs will not save you.

Nearly every sector is heavily inflated. Interest rates were at zero for far too long. The US economy is astronomically leveraged. The US has unfathomable amounts of debt and unfunded liabilities. What's going to happen to all of the people relying on their pensions, 401ks, their jobs, and ultimately social security/medicare when the growth stalls and these bubbles finally pop?

Considering the above, I'd urge you to think more globally with this. The larger picture will show you that even if the US would technically be ready to fail, nobody could let it happen on the short term as it would take everyone else with it. We live in a fiat-based economy, meaning it will only go down when the relevant rulers decide it will or how fast it's allowed to do that. In this case I think there's global pressure on the U.S. to change the military spending into more profitable endeavors but it needs also a transition of industry.

Think more globally? Have you even been reading what I've been saying? China is buying up American assets. While Americans feast, China sees the writing on the wall. How much simpler can I make it?

Now the human mind, that's a whole other story. A mind not ruled by fiat, medication or outside control frameworks. And that makes it the more interesting topic. And your particular fear or prediction fails to take it into account. Actually I think you're being played, a nice little consumer of fear which will make you buy the very things you probably shouldn't buy and enter a "bear" kind of lifestyle. Another product to buy into!

Just be glad you do not live in the United States. It is much easier to play the advocate of the deluded when you won't be the one living with the consequences.

[Diebert van Rhijn]

Actually 2018 was the worst year for stocks since the great depression.

Since 2008? You mean the correction at the end. Those are statistically or on long term not saying that much. And the S&P 500 is not reflecting it.

My guess is either great recession/depression 2.0 on a global scale later this year, triggered by Brexit and/or the inevitable extension of the trade war. It was put off since 2016 by simultaneously inflating every asset class bubble there is. The aftermath will be the next round of marginal borrowers consigned to oblivion, only this time closer to your home, as well as mine. China will probably be the worst hit, followed by Australia and other exporters to it.

Yes I wrote that in 2020 a mild recession is generally expected, which normally are effects of a downturn starting end 2019. You say "great" but you need to quantify that for when I ask you about it again in 2020. It's reasonable to expect global adaptions to make sure the recession will stay "mild" overall. As for the effects of the Brexit, I think the biggest factors will be crippling protests (even when remaining) partly fueled by higher (green) taxation and forced energy transition. This will be seen in Netherlands and Germany as well by then. My prediction, 90% confidence :-)

[Diebert van Rhijn]

Even CNBC is talking about gold etfs to hedge against a recession, which means one of two things. Either there will be no recession, or the recession will be so bad that buying gold etfs will not save you.

Looks to me it's mostly about gold price starting the reflect the fear of the next recession in the general populace. This generally will follow by a correction because it cannot be sustained for long.

Nearly every sector is heavily inflated. Interest rates were at zero for far too long. The US economy is astronomically leveraged. The US has unfathomable amounts of debt and unfunded liabilities. What's going to happen to all of the people relying on their pensions, 401ks, their jobs, and ultimately social security/medicare when the growth stalls and these bubbles finally pop?

It's not a new thing. What you call the bubble is not just the bug but also the feature of the current system. Some restructuring will be in order but nobody in terms of global large actors, will be benefiting of trying to burst the bubble now. That's why I don't think it will be allowed to happen. These very movements of a credit/debit based economy are generating the needed heat to keep the market flowing over longer periods. The fear and panic will be siphoned off nicely, that's what I expect. And that's why I think you are right now a "product" and not a prophet.

Think more globally? Have you even been reading what I've been saying? China is buying up American assets. While Americans feast, China sees the writing on the wall. How much simpler can I make it?

They have a lot of fluid capital bursting out the seems of their containers and they are looking to invest globally even more. The whole point of the dollar being the global backup currency was to invest back into the USA. So I'm not sure what exactly is your problem by "buying up assets". Like Saudis and other global investment funds were doing for decades already? Perhaps it's more rapidly and aggressively these days but that's because the market has become just that, IMO.

Just be glad you do not live in the United States. It is much easier to play the advocate of the deluded when you won't be the one living with the consequences.

You're missing the point here. The whole freaking point of the US economy is that it's networked, not an island and deeply linked to for example the European fate. If you want to talk about volatile, read about Yellow Vest movement in France (and beyond) who started street protest three months ago and ongoing over a tax hike. Statistics: 15 dead, 1,843 injured and over $1 billion direct loss in revenue caused by protests, could become more than 10 billion over years, if tourism would drop as well. And this is all because of hiking in prices and taxes, which were caused by world oil prices, climate agreements and a general cooling of economy.

Don't talk about your American fears for the dollar and "easier" European position. That makes you sound disconnected from reality in your understanding of economy and risks.

[Glostik91]

Looks to me it's mostly about gold price starting the reflect the fear of the next recession in the general populace. This generally will follow by a correction because it cannot be sustained for long.

Like I said, either this is nothing, there will be no recession (or a minor one), and your CNBC prescribed 5% hedge in the GLD might even lose value.
or the recession will come and it will be so bad that a 5% hedge will do nothing for you. Your broker might even collapse if the nightmare scenario really comes true.

It's not a new thing. What you call the bubble is not just the bug but also the feature of the current system. Some restructuring will be in order but nobody in terms of global large actors, will be benefiting of trying to burst the bubble now. That's why I don't think it will be allowed to happen. These very movements of a credit/debit based economy are generating the needed heat to keep the market flowing over longer periods. The fear and panic will be siphoned off nicely, that's what I expect. And that's why I think you are right now a "product" and not a prophet.

You're missing the point here. The whole freaking point of the US economy is that it's networked, not an island and deeply linked to for example the European fate. If you want to talk about volatile, read about Yellow Vest movement in France (and beyond) who started street protest three months ago and ongoing over a tax hike. Statistics: 15 dead, 1,843 injured and over $1 billion direct loss in revenue caused by protests, could become more than 10 billion over years, if tourism would drop as well. And this is all because of hiking in prices and taxes, which were caused by world oil prices, climate agreements and a general cooling of economy.

Don't talk about your American fears for the dollar and "easier" European position. That makes you sound disconnected from reality in your understanding of economy and risks.

The idea that this tidal wave can be stopped is completely false. This is far beyond any one person or organization. What you don't understand is that the collapse of the dollar will ultimately liberate Europe and the world, not condemn them. The US is a feeding cancer and once amputated, the world will finally heal. If you could even put two pieces together you would realize that the interested parties want things to change, and emerging technology startups will be at the forefront of the new financial revolution.

I could be wrong though. Two other scenarios are possible. It may be possible to kick the can down the road, and more 0% rates/QE will fill other parts of the world, perhaps Malaysia and Indonesia will absorb the money injections (TPP). Or the US debt may somehow be resolved and simultaneously not destroy credibility of the US. The first scenario is possible, but the second scenario is simply impossible for multiple reasons.

[Glostik91]

Saying the United States is a feeding cancer in need of amputation, may have been a bit hyperbolic. My point is this though. It has been my experience that academic economists tend to focus too much on consumption. Consumption is and always will be secondary to production. The first and foremost modus operandi of an economy is production. And the fact of the matter is that the United States' production is absolutely pathetic.

Production (of real assets and resources) is essentially a floor which supports an economy. For 100 years, the majority of the production supporting the United States economy was in the United States. Today, the majority of the production comes from outside the United States. Production flows into the United States, and dollars flow out. When this transference becomes disrupted, (i.e. when the production flowing into the United States is diminished/when the dollars flowing out of the United States are not as desired) the floor supporting the economy drops, the dollar is set on fire, and the dollar denominated asset holders are left with the cinders.

The more debt the United States racks up, the more unlikely it seems that the bonds we issue will net a positive return. This makes other countries much less likely to buy the debt, which means the debt will have to be bought by the central bank. This means inflation will rise. China is also pumping money back into the United States via large purchases which act as cash infusions driving the inflationary spiral.

The United States will be in great suffering soon, but we are currently in a good position to avoid total implosion because we still have ample amounts of fertile farmland, coal, oil, natural gas, and plenty of equipment to harvest these resources which will help cushion us. If the economy crashes and we enter recession while Trump is in office, the democratic socialists will likely be able to rally the afflicted throngs and seize power. As crazy as it might seem, there is potential that we may see the oil and gas industry become nationalized in the United States.

In short, buy real assets now before the crisis is here. It is coming soon.

[Diebert van Rhijn]

No disagreement from me on the debt circus. The only difference in my perspective is that I don't see sudden endings. More like a hollowing out but there are many ways to transition away from a collapse. As I wrote before, the system is already supported by fiat from global players. What's left is endless bargaining and dealing between those players. Destruction of the game is an outcome no player would desire. Of course I'm willing to entertain the notion of things being "out of control" but that would mean that making predictions is even harder!

I could be wrong though. ... It may be possible to kick the can down the road, and more 0% rates/QE will fill other parts of the world, perhaps Malaysia and Indonesia will absorb the money injections (TPP).

But then why sounding the alarm and making firm sounding predictions of impending collapse? What kind of probabilities do you have in mind?

[Glostik91]

No disagreement from me on the debt circus. The only difference in my perspective is that I don't see sudden endings. More like a hollowing out but there are many ways to transition away from a collapse. As I wrote before, the system is already supported by fiat from global players. What's left is endless bargaining and dealing between those players. Destruction of the game is an outcome no player would desire. Of course I'm willing to entertain the notion of things being "out of control" but that would mean that making predictions is even harder!

You still don't understand the problem. The problem is production. The system is supported by production from global players. The players don't want their production flowing into the black hole of consumption that is the United States. And this is why I call the United States a cancer. Because we have $122 trillion in government liabilities and millions of, I will grant, hard working people, yet not actually producing anything. We need people producing actual things, not rolling boulders up hills in the morning and feasting in the evening.

But who's talking about sudden ends? This recession is going to last a very long time, potentially 10 years until things begin to get better. Some even think it will take 20 years to get better. Eventually people will begin to start realizing the problem, the problem being a lack of production supporting the dollar. And for each person who wakes up to this realization, in that will be your sudden end. There will be sudden ends happening all over the place over the next decade.

But then why sounding the alarm and making firm sounding predictions of impending collapse? What kind of probabilities do you have in mind?

I sound the alarm because it is not obvious. It looks like things are chugging along just fine, maybe a minor recession in the cards, but the fact is that we are poised for an incredible amount of pain.

What's troubling is that if the recession gets into full gear with Trump in office, it will damage the idea of a free market and promote the idea that nationalizing corporations is the answer to our production problem. The next decade will be a very dangerous tight rope walk between freedom/free market and national socialism, and that's why I'm saying get ready.

[Eric Schiedler]

The "free market" propaganda is false and does not explain the economy in the slightest. That's part of your confusion.

That there is going to be a recession is the easiest thing to predict, since commodity and trading prices always swing and people react irrationally to them both during "expansions" and "recessions".

[Glostik91]

The "free market" propaganda is false and does not explain the economy in the slightest. That's part of your confusion.

That there is going to be a recession is the easiest thing to predict, since commodity and trading prices always swing and people react irrationally to them both during "expansions" and "recessions".

Explain the economy for me then. Because it seems to me that a free market is preferable to nationalizing industry. A free market respects people as morally autonomous agents and preserves human dignity by allowing them to choose of their own free will what they want to do with their lives, whether that be working hard producing, or working very little.

A government on the other hand is the gun. It destroys human dignity. It is basically slavery. I see absolutely no reason why anyone would want a government powered by insane nationalistic fervor taking over industries.