Monitoring US Economy

Two Minutes To Midnight

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View attachment 154815
A recession is basically confirmed. I hope you all the best for the future.
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Here's what's up:

1) For most of history, interest rates had to be ABOVE the rate of inflation. In fact, arguably, part of the reason for the great inflation of the 1970's was that interest rates were a bit too low in the years before.

Although there was also some stuff going on with leaving the gold standard, and the oil crisis and such.

2) Back in the 1970's, the Federal Reserve had to raise the Federal Funds rate to almost 20% to tamp down inflation. A crazy move, somewhat legendary in history, by Paul Volker.

The problem is that today, the national debt is so high, that raising interest rates to even 10% would completely break the government's ability to repay debt. Back in the 1970's The Great Satan was a creditor nation, the national debt was very low. That's a big problem.

The Great Satan has gone through a series of bubbles, and collapses, over the years. In the 1990's, the stock market bubble burst, which sent the US into a recession. Most of that money was absorbed into the housing market, which became wildly inflated.

And in 2008, the bubble burst, which almost crushed most of America's big lending institutions. They got bailouts from the government, and the government took all of their debt onto their own books.

That means government bonds are the next bubble.

And that’s going to be a big, big disaster.

IMG_20220509_162723_314.jpg


Because there is literally nothing else left to inflate. The bankers (and the world) are at the end of the road. All the other bubbles (stock market, housing, banks) were blown to prop up the biggest of them all, bonds.

What they have done is inflate the greatest bubble in bonds and this bubble is popping right now. The banksters are trapped and there is no way out.

They're backstopping everything, absorbing everything into themselves. That means, they are next.

I really think it could be bad. Why is anyone going to buy US debt when the promised interest rate is so much lower than the rate of inflation? Just like in 2008, I think these are junk bonds, they will collapse in value. And that will take the government down with it.

Now, some people say, "they want the inflation to be structural to inflate away the debt."

But, why would anyone buy US debt if they're planning to inflate it away? Nobody's going to do that. That mean, investment leaves the US and is poured into China.

And then you have the real big-brained Modern Monetary Theory geniuses:

"We'll just print the money with interest and pay ourselves back! Who cares, just print, use the magic money printer and print to oblivion!"

Yeah, Great idea, dumbfucks. Nobody ever tried that before.

1652094369252.png
 

karn

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View attachment 154876

Here's what's up:

1) For most of history, interest rates had to be ABOVE the rate of inflation. In fact, arguably, part of the reason for the great inflation of the 1970's was that interest rates were a bit too low in the years before.

Although there was also some stuff going on with leaving the gold standard, and the oil crisis and such.

2) Back in the 1970's, the Federal Reserve had to raise the Federal Funds rate to almost 20% to tamp down inflation. A crazy move, somewhat legendary in history, by Paul Volker.

The problem is that today, the national debt is so high, that raising interest rates to even 10% would completely break the government's ability to repay debt. Back in the 1970's The Great Satan was a creditor nation, the national debt was very low. That's a big problem.

The Great Satan has gone through a series of bubbles, and collapses, over the years. In the 1990's, the stock market bubble burst, which sent the US into a recession. Most of that money was absorbed into the housing market, which became wildly inflated.

And in 2008, the bubble burst, which almost crushed most of America's big lending institutions. They got bailouts from the government, and the government took all of their debt onto their own books.

That means government bonds are the next bubble.

And that’s going to be a big, big disaster.

View attachment 154879

Because there is literally nothing else left to inflate. The bankers (and the world) are at the end of the road. All the other bubbles (stock market, housing, banks) were blown to prop up the biggest of them all, bonds.

What they have done is inflate the greatest bubble in bonds and this bubble is popping right now. The banksters are trapped and there is no way out.

They're backstopping everything, absorbing everything into themselves. That means, they are next.

I really think it could be bad. Why is anyone going to buy US debt when the promised interest rate is so much lower than the rate of inflation? Just like in 2008, I think these are junk bonds, they will collapse in value. And that will take the government down with it.

Now, some people say, "they want the inflation to be structural to inflate away the debt."

But, why would anyone buy US debt if they're planning to inflate it away? Nobody's going to do that. That mean, investment leaves the US and is poured into China.

And then you have the real big-brained Modern Monetary Theory geniuses:

"We'll just print the money with interest and pay ourselves back! Who cares, just print, use the magic money printer and print to oblivion!"

Yeah, Great idea, dumbfucks. Nobody ever tried that before.

View attachment 154882
Nice .. thanks for compiling this.
Another aspect is that investors are looking at home loan delinquency rates like last time .. they see no issues ( always preparing for the last war eh) .. But most house buys recently were cash ... But here it is institutional investors that are buying houses still using loans backed by .. drumroll.. equity.
I'm no too thrilled about US bonds crashing.. in the last few years only India and Switzerland increased their dollar holdings ..however last month RBI bought a lot of gold .. so it seems they see the danger too.
 

Two Minutes To Midnight

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I'm no too thrilled about US bonds crashing.. in the last few years only India and Switzerland increased their dollar holdings ..however last month RBI bought a lot of gold .. so it seems they see the danger too.
The moment the fed tapers its purchases of junk mbs and corporate junk bonds, the US economy totally collapses. It's literally a fake economy based on effectively printing trillions for billionaires, it is a sick joke.

The RBI is doing the right thing with the gold purchases, though of course I wonder if it was a day late and a dollar short, no pun intended.

Recessions are dominated by a faltering paper market in today's world. If you want to have a position in PMs, you would want to buy them during good economic times because they're less in demand compared to paper instruments that have more risk (i.e. opportunity to get rich quick).

When the economy starts shitting the bed is when people start looking for less risky investments like metals that are not typically expected to do much more than hold their value while other things crash.

This is why The Great Satan's government and its coven of bankers typically smack down the PM market when the paper market falters so that there isn't any substantial run on derivatives, stocks, or worst of all bonds.
 

Two Minutes To Midnight

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Sleepy Joe with another useless press conference, with the usual bullshit, blaming Republicucks and of course, the "Putin Price Hike" for all the problems.

Except, of course:

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And surprisingly, the Americuck public actually knows this.

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Not a single person believes the big lie about "Putins Price Hike".

Truth is, the hyperinflation had almost nothing to do with the Russia-Ukraine conflict. Started way earlier when money printer went brrr.

The problem sanctions triggered was divorcing all that paper money from things that were actually worth something - like 35% of the world's fertilizer, petroleum, natural gas.

So yup, we're going to see everything. Energy shortages, food shortages, rising prices, blocked exports, suspended production, hyperinflation.

The CPI data is also coming out on Wednesday, should be an interesting read, considering the markets crashed hard after Dementia Joe made this press conference.
 

Super Flanker

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I currently live in the US and am feeling the pain of it. It is gonna be real bad.
Are you born in US and living there as a US citizen? Or are you an Indian Settled here in the US??))
 

Detective Pennington

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Republican takeover in midterms is unavoidable due to inflation, there is basically nothing Biden admin can do about it at this point.

Only thing that can be done is to take money out of the economy. That means taxing the middle class and poor. No one will do that as that is political suicide. So the other option is fed rate hikes. I think more are coming.
 

KurtisBrian

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I currently live in the US and am feeling the pain of it. It is gonna be real bad.
Americans are already attacking the "boogie" man foreigner invaders. It is common for tribes to hate and fear invaders even when times are good. When times are bad we get what happened in Rwanda or Germany. If there are not enough foreigners then those who used credit to take are often the targets (like in Germany, China and Russia).
 

Two Minutes To Midnight

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Stagflation prediction.
Stagflation is going to set in in a lot of countries. This is just like the 1970's crisis.

>oil prices increase
>gov spending to promote 'stimulus'
>inflation levels rise
>people demand higher wages
>prices increase
>gov spending to promote 'stimulus' again
>inflation levels rise

They only had 5% unemployment when their stagflation cycle began in the 1970s which of course turned into 13% unemployment once Fed rates skyrocketed.

We are actually worse off than the 1970s because the supply of everything is artificially capped by global incompetence and chink flu lockdowns, and every government keeps printing more money.
 

Two Minutes To Midnight

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If you really think about it, it's not so much necessary as much as it is pure class warfare.

Ultimately the Central Banks are an arm of the rich. If they don’t want a healthy middle class, the central banks will do their bidding by kicking the teeth of the working class.

That’s what this whole situation is all about. The corporations the rich own shares in don’t want workers to have more power than they currently do and certainly don’t want to lower economic inequality.

Right now the problem is that the rich have decided they want to concede nothing and have become too greedy. Now the central banks do what they can to fulfill the goals of the rich.

The real problems, such as increasing the production of the goods in short supply, or securing the ability to extract certain natural resources like oil are not going to be addressed.

Actually the policies that the central banks and rich have chosen could make the problem worse by increasing the interest rates for any company that wants financing loans to pay for their capital investments.

Addressing the real problem was never the goal. The Central Bankers themselves admit they can’t even if they wanted to. If the goal was to actually solve the shortages, the approaches would be quite different and the Central Banks could be quite productive.

An example is if the Central Banks are offering super generous funding for capital projects, with high priority to the areas with serious shortages. Actually that would require that the Central Bank become a Public Bank the way that Ellen Brown talks about.

That won’t happen in the current political climate because it is anathema to what the rich and their ideology want.

Creating “social partnerships” would require that the rich have some sense of noblesse oblige and that they use the institutions of society under their control like Central Banks for the purposes of the benefit of everyone, not just the rich. Unfortunately that is not happening right now.
 

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