Can we call it a recession now that the largest activist investor is accusing someone of causing a recession “unlike any other”. I keep saying we’re in a spot where if we are not careful we could well see the next depression. To blindly ignore an economy that’s teetering on the edge of collapse for political reasons is foolish. If either party uses this crisis to score political points they need to be held accountable.
https://finance.yahoo.com/news/blackrock...00827.html
“ Many experts have already sounded the alarm on the U.S. economy. But you still want to pay attention to what BlackRock — the world’s largest asset manager — has to say for a very simple reason: it’s predicting a recession unlike any other.
“Recession is foretold as central banks race to try to tame inflation,” BlackRock’s team of strategists write in their 2023 Global Outlook.
In fact, the strategists believe that central banks are “deliberately causing recessions by overtightening policy” in an effort to bring price levels under control.”
can I say it one more time................
y'all ain' shite, yet!
Gee BlackRock...no sh!t. Recessions are very common effects when interest rates are increased to bring down inflation. There are 3 causes to high inflation: 1) Demand is too high, 2) Supply is too low and 3) Money supply is too high. Our inflation issues are caused by a combination of too much money available due to 2021 "bailouts" and too little supply for a variety of products - with hydrocarbons being a major one that touches the price of everything else.
Raising interest rates is designed to squelch demand on durable goods, so it will cut SOME of the demand for products. It also affects the money supply by reducing people's desires/abilities to leverage themselves and force them to allocate more capital to debt payments if they have variable interest debt - like credit cards.
I don't know if Peter Zeihan ever explicitely spelled it out like this, but the reason why globalism is going to fail is all due to demographics. We can no longer be the "market of last resort" for the rest of the world because there will simply be too many countries who won't be able to consume the excess supply. It's similar to where Nixon took the U.S. off the Bretton/Woods system where the dollar was convertable to a fixed quantitiy of gold. The overhang of paper and digital currency out there was too great vs the gold reserves on hand. Same logic applies to our markets relative to the rest of the world's ability to export. This paragraph doesn't directly connect to the more immediate concerns of inflation and recession; however, this is playing out in the world today as the U.S. is basically pulling the plug on China's export driven model for their economic growth plus a number of companies reshoring their manufacturing in the U.S. or at least in the Western Hemisphere.
Yeah, the trick is to raise rates just enough to stave off inflation without causing a recession. It's more an art than a science. Doesn't really matter currently since the US is already in a recession.
There is so much free money baked in the cake now, what we are going through may be the "new norm" Obama was telling us about. Everybody remember when he said that? I do. "Suck it up. I'm rich and live on the water in Martha's Vineyard".
(12-13-2022 10:20 AM)miko33 Wrote: [ -> ]Gee BlackRock...no sh!t. Recessions are very common effects when interest rates are increased to bring down inflation. There are 3 causes to high inflation: 1) Demand is too high, 2) Supply is too low and 3) Money supply is too high. Our inflation issues are caused by a combination of too much money available due to 2021 "bailouts" and too little supply for a variety of products - with hydrocarbons being a major one that touches the price of everything else.
Raising interest rates is designed to squelch demand on durable goods, so it will cut SOME of the demand for products. It also affects the money supply by reducing people's desires/abilities to leverage themselves and force them to allocate more capital to debt payments if they have variable interest debt - like credit cards.
I don't know if Peter Zeihan ever explicitely spelled it out like this, but the reason why globalism is going to fail is all due to demographics. We can no longer be the "market of last resort" for the rest of the world because there will simply be too many countries who won't be able to consume the excess supply. It's similar to where Nixon took the U.S. off the Bretton/Woods system where the dollar was convertable to a fixed quantitiy of gold. The overhang of paper and digital currency out there was too great vs the gold reserves on hand. Same logic applies to our markets relative to the rest of the world's ability to export. This paragraph doesn't directly connect to the more immediate concerns of inflation and recession; however, this is playing out in the world today as the U.S. is basically pulling the plug on China's export driven model for their economic growth plus a number of companies reshoring their manufacturing in the U.S. or at least in the Western Hemisphere.
I can't love this post enough ... well done, miko!
(12-13-2022 09:19 AM)CardinalJim Wrote: [ -> ]Can we call it a recession now that the largest activist investor is accusing someone of causing a recession “unlike any other”. I keep saying we’re in a spot where if we are not careful we could well see the next depression. To blindly ignore an economy that’s teetering on the edge of collapse for political reasons is foolish. If either party uses this crisis to score political points they need to be held accountable.
https://finance.yahoo.com/news/blackrock...00827.html
“ Many experts have already sounded the alarm on the U.S. economy. But you still want to pay attention to what BlackRock — the world’s largest asset manager — has to say for a very simple reason: it’s predicting a recession unlike any other.
“Recession is foretold as central banks race to try to tame inflation,” BlackRock’s team of strategists write in their 2023 Global Outlook.
In fact, the strategists believe that central banks are “deliberately causing recessions by overtightening policy” in an effort to bring price levels under control.”
Nope, not until Tom says we can.
(12-13-2022 10:26 AM)VA49er Wrote: [ -> ]Yeah, the trick is to raise rates just enough to stave off inflation without causing a recession. It's more an art than a science. Doesn't really matter currently since the US is already in a recession.
Tom would like a word with you......
(12-13-2022 10:51 AM)Eldonabe Wrote: [ -> ] (12-13-2022 09:19 AM)CardinalJim Wrote: [ -> ]Can we call it a recession now that the largest activist investor is accusing someone of causing a recession “unlike any other”. I keep saying we’re in a spot where if we are not careful we could well see the next depression. To blindly ignore an economy that’s teetering on the edge of collapse for political reasons is foolish. If either party uses this crisis to score political points they need to be held accountable.
https://finance.yahoo.com/news/blackrock...00827.html
“ Many experts have already sounded the alarm on the U.S. economy. But you still want to pay attention to what BlackRock — the world’s largest asset manager — has to say for a very simple reason: it’s predicting a recession unlike any other.
“Recession is foretold as central banks race to try to tame inflation,” BlackRock’s team of strategists write in their 2023 Global Outlook.
In fact, the strategists believe that central banks are “deliberately causing recessions by overtightening policy” in an effort to bring price levels under control.”
Nope, not until Tom says we can.
The root cause of the Great Depression was DEFLATION.
(12-13-2022 10:52 AM)Eldonabe Wrote: [ -> ] (12-13-2022 10:26 AM)VA49er Wrote: [ -> ]Yeah, the trick is to raise rates just enough to stave off inflation without causing a recession. It's more an art than a science. Doesn't really matter currently since the US is already in a recession.
Tom would like a word with you......
lol, yeah, hence the pot stirring. In reality, if it looks and quacks like a duck, it's a duck. Always has been, always will be.
(12-13-2022 11:12 AM)stinkfist Wrote: [ -> ] (12-13-2022 10:54 AM)miko33 Wrote: [ -> ] (12-13-2022 10:51 AM)Eldonabe Wrote: [ -> ] (12-13-2022 09:19 AM)CardinalJim Wrote: [ -> ]Can we call it a recession now that the largest activist investor is accusing someone of causing a recession “unlike any other”. I keep saying we’re in a spot where if we are not careful we could well see the next depression. To blindly ignore an economy that’s teetering on the edge of collapse for political reasons is foolish. If either party uses this crisis to score political points they need to be held accountable.
https://finance.yahoo.com/news/blackrock...00827.html
“ Many experts have already sounded the alarm on the U.S. economy. But you still want to pay attention to what BlackRock — the world’s largest asset manager — has to say for a very simple reason: it’s predicting a recession unlike any other.
“Recession is foretold as central banks race to try to tame inflation,” BlackRock’s team of strategists write in their 2023 Global Outlook.
In fact, the strategists believe that central banks are “deliberately causing recessions by overtightening policy” in an effort to bring price levels under control.”
Nope, not until Tom says we can.
The root cause of the Great Depression was DEFLATION.
which is coming...
If you don't mind, can you lay out where you'll see deflation developing? Or maybe paste a link to a site to take a look at? I honestly don't see deflation on the horizon. Maybe I'm not thinking it thru properly, but with the amount of quantitative easing done since the end of GWB's 2nd term thru recent plus the gross gov't spending and monetizing the debt - I don't see the mechanism that would create a deflationary cycle.
(12-13-2022 11:38 AM)miko33 Wrote: [ -> ] (12-13-2022 11:12 AM)stinkfist Wrote: [ -> ] (12-13-2022 10:54 AM)miko33 Wrote: [ -> ] (12-13-2022 10:51 AM)Eldonabe Wrote: [ -> ] (12-13-2022 09:19 AM)CardinalJim Wrote: [ -> ]Can we call it a recession now that the largest activist investor is accusing someone of causing a recession “unlike any other”. I keep saying we’re in a spot where if we are not careful we could well see the next depression. To blindly ignore an economy that’s teetering on the edge of collapse for political reasons is foolish. If either party uses this crisis to score political points they need to be held accountable.
https://finance.yahoo.com/news/blackrock...00827.html
“ Many experts have already sounded the alarm on the U.S. economy. But you still want to pay attention to what BlackRock — the world’s largest asset manager — has to say for a very simple reason: it’s predicting a recession unlike any other.
“Recession is foretold as central banks race to try to tame inflation,” BlackRock’s team of strategists write in their 2023 Global Outlook.
In fact, the strategists believe that central banks are “deliberately causing recessions by overtightening policy” in an effort to bring price levels under control.”
Nope, not until Tom says we can.
The root cause of the Great Depression was DEFLATION.
which is coming...
If you don't mind, can you lay out where you'll see deflation developing? Or maybe paste a link to a site to take a look at? I honestly don't see deflation on the horizon. Maybe I'm not thinking it thru properly, but with the amount of quantitative easing done since the end of GWB's 2nd term thru recent plus the gross gov't spending and monetizing the debt - I don't see the mechanism that would create a deflationary cycle.
can't do that ... it's op-ed only based on my eyeballs ... however, it's better defined in the CPI thread..
I see catastrophic unemployment happening in the inflation centers as they continue to make their exodus from the west coast/NE to the undervalued centers in the interior/SE ... it's impossible to predict the 'when', but I always had it pegged to the boomers in numbers ... hence, '30 was my start point ...
the one thingy I'll give ya, there's a reason the border is wide arse open ... that one I never saw coming ... therefore, I'll give ya that nugget as a 'chance' you're correct...
(12-13-2022 12:31 PM)stinkfist Wrote: [ -> ] (12-13-2022 11:38 AM)miko33 Wrote: [ -> ] (12-13-2022 11:12 AM)stinkfist Wrote: [ -> ] (12-13-2022 10:54 AM)miko33 Wrote: [ -> ] (12-13-2022 10:51 AM)Eldonabe Wrote: [ -> ]Nope, not until Tom says we can.
The root cause of the Great Depression was DEFLATION.
which is coming...
If you don't mind, can you lay out where you'll see deflation developing? Or maybe paste a link to a site to take a look at? I honestly don't see deflation on the horizon. Maybe I'm not thinking it thru properly, but with the amount of quantitative easing done since the end of GWB's 2nd term thru recent plus the gross gov't spending and monetizing the debt - I don't see the mechanism that would create a deflationary cycle.
can't do that ... it's op-ed only based on my eyeballs ... however, it's better defined in the CPI thread..
I see catastrophic unemployment happening in the inflation centers as they continue to make their exodus from the west coast/NE to the undervalued centers in the interior/SE ... it's impossible to predict the 'when', but I always had it pegged to the boomers in numbers ... hence, '30 was my start point ...
the one thingy I'll give ya, there's a reason the border is wide arse open ... that one I never saw coming ... therefore, I'll give ya that nugget as a 'chance' you're correct...
I've thought the illegal immigration was a way to maintain balance in the U.S. economy previously as a means to control wage growth but more recently as a means to import people to fill in the younger generations. While we aren't in nearly as bad of shape demographically as most of the rest of the world, it's hard to say what the true impact of the illegals will be on the U.S. economy. So long as a high percentage of them take what they earn and send it to their home countries, they won't be a significant part of the consumer driven economy. Low level of consumerism coupled with more plentiful labor would accelerate deflation.
HOWEVER, we still have those excess dollars floating around. While there are methods the Fed can use to remove money from the system - like selling debt instruments for example - there will also be fewer and fewer people buying them over time. Also, the Fed will have no interest in removing dollars if they see deflation start to occur. Also the supply side will shrink with demand in order to stabilize prices.
I'm not seeing the bigger picture that you see as it pertains to deflation. Unless there is a way for the gov't to literally destroy dollars with no exchange of value to compensate for the dollars removed from the system - I don't see how we go deflationary in the near term.
(12-13-2022 03:28 PM)miko33 Wrote: [ -> ] (12-13-2022 12:31 PM)stinkfist Wrote: [ -> ] (12-13-2022 11:38 AM)miko33 Wrote: [ -> ] (12-13-2022 11:12 AM)stinkfist Wrote: [ -> ] (12-13-2022 10:54 AM)miko33 Wrote: [ -> ]The root cause of the Great Depression was DEFLATION.
which is coming...
If you don't mind, can you lay out where you'll see deflation developing? Or maybe paste a link to a site to take a look at? I honestly don't see deflation on the horizon. Maybe I'm not thinking it thru properly, but with the amount of quantitative easing done since the end of GWB's 2nd term thru recent plus the gross gov't spending and monetizing the debt - I don't see the mechanism that would create a deflationary cycle.
can't do that ... it's op-ed only based on my eyeballs ... however, it's better defined in the CPI thread..
I see catastrophic unemployment happening in the inflation centers as they continue to make their exodus from the west coast/NE to the undervalued centers in the interior/SE ... it's impossible to predict the 'when', but I always had it pegged to the boomers in numbers ... hence, '30 was my start point ...
the one thingy I'll give ya, there's a reason the border is wide arse open ... that one I never saw coming ... therefore, I'll give ya that nugget as a 'chance' you're correct...
I've thought the illegal immigration was a way to maintain balance in the U.S. economy previously as a means to control wage growth but more recently as a means to import people to fill in the younger generations. While we aren't in nearly as bad of shape demographically as most of the rest of the world, it's hard to say what the true impact of the illegals will be on the U.S. economy. So long as a high percentage of them take what they earn and send it to their home countries, they won't be a significant part of the consumer driven economy. Low level of consumerism coupled with more plentiful labor would accelerate deflation.
HOWEVER, we still have those excess dollars floating around. While there are methods the Fed can use to remove money from the system - like selling debt instruments for example - there will also be fewer and fewer people buying them over time. Also, the Fed will have no interest in removing dollars if they see deflation start to occur. Also the supply side will shrink with demand in order to stabilize prices.
I'm not seeing the bigger picture that you see as it pertains to deflation. Unless there is a way for the gov't to literally destroy dollars with no exchange of value to compensate for the dollars removed from the system - I don't see how we go deflationary in the near term.
you're already seeing the residual impact in housing and food/energy markets ... start there ... work it downstream to the impact of non-essentials/rationing ... no way this ends well for the middle class or first starters moving forward .. the shite has to hit the proverbial first ... it's coming....
(12-13-2022 10:54 AM)miko33 Wrote: [ -> ] (12-13-2022 10:51 AM)Eldonabe Wrote: [ -> ] (12-13-2022 09:19 AM)CardinalJim Wrote: [ -> ]Can we call it a recession now that the largest activist investor is accusing someone of causing a recession “unlike any other”. I keep saying we’re in a spot where if we are not careful we could well see the next depression. To blindly ignore an economy that’s teetering on the edge of collapse for political reasons is foolish. If either party uses this crisis to score political points they need to be held accountable.
https://finance.yahoo.com/news/blackrock...00827.html
“ Many experts have already sounded the alarm on the U.S. economy. But you still want to pay attention to what BlackRock — the world’s largest asset manager — has to say for a very simple reason: it’s predicting a recession unlike any other.
“Recession is foretold as central banks race to try to tame inflation,” BlackRock’s team of strategists write in their 2023 Global Outlook.
In fact, the strategists believe that central banks are “deliberately causing recessions by overtightening policy” in an effort to bring price levels under control.”
Nope, not until Tom says we can.
The root cause of the Great Depression was DEFLATION.
I don't want to split hairs, but I'm going to anyways because I think it is important to make this distinction. Deflation was the result of the Great Depression. Horrible monetary policy was the root cause.
(12-13-2022 09:38 PM)RuckleSt Wrote: [ -> ] (12-13-2022 10:54 AM)miko33 Wrote: [ -> ] (12-13-2022 10:51 AM)Eldonabe Wrote: [ -> ] (12-13-2022 09:19 AM)CardinalJim Wrote: [ -> ]Can we call it a recession now that the largest activist investor is accusing someone of causing a recession “unlike any other”. I keep saying we’re in a spot where if we are not careful we could well see the next depression. To blindly ignore an economy that’s teetering on the edge of collapse for political reasons is foolish. If either party uses this crisis to score political points they need to be held accountable.
https://finance.yahoo.com/news/blackrock...00827.html
“ Many experts have already sounded the alarm on the U.S. economy. But you still want to pay attention to what BlackRock — the world’s largest asset manager — has to say for a very simple reason: it’s predicting a recession unlike any other.
“Recession is foretold as central banks race to try to tame inflation,” BlackRock’s team of strategists write in their 2023 Global Outlook.
In fact, the strategists believe that central banks are “deliberately causing recessions by overtightening policy” in an effort to bring price levels under control.”
Nope, not until Tom says we can.
The root cause of the Great Depression was DEFLATION.
I don't want to split hairs, but I'm going to anyways because I think it is important to make this distinction. Deflation was the result of the Great Depression. Horrible monetary policy was the root cause.
No, it's fair and I'm glad you did. It was a lazy off the cuff response that I made earlier with little real thought to it. Tightening money supply leads to deflation - which in the short term would have been the correct call if the the stock market bull run was being fueled by inflation. However, from what I read about it there wasn't much inflation during the bull market so I don't understand why the Fed raised interest rates. However, I'm not too familiar with the economic theories behind interest rate theories when the currency is backed by gold.
Once deflation took off in the form of a negative feedback loop - it turned what was originally a severe recession into the Great Depression. Neither fiscal nor monetary policy was enough at the time to break out of the deep trough.
(12-13-2022 12:31 PM)stinkfist Wrote: [ -> ] (12-13-2022 11:38 AM)miko33 Wrote: [ -> ] (12-13-2022 11:12 AM)stinkfist Wrote: [ -> ] (12-13-2022 10:54 AM)miko33 Wrote: [ -> ] (12-13-2022 10:51 AM)Eldonabe Wrote: [ -> ]Nope, not until Tom says we can.
The root cause of the Great Depression was DEFLATION.
which is coming...
If you don't mind, can you lay out where you'll see deflation developing? Or maybe paste a link to a site to take a look at? I honestly don't see deflation on the horizon. Maybe I'm not thinking it thru properly, but with the amount of quantitative easing done since the end of GWB's 2nd term thru recent plus the gross gov't spending and monetizing the debt - I don't see the mechanism that would create a deflationary cycle.
can't do that ... it's op-ed only based on my eyeballs ... however, it's better defined in the CPI thread..
I see catastrophic unemployment happening in the inflation centers as they continue to make their exodus from the west coast/NE to the undervalued centers in the interior/SE ... it's impossible to predict the 'when', but I always had it pegged to the boomers in numbers ... hence, '30 was my start point ...
the one thingy I'll give ya, there's a reason the border is wide arse open ... that one I never saw coming ... therefore, I'll give ya that nugget as a 'chance' you're correct...
2030's is going to be a brutal decade if the US doesn't start manufacturing goods or at worst find an alternative to manufacture goods. If we're not careful, the Chinese collapse of the '30s will bring us down with them. Population bottleneck will also be problematic for Russia come the '30s.