US Stocks on track for worst December since the Great Depression

[VCheng]

There have been a couple of recessions post 2000 no? The debt ceiling crisis, the dip in stock markets, etc!!

Of course, such temporary recession are part of the process, as I said. Right now the economy has been expanding steadily for the last decade, almost:

https://en.wikipedia.org/wiki/List_of_economic_expansions_in_the_United_States

 

[Chinese-Dragon]

Of course, such temporary recession are part of the process, as I said. Right now the economy has been expanding steadily for the last decade, almost:

https://en.wikipedia.org/wiki/List_of_economic_expansions_in_the_United_States

The boom and bust cycle aside, what about the underlying problem with America's economic fundamentals?

I.e. The mentality of "spending spending spending".

Spending (which tends to make up the majority of GDP growth) is the best short-term way to boost the economy, particularity employment and income. Thus it is favoured by politicians looking to get re-elected.

However, increasing spending leads to a reduction in saving, leading to a ballooning Current Account deficit, fiscal deficit and national debt. Which are all so high in the US that it puts the rest of the world to shame.

It is the triumph of political short-termism, no one dares to advocate for a responsible approach to the unending debt and deficit, which of course would require "tightening the belt". Which no one wants to do, with regards to the economy or even food.

All of this is based on an extremely shaky foundation, on the assumption that the US dollar will remain the reserve currency forever. And that Current Account surplus countries (net lenders) such as China, Japan and Germany will continue to lend enough money to plug the US deficits forever.

Meanwhile Trump is pissing off the rest of the world to the point where Europe is doing everything they can to bypass the Iran sanctions, even setting up an alternative to their own SWIFT system. America's unilateral reversal of the Iran sanctions has made it clear that the rest of the world needs a way to bypass dollar transactions.

And the pace is picking up every day, with news of currency swaps becoming ever more common. It is America's saving grace that their creditor nations currently do not want to see economic turmoil in the US, and still see value in the dollar. But it is still a shaky foundation upon which to build the greatest debts and deficits in all of human history.

Is it so wrong to "tighten the belt" and live within one's own means? Just because people don't want to do it, doesn't mean it is wrong.

 

[VCheng]

And the pace is picking up every day, with news of currency swaps becoming ever more common. It is America's saving grace that their creditor nations currently do not want to see economic turmoil in the US, and still see value in the dollar. But it is still a shaky foundation upon which to build the greatest debts and deficits in all of human history.

What everybody sees as "shaky" foundations of the USD and its economy are still worlds better than anyone else's on the planet. You are correct that there are rising competitors, but unless one or more become viable alternatives, USA will likely maintain its leadership for quite a while yet.

 

[Chinese-Dragon]

What everybody sees as "shaky" foundations of the USD and its economy are still worlds better than anyone else's on the planet. You are correct that there are rising competitors, but unless one or more become viable alternatives, USA will likely maintain its leadership for quite a while yet.

Why don't they have American leaders who can say, "listen... we need to tighten our belt for the next 10 years or so... times will be tough but we need to sort out our mountains of debt and deficit, so that our children and future generations will not have to suffer due to our excessive spending".

All of that spending and deficit and debt can only be sustained as long as the US dollar remains the world's primary reserve currency, and that the Current Account surplus nations continue to lend enough to plug that gap. But that doesn't look like it will happen forever, nowhere close.

Especially with America's unilateral reversal of the Iran sanctions which has forced even their own allies to look for ways to bypass the US dollar. America is using the dollar as a political weapon against everyone in sight, which makes the rest of the world wonder why they should not look for other ways around it.

 

[VCheng]

Why don't we have American leaders who can say, "listen... we need to tighten our belt for the next 10 years or so... times will be tough but we need to sort out our mountains of debt and deficit so our children and future generations will not have to suffer due to our excessive spending".

All of that spending and deficit and debt can only be sustained as long as the US dollar remains the world's primary reserve currency. But that doesn't look like it will happen forever, nowhere close.

Especially with America's unilateral reversal of the Iran sanctions which has forced even their own allies to look for ways to bypass the US dollar. America is using the dollar as a political weapon against everyone in sight, which makes the rest of the world wonder why they should not look for other ways around it.

After the disruption caused by the present clown in the White House, the next President may very well do what you suggest. Seriously.

 

[Hamartia Antidote]

Don't count those chickens yet...

 

[Arsalan]

After the disruption caused by the present clown in the White House, the next President may very well do what you suggest. Seriously.

What? I though you were a big fan and supporter of Trump and his policies!! Have it changed lately or i got it wrong from the start?

 

[VCheng]

What? I though you were a big fan and supporter of Trump and his policies!! Have it changed lately or i got it wrong from the start?

I agree with many policies of the present administration, and I disagree with many other policies. I judge each by their relevance and impact on any given issue rather than blanket support or knee-jerk opposition, and that approach has never changed.

 

[Arsalan]

I agree with many policies of the present administration, and I disagree with many other policies. I judge each by their relevance and impact on any given issue rather than blanket support or knee-jerk opposition, and that approach has never changed.

Ok, then i must have missed all those things you disagreed with in the past.

 

[Nilgiri]

Ok, then i must have missed all those things you disagreed with in the past.

Vcheng and I have knocked heads on a whole bunch of them (in all direction of agree/disagree with Trump admin). I can vouch for it.

 

[Arsalan]

Vcheng and I have knocked heads on a whole bunch of them (in all direction of agree/disagree with Trump admin). I can vouch for it.

Oh no i am not doubting the man. I was being honest when i said "I must have missed all those things you disagreed with in the past"

 

[VCheng]

Ok, then i must have missed all those things you disagreed with in the past.

Vcheng and I have knocked heads on a whole bunch of them (in all direction of agree/disagree with Trump admin). I can vouch for it.

Oh no i am not doubting the man. I was being honest when i said "I must have missed all those things you disagreed with in the past"

It's okay. I will still speak my mind, whether I am ignored, chastised or berated, as long as I care to do so. My signature gets truer every day.

Back on topic, the market volatility is just a signal to the WH that it must keep in mind the consequences of its ill-advised twitterstorms, and not much else.

 

[Arsalan]

It's okay. I will still speak my mind, whether I am ignored, chastised or berated, as long as I care to do so. My signature gets truer every day.

lolz, now it looks like you are just trying to act all good and mighty!!

I seriously missed any such point where you were disagreeing with any trump policy in the past, this was a new one for me and therefore the surprise.

Anyway, we can move forward. As i always say, especially to you, you can believe whatever you want

 

[Götterdämmerung]

Trump should close down the FED and run the economy from the Trump Tower suite in which he hosted "the most successful show on earth."



So much winning. Even the stock market cannot take so much winning.

Closing the FED would be The biggest gift for the US as it's in fact an unconstitutional organisation. It will, in fact, be a gift to mankind to end the Khazarian cabal's usury system.

But don't expect the cabal to take this attack lightly, they would rather create a civil war in the US than to give up their robbery system.

 

[VCheng]

lolz, now it looks like you are just trying to act all good and mighty!!

I seriously missed any such point where you were disagreeing with any trump policy in the past, this was a new one for me and therefore the surprise.

Anyway, we can move forward. As i always say, especially to you, you can believe whatever you want

As I said before, I like to consider each policy for the effects it would have and try to take all sides into consideration rather than knee-jerk responses. Besides, the freedom to believe can be a distinct problem where the expectation is to believe only in what we are told.

Back on topic, the US economy is overdue for a recession anyway. When and how severe it will be will depend on how close to the next elections it occurs, and therefore will be very important in its effects for the following four years, not just for USA but the entire world.