TBH, reading all the stock experts on blind predicting an imminent collapse, I was trying to find economic precedent with no luck.
- undoubtably there is much inflation
- employment is super high
- market is headed down
- economic growth is slowing
- there are not goods on the shelf (my local supermarket runs out of random things like milk which is unprecedented. Looked at buying a new car and there is a one year wait for a Toyota)
My 2 cents is that the stock market is going down in the short term and we will see economic slowdown but only to get back to reality from the fiction weāve been operating in since 2018 (yes this started pre-pandemic, but I wonāt get into it). I know many will say it started in 2008 or even in 1971 and there may be some merit to that, since we have been printing money, but there is an argument to be made that it is ok to print some amount of money in some situations.
National debt for reserve currency of the world is another thing that gives me pause. It is ok for a nation to borrow money. Same as your personal life or a corporation. Musk borrows money against Tesla stock to access his wealth and avoid taxes, many borrow some amount for state school tuition or to buy an appreciating asset⦠those situation give you a greater return than what you borrowed. But US often just blows the money it borrows. These chickens will come home to roost (though people have been saying this since 1700s)
Anyway, I am not 100% sure which way we are headed when you weigh all the conflicting forces now at play, what do you think?
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comments
The state the housing market in is largely due to the pandemic. A lot of this kicked off with individuals leaving big cities and buying houses in other areas. This then pushed out the buyers in those areas. I think this has widely been seen in large areas like the Bay Area, Seattle and New York. Iām in CT and we had everyone from NYC coming here to buy houses in cash which caused prices to sky rocket and made it impossible for normal people to buy a house.
The āgreat resignationā, which was spurred on by the Pandemic is why we see the huge changes in the employment area that we do.
The stock market, again, was impacted by the Pandemic. First it saw a sharp drop at the beginning, and then we saw a huge increase in many tech stocks or āpandemic darlingā stocks.
Then, you have all the supply issues, which again, started with the pandemic, especially when Omicron hit. Supply chains still havenāt recovered from this.
You even have inflation spurred on by the several rounds of stimulus checks that were sent out.
Itās a recipe for disaster.
TLDR - This is all because some guy in China decided one day that he wanted to have bat soup
Itās not that simple.
The point about pork is spot on. I think you can cut a ton of the budget without any real effect on non-discretionary or discretionary spending.
Some other potential factors are demographics (we are getting older with fewer people producing economic output), currency manipulation, growing economic division between the haves and have nots, overbearing government regulations, globalization (there are many benefits but also some drawbacks), innate finite-sum (us v them) thinkingā¦