Hmm. I'm on the fence about this. Will the Fed pull the rug during his Administration and then blame the "Bad, Greedy Republicans"...? Probably. But there is also a chance that it doesn't matter. Trump is a competent fellow regarding economic policy. And free markets work. Never count out the ingenuity and industry of the American people when left alone. Also, when competence comes in, confidence goes up. So I do hold a slight bit of hope that competent leadership provided by DJT can save our economy.
Financial Crash (2022-25)
- Thread starter Cynllo
- Start date
I think a huge crash is needed, and would actually benefit society in the long run. Burn off the dead wood, get rid of all of the make-work jobs that are like daycare for adult single women liberal arts majors, stop the endless supply of gibs to illegals, and a return to valuing productivity and competency.
Our economy is already broken, a major crash would finally allow the healing process to start.
True. That would certainly restore the allocation of capital to its best uses. But we live in a democracy, my friend. The vast majority of people in this country, and sadly even many Trump supporters, don't want to see said huge crash, because they have invested in the broken system themselves. So it's unlikely that our rulers will allow a huge crash to happen
I've said that's possible but it won't be on the basis of structural. It'll be psychological. And even, it'd have to be war like I said. They can do stupid things like bond buying through the Fed to prop up til at least 2030. I do think 2026 might see something big, though - it's my top prediction currently.
That's what I'm saying. Let's see if he wins first.
The crash will happen either way regardless of who is president. 18.6 year real estate cycle, Kondratiev cycle, skyscraper index, 4 year global liquidity cycles and other indicators all point to it being likely that the economy has a major downturn starting sometime in 2026.
This guy thinks it will pop off after the election. 2008 was the fiscal end of the road for the US and we just kept the party going on credit. We never took our deflationary medicine and mathematically we have to some day. It’s either that or hyperinflation.
If you’re a big saver like me deflation is music to your ears, yet it causes serious economic issues.
Agreed. Current interest on the US national debt is coming up on 25% of current total federal tax revenues.
When a household gets to the point of paying 25% of their income on interest from unsecured debt, where are they headed? Bankruptcy! How can a household pay down a debt that so large it's taking 25% of their income in interest?
A person might say "The household should be able to refinance their debt from short term, high interest rate loans, to longer term, lower interest rates." Yes, but the US already is paying an estimated 3.3% interest on its $35.8 trillion debt. That's already about as low as possible. In fact ,it lower than the likely rate of inflation going forward. That rate is likely to rise.
A person might say, "It doesn't matter. A government can just print money to pay the interest!". Yes, but printing money raises inflation, as has been known for millennia. Rising inflation raises interest rates, so soon the US will be paying much more than 3.3% inflation on the enormous $35.8 trillion debt, which will reach $40 trillion in barely two years.
The government will either have to print money and cause significant inflation, or they will have to undertake painful measures now to start getting back on the right track.
They will print the money. The inflation will get much higher.
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Yes, this is a short end vs long end sort of thing. Either way ...
Yes, and if they do a version of that (QE) to control the yield curve, the psychological effects cause people to flee into gold and BTC. Further crushing the dollar.
Lyn Alden reader, I see. She is fantastic.