THE GLOBAL ECONOMY IS FUNDEMENTALLY BROKEN AND NEARING ANOTHER CRASH
/pol/ is very good at piecing together information. /pol often picks up on things the general public is missing out on. But I do think that there is a serious lack of economics comprehension here. I think this is yuge because there is a strong case to be made that a crash is inevitable and immanent
So for whoevers interested, heres an economics lesson. Bear with me if you just want the juicy habbening fuel. Im first going to explain what I think economics is good for and some basic econ
>>69551432
----PART ONE: HARD AND SOFT SCIENCES-----
If you think of science as a spectrum from hard science to soft science. Far on the hard side I think people would place things like physics and chemistry. Down the line but still hard would probably be sciences like geology or biology. Soft sciences might be sociology, psychology, and anthropology. The softest science would probably be some applied gender studies shit.
Hard science tell us in definitive way how our universe works. Understanding hard science allows us to directly manipulate our universe. It is possible to do that because hard science has a controllable number of variables that we can reliably expect to yield the same results every time. The data of a hard science is objective and exact.
Soft sciences don't use objective and exact measurements of the universe. The data is a result of someones subjective inferences based on subjective observations. These observations can help us understand why things are the way the are, but can't be modeled with absolute certainty because of their infinite variables.
As you probably have noticed, the soft sciences have a habit have being warped to astounding levels of bullshit. They are usually grounded in reality, but can be manipulated to enact vast social change. They are of course not always bad. It is undoubtedly useful or just nice to have an interpretation of our place in the world. We just need to remember that they are subjective inferences about the world and not exact, manipulable data.
>>69551517
-----PART TWO: ECON'S PLACE-----
That explains what is wrong with the field of Economics. It is too often treated as a hard science, when it is absolutely a soft science. Economics started out as simple observations of the way people use commerce to trade with each other. But today it is frequently used as if it can be manipulated like a hard science. State economists are given immense powers and influence despite being consistently wrong. They get away with this by using convoluted charts and equations that make people think economics is a hard science and that if we use the right equations we can directly manipulate our world like we do with hard science. They are not idiots and they aren't deliberately evil. Its just that the last few generations of economists have been taught to treat econ like a hard science. It often looks like it works because the current economic models are generally configured after the recent past. But infinite variables eventually catch up and break the models. So they are remodeled after newer data until another unforseen variable comes in and breaks it. This would continue for eternity since there are infinite variables in an economy. Economics is great at helping us understand abstract ideas such as how wealth is created, what value is, what money is, how prices are determined, etc. The truth is, basic economics is actually very simple. Problems that seem complicated can often be explained with a few principles.ii
>>69551628
----THE ABSOLUTE BASICS----
When humans combine land labor and capital they create products. Products can be traded. The value earned in that trade is revenue. Revenue minus the land labor and capital cost of producing the product are profits. Profits are distributed to individuals that contributed to the production according to their contributions of land labor and capital.
The price that the product is traded at is determined by the interaction of two functions. Supply and Demand. Supply represents the quantity of a product that a firm is able and willing to sell at a given price. Demand is the quantity that individuals and firms are willing and able to buy that product. Higher prices mean more supply and less demand, while lower prices mean less supply and more demand. Neither one determines the other. The functions are codependent on each other to determine a price. The price is where the functions intersect. Many failed economic theories have made the mistake of thinking one determined the other.
>>69552149
-----PART THREE: WHAT ARE SAVINGS?-----
The profits a person earns from utilizing their land, labor and capital make up their income. Individuals may consume their income immediately. Or they may defer consumption to a later time. This create savings. Savings are the backbone of an economy, as they allow for new wealth and value to be created.
You have 4 choices of what to do with savings.
A) Consume. There is no risk taken, but no wealth created either.
B) Save. A person may choose to continue deferring consumption to a future time. A small amount of risk exists here because there is no such thing as a perfect store of value.
C) Lend. Savings can be loaned to others for whatever purpose they desire. There is a risk of non repayment. This risk may be compensated with interest payed from the borrower to the lender.
D) Invest. Savings may be used to create more capital. This option has the potential for the highest rate of return but is also the riskiest option as there is no guarantee that the capital will yield enough value to justify the investment.
>>69552382
-
-----PART FOUR: ULTILIZING SAVINGS-----
Pretty much any individual can easily make decisions between whether to consume their income or save. A certain level of consumption is necessary for survival. Consumption past essentials are luxuries. When people don't consume all of their income it is because they realize that by using options C or D that can potentially consume luxuries at an even greater quantity and quality of goods and services in the future.
Individuals may want the passive income from interest or investment returns, but the average individual does not have the knowledge or time to use options C and D. This is what banking is for. Ordinary people with no financial knowledge can access the gains of options C and D by doing option B. Bankers are specialists at deciding how to use savings. They can analyze which borrowers have a high likelihood of repayment. Part of the interest charged to the borrower by the bank is paid as interest to the saver. The difference kept by the bank is a fee for connecting the borrowers and savers. This is a win-win-win scenario as banks have a profit incentive to give the highest possible interest payments to the savers yet the lowest possible rate for borrowers.
Savings in an economy not allocated for will be used for capital investment Investment bankers use knowledge of market conditions to decide which capital investment is most likely to succeed. Wealth is created when loans amd0 investments grow to a value beyond what they would have if the resources were just left alone.
>>69552684
-----PART FIVE: THE INTEREST RATE MECHANISM-----
When the economy is strong people will choose to defer more consumption creating more savings. This should be obvious. Weak economies mean a higher portion of peoples' incomes must be devoted to essentials. A stronger economy gives people disposable income. When a lower portion of their income is devoted to essentials, they have more to use on luxury consuption or saving.
This leads us to see what Interest Rates are. They are a spontaneously created mechanism to signal to the market that the current state of savings are. Low interest rates signal that savings are abundent. The economy is creating vast amounts of surplus value so the supply of money is high, driving down interest ratles. Low interest rates encourage riskier ventures. This is good. Economies should be taking risks when they have savings to fall back on. When interest rates are high, it is because the supply of money is low since people are saving less. High interest rates slow the rate of expansion. This is good because when people are saving less the economy should not be expanding. Expansion is the production of luxuries. An economy should not produce more luxuries when essentials are making up a higher portion of incomes.
>>69552958
----PART SIX: RECESSIONS AND KEYNES-----
A broken economy is one without savings. Weak economies, when truely left alone can recalibrate amazingly well y of how powerful the interest rate mechanism is. Higher interest rates encourage more people to defer consumption of their disposable income. This rebuilds savings and stabilizes the economy. Recessions are not supposed to be catastrophic like 2008. They are supposed to be healthy recalibrations of the economy.
Recessions are often met with a public demand for the state to "fix" them. In comes Keynesianism. John Keynes had some clever but ultimately flawed ideas on how to make a slow economy grow. Unfortunately those ideas have probably caused trillions of dollars of wealth to be destroyed or never created at all. He believed that recessions occur because demand is too low. Essentially the logic is this: Consumers can't buy products so firms can't make profits so workers can't make money to spend as consumers. Keynesians think that the necessary fix to a recession is for government spending to make up the gap in demand. To the layman this makes sense, which is why that line of thinking has infected much of the western world. But using the aforementioned concepts of how economies function, it is easy to demonstrate why Keynesian thinking is wrong.
Government spending comes from three sources. Taxes, borrowing and (indirectly) monetary policy. Taxes cut into savings, the backbone of economies, so it has been obvious for decades that raising taxes cannot fix a recession. So governments raise funds through debt.
>>69553529
---PART SEVEN: NATIONAL DEBT REARS ITS UGLY HEAD---
Debt is either foreign or domestic. National debt is dangerous because the government is sacrificing the economy's future savings for current consumption. Foreign debt means future earnings will be given different economies in the form of interest payments. Many Keynesians may agree with this but think domestically held national debt is ok since its paid to its own economy. It is not ok.
When governments issue bonds domestically they are raiding the savings of citizens. Normally, bankers lend to the borrowers who most efficiently use savings. Efficient use of funds is reflected in credit ratings and economic activities which bankers analyze the viability of. Businesses and individuals build their credit rating by reliable payment of liabilities. In order to pay they must opperate efficiently. Government sidesteps efficient use of funds yet still has "good" credit by being able to endlessly raid the economy by levying more taxes, taking on more debt or manipulating currency. Private entities cannot do this as they will eventually run out of savers that are willing fund their losses. When governments issue bonds domestically, they are taking from the savings that would have otherwise been given to some other more productive venture. Less available money raises the interest rates, and makes it harder for economies to recallibrate (but Keynsians consider this spending "stimulating demand")
Central planning is the allocation of resources by a central authority. Economies opperate under Chaos Theory and it will never, ever be possible to calculate a more efficient use of resources than how a market can spontaneously allocate. Even with the most powerful AI and processing power imaginable, it will still not be possible to measure every variable that effects an economy. Government debt and spending ultimately amounts to a massive opportunity cost and slows growth and decreases stability.
>>69551432
The big question at this point isn't if the world economy collapses but the question on when and how big the collapse will be. Back in 2008 there really was the opportunity to clean up the mess and unwind the huge amount of debt that had clogged up the system not to mention dealing with real financial regulation, reform the monetary and tax system so that productive borrowing is rewarded and speculative investment aka asset inflation doesn't occur. Unfortunately we're here in 2016 and I have a feeling that the mess is going to be a lot worse in the future because even more debt has entered the system, none of the fundamental flaws of the system have been addressed so when the collapse occurs it won't be pretty.
I think if another depression starts they will begin WW3
bump
>>69553980
doubt that
too big comfort zone in daily modern life to jump to
conflict
political instability perhaps and maybe going
back to tending land and animals yeah but
wars? need a bit more than a depression for
that.
>>69553668
----PART NINE: ARTIFICIAL INTEREST RATES-----
To counteract the loss of private funds from government debt, the state must turn to central banking. When government bonds take private savings, the interest rate will rise, reflecting the increased demand and decreased supply of money. As already established, high interests rates slow growth. Since Keynsianism is all about counteracting recessions, states must find another way to lower rates. Central Banks lend newly minted currency to banks at an interest rate lower than the market rate. The artificially lower rate signals the market to start expanding again. This of course a problem, because the underlying fundementals of the economy have not been repaired. Savings have not been restored to a level that justifies expansion and the production of luxuries. But politicians in democracies love this because it gives the short term illusion of a strong economy. In reality what is really happening is that the newly minted currency is devaluing existing savings. Effectively, this may as well be a tax on savings. Savers have their savings devalued by the increased supply of money. Artificially low interest rates encourage savings to be lent out and consumed in ways that are not efficient. But in the short term, it will appear that the economy is growing stronger since increased liquidity boosts raw numbers on paper. Eventually, the illusion is caught by the reality that savings have less value than assumed and the market backfires causing a crash.
I've missed these threads, bumping!
>>69553904
Yep. This is pretty spot on. But somehow that isn't a mainstream opinion. So thats why I want to spell it out. Pundits (at least in the US) have been pushing the rhetoric of the "Obama Recovery" for years. But no one is addressing why it broke in the first place
I'll be lurking this thread but I have under 10k in the bank right now. Lets say we see this coming what is the best course of action for me? I'm assuming that it would be moot point considering depressions at least a decade.
http://archive.is/CAUs0
>>69554170
Unfortunately the problem is that there is this belief that if the government prints money and spends it then it creates inflation which results in a rise in wages. The result of the higher wages chasing higher prices the theory goes that the debt as a percentage of income will decrease to the point that debt burden is no longer an issue. The theory is based on the pre, during and post WWII economic boom within the United States where the debt, private and public, was reduced to a point where it was no longer a matter although in the process of doing so it wiped out savers and bond holders because in real terms their money had shrunk in value. The problem is that no matter how much money is thrown at the problem they just can't create inflation and when it is created you don't see a corresponding uptick in wages - it just turns into a giant cluserfuck but unfortunately the true believers keep convincing themselves that the public works project needs to be even bigger to have affect.
The other problem is that none of the flaws are addressed - Bill Black went into great detail in a few videos on YouTube how the so-called 'toughest regulation' left massive loopholes for big party donors - something that both sides of the isle are guilty of. Heck, I'm a big proponent of not only separating and breaking up the banks but turning these banks into credit unions, building societies and trustee savings banks to avoid this mess again not to mention give the DOJ fangs to break up monopolies instead of the situation today where large monopolistic organisations can act with impunity.
>>69554059
---PART SEVEN: WHEN BEN BERANKE SAID "BUT WAIT THERES MORE!"---
Central banks can only lower interest rates so far. The federal funds rate (The Federal Reserves interest rate of short term loans to private banks) has been hovering just above 0% for years. Actually about 0.25%. Aftert he 2008 financial crisis, the state both directly and indirectly propped up the economy. Directly, through yhe bailouts. The long term effect of the bailouts is that the toxic debt and bad creditors have not been cleared from the market. Instead all the defaulted debt has just been more centralized. The economy has been indirectly propped up through the artificially low interest rates. "Cheap" money and infinite liquidity have made the economys numbers look strong on paper. But savings have not been rebuilt. It is only a matter of time before the market is shocked with the reality that our savings are worth much less than they appear.
But to further kick the can down the road quantitative easing was invented. The Federal Reserve buys securities from private banks by the trillions. This is just another way of devaluing savings to give a short term injection to the economy. When the Fed buys securities it again increases liquidity and again encourages more lending and more investing. There have been three rounds of QE in the US since 2009, each larger than the last. QE4 is considered inevitable and is estimated that it would be between $12 and $15 TRILLION dollars. Considering that those numbers are nearing the entire annual GDP of the USA, it should be very concerning what will happen if that much liquidity is pumped into the economy.
>>69551432
http://www.activistpost.com/2015/12/58-facts-about-the-u-s-economy-from-2015-that-are-almost-too-crazy-to-believe.html
>#1 These days, most Americans are living paycheck to paycheck. At this point 62 percent of all Americans have less than 1,000 dollars in their savings accounts, and 21 percent of all Americans do not have a savings account at all.
>#15 For each of the past six years, more businesses have closed in the United States than have opened. Prior to 2008, this had never happened before in all of U.S. history.
>#21 According to the U.S. Census Bureau, 49 percent of all Americans now live in a home that receives money from the government each month, and nearly 47 million Americans are living in poverty right now.
>#22 In 2007, about one out of every eight children in America was on food stamps. Today, that number is one out of every five.
>#24 46 million Americans use food banks each year, and lines start forming at some U.S. food banks as early as 6:30 in the morning because people want to get something before the food supplies run out.
>#38 Back in 1950, more than 80 percent of all men in the United States had jobs. Today, only about 65 percent of all men in the United States have jobs.
>>69551628
Pointless only a fool think that bankers are scientists
http://tribunecontentagency.com/article/in-search-of-fixes-for-a-fossilized-economy/
>In short, something has gone fundamentally wrong with the U.S. economy.
>All the new technology and innovations, the near-zero interest rates, the printed new money, the record number of college-educated youth, the massive government borrowing and the cheap energy have not brought millions back into the labor force or increased annual family income and purchasing power.
>Perhaps it is time to try something radically different — or rather, traditional — such as balancing the budget through additional cutting more than additional taxing, on the theory that individuals are more accountable and efficient than government bureaucracies.
>>69554829
---PART EIGHT: THE END GAME---
Central banks are out of tools. The only thing they have left to do is devalue the currency more through QE and lower interest rates. Hyperinflation is the only end condition.
Why the US has been able to sustain unprecedented levels of currency issuing without feeling the full effect of inflation is a story for another day. The short answer is that the US Dollar's status as a reserve currency has allowed inflation to be "exported" (this is why countries that have economies built on exporting to the US stay dirt poor for decades. The global monetary system effectively transfers their wealth to keep the USA on life support so we can continue consuming without producing).
In January 2016 the stock market almost crashed. A large cause of this was raising of rates. Once rates were lowered, the market stabilized. This is strong evidence that the financial system is built on the back of infinite money.
The Fed has said that QE4 is on the table. More concerning is that Fed chair Janet Yellen stated earlier this year that negative interest rates are on the table as well. This is a last ditch effort to stimulate demand and force banks to lend from savings that have been depleted and devalued.
The Federal Reserve was created in 1913. It managed to crash the economy by 1929, and in many ways we are still recovering. Economic crisis have been more severe and more frequent as time went on. The dot com and housing bubble and their respective recessions happening so close together was practically unprecedented. The state has no tools left to delay the inevitable. And its only a matter of time before we crash again. Maybe negative interest rates will keep us afloat for few years. We don't really know. But what we do know is that the underlying economy is fundamentally broken and at this point can only repair itself after the system crashes so hard that no more destructive state action can be taken.
Everything you said only applies to countries that don't control their own money supply like the eurozone countries.
Countries like usa and japan can print trillions like crazy, because the rest of the world DEMANDS dollars, yen and us and jap bonds for savings.
how can advanced economies ever have a positive current account if everybody in the world wants to buy their currency and bonds? not possible!
jap, german and swiss bonds are already at negative interest rates so it even pays for those governments to keep running up the debt.
so keynes was right!
your stupid simplistic austrian analysis makes absolutely no sense in the real world.
>>69555095
Great source. I find it astounding that the average American probably realizes that people are more worse off now than ever but still somehow buy into thr idea that the economy is "recovered"
>>69555732
I don't understand, what is wrong exactly with American spending habits? Why is demand insufficient? Does this mean that financial institutions simply do not accurately reflect reality?
>>69552149
>Higher prices mean more supply and less demand, while lower prices mean less supply and more demand
ehh
what
yeah alright but IT WAS SUPPOSED TO CRASH LAST SEPTEMBER GOD FUCKING DAMN IM SO TIRED OF WAITING
>>69555977
duuude
>>69555785
Heres what I said about that:
Why the US has been able to sustain unprecedented levels of currency issuing without feeling the full effect of inflation is a story for another day. The short answer is that the US Dollar's status as a reserve currency has allowed inflation to be "exported" (this is why countries that have economies built on exporting to the US stay dirt poor for decades. The global monetary system effectively transfers their wealth to keep the USA on life support so we can continue consuming without producing).
Theres a lot more to say about it. And Ill probably add it in eventually, but this is the gist of it. The US is in a unique position that no other state has ever had. The US monetary system probably would have actually broke in the 70s, but the global reserve status and Petro Dollar let the USD live on life support.
Also the Japanese economy hasn't grown in decades. Its NIRP has groundt he economy to a halt.
The swiss can also manage low rates by being a reserve currency. But also the Swiss have what is probably the strongest most stable underlying banking system in the world. If everything goes to shit, the Franc might be the last currency to go.
But ultimately the world markets are catching up with the fact that the USD broke in the 70s and so they exported their hyperinflation to the third world.
you think anyone is gonna read all of this? not trolling, I'm honestly interested but if you're gonna write 5k words you could as well make it a pdf.
>>69556011
Have you actually compared the economy from late august/september to now?
Shits been dropping like a rock. You won't have an economic collapse overnight. It won't be a HAPPENING!!!! in a sense like a shooter situation or terrorist attack, it's a long drawn out and painful death.
>>69555977
Higher prices signal to producers to create more of a good because they are then able to derive greater profit. Or in the case of some resources higher prices can make it economically viable to exploit more marginal sources. Such as in the case of Oil.
>>69556126
No, it's backwards. Unless somehow having a glut of supply raises prices
>>69551432
GODDAMMIT OP DO I BUY OR SELL
BUY
OR
SELL
So OP what should i do with my money?
>>69556126
I think he was more questioning the wording
high supply low demand means low prices, high demand low supply means high prices
the supply and demand dictates the prices, not the other way around
forget the fed and look at what the ezb is doing.
they are running QE infinity and europe still has deflation.
explain that with your stupid austrian economics.
austrian economics is used to make idiot-slaves for bond holders and the super super rich that don't work and want to live on interest like vampires sucking on the populace.
>>69556152
I'm not sure about the real economy, but what I am sure of is that the meme market has literally nothing to do with it. It's like the debt could be 9999999999999999999 and it still wouldn't affect the stock markets as long as the interest rates are low and the meme of the month (oil for example) isn't crashing.
>>69556239
Nevermind, it could also work in context
>>69556152
>>69556337
forgot my pic
>>69555977
Basically:
The supply function's output is the quantity of a product that a firm is able to produce at a given price. The inputs are its fixed and variable costs.
The demand function's output is the quantity of a product that buyers are willing to purchase at a given price. The input to the demand curve is the "marginal utility" of the product to the buyer. AKA how much the buyer values it.
>>69552149
Stopped reading here. You don't even know what economic profit is, yet you're going to teach me economics? Lol get fucked retard.
Here I made a graph. Whats so hard to understand? Im an economist.
>>69556239
>>69556314
>the supply and demand dictates the prices, not the other way around
It can be the other way around but yeah, true. Microeconomics is just extremely simplified.
>>69555732
-----PART TWELVE: COLLAPSES AND YOU-----
How big a collapse will be is hard to say. But the ultimate collapse will necessarily be bigger than the great depression.The reason being because the "fixes" over many decades usually just take wealth from another class or group of people to make the numbers look good for a few more years. Its now a mainstream opinion that the Euro is collapsing. But the possibility of the US Dollar collapsing is also very real, but much further off. The USD is the core of the global economy and we will be living in a unfathomably different world if it collapses. Whether or not the dollar will survive is impossible to say. But a massive global depression is certain. There are growing numbers of people that see this inevitability because of the increasing level of desperation in states' actions. It is important for you to understand what is going on and why things are happening. In the event of a collapse, power structures are destroyed and new power is up for grabs. The people who understand why everything collapsed will have a jump on this power void while everyone else is left scratching their heads. The thing about economic crashes is that they never begin as soon as predicted, but once they start they happen faster than anyone could have imagined.
>>69556475
Wow, your chart perfectly predicted Canada's gold reserves.
>>69556475
btw the fall in price at the end isnt a good thing. it hits 0 because were all dead and money isnt a thing anymore. Thanks DUDE Man
This:
>>69556459
Read Marx OP!, your explanation is only half correct.
It is not da guberments fault as such, but the capitalistic mode of production. Capitalism creates and co-depends on the state, for without it, capitalists can't monopolise the mediums of exchange to force the masses' dependence on their capital.
OP is right about economics being a soft science, but then goes on to speak as if his capitalism religion is hard science.
The collapse part is accurate.
>>69556648
so thats why small australia has red stars in its flag...
>>69555861
Different people have different views. I've noticed that higher income folks tend to think the economy has recovered because everyone they know is employed and relatively successful.
Lower income people know that the economy never actually recovered because their communities have their backs to the wall. Progressive college kids know the economy is shit, but some are unwilling this for ideological reasons. Others do mental gymnastics to paint the Republicans as having blocked or watered down Obama's stimulus bills, thus deepening the recession.
Every time I look at the 2009 stimulus package I am astounded at what they thought would help the economy.
>>69556520
Is gold and silver the best way to preserve wealth?
>>69555732
---PART TWELVE: COLLAPSES AND YOU---
How big a collapse will be is hard to say. But the ultimate collapse will necessarily be bigger than the great depression.The reason being because the "fixes" over many decades usually just take wealth from another class or group of people to make the numbers look good for a few more years. Saving have been raided over and over again. The people who defer consumption to are paying for this endless liquidity plan. There is no such thing as free lunch, and we will have o live through the consequences.
Its now a mainstream opinion that the Euro is collapsing. But the possibility of the US Dollar collapsing is also very real, but much further off. The USD is the core of the global economy and we will be living in a unfathomably different world if it collapses. Whether or not the dollar will survive is impossible to say. But a massive global depression is certain. There are growing numbers of people that see this inevitability because of the increasing level of desperation in states' actions. It is important for you to understand what is going on and why things are happening. In the event of a collapse, power structures are destroyed and new power is up for grabs. The people who understand why everything collapsed will have a jump on this power void while everyone else is left scratching their heads. We can see the evidence of what is going on. But because of the inherant impossibilities of calculating economies we don't know when or what will trigger the crash. Economic crashes never begin as soon as predicted, but once they start they happen faster than anyone could have imagined.
>>69556946
So what should people do with their money? invest in gold? store it in mattresses? move to canada?
>>69556946
As an average pleb of moderate wealth (read: not much) It seems like my lack of capital locks me out of taking advantage of this situation.
>>69555977
It's okay
Nobody expected child-bothering muzzie cunts to understand anything remotely relevant to the sciences or mathematics.
>>69557147
>move to canada?
kek
>>69557575
come on Canada give me an answer
>>69557719
Isn't New Zealand your Canada?
>>69557719
stock up on non-parishables and guns
>>69556011
It did, anon. Obama fixed it.
>>69555897
Any more specific of a part where I lose you?
What is wrong with our spending habits its that we should not be consuming, we need to be saving. Check out the beginning to see my case why savings are the backbones of economies. Essentially, because of government policy, we are trying to consime ourselves into prosperity.
Demand is not enough because there are two sides to the price equation. Supply is production. When an economy doesn't have savings, supply cant function and the economy cant grow. We dont habe producers anymore. Thats why unemployment and underemployment have been bad for years. No one is producing anything anymore. There is no one to hire people.
Does this mean the value in our institutions is wrong? Yes. And thats basically what a recession is. The market realizes that it overvalued itself and it backfires. This sends a shockwave through the economy as the overvalued industries and shrunk and the price level throughout the economy adjusts itself to reflect that. This is why the recession in 2008 should have been allowed to play out. It would have stung in the short run as some big companies would go under. But the market would quickly fill the void with new, smarter, better firms. The bad debt would be liquidated, and the irresponsible creditors would be pushed out of the market. Instead the government basically took all that debt and socialized. And then the Federal Reserve pumped up another financial bubble by just printing money. This gives the illusion of a boom. But printing money doesnt create real value. We are just setting ourselves up for another backfire once thr market realizes that the financial sector is over valued again. Its going to be much worse thank if we had just let the recession play ou in 2008
>>69557719
Invest in assets
BORRRRRRRRING
>>69558063
The burgers saw the NWO was going under and they were faced with the decision
>we no longer have the moral authority to govern the planet, but we do have the military might
>should we still rule the world?
>yes, let's still rule the world
>This thread https://www.youtube.com/watch?v=8-r-V0uK4u0
So as always, here I am a consumer of luxuries (internet, produce, utilities) for a marginal placement in the economic status of the free market for my lack of proprietary motivation. Monopolies and their finance groups provide for me telecommunications, mining, fabrication, and farming by means of a pro bono law in which the government oversees and then by which I consume for my services of labor, by the transactions of liquid paper notes or electronic payment.
Good thing hard sciences and the pursuit for free-knowledge is a private wealth in itself.
My concern is how much the economic machine shaped the infrastructure of modern society by luxury items (roadways, canals, and the power grid).
The only thing about economy and finance is that society puts everything on the market, or tries to amend it so in a way that people have no choice by law.
Where would a person go to be in isolation on this giant world, where no one would care for?
>>69557390
Not necessarily. The people who stand to lose the most in a crash are the people who have the most invested in the bubble. In a way, you are lucky to be broke at the peak of a bubble. The people who probably lose the most in terms of quality of life are middle class individuals who are saving for retirement. They will likely see the value of their retirement savings wiped. The government wont be able to just write them a check because pretty much every government is insolvent. People might really suffer in the coming years.
So how can you benefit? Once the economy bottoms out, prices of everything will bottom out with it. Even strong stocks from fundementally strong firms will be massive bargains at the bottom of the crash. Just understanding what is going on will give you a huge advantage when deciding how to store your wealth. Moving savings to preciois metals right before a crash is usually good. Silver is in a positon for a huge rally if theres a crash
All capital equipment will be cheap too. The folks who get business started up again after a recession are in a place to become the new movers and shakers in an economy.
But also if the US Dollar has hyper inflation, all bets are off. We don't really have any precident for a global monetary collapse like that would cause. Itll be a wild ride.
Buy buttcoins
>>69557147
Precious metals and commoditites will store value is a currency is collapsing. A collapsing currency basically means that the economy is oversatured in liquidity. Physical objects with real value retain that value as long as people still need it. Precious metals have been proven to hold value overt thousands of years and many crashed economies. If things started to get reallly bad Id stock up on canned food and ammo.
>>69556861
Generally yes. When currencies collapse people tend to flock to things that have held their value over time. Precious metals are just that
>>69554636
If a currency starts collapsing you need to get your savings into another store of value ASAP. You cant know for certain what the best option will be or when to do it, but noticing whats going on before the general population is going to be an advantage.
Precious metals are a pretty safe bet.
If the Euro goes under I think that the Swiss Franc and to a lesser degree the British Pound would rally.
Bitcoin has pretty good long term prospects as the network continues to grow and more and more business is in the bitcoin economy. I think that if the global economy crashes, the BTC economy stands to gain. It is somewhat separate from the rest of the monetary system and might stay functional without the rest of the economy.
And if the USD crashes then we're probably all fucked. It might not matter where your savings are. On the bright side it would give civilization a chance to rebuild a system that isn't so fucked
