Recession is upon us - disastrous economic data

[sherpa]

8 minutes ago, ChiGoose said:

 

So the inflation around the globe was caused specifically by the last stimulus in the US?

 

8 minutes ago, ChiGoose said:

The US did a bunch of stimulus, but those were fine. But then they did just one too many and it plunged the world into inflation?

 

No.

The US Central Bank was not the only one printing money.

Covid related price increases were real, but should have been short term unless there was another factor.

The other factor was the massive printing of money without similar increases in production.

[All_Pro_Bills]

49 minutes ago, ChiGoose said:

This might be more convincing if the recent bout of inflation was due to fiscal policy instead of supply shocks from the world’s transition away from the COVID economy. 

There's no evidence it was all entirely due to supply chain disruptions or that the cause in early 2025 needs to be consistent with 2020. Don't forget all those government handouts and payment freeze edicts too.

I mentioned that central banks are diversifying their reserves away from the dollar. Some to avoid the risk of being at the mercy of US sanctions and potential asset seizures. Who knows what might anger Washington? Others to manage their reserve mix.

Even Poland. A staunch NATO ally has been dumping dollars for gold. It was revealed recently the Saudis had purchased 160 tonnes.

The interest on the US debt surpassed $1 trillion recently. And with deficits of $4 trillion plus a certainty no matter who wins in November its all a mathematically calculation that our currency is headed to be worth less and less. More inflation.

 

The alternative is to deal with financial reality, cut government spending, limit social assistance and corporate giveaways and live as a country within our means. But who wants that or would vote for anyone suggesting such an approach? Even though when it comes to our personal finances that's what successful and financially solvent people do.

 

[Tommy Callahan]

 

 

It's just crazy how the media and fed officials sold us bull ***** job numbers for over a year. 

[SectionC3]

1 hour ago, Coffeesforclosers said:

 

So how do we fix inflation using tariffs and tax cuts? Honest question.

We don’t.  

[All_Pro_Bills]

17 minutes ago, SectionC3 said:

We don’t.  

You're right. Tariffs would support less efficient domestic producers and cost consumers more than the cost of the non-tariffed foriegn product. But when used to counter "dumping" or government subsidized foriegn producers they might be valuable tools.

[SectionC3]

6 minutes ago, All_Pro_Bills said:

You're right. Tariffs would support less efficient domestic producers and cost consumers more than the cost of the non-tariffed foriegn product. But when used to counter "dumping" or government subsidized foriegn producers they might be valuable tools.

I have no objection to their use to preclude dumping (say, perhaps, in the steel market).  But that type of precision isn’t what Trump proposes.  He wants blanket tariffs, which are nothing more than taxes on the American consumer. 

[The Frankish Reich]

1 hour ago, sherpa said:

 

Please.

 

The recent bout of inflation, about 20% since 2020 was due to over stimulus excused by covid. It was necessary to stimulate, but the last one was ill advised.

Much more money chasing the same production results in higher prices, and a good deal of that money has entered capital and stock markets, as always.

 

The argument that it was due to supply shock is specious. That black swan existed for a bit, but having returned to normal, if that was the case prices would lower as supply chain issues resolved.

 

Same thing happens in the energy market all the time. Hurricanes, refinery issues, middle east turmoil etc cause a brief spike in prices. Once those individual issues are resolved, prices fall to normal supply/demand levels.

 

The point is that the inflation we are now paying for was do to over supply of money and bad fiscal policy. Not supply chain problems which, largely, no longer exist.

In part. 

It appears to be a consequence of the intersection of monetary (low interest rates) and fiscal (huge spending) factors. The best study I've seen attributes about 30% of the inflation to the huge spending bills.

1 hour ago, sherpa said:

 

 

No.

The US Central Bank was not the only one printing money.

Covid related price increases were real, but should have been short term unless there was another factor.

The other factor was the massive printing of money without similar increases in production.

Correct. You beat me to it.

[sherpa]

Just now, The Frankish Reich said:

In part. 

It appears to be a consequence of the intersection of monetary (low interest rates) and fiscal (huge spending) factors. The best study I've seen attributes about 30% of the inflation to the huge spending bills.

 

I have absolutely no problem with monetary policy.

I think it saved us in 2008 and again during covid.

I am not concerned with what has happened or assigning some political component to Fed policy.

 

I think the independent Fed has been brilliant.

 

The problem is with fiscal policy designed to buy votes, and we are in the "silly season," between the announcing of the candidates and their attempt to win an election.

 

Promises made during this sill season are nearly always bad policy.

[Tommy Callahan]

Crazy how fast this is happening. 

 

 as the officials have said the economy was amazing till, now.  

 

 

[All_Pro_Bills]

38 minutes ago, sherpa said:

 

I have absolutely no problem with monetary policy.

I think it saved us in 2008 and again during covid.

I am not concerned with what has happened or assigning some political component to Fed policy.

 

I think the independent Fed has been brilliant.

 

The problem is with fiscal policy designed to buy votes, and we are in the "silly season," between the announcing of the candidates and their attempt to win an election.

 

Promises made during this sill season are nearly always bad policy.

The terms "moral hazard" or "to big to fail" come to mind for 2008.

The government should have let those banks fail, insured their depositors accounts at 100% and sold off their assets to better run financial institutions through receivership or bankruptcy proceedings and let the stockholders and creditors take a loss. That would be the free market approach. 

 

Instead they got rewarded for oversized and reckless risk taking and set the stage for the assumption that any major institution that fails in the future for whatever reason will be taken care of by the government. The message is the banker class can privatize profits and socialize losses when the situation calls for either. You or me? On our own.

 

And even after bailing them out the government should have broken them into smaller non-integrated parts to mitigate any further systemic risks. Separating out commercial, investment banking, and other areas.

 

All they did was kick the can down the road for the next emergency.

Edited September 20 by All_Pro_Bills

[sherpa]

3 minutes ago, All_Pro_Bills said:

The terms "moral hazard" or "to big to fail" come to mind for 2008.

The government should have let those banks fail, insured their depositors accounts at 100% and sold off their assets to better run financial institutions through receivership or bankruptcy proceedings and let the stockholders and creditors take a loss. That would be the free market approach. 

 

Instead they got rewarded for oversized and reckless risk taking and set the stage for the assumption that any major institution that fails in the future for whatever reason will be taken care of by the government.

 

And even after bailing them out the government should have broken them into smaller non-integrated parts to mitigate any further systemic risks. Separating out commercial, investment banking, and other areas.

 

All they did was kick the can down the road for the next emergency.

 

Fully disagree.

 

There is a time when things get so dangerous that the need is preserve the system.

Our entire system could have collapsed then, with no guarantee of outcome, and it would have been worse for the world beyond our shores.

Your last two paragraphs, suggesting the "gov" should have had anything to do with restructuring is a position I could not disagree more with.

The gov is horrible at this, and there wasn't/isn't any agency who was in position to do this.

 

The system needed to be saved. They did it.

[All_Pro_Bills]

1 hour ago, sherpa said:

 

Fully disagree.

 

There is a time when things get so dangerous that the need is preserve the system.

Our entire system could have collapsed then, with no guarantee of outcome, and it would have been worse for the world beyond our shores.

Your last two paragraphs, suggesting the "gov" should have had anything to do with restructuring is a position I could not disagree more with.

The gov is horrible at this, and there wasn't/isn't any agency who was in position to do this.

 

The system needed to be saved. They did it.

I agree there would have been terrible consequences but the sytem would not have failed. The free market system would have been allowed to work. In a free market good bets are rewarded, bad bets are not. But the bankers bad bets received preferential treatment and were transformed into good bets and losses were transfered to other parties that correctly shorted bad banks and took options and futures against them. It's a favor none of us would be afforded.

 

The $250 trillion or so in derivatives tied to the markets are still out there waiting for the next accident.

 

Bailouts just encourage more and greater risk taking because there is an expectation a safety net will catch anyone that falls.

 

And if the banks are too big to fail they need to be broken up through anti-trust action or as a condition for assistance.

 

 

[sherpa]

1 minute ago, All_Pro_Bills said:

I agree there would have been terrible consequences but the sytem would not have failed. The free market system would have been allowed to work. In a free market good bets are rewarded, bad bets are not. 

 

 

 

Disagree.

A philosophical discussion of bailouts was not an issue then.

A collapse of the capital markets was, and it would have been a far worse economic catastrophe.

Some were allowed to fail, some were propped, and it worked.

 

Libertarian philosophy is desirable and valuable, but there are times when defending the core that supports everything is the right thing to do, then clean up afterword. 

[Big Blitz]

Everything else (which is horrible) is just noise.  
 

This is a disaster.  And it was by design.  
 

 

 

[B-Man]

 

 

 

 

[Roundybout]

1 hour ago, B-Man said:

 

 

 

 

 

 

On 9/20/2024 at 8:02 PM, Big Blitz said:

Everything else (which is horrible) is just noise.  
 

This is a disaster.  And it was by design.  
 

 

 

Time to blame the Jews huh?

[Joe Ferguson forever]

S&P futures up almost 1%.  Employment growing, inflation down

https://finance.yahoo.com/news/september-jobs-report-crushes-expectations-as-us-economy-adds-254000-jobs-unemployment-rate-falls-to-41-123503927.html

 

if this is recession, I can't wait for boom times

[The Frankish Reich]

On 9/20/2024 at 6:02 PM, Big Blitz said:

Everything else (which is horrible) is just noise.  
 

This is a disaster.  And it was by design.  
 

 

 

That's largely because seniors like Blitzy refuse to let their kids put them in a home, freeing up that family home for the next generation.

[Backintheday544]

Amazing jobs report. Port strike over. Everything’s turning up Kamala

[The Frankish Reich]

How much more of these disastrous numbers - low inflation, job growth - can Americans take!