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The economy is totally and utterly fucked


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No matter what kind of spin they try to put on it, it is buggered. I might be a bit biased having watched the big short again tonight, but we were already heading there. Sub prime car loans in th

At risk of bringing this thread back on topic, I wanted to add a few thoughts As part of their policy to keep everyone in doors and also convince everyone that this is all necessary they have sca

A child's education cannot survive a sneaky day off under normal circumstances, but six months is fine.

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51 minutes ago, OurDayWillCome said:

The government will lift this lockdown quicker than [insert an Essex girl joke] once they realise frugality is contagious.

I'm not planning on spending on anything big for about 2 years until I see what happens with the virus and economy/inflation

Edited by ashestoashes
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Very timely thread @Wight Flight and mirrored over here also. Total capitulation reached in less than a month. Just shows the illusion of stability in the economic system.

Would appreciate @DurhamBorn‘s thoughts on where this goes now vis credit crunch, banking defaults, QE, inflation.

For me, I just see chaos and violence coming.

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6 minutes ago, DurhamBorn said:

No credit crunch,Fed have nearly right sized QE now,if we get one it will be in the EU,they are way behind getting things right.Fed has got enough in the pipes now to stop systemic collapse.Inflation is zero risk right now,deflation is the massive problem,they will print enough to stop it,then they will swing all western economies back to being more industrial than consumer driven.They are printing most of the deflation/dis-inflation we have had since 1982 over a very short period.It will kick in a reflation,but inflation will build slowly,the real damage from that will come late,maybe 2025-2028 when we could see inflation hit 18%+ though lower double digit is likely say 11%.Likely 90% to 130% inflation over the cycle.

Consumer is finished now,they wont drive the cycle,governments will drive it.

This is it. Unless they 'want' something else to happen.  But why do you think inflation at double digits in 2025. Whats going to cause that.? 

And what industrial stuff will they be doing. Unless the consumer is there to soak up all that industrial effort what industry will they do.  Build bridges to places.? In the west no point. Bring Africa into the present day? 

Edited by Poseidon
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41 minutes ago, Poseidon said:

This is it. Unless they 'want' something else to happen.  But why do you think inflation at double digits in 2025. Whats going to cause that.? 

And what industrial stuff will they be doing. Unless the consumer is there to soak up all that industrial effort what industry will they do.  Build bridges to places.? In the west no point. Bring Africa into the present day? 

Industrial cycles re-tool the economy,its business to business mostly.The consumer will still be spending,but they wont drive the economy.Massive amounts to invest in.Western economies will be bring back entire supply chains.It will be world wide though.Cycle turns like this are very rare.Most people think recessions are cycle turns,but they arent,they are simply business cycles within a dis-inflation or reflation longer term cycle.The turn now is a three times a century event.

The irony is before the Great Depression we had the roaring 20s,and at some point mid cycle you will hear that term again,the roaring 20s.Thats the time to worry.

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7 minutes ago, DurhamBorn said:

Industrial cycles re-tool the economy,its business to business mostly.The consumer will still be spending,but they wont drive the economy.Massive amounts to invest in.Western economies will be bring back entire supply chains.It will be world wide though.Cycle turns like this are very rare.Most people think recessions are cycle turns,but they arent,they are simply business cycles within a dis-inflation or reflation longer term cycle.The turn now is a three times a century event.

The irony is before the Great Depression we had the roaring 20s,and at some point mid cycle you will hear that term again,the roaring 20s.Thats the time to worry.

Good point - and the roaring 20’s followed, ahem, a pandemic.

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7 minutes ago, DurhamBorn said:

Industrial cycles re-tool the economy,its business to business mostly.The consumer will still be spending,but they wont drive the economy.Massive amounts to invest in.Western economies will be bring back entire supply chains.It will be world wide though.Cycle turns like this are very rare.Most people think recessions are cycle turns,but they arent,they are simply business cycles within a dis-inflation or reflation longer term cycle.The turn now is a three times a century event.

The irony is before the Great Depression we had the roaring 20s,and at some point mid cycle you will hear that term again,the roaring 20s.Thats the time to worry.

So what's the lead here then. Government regulation.? No more off shoring.? And if so how do they square it with environmental considerations. 

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1 minute ago, Poseidon said:

So what's the lead here then. Government regulation.? No more off shoring.? And if so how do they square it with environmental considerations. 

A lot of the investment will be in green projects,its just they will force up fossil fuel use during the building years.There will still be off shore jobs,but a lot more will come back.Countries will be looking inwards including China.Only one way out of a deflation,massive state injections into the economy.Printing now is just stage one.

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5 minutes ago, Bkkandrew said:

Good point - and the roaring 20’s followed, ahem, a pandemic.

Yes interesting isnt it.Of course unknown to most the Great Depression was actually started due to tractors.People invested heavily on credit for them due to booming prices of crops,but the dust bowl hit and they all defaulted.Maybe we get a similar environmental event towards the end of the cycle.Another world wide heat wave and crop failure?,

 

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4 minutes ago, DurhamBorn said:

Yes interesting isnt it.Of course unknown to most the Great Depression was actually started due to tractors.People invested heavily on credit for them due to booming prices of crops,but the dust bowl hit and they all defaulted.Maybe we get a similar environmental event towards the end of the cycle.Another world wide heat wave and crop failure?,

 

Interesting. Didn't know that.  According to some we're heading for a cold wave causing not so much crop failure but reduced crop yield. 

Edited by Poseidon
Didn't know . Not did know
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2 hours ago, Caravan Monster said:

And don't forget the self employed who are currently receiving fuck all, can't work, have lost jobs that were booked in as people cut back their spending and are probably going to be taxed out of business alongside inflation rises. Much more lockdown  and they won't have much left to lose :ph34r:

You can.....

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APPLY in JUNE!

:PissedOff:

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Time to create our own currency and go it alone. 

 

No borrowing from Globalists * for any helicopter cash.

No more fucking about.

 

The chains either go on for ever, or we release ourselves from them for good.

Edited by Carl Fimble
Adding the last paragraph AFTER Bkkandrew repped the post
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2 hours ago, DurhamBorn said:

They are printing most of the deflation/dis-inflation we have had since 1982 over a very short period.

Great post,  but slightly confusing.  Deflation in what?  Clearly not money supply..   real economic/manufacturing output?  You’ve lost me o.O

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I agree the economy is fucked and has been since (before) 2008.

I disagree that this episode will expose it for what it is with a huge recession/depression.

This will just be post-2008 all over again, they'll ''do whatever it takes'' (tm) to keep the charade going...

-Any job losses won't appear on the unemployment figures as all those who have lost their jobs will just become zero/low hours employees or ''self-employed'' cupcake makers, all claiming UC to ''top up'' their non-existent earnings.

-The latest round (and no doubt further rounds) of printin' and zirpin' will just result in further asset price inflation.

-This nation of mindless consumers, debt junkies and ten bob millionaires won't just suddenly become a nation of cautious prudent savers living modest lifestyles within their means.. the rich will become even richer, so they'll have even more money to flaunt whilst the poor will be prepared to load up on even more readily available debt to emulate the lifestyles of the rich.

 

*I'm usually wrong about most things and I really hope I'm proved wrong this time, but somehow I don't think I will be, unfortunately.

Edited by Royston
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4 hours ago, Bkkandrew said:

Good point - and the roaring 20’s followed, ahem, a pandemic.

And that was far worse than this one.

No amount of masks and shut shops will stop a pandemic. It's got out and will continue. It's media fear driven, and governments world wide have decided to fuck their economies, by being "seen to do something".

My advice would have been to stay in and pull a sicko if you feel ill, not shut all the shops.

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5 hours ago, The Masked Tulip said:

The US has given banks lots of cash to help out small businesses, but the banks are basically refusing to hand it out to the small businesses.

Same as 2009 - the banks have been bailed out. This time they had also bailed out state pension funds and no doubt lots of companies like Boeing.

I think the problem is the banks have been told they can borrow lots of money from the government..  but is it actually underwritten against defaulters?

If not,  then nobody is going to lend where you suspect you might not get paid back.   I suspect this is the problem..  especially when potentially looking down the barrel of the next big down turn.     If the government want to literally give out money they could just have their own treasury website where you apply for a grant and the treasury print it there and then.  Not really any different to QE anyway.

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Even though I work in food manufacturing, my role is hardly essential (commercial/strategic) considering we're just selling basic items with a simple supply chain now.

I'm not furloughed but a great deal of my pre-event job was dealing with customers, presenting plans etc which I'm not exactly doing much of right now.

I could very well be in the camp of "why do we need that role" when the shit settles so I'm currently just trying to enjoy the slow pace and focused on enjoying time with the kids.

The house isn't even a way out as I'm sure prices will halve by the time we get back to "normal" so I'm just going to keep my eye on the ball for what skills will be good to have when this is over and work on learning it.

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