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Thread: Great Depression II?

  1. #11
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    Quote Originally Posted by seanD View Post
    It's a very strange situation we're in. Personally, I think the stock market will crash (gradually if not suddenly) back to the pre-Obama era in spite of the trillions they're pumping to keep it up. No way can the Fed alone keep that going no matter how much they pump into it. But it's always possible the impossible will happen. The stock market will stay up (though with wild and violent peaks and dips), sustained by Fed direct interaction, while the rest of the economy rapidly deteriorates. Man, that would be really strange, and everyone would know that the markets are a complete sham if that happens.
    So the illusion is being exposed. The illusion is that a booming stock market = a good economy. CNBC had an interesting article about it. They go through scenarios of why the market is booming (albeit very choppy) in spite one of the worst recessions/depressions we've had, only to show where those explanations still don't make sense, but they do include just a brief one sentence fact into the article...

    Certainly, the trillions in Federal reserve asset buying has helped enable the rally in risk assets that has lifted equities off their lows and bolstered valuations.

    No, it hasn't "helped." It's the MAIN driver behind the market/economy disconnect. And now this is evident for all to see. Even folks that know nothing about the federal reserve, what it does, and how its actions affect the markets know that it makes absolutely no sense the market continues to climb, in the midst of all this uncertainty, while the rest of the economy is biting the dust. Even an eight year old can figure out something is amiss.

    And it's very easy to prove this. In 2018, the Fed begin raising interest rates and began to normalize their balance sheet, the most they had done since 2008. The market throughout that whole year stopped the upward climb and went sideways. Then once the Fed began backstopping the repo market (an important function of the market because it provides liquidity exchanges between financial institutions) in the fall of 2019, the market once again shot up and reached record highs.

    Now the Fed is literally pumping trillions into the financial system, like a patient in triage on the brink of death being pumped with IVs, and it's BARELY keeping the market propped up. How much longer this will work is a mystery.
    Last edited by seanD; 04-26-2020 at 03:05 PM.
    "I was the CIA director. We lied, we cheated, we stole, it was like... we had entire training courses. It reminds you of the glory of the American experiment." - Mike Pompeo, Secretary of State (source).

  2. #12
    tWebber shunyadragon's Avatar
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    Jan 2014
    Hillsborough, NC
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    Quote Originally Posted by demi-conservative View Post
    Or will it be hyperinflation?
    Neither the Great Depression lased more than ten years. The Pandemic will be over in a matter of months like previous pandemics.

    The 1918-20 pandemic kill over 50,000,000

    The 1957 N2H2 pandemic killed more then a million worldwide, and 116,000 in the United States

    The 1908 09 N1H1 pandemic:

    50 million worldwide with about 675,000 occurring in the United States. Mortality was high in people younger than 5 years old, 20-40 years old, and 65 years and older. The high mortality in healthy people, including those in the 20-40 year age group, was a unique feature of this pandemic.

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    This pandemic is not even close.
    Last edited by shunyadragon; 05-03-2020 at 02:48 PM.
    Glendower: I can call spirits from the vasty deep.
    Hotspur: Why, so can I, or so can any man;
    But will they come when you do call for them? Shakespeare’s Henry IV, Part 1, Act III:

    go with the flow the river knows . . .


    I do not know, therefore everything is in pencil.

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