Jump to content

Welcome to FutureTimeline.forum
Register now to gain access to all of our features. Once registered and logged in, you will be able to create topics, post replies to existing threads, give reputation to your fellow members, get your own private messenger, post status updates, manage your profile and so much more. If you already have an account, login here - otherwise create an account for free today!

These ads will disappear if you register on the forum

Photo

The Crash of 2016/7: Why the Next Great Depression has Already Begun

recession prediction great depression economy economic collapse debt hyperinflation deleveraging wealth inequality neoliberalism

  • Please log in to reply
184 replies to this topic

#1
Recyvuym

Recyvuym

    Apophis 2036

  • Members
  • PipPipPipPipPipPip
  • 999 posts
  • LocationDie Sonne

Last year, I predicted with 75% confidence that the world would be in recession by early 2017 at the latest, and that it will be a bigger crash than the Great Depression. It's now June 2016 and I'm 90% confident of my claim. So I'm starting this thread to record a future prediction that you can all point to if I get it wrong, and that I can point to if I get it right. Let's call it a gamble in credibility.

 

Since the 2008 Global Financial Crisis, economies have stagnated across the world. Interest rates remain at rock bottom and continued growth has only been possible by taking on record levels of private and public debt. The IMF now admits neoliberal capitalism has failed (a lot like the Pope admitting Catholicism is bullshit) and the Federal Reserve Bank has thrown in the towel, saying there is no end in sight to the stalling of the US economy. US GDP has not risen above 3% growth in Obama's entire term. This means the US has no current prospects of growing to meet the obligation of its debts.

 

Europe is a mess. The Eurozone experiment is quickly splintering. Multiple prominent nations now face insolvency. If the Deutsche Bank fails, its collapse will be three times bigger than the Lehman Brothers and it will take the entire German economy with it.

 

China's growth has turned out to be a magnificent mirage, they are up against an unavoidable major deflationary deleveraging crisis. Nigeria's growth has just gone off a cliff. Brazil is already in conditions likened to economic depression. Greece is shattered. All across the world, contagions of the financial crisis are flaring up and entire countries are already beginning to topple.

 

The last real domino waiting to fall is the US, with those big pesky deja vu subprime auto, home and student loans sitting under Wall Street like so much nitroglycerin. Ironically, once the yuan and the euro inevitably deflate, the rest of the developing world will be forced to follow suit to make their commodities more affordable and competitive on the global markets. Devaluation will spiral out of control. Investors will flock to the US dollar, which will skyrocket. The US will be suddenly find itself unable to compete on the markets, and its multiple bubbles will burst, causing trillions of dollars to vanish and leading to mass unemployment and bankruptcy. A severe crash can only follow, and nowhere will be spared from the shockwaves.

 

After that, the only way out will be a sort of involuntary debt jubilee through hyperinflation. If you know someone who lived through the 30s, they'll be able to tell you all about how extremely ugly and turbulent this will look. No matter where you live, strap yourself in for the ride now. There's no telling what the world will look like on the other side.

 

By the way, you know how I'm 90% sure? Jim Rogers puts those odds at 100%. This is the same guy who called it last time.

 

I will attach this thread to my signature no later than March 31st 2017 whether history proves me right or wrong. Feel free to quote me on that.


  • Yuli Ban, nomad and SkylightMT like this

I loudly predicted the second wave of the Global Financial Crisis would begin by the 31st of March 2017. But I was wrong! Observe my well-deserved public humiliation here, here and here. Let this be a warning to all of you who try to guess the future. Yes, that means you, reading this now! Put that prediction back in your pocket! Do it now, before it's too late! (Also check out my userpage, it's even funnier.)


#2
Pisiu369

Pisiu369

    Member

  • Members
  • PipPipPipPipPipPip
  • 742 posts

Oh yeah. Here we come. Could this possibly lead to ww3?



#3
Recyvuym

Recyvuym

    Apophis 2036

  • Members
  • PipPipPipPipPipPip
  • 999 posts
  • LocationDie Sonne

That's a worst-case scenario I suppose.


I loudly predicted the second wave of the Global Financial Crisis would begin by the 31st of March 2017. But I was wrong! Observe my well-deserved public humiliation here, here and here. Let this be a warning to all of you who try to guess the future. Yes, that means you, reading this now! Put that prediction back in your pocket! Do it now, before it's too late! (Also check out my userpage, it's even funnier.)


#4
wjfox

wjfox

    Administrator

  • Administrators
  • PipPipPipPipPipPipPipPipPipPip
  • 7,966 posts
  • LocationLondon

I agree we're heading for bad times – but worse than the Great Depression?

 

Worldwide GDP would need to fall by more than 15%, or about 15 times more than in 2008-9.

 

International trade would need to fall by 50%, unemployment in the U.S. would have to exceed 25%.

 

etc.

 

That's clearly implausible. Also, the global economy is far more dynamic and flexible than it was in the 1930s.

 

We're probably heading for a slowdown in the next year or two, but that's just part of the natural boom-bust cycle of capitalism.


  • Yuli Ban and GenX like this

#5
Recyvuym

Recyvuym

    Apophis 2036

  • Members
  • PipPipPipPipPipPip
  • 999 posts
  • LocationDie Sonne

That's clearly implausible.

 

Is it? Well, that will make it all the more interesting if I'm right, I suppose.

 

We have reasons to think this won't just be a minor slump, though.

 

http://www.bloomberg...-most-countries

 

A Lost Decade? We Should Be So Lucky

 

A growing number of economists seem convinced that the U.S., European Union and China are all headed for a prolonged period of sluggish growth -- secular stagnation, in the words of former Treasury Secretary Larry Summers. A close parallel would seem to be 1990s Japan. There, too, the bursting of debt-funded asset price bubbles gave way to multiple rounds of fiscal stimulus, massive monetary easing and rock-bottom interest rates. Rescue efforts stabilized conditions but couldn't spark a sustainable recovery, leaving the economy mired in low growth, low inflation and high debt.

 

In some ways, this outcome might not seem so terrible. (One visiting English politician dazzled by Tokyo’s Ginza noted that if this was a recession, he wanted one too.) When Japan entered its downturn, however, the country had several advantages both internally and externally that nations today don't. For many, a Japan-style slump would be the best-case scenario.

 

 

And though I tote this around a lot, that's because nobody really has an answer for any of the points it raises about the bubbles waiting to burst catastrophically in so many of the world's economies:

 

 

However, I realise that what I'm saying sounds extreme and even outlandish, and it's certainly not part of regular dialogue in the media. But that's the thing about the media. It's shit. I've been following this closely, since Occupy but especially more lately, as the socioeconomic crises in the world seem to be culminating. Time will soon tell if my finger is on the pulse.

 

And speaking of the regular boom-bust cycle, did you know that just as we have a recession roughly every seven years, we also have a depression roughly every eighty years? It's true, look it up.


I loudly predicted the second wave of the Global Financial Crisis would begin by the 31st of March 2017. But I was wrong! Observe my well-deserved public humiliation here, here and here. Let this be a warning to all of you who try to guess the future. Yes, that means you, reading this now! Put that prediction back in your pocket! Do it now, before it's too late! (Also check out my userpage, it's even funnier.)


#6
Yuli Ban

Yuli Ban

    Nadsat Brat

  • Moderators
  • PipPipPipPipPipPipPipPipPipPipPip
  • 17,148 posts
  • LocationAnur Margidda

And speaking of the regular boom-bust cycle, did you know that just as we have a recession roughly every seven years, we also have a depression roughly every eighty years? It's true, look it up.

Um... that's patently false. Like, even a 2 second Google search or a conversation with someone who's knowledgeable of history knows this to be false.
 
We haven't had a depression in 90 years, yes, but... before then, they happened roughly every 10 to 30 years. They were called Panics before then.
 
Right off the top of my head, before the Great Depression in '29, there was the Panic of 1893, the Panic of 1873, Panic of 1843, Panic of 1837, Panic of 1825, the Napoleonic Depression of 1815... There was even a depression in 1919, after World War I, that had deflation even more severe than during the Great Depression.
And we almost had a depression in 1907, if it weren't for J.P. Morgan. Unsure about others, but those are what I remember.
 
 
Nevertheless, I agree with you.
 
 
W-wait, what?!
 
No, it's true— I agree. We're about to enter another depression. I strongly doubt it's going to be Great Depression tier, but it will put the Great Recession to shame and actually be a "depression." 
 
 
Will the US Really Experience a Violent Upheaval in 2020?

cycles-violence.png?interpolation=lanczo

 

Like all things that repeat, it will resemble the spike in the '60s rather than the 1870's and 1920's. We're seeing the stirrings of it right now. 

 

know it's going to be caused by the oil shock, debt crises, and automation. And despite fears about China's economy, I believe they've actually already gone through the worst of it. The Western media is hyping a Chinese economic collapse since, you know, We've Always Been At War With Eastasia. In fact, as we suffer sluggish and even imploding economies, China (and indeed, most of East Asia) will already be riding the next crest. 

 

There will be a lot of articles and doomsday hype about "the End of Western Civilization" as China surpasses us. Our economies will be in the red, in decline, while they will have already dealt with it.

 

This map shows the center of world power. In the 1980s, it was squarely between America and Europe. It says that, in the 2050s, it'll be in the middle of China. I believe this is far too conservative, and it'll actually get there by 2030.

 

2010-09-27-lse_research-dq_map.gif


  • nomad likes this
Nobody's gonna take my drone, I'm gonna fly miles far too high!
Nobody gonna beat my drone, it's gonna shoot into the sky!

#7
Pisiu369

Pisiu369

    Member

  • Members
  • PipPipPipPipPipPip
  • 742 posts

What about Australia? What would happen to them in the event of a economical collapse in other countries such as Russia and China? I know that China is one of Australia's main importer. So it must effect them in a way. I'd like to see if the USD dollar will collapse.



#8
Recyvuym

Recyvuym

    Apophis 2036

  • Members
  • PipPipPipPipPipPip
  • 999 posts
  • LocationDie Sonne

I expect Australia to join the crash, not least of all due to our ties with China, but also due to the fat housing prices bubble that's begging to burst.

 

I know too little about Russia but I have been wondering this myself. I expect their isolation will serve them well in this case. I suspect (but I am only guessing) that the severe pressure on Europe will force them to lift sanctions. It would be interesting if this crash actually catapaulted Russia forward, it would be a spectacular change to their fortunes. Or perhaps I'm talking out of my ass. I always seem to get it wrong with that area of the world, it can be very counter-intuitive.

 

Um... that's patently false. Like, even a 2 second Google search or a conversation with someone who's knowledgeable of history knows this to be false.

 
We haven't had a depression in 90 years, yes, but... before then, they happened roughly every 10 to 30 years. They were called Panics before then.

 

You're quite right, my claim was in error. Allow me to amend it: Every eighty years or so, there is a particularly severe depression.

 

The Panic of 1857 - the first international financial crisis

The Crisis of 1772

 

There was the Long Depression of 1873 to 1879 or 1893. This was the original Great Depression, but it was notable more for its length than for its severity.

 

I agree. We're about to enter another depression. I strongly doubt it's going to be Great Depression tier, but it will put the Great Recession to shame and actually be a "depression."

 

 

Maybe. There are many reasons I think this one is going to be so bad. The main one is because it is the same Great Recession we all knew and loved so well. It's just been suppressed and left to boil over for eight more years like a volcano. At the time, they were talking about the financial apocalypse if Bush and Obama didn't bail out the banks. None of the problems that caused the crash have been addressed, there are now multiple bubbles like the mortgage bubble that started this whole fiasco, the banks that were too big to fail are now bigger, and the system itself is less equipped than ever to deal with it - inequality between rich and poor is higher, interest rates are still basically at zero, and investor confidence will plummet if the US continues to devalue its currency with bailouts.

 

Who knows what exactly it will look like or how it will evolve? Of all my predictions, 'worse than the Great Depression' is perhaps the one I'm least confident about, but it's more plausible than I think you guys realise.

 

In many ways, I think it is apples and oranges. The world of 1929 was much smaller than the world of 2016 and very different. Infrastructure is more resilient and flexible. Yet the financial sector is much less flexible than it was before that crash, and everybody is more globalised and interdependent. You may not see quite as many people starving on the streets, but I suspect the economic effects themselves will run far deeper.

 

I know it's going to be caused by the oil shock, debt crises, and automation. And despite fears about China's economy, I believe they've actually already gone through the worst of it. The Western media is hyping a Chinese economic collapse since, you know, We've Always Been At War With Eastasia. In fact, as we suffer sluggish and even imploding economies, China (and indeed, most of East Asia) will already be riding the next crest.

 

 

I have noticed the same trend regarding China, like Russia they are the victim of a big smear campaign by the West. But China, like Russia, does have its very real problems that should not be understated, including their thirty trillions dollars in debt and their 5+ trillion in bad debt owed.. I would not be surprised though if they emerge from this to overtake the US far earlier than expected.

 

As for the 'end of the western world,' I recommend the book When China Rules the World, makes some very apt points about Chinese culture, and what a China-dominated world will actually look like. I do believe the present world order and its neoliberal agenda has had its time in the sun and will be sadly leaving us shortly. It has become abundantly clear to anybody paying attention over the last decade that it has nothing more to offer us, it is obsolete.


I loudly predicted the second wave of the Global Financial Crisis would begin by the 31st of March 2017. But I was wrong! Observe my well-deserved public humiliation here, here and here. Let this be a warning to all of you who try to guess the future. Yes, that means you, reading this now! Put that prediction back in your pocket! Do it now, before it's too late! (Also check out my userpage, it's even funnier.)


#9
Mike the average

Mike the average

    Member

  • Members
  • PipPipPipPipPipPipPip
  • 1,475 posts

The problem is all of our markets are very much fake and protected by the media.

 

a lot of the time what keeps it going amongst other things, is there isnt anything else reliable to invest in, so on it continues.  Profits have to go soemwhere.   


  • Recyvuym likes this
'Force always attracts men of low morality' - Einstein
'Great spirits always encountered violent opposition from mediocre minds' - Einstein

#10
Recyvuym

Recyvuym

    Apophis 2036

  • Members
  • PipPipPipPipPipPip
  • 999 posts
  • LocationDie Sonne

October update:

 

NY Times on the housing bubble in China

 

Telegraph on the emerging European banking crisis

 

Business Insider: HSBC says to prepare for a severe stock market crash

 

Business Insider: The world economy is stuck in 'rolling cycle of crises'

 

CNBC: Bank of America warns of incoming recession

 

Bloomberg: IMF worried that global debt has spiked to $152tril

 

Telegraph: Fed risks repeat of Lehman blunder as US recession storm gathers

 

Is it official yet?


I loudly predicted the second wave of the Global Financial Crisis would begin by the 31st of March 2017. But I was wrong! Observe my well-deserved public humiliation here, here and here. Let this be a warning to all of you who try to guess the future. Yes, that means you, reading this now! Put that prediction back in your pocket! Do it now, before it's too late! (Also check out my userpage, it's even funnier.)


#11
Pisiu369

Pisiu369

    Member

  • Members
  • PipPipPipPipPipPip
  • 742 posts

What is your prediction for when the Global Depression will happen?



#12
Recyvuym

Recyvuym

    Apophis 2036

  • Members
  • PipPipPipPipPipPip
  • 999 posts
  • LocationDie Sonne

It's not really an event, it's a period. There may be an event that officially signals the period. But the 2008 Financial Crisis really began in 2007 in the US, long before Lehman Brothers collapsed. In the same way, the multiple crises we're seeing today are, to my eyes, a prelude to the ever more troubled times we're going into.

 

I'm not sure there will be any one single moment that everyone will be able to point to, like last time. There could be, or there might just be multiple separate incidents across continents that culminate into an extremely deep depression. Either way, things aren't going to get any better than they are now. It's been all downhill for some time now, I just think the decline is about to get considerably steeper.

 

If you press me for a month, I will guess around December, but even then, the lights aren't just going to go out overnight or anything. It'll be a long, slow, tumbling grind to the very bottom. And then who knows where the bottom is or how long we'll be there. But for myself, I am cheerfully treating it as though I'm living in the final weeks and months of relative prosperity before our quality of life begins to creep down another notch the way it did after the GFC.


I loudly predicted the second wave of the Global Financial Crisis would begin by the 31st of March 2017. But I was wrong! Observe my well-deserved public humiliation here, here and here. Let this be a warning to all of you who try to guess the future. Yes, that means you, reading this now! Put that prediction back in your pocket! Do it now, before it's too late! (Also check out my userpage, it's even funnier.)


#13
Yuli Ban

Yuli Ban

    Nadsat Brat

  • Moderators
  • PipPipPipPipPipPipPipPipPipPipPip
  • 17,148 posts
  • LocationAnur Margidda

I no longer believe the 2nd Great Depression will occur this year. I'll tell you why later. Hint: it's not for the reasons you'd expect.


Nobody's gonna take my drone, I'm gonna fly miles far too high!
Nobody gonna beat my drone, it's gonna shoot into the sky!

#14
Jakob

Jakob

    Fenny-Eyed Slubber-Yuck

  • Members
  • PipPipPipPipPipPipPipPipPipPip
  • 5,239 posts
  • LocationIn the Basket of Deplorables

 

But for myself, I am cheerfully treating it as though I'm living in the final weeks and months of relative prosperity before our quality of life begins to creep down another notch the way it did after the GFC.

Maybe I was just too young (I was 9) but I don't remember that happening.


Click 'show' to see quotes from great luminaries.

Spoiler

#15
TranscendingGod

TranscendingGod

    2020's the decade of our reckoning

  • Members
  • PipPipPipPipPipPipPip
  • 1,554 posts
  • LocationGeorgia
I don't either Jakob.

The growth of computation is doubly exponential growth. 


#16
tierbook

tierbook

    Member

  • Members
  • PipPipPipPipPipPipPip
  • 1,195 posts
  • LocationCharleston sc

I no longer believe the 2nd Great Depression will occur this year. I'll tell you why later. Hint: it's not for the reasons you'd expect.

Do you happen to work for Forbes magazine?


  • Yuli Ban likes this

#17
Yuli Ban

Yuli Ban

    Nadsat Brat

  • Moderators
  • PipPipPipPipPipPipPipPipPipPipPip
  • 17,148 posts
  • LocationAnur Margidda

I don't either Jakob.

Neither do I. Our wealth may have creeped down, but the quality of life remained roughly the same, partially due to the relentless forward march of technology. 

 

Anywho, why did I say we will not enter a depression or recession this year?

 

Because we're already in one.

 

Check out the global GDP per capita for 2014 and 2015.

 

oMXlxbU.png

uVSm0Rx.png

 

This was caused by the Great Oil Crash of 2015. Petrostates and states that rely heavily on oil wound up taking it up the ass last year and this year. However, the reason why this didn't cause a massive financial collapse (despite what the financial blogs kept harping on about) was because, as I predicted for 2016, we'd see a global recession marked by great upheaval— but it would be a bizarrely lopsided recession. Chances are, a harder collapse is coming in the next few years, but the oil collapse is one of those things that led me to believe we won't suffer a catastrophic, existential-crisis tier financial collapse that we see in the likes of cyberpunk fiction. If that were the case, we should be seeing oil prices in the other direction. Oil should be $500+ a barrel, not $50 and threatening to fall into the $20s at any moment. It's basically a massive face-heel turn bait and switch for cyberpunk dystopian fiction, which is always predicated upon the idea that the GFC would either be caused or enhanced by oil prices shooting into the exosphere. And like I said: while I do believe a big crash is about to happen within the next 5 years, I don't believe it's the Great Depression 2.0 or the Reaper of Western Civilization, with the first bit of evidence being the weakened state of the oil industry. A great collapse can happen for a variety of reasons, but almost all of them stem back to the price of oil. It's oil that fuels our civilization. Even if a super Depression struck us, if the price of oil remained stable, we'd just wind up getting back up and going back to work within 5 years.

 

If oil was that expensive (and we lack any alternatives to an oil-centric economy, which would happen regardless of if electric vehicles are widespread or not), we would no longer be able to support things like supermarkets, fast food chains, restaurants, air travel, ocean travel, space exploration, and much, much more. We vastly underestimate how much of our civilization is reliant upon oil, as we tend to think oil = fuel. In reality, just about anything involving carbon products you can think of (including graphene!) would receive a big fat K.O. if oil prices suddenly shot up by an order or two of magnitude, and our civilization would simply cease functioning.

Freighter trucks would not be able to travel, as gas prices would be exorbitant. Same deal with planes and trains. Thus, our globalized economy would grind to a halt due to how expensive everything would be. Food prices would then increase, perhaps by up to 1,000%. Wages would enter freefall since businesses have to cut any and all expenses. More and more of our increasingly reduced paychecks would be dedicated to the bare essentials. 

Transportation would cease to exist as a 'thing'. Remember how cars need oil changes? Now oil's so expensive that the price of an oil change nearly exceeds that of a car. Cars become thrice as expensive, and gas is out of here. People won't be able to afford to get around anymore. So even if supermarkets, restaurants, tourist traps, etc. managed to survive the initial apocalypse, they'd quickly die off due to a lack of business. Cities would collapse once cars can no longer go far enough without bankrupting their owners. We might even return to a more suburban sustenance-based lifestyle.

There goes Walmart. There goes K-Mart. There goes Macy's. There goes all the restaurant chains. There goes all the fast food places. As much as we demonize these big chains, they also provide millions of jobs. 

 

The price of space flight would increase exponentially due to oil's many uses for almost everything involving the materials needed to actually build space craft. NASA would no longer be able to afford a single failure. No one would. Least of all SpaceX. It seems that for every 5 or 6 successful flights, they have one failure. If oil became superexpensive (to GFC levels), that one failure would bankrupt SpaceX. Possibly several times over.

With high oil prices comes vastly reduced demand for things, ironically meaning the industry actually collapses thrice as hard as it does in our timeline. What does that mean?

 

Petrostates? Gone. Saudi Arabia? Kuwait? Iran? Canada? Russia? Venezuela? Welcome to the Thunderdome. Prepare to rediscover the "wonders" of violet nomadic gangs and repressive warlords fighting for scraps. In Russia's case— holy shit. Because if the Russian government were to fall due to an oil-sparked GFC and warlords fought for control, they'd also gain control of Russia's many thousands of nukes. That would be good for no one at all. Russia already took a bad hit from the oil price collapse, to the point they've been in a sanction-enhanced recession for two years now, a recession they're only just beginning to crawl out of. If the oil industry imploded completely due to this Burn-Hot-Burn-Out scenario, Russia as a nation is done for. And Saudi Arabia takes it up the ass even worse, because as I've been saying for years now— the government is the one that's progressive, believe it or not. Much of Saudi Arabia's population thinks the government is actually too progressive and that they need to come down hard on heretics, degenerates, and the like. Ultraconservative Wahhabists in the Middle East make ultraconservative Protestants in the US look like tolerant liberals, as we've seen with ISIS. Do you really want them gaining control over such a large territory?

 

 

That's what would happen if oil prices reached $500 or, heaven forbid, $1,000 a barrel. That is a collapse.

 

But right now? Oil prices are hovering around $50. They've gotten back up from their previous lows in the 20's, but everyone's expecting them to fall back into the $40 or even $30 range just in time for Christmas. What's more, the oil shock spooked many of these aforementioned petrostates into diversifying their portfolios. Yes, even Saudi fucking Arabia, whose whole nation is supposed to be one giant oil corporation. This "Invisible Recession" of 2015-2016 may have wound up preventing a greater financial calamity precisely because of these effects. Also, there's no one "good" option with oil being too high or too low, after all. If oil prices are too high, oil companies get rich and fat— but that also spurs green investment and they get less business from petroleum. If oil prices are too low, they net far fewer profits (to the point many companies go bankrupt) but they also get much more business. Oil being around $60-$80 a barrel would be the best for that industry, but no one knows if it'll be able to climb back up there.

The oil collapse wound up doing something that seems the antithesis to a total collapse as well— it's leading to one of the greatest transfers of wealth in human history. Trillions of dollars are flowing right back into the hands of the working/middle classes due to all that money we're saving from low oil prices. The drawback being, these trillions of dollars are going into the hands of the working/middle classes only in some places. Primarily those places that aren't dependent upon the oil industry. For example— cities are booming. Businesses are seeing more sales. Truck drivers are getting bonuses. More people are flying. We have more money to spend.

Where oil is the region's lifeblood, however, you're seeing Great Recession-level discontent and upheaval. Look at Alberta, Canada, or to Texas, USA. Look at Venezuela, which has become a dystopian, neo-Eastern Bloc hellhole. That's where there is a Great Depression going on. Russia is where we're seeing a Great Recession. Need I even say anything about the Middle East? Hence why I called it a "lopsided recession."

 

 

So yes, that's my dissertation about why we're not going to see a new Great Depression this year. Oil is far too cheap for there to be a collapse. The petrocrats did it to themselves.

I mentioned that the oiligarchs would either deny that the end is nigh or try to get their cronies to convince us that this is actually a bad thing. Hence why you kept seeing articles proclaiming that "Cheap Oil Will Doom Us All". That's because they want oil prices to reach $500 a barrel. Damn the world, as long as it means they get to become trillionaires for a brief period of time. But it's just not happening. 


  • SkylightMT likes this
Nobody's gonna take my drone, I'm gonna fly miles far too high!
Nobody gonna beat my drone, it's gonna shoot into the sky!

#18
tierbook

tierbook

    Member

  • Members
  • PipPipPipPipPipPipPip
  • 1,195 posts
  • LocationCharleston sc

Mostly correct, though I'd disagree with Texas since Texas' economy is somewhat diversified, North Dakota is all kinds of fucked though.



#19
Recyvuym

Recyvuym

    Apophis 2036

  • Members
  • PipPipPipPipPipPip
  • 999 posts
  • LocationDie Sonne

Cool, Yuli, but there are a couple of problems. First, the GFC was not caused by the petrodollar, and that still happened. In fact it was the biggest crash in eighty years. Second, the great wealth transfer you're talking about is pretty much consigned to developing countries. In America and Europe, it's a different story. You guys haven't seen a proper raise in nearly half a century now. And Europe is, well, pardon my French but it's fucked. It's become so ubiquitous they even have a name for it - the Great Regression. Now, there is the argument that developing countries drive growth; sure, but when the big fish are sinking, they still take most of the world's money down with them, as we've seen time and time again. Not to mention that very real possibility that the sinking yuan could sink all the other developing economies in a devastating chain reaction.

 

I would agree we are already in a kind of depression, but it's been going on since longer than last year. Keeping in mind that an economic depression is simply a state of being unable to return to high growth, you could easily make the case that the slump since the Great Recession 'ended' is a mild depression in itself. It's been the worst 'recovery' since WWII, and it's being fuelled entirely by emergency policy and debt. And the emergency policies aren't working anymore. Hence my argument that we're on the brink of the new Great Depression.

 

If nothing's happened by the end of March, which seems like a reasonable timeframe, I will concede that you are right.

 

Even if a super Depression struck us, if the price of oil remained stable, we'd just wind up getting back up and going back to work within 5 years.

 

 

But if I'm understanding you correctly, don't you think we're just a few years away from the big oil crash happening?

 

So, by the time we maybe begin to entertain the prospect of recovery from the upcoming recession I'm talking about, wouldn't we be entering the new one?

 

What you've done is painted a disaster scenario bigger than the one I'm talking about, but then made out like it's the only thing that can cause a big crash. I disagree, there are all kinds of other things that can go wrong with the system and are going wrong. Furthermore, while it's good to know low oil prices are levelling the playing fields, it's also causing massive bankruptcy and instability. So it's not like "low prices good, high prices bad." The present state of things is stressing the status quo. Right at a time when it needs calm and stability. And all this in an environment where the Fed hasn't been able to raise rates a quarter of a percent in ten years - without causing a stock market crash.

 

I don't either Jakob.

Well, maybe that's because you guys were in elementary school during the GFC. But I'm sure you have vivid memories of what the job market was like before then.

 

The effects are slower and subtler than you seem to think I'm suggesting. 63% of American families lost wealth as a result of the Great Recession. Well, that's a drop in quality of life. That's collapse, happening one tiny step at a time, almost too glacial to even notice. What's happening in Greece and the rest of Europe right now, would you not call that a drop in quality of life? Well, that was kicked off by the original banking crisis almost ten years ago.

 

If you would like to know more about what the GFC has done for you, check this out. But basically, here it is: you know how even just a generation back, a 20-year-old could look forward to buying a house and a car and starting a family in the short to midterm future? You notice how many millennials aren't even entertaining this thought these days? That's collapse. Slow, boring, but still very, very painful.

 

Millennials have benefited the least from the economic recovery following the Great Recession, as average incomes for this generation have fallen at twice the general adult population's total drop and are likely to be on a path toward lower incomes for at least another decade. A Bloomberg L.P. article wrote that "Three and a half years after the worst recession since the Great Depression, the earnings and employment gap between those in the under-35 population and their parents and grandparents threatens to unravel the American dream of each generation doing better than the last. The nation's younger workers have benefited least from an economic recovery that has been the most uneven in recent history."

 


I loudly predicted the second wave of the Global Financial Crisis would begin by the 31st of March 2017. But I was wrong! Observe my well-deserved public humiliation here, here and here. Let this be a warning to all of you who try to guess the future. Yes, that means you, reading this now! Put that prediction back in your pocket! Do it now, before it's too late! (Also check out my userpage, it's even funnier.)


#20
caltrek

caltrek

    Member

  • Members
  • PipPipPipPipPipPipPipPipPipPip
  • 5,220 posts

Typically, recession is defined as two consecutive quarters of negative economic growth.  A depression is something substantially worse than a recession. I am not going to make any predictions, but it would not surprise me if the United States enters a recession.  Such an event could turn into a depression, but only if political elites do not apply the lessons of the past as explained to them by competent economists.  There is a reason why the spacing of depressions in the United States came more often than every 80 years before the stock market crash of the late twenties.  That reason, I believe, was the development of economic theory, most notably by John Maynard Keynes.  When overcapacity occurs, elites at the governing heights of our economy know how to address the problem. Not always with pretty results, but always with a certain amount of "economic" success.

 

Of course, if some economic ignoramus gets himself elected President, then all bets are off.

 

If a hawk gets elected president, then the solution might very well be war, or such an extreme threat of war that Congress is cowered into making the needed appropriations. 


The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls






Also tagged with one or more of these keywords: recession, prediction, great depression, economy, economic collapse, debt, hyperinflation, deleveraging, wealth inequality, neoliberalism

0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users