How bad is this economy going to get?

I too fear another stock market correction especially if 3033030 pulls out a win. I held my positions, but bought technology stocks when the Covid fall occurred as well as some energy positions. I also closed on two pieces of real estate 20% below appraised value. I purchased gold two years ago that has done well. Should have bought more.

I wish I understood the crypto currency market, but it scares me.
 
upload_2020-8-23_10-2-19.png
 
Stock to flow model boys and girls! Pay attention. 4 year cycles, bull run for 2 years, bear market (transition year), then re-accumulation year, then another bull run. We’re starting the Bull run since March or so. I am not a trader I hold it.
 
Japan went though what the US is going through now. It is called the Japanification of America. Out of control money printing for a very long time, followed by inflation, followed by stagflation or very slow or stagnant GDP growth. It took Japan about a decade to recover. And then they went back and did this again in the late 90's early 2000's and still have not fully recovered. This is why I am scared of the Stock Market.

My alternatives are Bitcoin, Gold, Silver, Fine Art, Real Estate, and maybe fractional Farmland or Ethereum in a small %. It will be more clear later on.
 
AC, Friedman unfortunately left the door open to this destructive policy when he said there were good effects from printing more money. The good effects only come to the politically connected who receive that new money first. Everybody else never sees any good effects.
 
Monahorns said:
AC, Friedman unfortunately left the door open to this destructive policy when he said there were good effects from printing more money. The good effects only come to the politically connected who receive that new money first. Everybody else never sees any good effects.
Click to expand...
Cantillon Effect
 
I think the recession could go either way inflation or deflation. It’s interesting how the Fed QE gives banks credit by buying treasury bonds. That credit is not cash it’s a treasury reserve only to be used by the bank for a loan. If that is correct, QE pulls liquidity out of the system, Deflationary.
I would rather an inflationary recession than deflationary. He has a follow up video tomorrow. I’ll post that later.
 
The DXY US dollar index has rolled over and is pushing up to 93. It was 91.8 a day or so ago. This also points to a deflationary recession. The above tweet shows a massive drop in Velocity of Money. I think this recession will be deflationary which is probably worse. Brace yourselves.
 
Companies have fired everyone they can fire and still keep going
+ no new hires
= Productivity spike

EhEYgyhXYAASwYb
 
Joe Fan said:
Companies have fired everyone they can fire and still keep going
+ no new hires
= Productivity spike

EhEYgyhXYAASwYb
Click to expand...
Yeah, I think that is the reason for the fear that it may take awhile to whittle down the unemployment rate.
 
The DXY US dollar index has rolled over and is pushing up to 93. It was 91.8 a day or so ago. This also points to a deflationary recession. The above tweet shows a massive drop in Velocity of Money. I think this recession will be deflationary which is probably worse. Brace yourselves.
Click to expand...

AC, deflation as a problem is a Keynesian myth. Deflation is a good thing for working class and savers. If it wasn't people wouldn't be buying bitcoin.
 
Monahorns said:
AC, deflation as a problem is a Keynesian myth. Deflation is a good thing for working class and savers. If it wasn't people wouldn't be buying bitcoin.
Click to expand...
I recently started reading The Price of Tomorrow, Why Deflation is the Key to an Abundant Future — by Jeff Booth.

His basic thesis is that in a world of rapidly accelerating technological progress (which is inherently deflationary), deflation is inevitable and we should embrace falling prices over time as a natural outcome of this.

The Price of Tomorrow – And the Era of Abundance
 
mchammer said:
Yeah, I think that is the reason for the fear that it may take awhile to whittle down the unemployment rate.
Click to expand...

Then of course the only thing that makes any sense is to throw open our borders completely and flood the labor pool with uneducated, unskilled workers
 
I’m busier than a one armed paper hanger this week! When I can I’ll post the Rebel Capitalist interview with Lyn Alden and Jeff Booth. They agree that we should see Deflationary recession first. Mainly because COVID-19/ QE has so far caused velocity To push way down. QE has not put cash into the economy also a myth. It’s added bank reserves which let a bank loan money but it’s not cash. So liquidity is low the DXY has gone from 91-93 and should run back up to 103. If that happens a deflationary crash ala 1929 could occur. I nor any global macro analyst hopes so but it appears possible. That would be followed up by inflation when the Fed responds to it. This is why I push Bitcoin and Gold. Watch the George Gammon (Rebel Capitalist) video from two days ago or so on this thread. Very informative, George’s partner is Lyn Alden. I am NOT a Keynesian. I’m 100% Austrian Economics. I disliked Keynes since my professors crammed him down my throat in College.

This stuff is complex as hell. It has appeared lately that the recession will be worse than originally thought but everyone is speculating. We only half a fraction of the chess pieces.

I’ll buy Jeff’s book. I know he’s right.
 
His basic thesis is that in a world of rapidly accelerating technological progress (which is inherently deflationary), deflation is inevitable and we should embrace falling prices over time as a natural outcome of this.
Click to expand...

The underlying logic is that as more and more valuable things come to market all the other things will cost less. The prices adjust down for those things that people want less. It means things like food, clothes, and shelter go down in price. Not because food isn't less important but because of supply and demand and the quantity of money available to buy things.
 
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