At the risk of being alarmist, who here understands the coming economic collapse?

[lostnfound]

Our money is electronic dots. That includes both debts like mortgages and assets like 401(k)s, stock accounts.

Russia and perhaps others seem to be gearing themselves up for war on the Internet. If they are able to undermine the integrity of the banking system, what happens? The Black Friday sale run on the banks?

Trade wars are happening. That will bring inflation, correct?

Will trade wars bring down the value of US stocks? When the stock market crashes, does that not cause deflation?

If the stock market collapses, what does that do to the value of land or housing?

If the waters here in the US become very rough, where will the water be calm? Anywhere?

[Sherman A1]

1. All valid points

I would however refer to it as the potential economic collapse, nothing is certain in the future.

[cheyanne]

2. wall street on parade may 30th article

"wall street banks tank"

"The Standard and Poor’s 500 Index fell by 1.16 percent yesterday while big banks on Wall Street fell by three, four and five times that amount. Morgan Stanley fell by a whopping 5.75 percent, helping its decline along by announcing at a conference that its wealth management division has been experiencing a slowdown since March. JPMorgan Chase, which serially touts its “fortress balance sheet,” shed 4.27 percent. Citigroup and Bank of America were down 3.99 and 3.98 percent, respectively, while Goldman Sachs shed 3.40 percent. All of the banks traded on heavier than normal volume – another negative signal."

article also mentions msm silence on the topic.

[extvbroadcaster]

3. My biggest fear

next to Trump pushing the button. He is such an idiot that he could bring on an economic mess like we have never seen. People don't understand that they really have nothing in the bank. They have a bunch of numbers. Now people say those numbers are worth x amount of goods. What if they are not? What if a loaf of bread costs 20 bucks? Think about it. When it all goes down you will have your house, car, whatever gas and food you have around and your gun and shells. That's it. Now Trump is such a moron that he does not understand this. Neither does the American public. They are all banking on a stable system. Even those wall street yahoos. If the system is not stable, we are all screwed. That is why it is the most important thing right now to get rid of Trump. A start is the November elections, and maybe getting the house. Pray democrats succeed.

[lostnfound]

33. Inflation or deflation...and instability

Looking at graphs from the twenties, it looks like their was deflation occuring for about ten years beginning in 1929. What was the reason? Demand falling faster than production?

I agree, we all may have nothing in the bank..at least, in th face of instability, we don’t know what’s we've got.

Add to that the prospect of hackers trying to break into the financial systems.

[ashredux]

4. We are all screwed....simple as that

[safeinOhio]

5. Here is what happens....

rich get richer and poor get poorer.


Until the revolution and we eat the rich.

[a kennedy]

23. I've been wearing my "eat the rich" pin for a very long time.....

[WhiteTara]

27. or we eat pictures of food

because there is none.

[cheyanne]

6. there is a politicususa article on wsj article on economists fear of trump

According to a recent survey of 62 real economists by the Wall Street Journal, it is not the instability of China’s stock market, or its move to devalue its currency, or the Greek Eurozone crisis, or the possibility of the Federal Reserve finally raising interest rates. What frightens a great majority of the nation’s leading economic experts most of all is that the Republican-controlled Congress will “precipitate another fiscal crisis this fall” when Republicans plan to either shut down the government unless Planned Parenthood is destroyed, or hold the debt ceiling hostage until Planned Parenthood is destroyed. It is important to note that the push to put an end to Planned Parenthood has nothing to do with the economy, debt and deficit, national security, jobs, or economic growth; it is about legislating and enforcing an extremist religious policy.

"politicousa

[ewagner]

13. I wonder....

...did the Trumpster phenom happen as a harbinger of economic collapse where the "have nots" were already demanding an authoritarian form of government????????

[liberal N proud]

7. 401K's will be destroyed and those of us on the brink of retirement are screwed

[empedocles]

8. Economic cycles do tend to . . .

. . . persist. When asset values depreciate, economic engines slow down, assets become more scarce - people become more fearful. Fearful people can be less 'cooperative'. The poor and the very wealthy historically may look to authoritarian solutions. This happened in Europe, and the U.S., among other places, in the Great Depression. [British wealth and facism, the attempted coup attempt against FDR in the U.S. - a well-financed $60 million in current dolllars effort by 'leading families like DuPont, Birdseye come to mind]. [This army effort was covered up behind closed doors in Congress, the records sealed for 30 years - Smedley Butler was the hero].
A relatively 'minor' harbinger of this possibility may be evident in the current worldwide macro, decades long 'disinflation' cycle which has dampened economic growth in most places. Europe has seen authoritarian figures on the rise; as has Trumpism among a number of the 'left behind' voters and some of the very wealthy [Koch, et al].
In this 'age', our best hopes seem to be our democratic government of deliberate checks and balances, which seem to be working somewhat creakily, but working - augmented by the Information Age which has been a fairly powerful tool, [Trump unable to monopolize information like the WWII facists], so far.

[DownriverDem]

9. Terrified

So much that trump has brought us terrifies me. The economy is just one of those things. I know a couple that could retire, but they are afraid. The cuts planned to Medicare and Social Security keep them working. trump has aligned himself with dictators. I fear that he will start a war to bring up his poll numbers and do the bidding of putin. Did folks really vote for this?

[Roy Rolling]

10. I'm 100% short in my IRA

I put my money where my mouth is. What little I have.

[empedocles]

11. I too am hedged

[lostnfound]

17. Hugs

it sucks.
One of the reasons I’m trying to preserve what I have is I have relatives and friends who need some security.
The inequality and lack of opportunity is very unfair and immoral..The policies and lack of humanity in our society is disgusting.

[Locrian]

18. how does one protect anything?

I too fear that all I've worked for, saved, lived frugally etc will be for nothing.... but have no idea how to protect against a calamity. Ups and downs I get - but does anyone have a strategy that makes sense?

[empedocles]

34. Economic hedges

A stable, good job that won't cave, in a downturn

T-bills to preserve cash - favored by the wealthy the world over [ever wonder who finances our enormous deficits, the world wealthy who stash, where they can get their money back. the government needs to roll over T-bills weekly to pay the troops, etc.]

Some gold, preferably bought in deflationary times as guard against inflation

Some bear stock funds, to make some $ in this overinflated stock market.

Keeping your wits, and family, about you

[mahina]

38. I'd love to hear any funds you recommend for that

Thank you!

[empedocles]

40. If you''re asking me mahina

I would recommend most no load mutual funds with a large roster of options. I use Vanguard and American Century mutual funds.
My bear fund now has a front end load of 5%, [I am grandfathered in with no load for me, so I haven't surveyed other bear funds]. I look at bear funds, not as typical stock funds, but as insurance policies. Hope u don't have to use them. If things go down, you should have something positive, when others have losses - that's very good at a bad bottom. Bear funds can possibly do badly in a bad inflation in which stocks could possibly go up despite a bad economy - a gold fund can hedge that. Something to think about. Wish you well.

[mahina]

41. Thannk you

I appreciate that!

[Blue_true]

42. Instead of shorting, put your money in the longbond.

Even with Trump in office, when the shit hits the fan, the longbond will be the only thing standing. If Germany does not flirt with "restrictive social policies" like it did vis a vis 2010-2011, bonds from the German government would also be safe bets.

The issue with shorting is the timing issue, you may be right on the outcome, but loose your shorts because you shorted too soon.

[ewagner]

12. One of our financial advisers

has been warning us of the coming "Retail Apocalypse" for a number of years. Locally and nationally we're beginning to see it come to pass before our eyes.

Apparently the combination of on-line purchasing and the major retailers being bought out by hedge funds and accumulating MASSIVE debts to be paid by non-existent profits will force the closing of more and more retail stores.

What will this do to the rest of the economy?

Who knows!!

[Mc Mike]

14. Repugs are always trying to throw a great depression.

It helps their bloated plutocrat masters, who always come out of things with more money and power.

[cubbies01]

15. He is controlled by Russia

Up until recently many view his actions as controlled and purposely helping Russian interests in international policy. Now, we are seeing another even more sinister plot. They are having him wreck our economy. Weakening us on all fronts.

[PoindexterOglethorpe]

16. Our money has been electronic dots

for several generations now.

People have been crying wolf about a total meltdown of the economy, possibly accompanied by hyper-inflation for about as long. A month or so ago someone I was having dinner with said he'd heard that gas would be over $5.00/gal by the end of summer. Where I live it's come down a few pennies and is just under $3.00/gal.

We did have a collapse in housing prices in many parts of the country recently. A lot of people were hurt, I know, but most survived.

Things change. They change all the time. Why some people delight in apocalyptic predictions I'll never quite understand.

[JayhawkSD]

24. People focus on apocalyptic predictions because of bad governance.

(They don't actually "delight" in apocalyptic predictions. Read more carefully. I have not read anyone say that they are happy that a collapse is coming.)

Government is being controlled, and has been for decades, by a group of oligarchs who govern for the benefit of themselves and their class, and to the great detriment of the working class. In order to distract the working class and to keep the working class reelecting them they practice "the politics of fear." By keeping the working class in a state of fear, they can keep the working class essentially paralyzed and unable to effect significant change. The media is very much part of the mechanism of the politics of fear.

Look at today's upcoming midterm elections. We are told that Republicans and Trump are a disaster and will turn America into a garbage dump. It is essential to get Congress out of Republican control and into the hands of Democrats to save us all from death and destruction. We've been here before, in the George W. Bush midterm of 2006.

But what happened after Democrats took control of both houses of Congress? Instead of stopping the war in Iraq we got "the surge" and troops remaining in Iraq until Obama was in office. No effort was ever made for any significant overturn of the Bush tax cuts. Not only was the Patriot Act not withdrawn, it was renewed, and the Military Comissions Act added. Spying was affirmed by Congress and the telecom industry immunized for its role even as Obama was running for the White House.

Despite the endless rhetoric of fear of the destruction that Republicans are doing and will do the the nation, and the constant refrain of the evils of Russia's controlling influence over Trump, how many Republicans running for reelection in this midterm are being voted out so far in their primaries? Zero. Zilch. In California's "jungle primary" no Republican incumbent shows any sign that he/she will fail reelection in the general.

[empedocles]

31. Republicans will be Republicans

At the bottom of the Great Depression in 1932, 43% voted for 4 more years of Hoover and his 'Hoovervilles.' Near trump numbers today. [We did reverse course and were and thrive eventually, though 'conservatives' seem to have dimmed/limited progress for, oh, most of 38 years].

[PoindexterOglethorpe]

49. As you've pointed out, the status quo reigns supreme.

Not to mention that for almost two decades now Democratic leadership has proven itself craven cowards. It's apparently not permitted here to criticize specific Dems, but even if we somehow got a super majority this November, they will do nothing.

[uponit7771]

19. The run from equities to safe bonds is number one concern.

Bonds yields are going up because of inflation and debt caused directly by Republican tax cuts

[roamer65]

48. Yes. Investors want more interest for a more risky investment.

With $21T in debt, less revenue and increasing interest rates...it’s a recipe for a currency crisis of biblical proportions.

[TimeSnowDemos]

20. It's worse

Than even that.

Regulations have been gutted, traders aren't even in control of trades any more, people on both sides have all their retirement money is what is really nothing more than a casino!

On top of that, vast chunks of the global economy are destabilized and decoupled, making them hard to manage, and central banks have used almost all their preventative wiggle room...theres little chance of a big central bank rescue if things go bad this time.

And of course the US economy is corrupt. It's rigged. Everyone knows it. Markets which used to sort of work barely work at all any more. Prices are rigged. Corporations don't pay taxes. Income inequality is picking up speed.

It's gonna get bloody.

[bucolic_frolic]

26. I can understand the prices are rigged parts

It's like QE3 all over again. There are up days, and pause days. Market makes a 30 minute move and stays there, yet there are no bargains. Bursts of volatility, then lethargy. Something's up.

[Achilleaze]

35. "...nothing more than a casino..."

And the republicans put a corrupt, money-laundering casino hustler* with massive debts to russia, in charge of the whole frikken candy store.

Tell me again about how the republicans are supposed to be "conservatives."

* aka republican Draft-Dodger-in-Chief

[roamer65]

47. The first salvo will be massive quantitative easing.

QE through buying up every piece of Treasury paper they can get their hands on, followed by corporate bonds then stocks themselves.

It will make 2008 look like a picnic.

[TimeSnowDemos]

50. At some point

People will, en masse, come to realize that the majority of the logic that supposedly guides the market is nothing more than an illusion.

It can't last.

Valuations along are so unhinged... It can't last.

[KY_EnviroGuy]

21. Experts say the big, BIG collapse will be due to world-wide debt....

becoming unsustainable. Trump and the Repug congress are just stepping on the gas pedal.

I get an email newsletter from an economist named John Mauldin. He's a Texas Republican but knows his stuff on the global economy. From the newsletter:

(snip - regarding global debt)

And we don’t even really like to talk about it in polite circles. In a private email conversation this week, which must remain anonymous, this pithy line jumped out at me:

The total of Federal (remember they do not use GAAP) debt, state debt, and city debt [unfunded liabilities included] exceeds $200 trillion dollars. There is no set of math that works to pay this off. Let me be sure it’s heard by repeating it: There is no set of math that works to pay this off. Therefore, there has to be some form of remediation. This conversation is uncomfortable, so it is avoided.

This is a pretty comprehensive article on the subject from Mauldin's web site:

Train Crash Preview
By John Mauldin May 18, 2018
Link: http://www.mauldineconomics.com/frontlinethoughts/train-crash-preview

Much of this stuff makes my head spin, but I can usually get the general drift and intent. Perhaps those with an economics background can shed better light on this topic than I.

.......

[former9thward]

22. Gloom and doomers have been predicting economic collapse for years -- even decades.

It never happens. The stock market is not going to collapse despite the regular predictions that it will. There is no trade war, just politicians giving off hot air for their various constituents. Anyone who makes economic decisions based on wild posts on the internet is in sad shape.

[empedocles]

29. To use a more current example. The Japanese Nik peaked near 38,900 in 1990!

Currently, the Nik is bobbing near 24,000. Spent a fair amount of time at a 50% discount - and some lower numbers. Japan still makes and sells good cars, electronics, etc. Japan has a whole lost generation - unable to use their education, real estate underwater, malaise, etc. Serious problems. Fortunately for Japan, enough of the rest of the world has recovered from crashes enough to buy some Japanese again. The implications of the serious Japanese problems are worth very serious consideration. [Historically, of course, there have been numerous collapses].

Point here is 'never say never'. [I do have friends who are certain that 'the government will take care of it'. In the old days, some liked to say, 'strong hands will step in and restore order', - not too much of that anymore ].

[Blue_true]

43. Very good example. The USA under Bush was matching the Japan example

of stock market decline, until the shit hit the fan with the bank crisis in 2008. I expect to see a slow bleed off in USA stocks, similar to what started for Japan in the mid-late nineties and has lasted through today. The one fortunate factor for the USA is that it has democrats, democratic Presidents have shown a historical tendency for around 116 years of stopping economic decline and turning the economy around toward growth, the exception was LBJ, mostly because of Vietnam.

What do I guess? Trump will run the country into a shithole, voters will react and elect a democrat, the democrat will get the economy back on track with attacks coming from the right and the far left, after 8 years of recovery, the country elects another republican and setup to head downward again.

[bucolic_frolic]

25. Hedge against the collapse - anticipate what could go wrong

Make a paper copy of an occasional monthly statement for all accounts you have. Store off-line at least a digital copy of major checks you write. USB thumb drives hold a lot of information. Have a backup copy, or two! Think hard - for weeks - on what consumables, goods, parts, clothing you require. Could be spices, oil filters, underwear, pens, plumbing or faucet seals, an old spare computer. Old car? Which are the parts that wear out over time? Catch an extra pair of shoes on sale - because you like them but in case you need them in 3-4 years. Of course pay down debt. Maintain your home. Don't have to be luxury about it. Keep the water out. Don't get caught where you can't buy paint or caulking.

Inoculate yourself against catastrophe. Get your family members on the same page. But don't be a zealot. Some prep is fine. Building a home warehouse with 18 months of canned beans is overload. If things get that bad, we all have bigger problems.

[lostnfound]

39. That's good advice. Nt

[Hoyt]

28. It is possible, but it's going to be hard to convince voters when economy is doing reasonably well.

[Thirties Child]

30. The inauguration astrology chart says big economic trouble is coming.

Also big problems with/because of congress, conflict between the two. By the same token, the 1996 inaugurations promised the Lewinsky scandal..

[Cicada]

32. Stock market predicts better than us, so far no worries

But no one knows imo

[empedocles]

36. 'so far no worries'?

I wouldn't go quite that 'far'.
[Remember the volume of stock trades that are intra day, and high frequency like minute to minute in the same stock, - all very high and volatile - their 'future is now'].

[mnmoderatedem]

37. Two things

the extremely dangerous trade war trump is trying to start with our closest allies, and the 1.5 trillion hole being blown in the budget deficit. Two extremely harmful things that are going to take effect down the road.

since the ramifications won't take effect tomorrow, trumpets will beam and proclaim thing are A-OK and trump is a genius. it will have to smack them in their stupid faces before they "get it". By then it will be too late for the country.

[airplaneman]

44. Hi lostnfound - I will try and answer - I am somewhat educated on macro-economics.

"Our money is electronic dots. That includes both debts like mortgages and assets like 401(k)s, stock accounts."

95% of Money is loaned into existence by private banks - this is deflationary overall. We have fiat money - I do not agree it is worthless. GDP, Total Wealth, and every transaction you make defines the value of money - inflationary forces are more desire-able than deflationary forces because if deflation sets in then debt become unmanageable. I do not think we are likely to see hyper-inflation anytime soon. Most of the hyperinflation hawks I have listed to over the last 30 year don't understand what they are talking about

"Russia and perhaps others seem to be gearing themselves up for war on the Internet. If they are able to undermine the integrity of the banking system, what happens? The Black Friday sale run on the banks?"

Cyber warfare can be a problem but I do not believe this to be a likely outcome - The world needs each other too much for prosperity for declaring cyber warfare.

"Trade wars are happening. That will bring inflation, correct?"

Trade wars are inflationary but importing more than you export is deflationary. Intelligently targeted trade wars can be beneficial but Trump random actions will cause problems. I am guessing that the trade wars and Trump will not last much beyond 2020.

"Will trade wars bring down the value of US stocks? When the stock market crashes, does that not cause deflation?"

The stock market tends to over-react to everything. Yes trade wars will bring down the stock most affected by the particular tariffs. Yes a stock market crash is very deflationary. I do not think the stock market is the best place to have your money right now. I am not predicting a crash yet but I do expect a 20% adjustment withing 2-4 years.

"If the stock market collapses, what does that do to the value of land or housing?"

There are always a number of inflationary and deflationary forces going on at all times. Understanding them and seeing an overall picture is better than just looking at one event like the stock market. My first guess is a major crash would be deflationary.

"If the waters here in the US become very rough, where will the water be calm? Anywhere?"

The US has the largest economy in the world - what happens here will spill over. BRICKS counties may do better if the US takes a big hit. because they have more public banking than the western world.

-Airplane

[empedocles]

51. Incisive points

At some point I will try to dialogue on this thread if there is interest.

[lostnfound]

53. An airplaneman with 787 posts... ✈️ ..thank you

Thanks, that’s interesting. I’m going to reread it carefully after a couple cups of coffee.

If I could roll the calendar forward a year, I expect to be selling and ridding myself of a too-large-house and-mortgage (2.5% but ARM starts next year). So I’m trying to decide on a strategy, with a 12 to 18 month target for everything changing. A strategy of cash / mutual funds / mortgage. I was looking for historical patterns of what falls or climbs first, in a volatile world.

What might seem conservative at this point — the market isn’t likely to be bullish for the next twelve months and might even get bearish —would be to turn to cash. But what if trade wars, or hackers, manage to destabilize US currency values such that we have rampant inflation?

Here’s a key question for you: if the US dollar weakens relative to other currencies, what happens to US markets / stocks in U.S. based corporations?

[empedocles]

54. The $ seems unlikely to weaken much relative to other currencies,

because there is no very plausible alternative currency to 'flee' to, even w the trump threats to realities. [I enlarge on this in other posts, and in other threads]. Complicated world isn't it?

[turbinetree]

45. I second your motion......................

[roamer65]

46. You all know what happens to the currency of a dying empire?

It dies along with it. Think Rome and its denarius.

Dump’s foibles will set off a currency crisis and most will lose a good chunk of their life savings as a result.

Think Argentina and you will be in the right frame of mind.

[empedocles]

52. Your currency insight is very interesting.

Many 'doomers' thought with the bad inflation [Nixon gold window shutting] of the '70's, and Reaganhood wild deficits and rich tax cuts [by those standards], that the end was 'nigh' for the US dollar. However, a global currency is much needed, and would be successor nations all had their own problems. The USSR was greatly weakened by the commodity price drops and its calamitous profit/revenue drops, W.Germany suffered massive economic indigestion from absorbing E.Germany, and Japan still stuck from their massive bubbles bursts in real estate/stock market losses/overseas investments/ lost generation.

So the US dollar survives as the world currency, safe haven for world richies, despite massive deficits, debts, trump erraticisms and treasons. Veddy interesting.