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Reasons the banking crisis isn’t a repeat of 2008

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Re: Reasons the banking crisis isn’t a repeat of 2008

#221

Post by elefanten »

mushbino wrote: post #214
fyzix wrote: post #23

History never repeats itself, but it does often rhyme. We cannot have a decade of 0% interest rates and expect no consequences. Peter Schiff predicted this from the moment the fed bailouted the banks in 2008. There's nothing the fed can do to escape this one, it's either massive inflation or massive recession. The fed has avoided the latter by bailing out the banks again so expect double digit inflation for the next…

Peter Shiff predicts a million things and about 2 per decade end of being correct, aside from the obvious ones. 0% interest can work just fine, but not in the trickle down model.

Agree on Schiff.

Got any names or search terms for the 0 interest point? What political economy does it work with?

Re: Reasons the banking crisis isn’t a repeat of 2008

#222

Post by 64bittechie »

TexanFeller wrote: post #198
Beached wrote: post #172

Earlier quoted context omitted.

within reason of course. it's a position of privilege, but that position used to below to the UK. they lost that position over/after the world wars, and we got it. it is possible that doing whatever we want could push people to the euro as the reserve or the pound. it seems far fetched, but I could see a world where the euro the the world's reserve currency

The yuan may be the competition we should fear. Since we disconnected Russia from our financial systems, Russia is willing to do business with our biggest rival, China, in their currency.

Well, what do you expect? The US over the past several decades has effectively crippled economies for its own interests by cutting off USD access. When you do this to a non-trivial number of countries they get around it by trading among themselves and dumping the USD for their own currencies. There are many countries including India, Japan, Korea, China, Russia, etc who are opening up bilateral or trilateral agreements to trade in their own currencies bypassing the USD. The US has pissed off a significant portion of the world that its days as reserve currency are certainly numbered. However, unbelievable it might sound today but the world is inching closer to non-USD centric future.

Re: Reasons the banking crisis isn’t a repeat of 2008

#223

Post by 64bittechie »

quesera wrote: post #179
safety1st wrote: post #154

Earlier quoted context omitted.

Over the years as my perspective has become more global I've come to realize what a privileged position the US is in, economically: * Ports on both the Atlantic and Pacific * A very effective transportation system in between * In the big growth sector where points 1 and 2 don't matter, tech, it's still #1 in the world anyway * A market of 350 million high income people (by global standards) under one regulatory frame…

You left out: * Issues the global reserve currency * Maintains the largest military * Has the widest media reach * Has significant natural resources There are problems too, but the unfair advantages are quite strong, and self-perpetuating. Which is fortunate for Americans, because very few countries could be so haphazardly managed, without failing.

[dead]

Re: Reasons the banking crisis isn’t a repeat of 2008

#224

Post by Dylan16807 »

Operative0198 wrote: post #190
riffraff wrote: post #186

Earlier quoted context omitted.

Do you realize hyperinflation is generally defined to be 50% per month? February US inflation is 6% year over year. This is orders of magnitude below "hyper".

And the definition of a recession was rescinded last year by the White House. Is inflation for you better now than it was in 2019?

> And the definition of a recession was rescinded last year by the White House.

It what? Also if you predict a recession every year you'll eventually get one right, but that doesn't make you right about recession predictions in general.

> Is inflation for you better now than it was in 2019?

Did he predict "higher than 2019"? If "higher than 2019" wasn't his prediction then I don't see why it matters that "higher than 2019" happened.

And that's not much of a prediction. 2019's inflation was below target.

Re: Reasons the banking crisis isn’t a repeat of 2008

#225

Post by LoveMortuus »

fyzix wrote: post #23

History never repeats itself, but it does often rhyme. We cannot have a decade of 0% interest rates and expect no consequences. Peter Schiff predicted this from the moment the fed bailouted the banks in 2008. There's nothing the fed can do to escape this one, it's either massive inflation or massive recession. The fed has avoided the latter by bailing out the banks again so expect double digit inflation for the next…

If the inflation does reach (although in EU it already is) double digits, could that be a big of a hit to destabilize the US dollar and pave the way to the next global reserve currency?

I'm asking because I've had these thoughts on my mind ever since Ray Dalio uploaded his video Principles for Dealing with the Changing World Order [0].

[0] (Video length: 43:43) https://youtu.be/xguam0TKMw8

Re: Reasons the banking crisis isn’t a repeat of 2008

#226

Post by FredPret »

tfourb wrote: post #216
FredPret wrote: post #195

Earlier quoted context omitted.

The other advantage is the total net worth as opposed to GDP. You hear a lot about GDP and the US has the biggest economy by far. But the total net worth per person in the States is even further ahead of the rest of the world. Only Switzerland is ahead of the US in per-capita net worth (only by a hair though) and one suspects that’s partly due to so many Americans parking their money there. Having had the biggest GDP…

Actually the U.S. in 3rd place behind Switzerland and Luxembourg in terms of mean wealth per adult and Hong Kong is not far behind. But you are right that the other countries on the upper ranks are mostly smaller nations with large banking sectors: https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe... While I agree that the U.S. has an enormous built-in advantage over other countries, I would really highlig…

While it is true that the US mean is much higher than the median, the median person still benefits greatly from that wealth. The rich invest their wealth in business, real estate for rent, and real estate for themselves, making all these things better.

I'm currently in the EU, in a country that outperforms the US in median wealth by about 20%. While it's clear that life here is good, I'm also struck by how much worse everything looks here, from the rental real estate where I'm staying, to the generally unprofessional standard of business.

So just looking at the slightly-higher median and ignoring the 2-3x higher mean also skews the picture.

Re: Reasons the banking crisis isn’t a repeat of 2008

#227

Post by mullingitover »

mike_d wrote: post #193
quesera wrote: post #179

Earlier quoted context omitted.

You left out: * Issues the global reserve currency * Maintains the largest military * Has the widest media reach * Has significant natural resources There are problems too, but the unfair advantages are quite strong, and self-perpetuating. Which is fortunate for Americans, because very few countries could be so haphazardly managed, without failing.

Whenever the "what actually backs the US dollar" discussion comes up I remind them: 11 aircraft carriers.

USD is ultimately backed by plutonium.

Re: Reasons the banking crisis isn’t a repeat of 2008

#228

Post by inglor »

hettygreen wrote: post #174

I wasn't worried about this until Chase Bank felt the need to publish "Reasons the crisis isn't a repeat of 2008"

I was about to say this I’m legitimately worried now -_-‘

Anywhere I can read about why things are so bad they had to publish this?

Re: Reasons the banking crisis isn’t a repeat of 2008

#229

Post by Dylan16807 »

fyzix wrote: post #117
paulpauper wrote: post #107

Earlier quoted context omitted.

Peter Schiff predicted this from the moment the fed bailouted the banks in 2008. He predicted dollar collapse, hyperinflation for 11 years, and a bunch of other stuff the didn't come true. Major broken clock syndrome on his part. Inflation finally spiked, but after being wrong since 2008. Gold still has not done much in a decade. The inflation was from the post-covid recovery, which was so strong that supply chain co…

It's better to be wrong until you're right than right until you're wrong...because you will get the last laugh. The fundamental problem is that price controls never work and the interest rate is the price of money. If you understand this, then it's easy to predict the endgame, whether it takes 10 or 20 yrs to fail, you will still be right once you position yourself for the windfall.

Position yourself for the windfall how?

Let's say Alice will be wrong several times and then right once, and Bob will be right several times and wrong once. Both of them start with $10k.

To give Alice every advantage, let's say her bets pay out 10x or nothing, and Bob's bets pay out 4x or nothing. We'll also say Alice magically knows which time she'll be right, but Bob won't know which time he'll be wrong.

Alice will obviously bet all her money on the time she's right, and come out with $100k.

Bob can invest 2/3 of his money each time, repeating every time he's right. Let's say he happens to be right 8 times, then is wrong. After those 8 right bets, he'll have $6.6M. After he makes his wrong bet, his fortune will drop to $2.2M. Then he'll retire.

Looks like Bob has a much better windfall to me.

Re: Reasons the banking crisis isn’t a repeat of 2008

#230

Post by [deleted] »

riffraff wrote: post #180
safety1st wrote: post #154

Earlier quoted context omitted.

Over the years as my perspective has become more global I've come to realize what a privileged position the US is in, economically: * Ports on both the Atlantic and Pacific * A very effective transportation system in between * In the big growth sector where points 1 and 2 don't matter, tech, it's still #1 in the world anyway * A market of 350 million high income people (by global standards) under one regulatory frame…

You missed one massive advantage: the US has a good and reliable legal system. It can not be overstated how good this is for an economy, and it's something emerging markets struggle with, and even some of the advanced economics. It'll always be easier to start and run a business where you can rely on tribunals to solve problems quickly and somewhat fairly.

[deleted]
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