Reasons the banking crisis isn’t a repeat of 2008 • Hacker News Board

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

#271

Post by pjc50 » Sat, Mar 25, 2023, 10:18 AM UTC

safety1st wrote: post #154

quags wrote: post #103

Earlier quoted context omitted.

If we go by another Peter, Peter Lynch in this case he would say no one can predict inflation or interest rates long term. Secondly his words is there is always something to worry about when investing - like when oil went to 40 and there would be a depression or when Japan was going to take over the world leading to Americas downfall - or when Japan was crashing and going to cause a depression. Or when oil went from…

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…

> It probably also helps that Americans tend to flip out and go full doomsday mode when anything goes wrong inside of their borders

Indeed. American doomerists are just ridiculously parochial. Panicking about the dollar when it's the currency that everyone else runs to as a safe haven. The biggest risk to America is its debt ceiling mechanism; the opportunity to completely destroy America's credit and economy to own the libs is very tempting to some people.

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

#272

Post by dtech » Sat, Mar 25, 2023, 10:19 AM UTC

riffraff wrote: post #243

wodenokoto wrote: post #234

Earlier quoted context omitted.

Who are we calling an "advanced economy", but also considering having an unreliable legal system? Contenders, in my mind: - China, second largest economy, but generally still considered developing, so I don't think it counts as "advanced" - Russia? They've been a big player in the world economy long enough it is hard to call it a developing country.

Italy for example (second exporter in Europe, tenth by GDP in the world) has notorious issues with its legal system (for a variety of reasons) where trial may take many years to be concluded.

That export sounds like a suspicious claim, do you have sources? afaik DE, FR and NL are much bigger exporters, and a random Google result seems to back that, placing Italy 5th in EU absolutely and almost last by GDP [1] [2]

[1] https://data.worldbank.org/indicator/NE.EXP.GNFS.KD?location...

[2] https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS?location...

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

#273

Post by emptysongglass » Sat, Mar 25, 2023, 10:23 AM UTC

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…

Every time I see the fed adjusting these levers of debasing a money they print I shake my head and wonder why no one questions these levers as leading to a healthy economic society. Now my money is worth this much less tomorrow so now I must work this much extra for a raise to cover the loss. Doesn't this strike anyone as an absurdist parody play starring us its marionettes?

If crypto isn't the answer, what is? I think inflation and deflation are awful levers of monetary policy and should not be wielded by government institutions like the fed. They've proven themselves time and again bad stewards.

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

#274

Post by TheOtherHobbes » Sat, Mar 25, 2023, 10:25 AM UTC

FredPret wrote: post #264

ljf wrote: post #236

Earlier quoted context omitted.

True, but look at the rental markets for the majority of Americans that don't live in the rich coastal areas. And talk about unprofessional business - you have unprofessional legal professionals in parts of the US. Where America is great, it is great. But for the rest of it, it can be a very differently life for most of the inhabitants.

Compare "poor" America with poor (insert geographic area here). There's no comparison. It's hugely, vastly better in the States. The only other places that have large backwater areas that can compete are maybe Canada and Australia. This is due to investment by rich people in rental real estate and businesses such as Walmart, Costco, Amazon, etc. When a family like the Waltons have a net worth in the 100's of $Bn's, t…

It's an empire. Empires are good at concentrating wealth by extracting it from their surroundings.

Personally I would absolutely not want to be a poor person in the US. High crime, police violence, abusive work conditions, random shooters, health care bankruptcy, Fentanyl being pushed by medical professionals, zero Covid protections - it's a dystopian horror show.

This may surprise you, but there are locations around the world with much lower GDP and much happier people.

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

#275

Post by TheOtherHobbes » Sat, Mar 25, 2023, 10:28 AM UTC

Beached wrote: post #172

creakingstairs wrote: post #163

Earlier quoted context omitted.

All that but most of all, the fact USD is the world reserve currency is the biggest privilege. Every other countries have to stock up on USD/ have swaps in place and follow US when they raise fed interest rates instead of doing what’s best for the domestic economy. For example, South Korea’s USD reserves has been sharply going down as they’ve been trying to resist following the recent rate hikes to soften the blow to…

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 privilege is maintained by having the biggest military force in the world - which is why the UK used to be in that position, and the US is in that position now.

It's not inconceivable China could take over. Russia won't (lol...) and the EU doesn't have much interest in becoming militarised.

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

#276

Post by TheOtherHobbes » Sat, Mar 25, 2023, 10:30 AM UTC

monero-xmr wrote: post #188

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.

I would argue the perceived haphazardness is an advantage. The more centrally planned the economy, the more likely an incompetent government takes power and mucks it up. Part of America’s genius is the (fairly) restricted powers and decentralized nature of responsibility.

Is this why the US financial system blows up so regularly?

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

#277

Post by dtech » Sat, Mar 25, 2023, 10:31 AM UTC

FredPret wrote: post #264

ljf wrote: post #236

Earlier quoted context omitted.

True, but look at the rental markets for the majority of Americans that don't live in the rich coastal areas. And talk about unprofessional business - you have unprofessional legal professionals in parts of the US. Where America is great, it is great. But for the rest of it, it can be a very differently life for most of the inhabitants.

Compare "poor" America with poor (insert geographic area here). There's no comparison. It's hugely, vastly better in the States. The only other places that have large backwater areas that can compete are maybe Canada and Australia. This is due to investment by rich people in rental real estate and businesses such as Walmart, Costco, Amazon, etc. When a family like the Waltons have a net worth in the 100's of $Bn's, t…

I find this a weird take. In my country we're always amazed that there are places in most largish US cities where it simply isn't safe to be if you aren't a native, and lethal violence is a daily occurence.

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

#278

Post by kevviiinn » Sat, Mar 25, 2023, 10:33 AM UTC

emptysongglass wrote: post #273

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…

Every time I see the fed adjusting these levers of debasing a money they print I shake my head and wonder why no one questions these levers as leading to a healthy economic society. Now my money is worth this much less tomorrow so now I must work this much extra for a raise to cover the loss. Doesn't this strike anyone as an absurdist parody play starring us its marionettes? If crypto isn't the answer, what is? I thi…

What I wonder is why a bunch of programmers seem to think they know economics and finance better than the fed

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

#279

Post by dtech » Sat, Mar 25, 2023, 10:34 AM UTC

pjc50 wrote: post #269

TexanFeller wrote: post #198

Earlier quoted context omitted.

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.

The yuan has capital controls. You can't move money freely in and out of China even (especially) if you're a Chinese national. Absolute non-starter for any kind of reserve currency idea.

For now. China has been actively working on making the yuan a world reserve currency [1], including relaxing the controls if it is adventageous.

[1] https://finance.yahoo.com/news/putin-strengthening-yuan-role...

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

#280

Post by TheOtherHobbes » Sat, Mar 25, 2023, 10:36 AM UTC

pjc50 wrote: post #270

paganel wrote: post #242

Earlier quoted context omitted.

I think this is a skewed perspective. In case of a war the Chinese leaders won't care about the fact that they won't be able to sell their plasticky stuff to Europe or the US, they'll only care to have enough food for their population and enough raw materials for their Army (it takes lots of iron and access to cheap energy to make lots of artillery shells). Lack of enough food for their population was what brought th…

The alternative of allowing Russia to conquer another state and openly threaten further states would be far worse. The West has disengaged with Russia (and Russian money and gas) only very reluctantly.

China has been a clear threat since the 1990s. The US utterly failed to recognise it as a strategic danger.

Russia could have been Westernised with a little more effort, and turned into an ally and partner. (Which is not to say it would have been easy, but it would have been possible.)

Instead Russia was neoliberalised, turned into a mafia economy with huge concentrations of wealth on top of raging poverty, and its imperial pretensions were tolerated for two decades.

Ukraine and Russia are both direct US foreign policy failures.