Posted on 08/09/2019 5:11:55 PM PDT by amorphous
“The Fed is just another typical government agency. Staffed with people creating the very problems they’re supposed to prevent and arrogant enough to not realize it.”
AAAAAAAAAAmen, AAAAAAAAAAAAAmen, AAAAAAAAAAAmen, Amen, Amen
I agree that the direct effect on our real economy from the Chinese economy imploding is not overly significant from a trade balance point of view (South Korea, and other Asian economies, including Australia will take a bigger hit).
Big slowdowns in other trading partners would further reduce our exports.
Additionally, there could be effects from shortages of some products or components, if Chinese suppliers closed shop suddenly in bankruptcies.
Also, American companies with investments or sales in China, would take some losses or slowdowns, reducing corporate earnings somewhat. Like our direct trade with China, it would be a small effect on overall corporate earnings, but would be increased to some degree by the secondary effects of other countries slowing down as a result.
The big potential effect could be financial. Banks with a lot of exposure to Chinese debt might fail, and others that survive would have less available to lend. Money could dry up for new investment, and possibly be withdrawn from marginal businesses who need loans to fund their ongoing operations (a common practice).
Because China is a big economy, and they are so extremely loaded with debt and fraudulent accounting, the down draft from the financial industry having to write off most Chinese debt would be significant. Money would dry up (Governments would jump in with liquidity, interest rate cuts and bailouts).
On the other hand, there would be some upside effect of American producers jumping in to fill shortages from the withdrawal of Chinese producers.
So there is a range of potential outcomes, but the worst case includes a global financial crisis and recession. Not the end of the world, not a Great Depression, but still a significant drag. Personally, I feel it would be a cost worth paying, compared to the future cost of war with a Communist superpower.
Roger that.
Likewise American industry, which tariffs were intended to help, has taken a hit. For example, RV manufactures with an overall economic impact on the US economy of $114 billion, supporting nearly 600,000 jobs, contributing more than $32 billion in wages, and paying more than $12 billion in federal, state, and local taxes, is really hurting too.
Tariffs Promise Long-Term Damage to Ag, Also Hurting RV and Metal Makers
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Slapping tariffs on imports was a bad move on the Trump Administration's part, IMO. I totally agree we've gone off the rails with importing, but there are better ways of turning this around and bring manufacturing back to the US.
While only certain sectors are feeling the pain now, everyone is going to feel it soon, and probably just before next year's elections.
If Trump loses in 2020, where does that leave us?
“The ONLY reason that “...America would be destroyed, if we had to go through that today”, is because of the spoiled, cozzetted, and coddled SNOWFLAKES that are around today!”
They can’t be like my cousins and I were, we grew up walking behind a plow, chopping wood with an axe or pulling a long crosscut saw, hoeing weeds out of the cotton, picking cotton, feeding the livestock etc. They could lay down the danged cell phone and get some exercise though.
Interesting theory. Should be easy to test.
What hard assets were absorbed by central bankers after the 2008 crash?
I would have just said assets, since small and medium business and family farm foreclosures rarely make the news, but if it's hard assets we're interested in, I'd start with records from auction houses/services during that period.
Below is a short burp from Wiki;
Consequences
While the collapse of large financial institutions was prevented by the bailout of banks by national governments, stock markets still dropped worldwide. In many areas, the housing market also suffered, resulting in evictions, foreclosures, and prolonged unemployment. The crisis played a significant role in the failure of key businesses, declines in consumer wealth estimated in trillions of US dollars, and a downturn in economic activity leading to the Great Recession of 2008–2012 and contributing to the European sovereign-debt crisis.[28][29] The active phase of the crisis, which manifested as a liquidity crisis, can be dated from August 9, 2007, when BNP Paribas terminated withdrawals from three funds citing "a complete evaporation of liquidity".[30]
The bursting of the US housing bubble, which peaked at the end of 2006,[31][32] caused the values of securities tied to US real estate pricing to plummet, damaging financial institutions globally.[33] The financial crisis was triggered by a complex interplay of policies that encouraged home ownership, providing easier access to loans for subprime borrowers; overvaluation of bundled subprime mortgages based on the theory that housing prices would continue to escalate; questionable trading practices on behalf of both buyers and sellers; compensation structures that prioritize short-term deal flow over long-term value creation; and a lack of adequate capital holdings from banks and insurance companies to back the financial commitments they were making.[34][35][36] Questions regarding bank solvency, declines in credit availability, and damaged investor confidence affected global stock markets, where securities suffered large losses during 2008 and early 2009. Economies worldwide slowed during this period, as credit tightened and international trade declined.[37] Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion and institutional bailouts.[38] In the US, Congress passed the American Recovery and Reinvestment Act of 2009.
https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932008
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Who owns a lot of the rental properties now?
Blackstone is now 'the largest owner of real estate in the world'
https://www.businessinsider.de/blackstone-is-largest-owner-of-real-estate-2015-11/?op=1&r=US&IR=T
I earned $0.03 lb for picking cotton, $0.75 day for feeding 65 head of cattle thru the winter. Chopped wood for free, just to stay warm.
Well, we know who the Fed Board of Governors were at the time.
Have any of them accumulated massive wealth since the crash by buying distressed assets?
Seems like some pretty basic research one would do before publishing this theory.
Blackstone is now 'the largest owner of real estate in the world'
Not sure I see the relevance. Blackstone was founded by Stephen Schwartzman in 1985 and I don't think he ever had anything to do with the central bank.
My family stories, though very real and factual, are just that: MY FAMILY STORIES; hence anecdotal and private, so I shan't share those, even though one is pretty funny!
But the BEST thing that they knew was...HOW TO INTERACT, FACE TO FACE WITH OTHERS!
Though nothing is 100%, there are probably more exceptions than we realize,many of those in younger generations have the maturity level of a 2 year old and also about the same level of knowledge of EVERYTHING!
https://corpwatch.org/article/blackstone-group-buys-houses-bulk-profit-mortgage-crisis
Excerpt:
"You can't compete with a company that's betting on speculative future value when they're playing with cash," says Alston. "It's almost like they planned this."
"In hindsight, it's clear that the Great Recession fueled a terrific wealth and asset transfer away from ordinary Americans and to financial institutions. During that crisis, Americans lost trillions of dollars of household wealth when housing prices crashed, while banks seized about five million homes. But what's just beginning to emerge is how, as in the recession years, the recovery itself continues to drive the process of transferring wealth and power from the bottom to the top."
#74
Whoa, whoa, whoa!
The author said central banks created booms and busts to enrich themselves.
None of those people or organizations are part of the Fed and none of them get a vote on monetary policy.
"Central bank" isn't the same as any random rich guy.
Do the rich and powerful come out of these things better than most? Absolutely, but where's the evidence of the Fed members enriching themselves?
You’re just a weird conspiracy nutter; looking to blame those whom you obviously see as some kind of “enemy”/ have a bias against. And you just don’t know enough nor have the facts with which to prove your theories. Hence you post stuff from Wiki and others’ words to shore up what can’t be shored up, since especially this bit is stupid opinion!
Has anyone ever held a position at a big bank or investment firm who later held a position at the Fed or Treasury? Who owns the Fed? Who does the Fed work for? Are Fed chairpersons really peons/automatons. How much does the Fed chairman make in a year? Who was the president who signed the Federal Reserve Act? When was it passed? What did he later say about what he had done? Did anyone who owns/controls the Fed become wealthier during the financial crisis of '08? If not wealthier, after helping to cause the crisis did they escape unscathed? Who was bailed out? What word do 'banks' and 'central banks' have in common? What do they both handle? What do they do with what they both handle?
Certainly. But you probably knew that.
Who owns the Fed? Who does the Fed work for?
The Federal Reserve Board is appointed by the US government and the board members' salaries are set by the government, so you could say that the taxpayers own it.
The network of regional Federal Reserve Banks are owned by the federally chartered banks in their region but all operating profits from the entire system go to the US Treasury. The "owning" banks get a fixed dividend on the capital they contribute but earn no profits.
But you probably knew that.
Are Fed chairpersons really peons/automatons.
Jerome Powell is the current chairman and Trump certainly doesn't think he's an automaton.
But you probably knew that.
How much does the Fed chairman make in a year?
The 2019 salary, as set by Congress, is $203,500.
But you probably knew that.
Who was the president who signed the Federal Reserve Act? When was it passed?
The Federal Reserve Act of 1913 was signed into law by Woodrow Wilson.
But...never mind.
What did he later say about what he had done?
Probably lots of things. Is there something in particular that you want to discuss?
Did anyone who owns/controls the Fed become wealthier during the financial crisis of '08?
Don't know. The author of this article implies that they must have but offers zero evidence
If not wealthier, after helping to cause the crisis did they escape unscathed?
Not entirely. They suffered some reputational damage.
Who was bailed out?
Lots of financial institutions as well as parts of the auto industry.
What word do 'banks' and 'central banks' have in common?
Banks.
What do they both handle? What do they do with what they both handle?
I assume you're talking about money?
They both are concerned with it but do very different things. Most banks hold and lend money. The central bank primarily decides monetary policy.
Do you have some point you would like to make or do you think that if you just ask enough inane questions people will think there must be something to your conspiracy theory?
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