Posted on 07/20/2021 7:11:42 AM PDT by Browns Ultra Fan
Well, that was fast.
According to the National Bureau of Economic Research (NBER), the Covid recession is over, lasting just two months. That is the shortest recession in US history.
But read the fine print: “The Covid-19 recession ended in April 2020, the National Bureau of Economic Research said Monday.”
Like the Case-Shiller house price index, this measure of recession is lagged. So, it tells us good news … from April 2020 PRIOR to President Biden and the Pelosi/Schumer “Stimulypto” Congress.
So, if there is a link between economic recessions and Federal Reserve monetary policy, why is The Fed continuing its unusual “magic money” policies?
Stated differently, why is the Biden Administration engaged in massive Covid-related spending if the Covid recession ended in April 2020? And why is The Federal Reserve sticking to its unprecedented zero-interest rate policies?
(Excerpt) Read more at confoundedinterest.net ...
“There are thirty-two ways to write a story, and I’ve used every one, but there is only one plot – things are not as they seem.”
― Jim Thompson
bullshit
This reminds me of the stock market crash of October, 1929. It’s the one everybody remembers, but it was just the beginning. It even recovered a bit from that one. The BIG one was 1932.
I see something similar here. Keep your seatbelt on. The ride is just getting started.
The Great Depression really began when banks started failing in 1930. 1933 was a tough year, with many auto companies failing or going through bankruptcy. FDR kept the misery going for another decade.
We’ve also never had a government-imposed lockdown (and then release) like that. Something like a 10% growth after a 50%, government-imposed contraction, is not really impressive. (#’s for illustrative purposes only.)
There are very few similarities to 1929. For starters, the consumer is in record shape financially. Second, the risk is inflation here not deflation. Third, the drop last year was due to forced government shutdowns and fear 5% of the population was going to die (we now know it will be a small small %, nearly the same identical death age as the general population). Fourth, the federal reserve has already promised to bazooka the economy and will just continue to print. There are a lot more similarities to 1976 than 1929.
It’s mainly because they don’t want to admit there was inflation. Once you include the inflation, the real gdp would not be growing.
No. I’m comparing this to 1932, not 1929.
and history repeats, but never identically. People thought WWII was going to be rife with the use of gas...it didn’t, but it was still a pretty bad war.
Hitler's experience being gassed in WWI was the reason he didn't use it. Even he knew how horrible it was.
Ironically though, he sure had no problem with using gas on defenseless Jews.
It has nothing to do with 1929 or 1932, just like I said. We had massive deflation from 1929-1940. We are having massive inflation. We are repeating history - with the late 70s.
It has nothing to do with 1929 or 1932, just like I said.
That’s what’s happening here. Think of this period we are in as a sort of “eye of the storm”.
On the plus side, Lowes had 10 foot 2x4’s at $15 last week and I just got a ton of them for $7 each from a local supplier yesterday. I’m good. :)
We are repeating history - with the late 70s.
Yes, but I’m not talking about inflation or deflation. I’m talking about everybody remembering one date, but the second one was actually worse. Look at the stock market graphs of the period. I’m making the argument that the bad part is yet to come.
To avoid confusion on specifics, Let me use a different analogy that is not market related:
We are, right now, in the “phoney war”. https://en.wikipedia.org/wiki/Phoney_War
Yes, but whether stocks go up or down will matter a lot on deflation or inflation. Stocks will go up with inflation, even if down in real terms. I do not see the stock market crashing worse than last March or even more than 20%, so I do not agree with the 1932 comparison. The federal reserve will print and print some more to keep values from cratering, causing inflation.
I don’t know much about the market. I was just using the crashes before the depression as an analogy. I changed analogies to remove that element.
BTW, QE was not inflationary because the money went into the markets. That is when the markets separated from the general economy. This time the money was given to the public, who spent it. The first thing to reflect this was lumber. I went to Lowe’s after the first stimulus check was delivered and it was like a shopping mall at Christmas.
On a side note, I just picked up all the 10’ 2x4’s I need to finish up the interior walls of my one year old 30x60 shop building and office. $7 each. They were almost $15 each a week ago. And even when things were “normal”, they were around $6, so I’m good. :)
No, QE WAS/IS inflationary, it just wasn’t enough to fully offset the massive deflation from the housing, debt market and stock market collapse in 08-09. That’s why the fed pumped in multiple trillion instantly last March - effectively 3-4 QEs at once before things rippled too much with the real economy which is why stocks and bonds rocketed in value long before anything consumer driven did.
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