https://www.2ndsmartestguyintheworld.com/p/huge-financial-shock-inevitable-and
by Greg Hunter
Former Wall Street money manager Ed Dowd is a skillful financial analyst. Even though he has a wildly popular book on CV19 vax deaths and injuries called “Cause Unknown,” he is now turning his attention back to the economy. Dowd warns the economy can fall out of bed at any time. Dowd explains, “What’s coming up next is a credit cycle. We are going to see commercial real estate go into problem mode. There are a lot of loans that need to be rolled over in 2024 and 25. A lot of these properties are down 80% . . . . There is huge credit risk coming. The prediction of bank failures is accurate. We are going to see, over the next 12 to 24 months, banks go belly-up. Then, they will have to get merged with bigger banks.”
What happens to the Biden economy? Dowd says, “The economy is going to take a nosedive sometime in the next 12 months. The real economy is not doing well. . . . The only thing that has been holding up the GDP growth is government spending. We are spending $1 trillion every 100 days. That’s adding $1 trillion to the deficit. The only job creation is government jobs, and they don’t actually add to the economy. . . . Reports are coming out now that the low-income consumer is getting absolutely hammered. McDonald’s talked about it in their most recent earnings call. . . . So, low-income and the middle-class are getting squeezed while the rich continue to plug along.”
Dowd told me off camera that the economy could get into trouble without warning. Dowd explains, “You’ve got to look at history. In 2008 and 2009, everyone talks about the crisis, but bank failures started showing up in 2007. . . . I suspect as we roll through time in the real economy and the money supply issues start to hit the economy, we will see more bank failures and more businesses shut down. 46% of small businesses are having problems paying their rent. There is going to come a time in the next 6 to 12 months this huge shock that we saw in the 2008 financial crisis, and the 2000 bubble where massive layoffs start to happen–it’s inevitable. This is what happens when you crank up interest rates from 0% to 5.5%. There is a lag in the real economy, and it’s hitting right now. It’s only going to intensify as time goes on.
by Greg Hunter
Former Wall Street money manager Ed Dowd is a skillful financial analyst. Even though he has a wildly popular book on CV19 vax deaths and injuries called “Cause Unknown,” he is now turning his attention back to the economy. Dowd warns the economy can fall out of bed at any time. Dowd explains, “What’s coming up next is a credit cycle. We are going to see commercial real estate go into problem mode. There are a lot of loans that need to be rolled over in 2024 and 25. A lot of these properties are down 80% . . . . There is huge credit risk coming. The prediction of bank failures is accurate. We are going to see, over the next 12 to 24 months, banks go belly-up. Then, they will have to get merged with bigger banks.”
What happens to the Biden economy? Dowd says, “The economy is going to take a nosedive sometime in the next 12 months. The real economy is not doing well. . . . The only thing that has been holding up the GDP growth is government spending. We are spending $1 trillion every 100 days. That’s adding $1 trillion to the deficit. The only job creation is government jobs, and they don’t actually add to the economy. . . . Reports are coming out now that the low-income consumer is getting absolutely hammered. McDonald’s talked about it in their most recent earnings call. . . . So, low-income and the middle-class are getting squeezed while the rich continue to plug along.”
Dowd told me off camera that the economy could get into trouble without warning. Dowd explains, “You’ve got to look at history. In 2008 and 2009, everyone talks about the crisis, but bank failures started showing up in 2007. . . . I suspect as we roll through time in the real economy and the money supply issues start to hit the economy, we will see more bank failures and more businesses shut down. 46% of small businesses are having problems paying their rent. There is going to come a time in the next 6 to 12 months this huge shock that we saw in the 2008 financial crisis, and the 2000 bubble where massive layoffs start to happen–it’s inevitable. This is what happens when you crank up interest rates from 0% to 5.5%. There is a lag in the real economy, and it’s hitting right now. It’s only going to intensify as time goes on.
There's a bunch of other stuff that'll happen on the trouble too.
In 2008, the federal debt had increased from 4 trillion in 2000 to 8 trillion in 2008, but gdp was 14 trillion dollars. Today, debt is 32 trillion, but the GDP is only 27 trillion, and besides that, GDP(which we denote as Y) is divided into four components(Components of GDP). Consumption (C), Investment (I), Government purchases (G), and Net exports (NX).
Y = C + I + G + NX.
So there's some problems as a result of this.
Consumption is in trouble with households at record levels of debt, credit cards making up 1.1 trillion dollars for the first time ever.
Investment in productive assets has been in trouble domestically, with a continuous outflow of capital to other countries.
Government debt is at historical highs, and federal spending as a % of GDP is closer to where it was after the 2008 financial crisis than before it, so there's much less room to increase government in response to a recession.
The trade deficit has been so bad for so long people don't even pay attention to it, but it does matter.
This all leaves a lot fewer potential ways out of a recession than in the past, and they're already leaning on the levers they might rely on to get out of one..
It's making numbers look good in the short term, but I suspect it'll be like if you dip into your emergency rations before there's a famine -- eventually the famine comes and you have no food.
In 2008, the federal debt had increased from 4 trillion in 2000 to 8 trillion in 2008, but gdp was 14 trillion dollars. Today, debt is 32 trillion, but the GDP is only 27 trillion, and besides that, GDP(which we denote as Y) is divided into four components(Components of GDP). Consumption (C), Investment (I), Government purchases (G), and Net exports (NX).
Y = C + I + G + NX.
So there's some problems as a result of this.
Consumption is in trouble with households at record levels of debt, credit cards making up 1.1 trillion dollars for the first time ever.
Investment in productive assets has been in trouble domestically, with a continuous outflow of capital to other countries.
Government debt is at historical highs, and federal spending as a % of GDP is closer to where it was after the 2008 financial crisis than before it, so there's much less room to increase government in response to a recession.
The trade deficit has been so bad for so long people don't even pay attention to it, but it does matter.
This all leaves a lot fewer potential ways out of a recession than in the past, and they're already leaning on the levers they might rely on to get out of one..
It's making numbers look good in the short term, but I suspect it'll be like if you dip into your emergency rations before there's a famine -- eventually the famine comes and you have no food.
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@sj_zero @abgreport
They are going to choose WW3. If the US destroys European economies, it ends up able to pay off its debt from the huge economic boom of being the last economy functional, _in theory_.
They are going to choose WW3. If the US destroys European economies, it ends up able to pay off its debt from the huge economic boom of being the last economy functional, _in theory_.
That's definitely what happened after world war 1 and world war II. One thing that was a little bit different at those times is the country wasn't nearly as entwined in the entire world as it is today. That lack of investment in productive infrastructure would really bite hard in a world war 3 scenario. Meanwhile, China would likely be on the other side of the world war 3 scenario and they manufacture all of our stuff! (A long with Taiwan, who they'd either take immediately or bomb into the stone age)
@sj_zero @abgreport
If we have an automation breakthrough, we will no longer need the third world.
This will also stop the distasteful Western practice of dumping its waste on the third world.
If we have an automation breakthrough, we will no longer need the third world.
This will also stop the distasteful Western practice of dumping its waste on the third world.