A Recession Before 2020 Is Likely | Hacker News Reader

A Recession Before 2020 Is Likely

ntguardian.wordpress.com

28 pointscgmil4 comments

Recession would be caused by the fact that $10 trillion was poured into the economy during the Global Financial Crisis. Yet all this money failed to really stimulate GDP. The reasons it failed are extensive and likely were beyond fixing by any Central Banking policy anyway.

It also was worsened by the fact that likely another $5-$10 trillion is leaking into world’s economy, unreported, via opaque Chinese banking regulations and currency schemes. One way this has been deduced is that if you add up all the values of the world’s exports and imports...they should equal each other right? But the thing is...they don’t, and they’re off by trillions of dollars.

td;lr: it’s like a person taking steroids for the last 10 years, only bench pressing a few more pounds by the end of it, all the while aging and building disease on the inside. And also they’re committing wire fraud.

A really good, research backed documentary on this is ‘97% Owned’ by Queue Politely films.

There are over $200 trillion in global stock and bond assets, and over $300 trillion including loans. That should put QE into perspective.

The problem is that the world is awash in cash and not enough interesting-enough investments. OTOH, in no other time in history could a company like SpaceX have existed. OTOOH, companies like SpaceX, Amazon, etc, with huge upsides set the bar really high. Nobody wants to invest in some low-yield market when people believe (rightly or wrongly) they could quintuple their money somewhere else.

It turns out that financial markets aren't anywhere close to being as fluid and efficient as once believed. They're sticky and irrational in all the ways people are elsewhere in the economy.

This is really cool and I wish I knew more statistics to fully grasp it.

I can’t see what would cause the recession though. Interest rates are only just starting to rise.

Though to be fair if the media says the economy is good then it’s time to pull out. If the media says the economy is bad it’s time to invest.

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