Johns Hopkins economist predicts ‘whopper’ of a recession in 2023 — and points to one key economic

Discussion in 'Economics & Trade' started by wgabrie, Aug 30, 2022.

  1. wgabrie

    wgabrie Well-Known Member Donor

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    Oh no! The money supply is too big. And that means you and everyone else have too much money saved! For the good of the economy, you have to stop saving and stop being fiscally responsible. You must not have any savings, investment, or retirement accounts because that hurts the economy! Or, at least that's what I'm taking away from all of this.

    Steve Hanke predicts recession ‘whopper’ in 2023 and points to M2 reading the Fed is missing | Fortune
     
  2. bringiton

    bringiton Well-Known Member

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    Not quite. The money is not in ordinary people's hands. It is in corporate cash holdings, hedge fund accounts, etc. The problem is that the money supply was dramatically increased by commercial bank lending to wealthy customers at extremely low interest rates to finance asset purchases. There is now so much debt that it is impossible to service it at positive real interest rates. That leaves two choices: inflation or massive debt defaults. Inflation is much the less painful of the two, but Powell seems bound and determined to inflict a lot of economic pain before the Fed capitulates and inflates away the debt.
     
  3. kazenatsu

    kazenatsu Well-Known Member Past Donor

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    Just so everyone is aware, it is the Democrat Party that have typically supported these policies, of artificially keeping interest rates low.
    Just hope everyone is aware of that, and what it is doing.
     
  4. Battle3

    Battle3 Well-Known Member

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    Once the velocity of money picks up, inflation will explode.

    If I have 1 trillion trillion dollars under my mattress it has no effect. Once I spend it then inflation goes crazy.
     
  5. psikeyhackr

    psikeyhackr Well-Known Member

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    That is the problem with a cash flow economy compared to a Net Worth economy. Accounting/finance could have been mandatory in the schools since Sputnik and students taught to concentrate on Net Worth. instead we produce brainwashed worker/consumers going into debt designed to become obsolete.

    Decades of useless variations in crappy cars.
    Where is the data on the annual depreciation of automobiles since Sputnik?
     

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