Idontbelonghere
Active member
- Joined
- Feb 24, 2020
- Messages
- 323
- Reaction score
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- Gender
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- Political Leaning
- Private
Let’s start with the good news. We’ve been here, done this several times before. The house of cards always crumbles, and partisans mentally masturbate their pain away with blame. It’s government’s fault. It’s greedy capitalist’s fault. And my personal favorite - it’s just the natural ebb and flow of the economy, and therefore no one’s fault.
2008 was just another in a long line of opportunities for us to address the seemingly cyclical boom and bust cycles, and we chose not to address it - again. We are definitely going down the path of making it worse - again. We can whine and cry and blame and keep doing stupid things, or we can address it now - like we’re going to wish we had done in 2008.
Here are some inescapable truths.
Stability in any market relies first and foremost on a stable currency. Our current monetary system has proven to be anything but stable. We’re eventually going to have to come to terms with that - regardless of our political associations.
Easy money policies are always going to result in lost real savings, malinvestment, and ultimately bubble bursts. Easy access to money causes bad capital investment (including human capital), skews profits, and creates a false sense of security (we can just borrow more!). That causes high unemployment (some are already predicting up to 20%). These policies adversely impact government and businesses, but the hardest hit will always be individuals. Savings are wiped out. Opportunities are diminished by “protective” law and regulation, and so on...
When the cure looks no different than the disease, it’s usually a good time to reconsider our course of action. Some experts are advising their clients that they’ll know the market has truly corrected when the DOW matches the price of gold. I know of at least one who thinks that match will be around the 5000 mark - but that was in 2007 (when he was screaming about the real estate and stock market bubbles).
What do you think would happen if the federal government took no action on the economy? What would you do?
2008 was just another in a long line of opportunities for us to address the seemingly cyclical boom and bust cycles, and we chose not to address it - again. We are definitely going down the path of making it worse - again. We can whine and cry and blame and keep doing stupid things, or we can address it now - like we’re going to wish we had done in 2008.
Here are some inescapable truths.
Stability in any market relies first and foremost on a stable currency. Our current monetary system has proven to be anything but stable. We’re eventually going to have to come to terms with that - regardless of our political associations.
Easy money policies are always going to result in lost real savings, malinvestment, and ultimately bubble bursts. Easy access to money causes bad capital investment (including human capital), skews profits, and creates a false sense of security (we can just borrow more!). That causes high unemployment (some are already predicting up to 20%). These policies adversely impact government and businesses, but the hardest hit will always be individuals. Savings are wiped out. Opportunities are diminished by “protective” law and regulation, and so on...
When the cure looks no different than the disease, it’s usually a good time to reconsider our course of action. Some experts are advising their clients that they’ll know the market has truly corrected when the DOW matches the price of gold. I know of at least one who thinks that match will be around the 5000 mark - but that was in 2007 (when he was screaming about the real estate and stock market bubbles).
What do you think would happen if the federal government took no action on the economy? What would you do?
