Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20
China Under Reporting Coronavirus COVID-19 Infections, Africa and South America Hidden Outbreaks - 12th Feb 20
Will USD X Decline About to Trigger Precious Metals Rally - 12th Feb 20
Copper Market is a Coiled Spring - 12th Feb 20
Dow Theory Stock Market Warning from the Utilities Index - 12th Feb 20
How to Get Virgin Media Engineers to FIX Hub 3.0 Problems and NOT BS Customers - 12th Feb 20
China Under Reporting Coronavirus COVID-19 Infections by 66% Due to Capacity Constraints - 12th Feb 20
Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? - 12th Feb 20
Stock Market 2020 – A Close Look At What To Expect - 12th Feb 20
IBM AI Mega-trend Tech Stocks Investing 2020 - 11th Feb 20
The US Dollar’s Subtle Message for Gold - 11th Feb 20
What All To Do Before Opening A Bank Account For Your Business - 11th Feb 20
How and When to Enter Day Trades & Swing Trade For Maximum Gains - 11th Feb 20
The Great Stock Market Dichotomy - 11th Feb 20
Stock Market Sector Rotation Should Peak Within 60+ Days – Part II - 11th Feb 20
CoronaVirus Pandemic Stocks Bear Market Risk 2020? - Video - 11th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

TICK TOCK, Counting Down to the Next Recession

Economics / Recession 2019 Dec 03, 2018 - 01:04 PM GMT

By: James_Quinn

Economics

“This country, and with it most of the Western world, is presently going through a period of inflation and credit expansion. As the quantity of money in circulation and deposits subject to check increases, there prevails a general tendency for the prices of commodities and services to rise. Business is booming. Yet such a boom, artificially engineered by monetary and credit expansion, cannot last forever. It must come to an end sooner or later. For paper money and bank deposits are not a proper substitute for non-existing capital goods. Economic theory has demonstrated in an irrefutable way that a prosperity created by an expansionist monetary and credit policy is illusory and must end in a slump, an economic crisis. It has happened again and again in the past, and it will happen in the future, too.” – Ludwig von Mises – 1952


As the von Mises quote proves, economic cycles, artificial booms created by Federal  Reserve easy money and delusional human nature are cyclically constant across the decades. Anyone with an ounce of critical thinking skills realizes the current artificial boom, created by a feckless Fed captured by Wall Street banks and corrupt Washington politicians who took Dick Cheney’s “deficits don’t matter” mantra to obscene levels, will end in another financial crisis. Our Deep State controllers have “solved” a financial crisis caused by too much debt by tripling down on more debt.

The current artificial boom would have ended in 2018, but Trump’s massive tax cut for corporations, who used their windfall to buy back their stock at all-time highs, and reckless government spending increases directly into the pockets of the military industrial complex, gave the GDP one final burst. Pumping adrenaline into a patient with cancer will also give the patient a momentary appearance of health, but the cancer continues to grow.

The highly educated IYI MBAs running companies like General Electric and GM wasted tens of billions in shareholder funds buying back stock at prices  far higher than their current price, putting their companies in danger of bankruptcy. A large proportion of S&P 500 companies have also committed this same outrageously idiotic greedy act. This is exactly what happened from 2005 through 2007 before the last financial collapse. It seems greedy CEOs always put their own personal wealth ahead of their shareholder’s wealth, as their compensation is dependent upon earnings per share.

As the propaganda peddling cheerleaders on financial networks and in the bird cage lining financial press tout stocks at all-time high valuations and parrot bullshit about the “best economy ever”, the average American has seen their real wages stagnant going on a 3rd decade, as their debt levels reach all-time highs. The faux prosperity has been illusory, unless you are in the .01%, a corrupt politician, a government apparatchik, or a Deep State mouthpiece. If I wasn’t such a trusting soul, I might conclude financial crisis is used by the wealthy to get wealthier.

When the fake news networks proclaim the economy can grow for many more years and the stock market will surely hit 30,000 in 2019, remember the simple chart below. It shows the U.S. stock market and recessions going all the way back to 1871. Over the last 147 years, recessions are a fairly regular occurrence, but since 1950 the country has only been in recession 15% of the time.

The arrogant academics running the Federal Reserve believe they can manipulate the levers of monetary policy to control the direction of the economy. Their hubris is always revealed when their easy money machinations blow up and lead to economic hardship for the masses. Every time.

To me, the most interesting aspect of the graph is the amount of time between recessions. It seems, in the history of the country, the longest we have ever gone without a recession was ten years. It has happened twice (1961 to 1971) and (1991 to 2001). We are now in year nine of economic advancement (at least for the .01%). Based on history the odds of recession in the next year would appear to be high. No one in the fake news media will provide these facts because they know stocks crash whenever a recession comes our way. The Fed is always surprised by recessions, financial crisis, and the busts created by their own policies.

With interest rates at still emergency low levels, government deficits over $1 trillion, consumer debt at all-time highs, stagnant real wages for real people, housing bubble 2.0 bursting, subprime auto bubble bursting, weak corporations saturated with debt, peak corporate earnings and a stock market still 50% overvalued based upon all long-term valuation measures, only a Wall Street shyster, Ivy League academic, or a bubble headed financial news network spokes-model can’t see recession and stock market crash dead ahead. The masses are about to find out again you can’t spend your way out of a recession or borrow your way out of debt.

Economic history is littered with the bodies of those who declared this time was different. If you think the economy will continue to grow for another few years based upon your belief in the brilliance and infallibility of the Fed, just remember their prescience as the last financial crisis was already in progress:

“The Federal Reserve is not currently forecasting a recession.”- Bernanke – January 10, 2008

“The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”Bernanke – June 9, 2008

“The GSEs are adequately capitalized. They are in no danger of failing.”Bernanke – July 20, 2008

The tide is going out and we’re about to see who has been swimming naked. This next recession will not be reversed by running $3 trillion deficits and the Fed driving rates negative. The next recession won’t end until Americans learn how to live on what they’ve got. It will be a profoundly earth shattering experience for a delusional populace. Hopefully, they will realize the true culprits and inflict justice on the financial criminals who escaped unscathed after their last criminal escapade. Time is growing short. The next crisis will define our nation going forward.

By James Quinn

quinnadvisors@comcast.net

James Quinn is a senior director of strategic planning for a major university. James has held financial positions with a retailer, homebuilder and university in his 22-year career. Those positions included treasurer, controller, and head of strategic planning. He is married with three boys and is writing these articles because he cares about their future. He earned a BS in accounting from Drexel University and an MBA from Villanova University. He is a certified public accountant and a certified cash manager.

These articles reflect the personal views of James Quinn. They do not necessarily represent the views of his employer, and are not sponsored or endorsed by his employer.

© 2018 Copyright James Quinn - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

James Quinn Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules