3 ms·
Burying your head in the sand won't change reality. Recession, market busts and depressions don't happen because people talk about it. It's just part of the c
by segmondy 7y ago
Burying your head in the sand won't change reality. Recession, market busts and depressions don't happen because people talk about it. It's just part of the cycle.
Think about this. Imagine 100% employment. 100% Sounds great right? Well, what will that mean for job reports the month after? 0% growth! 0 hiring. If there's 100% employment, what will that mean for pay? Pay will absolutely go up as workers are in immense demand. If pay goes up, what will that mean for the companies? Profits must come down than before! If profits are coming down, guess what? That's the beginning of recession. ... companies are going to cut back, etc, etc. This is really basic economics, the market is long term rational.
With that said, is a recession around the corner? Perhaps. People are spending a lot, wages haven't gone up much. Cost of health care, college education, cars have gone up more. Tons of zombie companies out there who should be dead but are alive because of easy money. Tons of money have been printed and injected into the economy because of quantitative easing. Rates are at an all time low. The Fed is bailing out banks on a short term daily basis to keep things running. Lots of capital can't find a safe spot to be invested in. Things are lining up. When will it happen? Who knows? maybe tomorrow, maybe 5 years. If anyone knew, they would be rich!