2 ms·

I'll be greedy when others are in abject despair. Or in other words, I'm waiting on the sidelines for a while longer. Call me a doomer, but I believe the econom

I'll be greedy when others are in abject despair. Or in other words, I'm waiting on the sidelines for a while longer. Call me a doomer, but I believe the economic turbulence we are experiencing right now is just the beginning of a far more significant downturn.

dalyons 4y ago
Curious why do you think that though? It’s only dooming if there’s no reasoning behind the negativity :)
- BitwiseFool 4y ago
  The major central banks of the world, The Federal Reserve, The European Central Bank, and the Bank of Japan all face the seemingly impossible task of trying to control inflation while simultaneously dealing with supply shortages and the downstream effects of sanctions against Russia. Because the US, EU, and Japan all have significant amounts of debt, the kind of interest rate hikes necessary to address the inflation would cripple their ability to borrow and service debt at the levels necessary to support their current level of deficit spending. So that will either lead to austerity, or pressure on the banks to keep interest rates lower than needed out of sheer necessity. Doing that would keep the governments solvent, but would allow inflation to run wild. I don't think the war is going to end anytime soon, so the odds of commodities going back to normal seems unlikely. Cynically, given the choice between default and having us plebeians lose value due to inflation and recession, our leaders will pick the latter. They won't choose to destroy their own government. To be clear, I don't think this is an economic apocalypse. I just foresee the most significant downturn of my lifetime on the horizon because we seem to be in a perfect storm of problems with solutions that are mutually exclusive.
  - dalyons 4y ago
    thank you for elaborating! Everything you say makes sense, and is hard to argue against. I guess i just disagree somewhat in the magnitude of these factors, im a bit more optimistic. I think its hard to imagine a bigger-than-2008 size collapse at present - i think demand destruction / recession will slow things down enough to avoid that kind of fall.
  - dragonwriter 4y ago
    > The major central banks of the world, The Federal Reserve, The European Central Bank, and the Bank of Japan all face the seemingly impossible task of trying to control inflation while simultaneously dealing with supply shortages and the downstream effects of sanctions against Russia. Some of them might, because they have different mandates, but while all of them are going to be concerned with inflation, much of the rest of that is the responsibility of the entities responsible for fiscal, not monetary, policy; the whole purpose of having central banks is separating monetary policy from general government policy (most of which is still about the economy.)

dalyons 4y ago

Curious why do you think that though? It’s only dooming if there’s no reasoning behind the negativity :)

BitwiseFool 4y ago
The major central banks of the world, The Federal Reserve, The European Central Bank, and the Bank of Japan all face the seemingly impossible task of trying to control inflation while simultaneously dealing with supply shortages and the downstream effects of sanctions against Russia. Because the US, EU, and Japan all have significant amounts of debt, the kind of interest rate hikes necessary to address the inflation would cripple their ability to borrow and service debt at the levels necessary to support their current level of deficit spending. So that will either lead to austerity, or pressure on the banks to keep interest rates lower than needed out of sheer necessity. Doing that would keep the governments solvent, but would allow inflation to run wild. I don't think the war is going to end anytime soon, so the odds of commodities going back to normal seems unlikely. Cynically, given the choice between default and having us plebeians lose value due to inflation and recession, our leaders will pick the latter. They won't choose to destroy their own government. To be clear, I don't think this is an economic apocalypse. I just foresee the most significant downturn of my lifetime on the horizon because we seem to be in a perfect storm of problems with solutions that are mutually exclusive.
- dalyons 4y ago
  thank you for elaborating! Everything you say makes sense, and is hard to argue against. I guess i just disagree somewhat in the magnitude of these factors, im a bit more optimistic. I think its hard to imagine a bigger-than-2008 size collapse at present - i think demand destruction / recession will slow things down enough to avoid that kind of fall.
- dragonwriter 4y ago
  > The major central banks of the world, The Federal Reserve, The European Central Bank, and the Bank of Japan all face the seemingly impossible task of trying to control inflation while simultaneously dealing with supply shortages and the downstream effects of sanctions against Russia. Some of them might, because they have different mandates, but while all of them are going to be concerned with inflation, much of the rest of that is the responsibility of the entities responsible for fiscal, not monetary, policy; the whole purpose of having central banks is separating monetary policy from general government policy (most of which is still about the economy.)