Economic "Doom" Mega thread

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I guess that $1000 per ?taxpayer? is a done deal. Handing out free money is an End Game; either it works and things get better or we find ourselves with extra $Trillions in debt still going deeper.

Forgot the other part - handing out money NEVER WORKS.
Generally no, but I cannot think of any ways to help the economy in the short term. Interest rates have dropped, gas prices are dropping... and so too has people's investments and their jobs because of social distancing. People are going to be hurt financially very badly by this crisis and unlike when Bush was President and cut people checks for a few hundred, that was during a normal correction/downturn in the economy, not some microscopic virus floating in the air forcing people to stay home.

BTW, the talk is that it may be $2000, not 1000.

I'm figuring that the government is projecting that we're going to lose millions of people to this virus and they will be overwhelmingly seniors who are on Social Security. Basically, they're expecting that next year the expense on those seniors is going to drop because they're dead, thus they're going to have all this extra money and for right now, because we've all seen the polls that 60% of people live paycheck to paycheck, they're gonna cut people checks.

Although, if the amount of people the gov is projecting will die is not as high, say half the projection, then yeah, we're going to have to pay that money back in the future, likely through an increase in income tax.

Under normal economic circumstances, this is a bad move, but a pandemic is far from normal.
 

xtry51

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We have the world's biggest economy. If you disband the Fed, with what are you going to replace it?
Nothing. And in fact I would like a constitutional amendment banning national (federal) banks. The Treasury remains and may only issue money that is backed by physical PMs and directly exchangable if you issue paper or digital currency.

National banks only do 1 thing. Inflate money until the system collapses.
 

number9

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Nothing. And in fact I would like a constitutional amendment banning national (federal) banks. The Treasury remains and may only issue money that is backed by physical PMs and directly exchangable if you issue paper or digital currency.

National banks only do 1 thing. Inflate money until the system collapses.
The idea of a currency backed to a gold standard is pretty dumb in this day and age. The idea of a country with no central bank* is even worse.

* With the exception of countries who are in an currency union, of course
 

richc

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The hotel business is a highly leverage model. If their occupancy goes up by 10% they do incredibly well. If the occupancy drops by 10% they suck wind.

And now their occupancy is zero. Think about it...
 
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The hotel business is a highly leverage model. If their occupancy goes up by 10% they do incredibly well. If the occupancy drops by 10% they suck wind.

And now their occupancy is zero. Think about it...
I'm expecting as this pandemic worsens that those hotels will be nationalized being called "critical infrastructure" and used to house homeless who are infected and need to be quarantined.

Hotel renovation business will be booming after the pandemic is over.
 

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I think the only way this should play out is to stick China with the bill. Cancel our debt obligations to them for engaging in biowarefare. Completely decouple from them economically and tell the CCP to go f*** itself.
Defaulting on our debt to our biggest foreign holder of debt will make the economic impact of the Coronavirus seem mild in comparison.
 

number9

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Oh by all means please tell us why.
Which part?

The fact that no single country (of which I am aware) is still on the gold standard should tell you something. The fact that the only countries without a central bank are tiny Pacific dependencies should tell you something also...
 

Jason Flare

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Which part?

The fact that no single country (of which I am aware) is still on the gold standard should tell you something. The fact that the only countries without a central bank are tiny Pacific dependencies should tell you something also...
You lost me earlier with, “...in this day and age.”

When was a gold standard a good thing and why was it a good thing.
 

PennyPincher

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I think the only way this should play out is to stick China with the bill. Cancel our debt obligations to them for engaging in biowarefare. Completely decouple from them economically and tell the CCP to go f*** itself.

A Boca Raton firm is seeking class-action status in a lawsuit against the Chinese government, claiming it “covered up” the dangers of coronavirus.
 
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Which part?

The fact that no single country (of which I am aware) is still on the gold standard should tell you something. The fact that the only countries without a central bank are tiny Pacific dependencies should tell you something also...
It's almost like a banking cabal took over the whole world to enslave us with paper coupons.
 

Varmint

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We have the world's biggest economy. If you disband the Fed, with what are you going to replace it?

They're safe because we don't default on our debt. If you're worried about inflation, you can always buy TIPS.
We were much better off before we had a Fed - but yeah, at this point, the Fed is like a crossbow bolt in our chest - pull it out and we bleed out in minutes.

TIPS use an artificially low inflation number - it doesn't protect you from real inflation.

And yeah, we've never defaulted on our debt. But the last week we've done things nobody ever thought we would do. Trillion dollar handouts? Trillion dollar a year Treasury debt monetization?

With Treasury bonds you give today's dollars to the government, and in 10 years, you'll get worthless dollars back.
 

PennyPincher

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We were much better off before we had a Fed - but yeah, at this point, the Fed is like a crossbow bolt in our chest - pull it out and we bleed out in minutes.

TIPS use an artificially low inflation number - it doesn't protect you from real inflation.

And yeah, we've never defaulted on our debt. But the last week we've done things nobody ever thought we would do. Trillion dollar handouts? Trillion dollar a year Treasury debt monetization?

With Treasury bonds you give today's dollars to the government, and in 10 years, you'll get worthless dollars back.
If we end the Fed and default, every country will do the same. And we will all be "equal." Then countries that actually OWN GOLD in the treasury and/or produce something useful will thrive.
 

Varmint

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Generally no, but I cannot think of any ways to help the economy in the short term. Interest rates have dropped, gas prices are dropping... and so too has people's investments and their jobs because of social distancing. People are going to be hurt financially very badly by this crisis and unlike when Bush was President and cut people checks for a few hundred, that was during a normal correction/downturn in the economy, not some microscopic virus floating in the air forcing people to stay home.

BTW, the talk is that it may be $2000, not 1000.

I'm figuring that the government is projecting that we're going to lose millions of people to this virus and they will be overwhelmingly seniors who are on Social Security. Basically, they're expecting that next year the expense on those seniors is going to drop because they're dead, thus they're going to have all this extra money and for right now, because we've all seen the polls that 60% of people live paycheck to paycheck, they're gonna cut people checks.

Although, if the amount of people the gov is projecting will die is not as high, say half the projection, then yeah, we're going to have to pay that money back in the future, likely through an increase in income tax.

Under normal economic circumstances, this is a bad move, but a pandemic is far from normal.
I think you're right that we need to hand out $2000/person - although plenty will get it who don't need it, and plenty will need way more, and plenty don't deserve anything cause they're illegals or deadbeats, or welfare abusers. But I do think handing out a trillion to the actual people is far better than giving it to Wall St., which is what we've been doing the last 11 years, and it created this mess.

If you think it'll be paid for by taxes, you don't understand what's been going on.

To put it simply, the US government runs a deficit, say $1 trillion. To pay it, they issue $1 trillion in Treasury bonds. Normally they'd have to adjust the rate on the bonds to attract a trillion dollars in buyers. But since nobody wants a trillion in 0 or 1% interest bonds, and we can't afford to issue bonds at 3-4% interest, we have the Federal Reserve buy all the bonds, and put them on its balance sheet. So no one's actually buying these bonds - the Fed is creating money out of thin air and giving it to the US government to run its deficits.

In the past week, the Fed has committed to buying another trillion, and people know they're gonna buy the extra trillion in bonds we need to pay for the handout, plus tax revenues will drop, so the Fed might need to buy another trillion. Their balance sheet could balloon from $4 to $7 trillion in a few months. Nobody knows what that means, it's just a number on a spreadsheet, but investors are starting to wonder how long the Fed can create money with immunity. Bonds are being sold off, when usually fearful buyers flock to bonds.
 

Varmint

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If we end the Fed and default, every country will do the same. And we will all be "equal." Then countries that actually OWN GOLD in the treasury and/or produce something useful will thrive.
This is why all central banks have been gobbling up gold the last few years, and bringing their gold home within their borders. They know what's coming.
 

mibro

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Anyone buying Royal Dutch Shell here? I missed it in 2009 when the low price was about $42 and the dividend yield was 9%. Kicked myself.

So I bought some yesterday with a 15% dividend yield. RDSB fell another crazy 17% today to $19.58 and the dividend yield is now over 19%.

This company is too big to fail and hasn't cut its dividend since WW2. So, crazy great opportunity or suicide?
 
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you're not gonna make 5% on a 3 month Treasury, maybe a 10 year but you'll lose way more than that in inflation if you keep it to maturity. You can't cheat death by holding to maturity, if interest rates shoot up you're losing money on bonds either by selling or by inflation if you hold it to maturity.

And 401k's don't let you buy actual bonds, just bond funds, and those can go down as fast as stocks. Many are down 5% this week. Interest rates are shooting up, when they should be going down with stocks.

a lot of people in this thread are probably sitting in bond funds thinking they're gonna go up cause the Fed is printing. It's the opposite.
If u buy a treasury at 95 and it matures at par you made 5%
 
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I guess that $1000 per ?taxpayer? is a done deal. Handing out free money is an End Game; either it works and things get better or we find ourselves with extra $Trillions in debt still going deeper.

Forgot the other part - handing out money NEVER WORKS.
Most people will piss away that 1k in a few days. Retail will get a very brief spike and then it's over.

More prudent would be making interest free loans to small business to float them thru until this is over. Most taxpayers dont need a thousand dollars.
 

Varmint

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Anyone buying Royal Dutch Shell here? I missed it in 2009 when the low price was about $42 and the dividend yield was 9%. Kicked myself.

So I bought some yesterday with a 15% dividend yield. RDSB fell another crazy 17% today to $19.58 and the dividend yield is now over 19%.

This company is too big to fail and hasn't cut its dividend since WW2. So, crazy great opportunity or suicide?
Buy when there's blood on the streets. As long as the company can survive the next 3 months w/out going bankrupt or diluting their shares to nothing, it's probably a good time to buy.

Also it's good to buy now, in a few days you may not have the nerve, also when it does turn, it'll turn so fast it's easy to miss it.
 
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