As we have noted in the previous article, the risk of the next big economic crash continues to loom larger than ever before, and it is most likely too late to actually prevent it from occurring entirely. That's not to say that there aren't things that should be done to prepare for it to make it less catastrophic, though. Back in 2014, the TSAP had predicted that a crash would occur within a few short years, and we had written an article then discussing how to prevent it before it occurs or at least take the edge off of it, while ending the previous economic "stagpression" for good. We also reiterated such ideas in 2016 as well, the year for which the insightful Thom Hartmann predicted the epic crash that was his book's namesake. (Being off by two years or so is still fairly accurate in our book.) And we should note that these things would indeed help take the edge off of the next looming financial crisis as well.
Two things come to mind right away: 1) a Universal Basic Income Guarantee for all, an idea that is LONG overdue, and 2) Quantitiative Easing for We the People in general (as opposed to the banks, which only benefits the ultra-rich) by injecting newly-created money directly into everyone's bank accounts and/or via debit card. Additionally, we need to better regulate the Wall Street casino so such a crisis could never, EVER happen again, and also JAIL the banksters who caused the crisis (instead of bailing them out) like Iceland did. A complete debt jubilee would be even better still (in general, but especially for student loans), but even the things we just mentioned are a fairly tall order for a government who is bought and paid for by the banksters/oligarchs. While other things need to be done as well in the long run, such as critical investments in infrastructure and education, the aforementioned measures would go a long way towards fixing our soon-to-be-ailing economy.
Those are the things that should be done at the government level, of course. At the individual level, there is really not much one can do except get OUT of the stock market while you still can, and take at least most of your money OUT of the big banks (before the "bail-ins" begin) and put it into smaller banks, credit unions, or even under your mattress. Or even in a big, brown bag inside a zoo (what a thing to do!)
Wednesday, March 21, 2018
The Crash of 2018?
Despite the fairly rosy economic reports, the next financial crisis, recession, or perhaps even depression is most likely already baked into the cake at this point. It is not a matter of if, but WHEN, and just how bad it will be. In fact, we are overdue for one. And the beginning of the slump will be one of those things that will only be noticed in hindsight, as was the case last time ten years ago. And this one may very well make 2008 or even 1929 look like a walk in the park.
The positive economic numbers mask a rather dismal underlying reality just beneath the surface: wages lagging behind the true cost of living, and (not coincidentally) unsustainable record-high levels of consumer debt. This time the debt increase is not primarily mortgages (though there is plenty of that too) but is now mostly student loans, along with that perennial, decades-old papering-over-declining-wages tool: credit cards. In fact both are a result of a problem decades in the making: reverse Robin Hood economics has robbed from the poor, gave to the rich, and torpedoed the middle class as the real economy has been systematically hollowed out since Reagan. And the debt has become a way to artifically and temporarily sustain ever-increasing consumer spending (and thus economic growth) despite stagnant or declining wages for the bottom 80% of Americans--and eventually even that becomes insufficient, and the house of cards collapses. That is the powder keg, just waiting for a spark to set it off. And practically any sort of "black swan" event could serve as the spark at this point. Here be dragons.
The stock market is a bubble. Scratch that, it is a big, festering BOIL just waiting to be lanced. The recent "correction" in early February is a warning, followed by a return to "normal" before the Big One happens sooner or later. If Trump goes through with his plan to start a trade war, that will likely trigger the crash, as will any further increases in FERAL Reserve interest rates. But it looks like a crash is coming, one way or another. So don't say we didn't warn you.
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