Wednesday, January 2, 2019

recessions typically start when the economy is at its peak and has nowhere to go but down

Trump overheated the economy by reducing unemployment as far as he did. This caused a shortage of good employees in the U.S. When this happens people have to pay employees more. When this happens the Fed has to step in to control Inflation so people on fixed incomes aren't all destroyed nationwide. When the fed raises interest rates stocks lose value and often bonds and savings accounts take the place of stocks as desirable investments. It's a cycle that was speeded up by Trump reducing unemployment. Trump seems to see things in one dimensional ways whereas recessions and when the economy heats up is cyclical. Trump just speeded up the process towards recession by seriously reducing unemployment like he did.That he is angry at the Fed just shows how ridiculous Trump thinks that he doesn't understand basic world economic patterns of economies heating up before they have inflation and then go into recession or depressions. In the 1970s and into the 1980s there was a recession every few years because of the Arab Oil embargo and gas prices quadrupling during this time. This has been a long time since the Great Recession speeded up now by Trump into this coming recession.

begin quote from:
https://www.cnn.com/2019/01/02/economy/slowdown-recession-warning-signs/index.html
The fact that the economy is strong right now is no shield against a recession. In fact, recessions typically start when the economy is at its peak and has nowhere to go but down.
Most economists expect slower growth in 2019, but the big question is whether that will morph into a full-blown recession — or if the Federal Reserve can successfully guide the US economy into a "soft landing," in which the economy slows but doesn't shift into reverse.
Every economist has their favorite advance warning system.

No comments:

Post a Comment