Re: Economics and the possibility of a meltdown

by **ReadyMom** Thu Mar 04, 2021 10:46 am

rick1 wrote:Blondie, my advice, buy some cows, chickens, pigs, plant a big garden, can, freeze goods, stock up on flour, sugar, etc.. AND don't forget the guns and ammo.

It'll all come together for the prepared.

My homeowners Association would just love me! I'm doomed! Neutral

by TRex2 Thu Mar 04, 2021 6:09 pm

ReadyMom wrote:
rick1 wrote:Blondie, my advice, buy some cows, chickens, pigs, plant a big garden, can, freeze goods, stock up on flour, sugar, etc.. AND don't forget the guns and ammo.

It'll all come together for the prepared.
My homeowners Association would just love me! I'm doomed!

Ultimate revenge against anti prepper groups.
Survive long enough to see them gone.

by TRex2 Sat Mar 06, 2021 2:30 pm

TRex2 wrote:(snipped things from Aug 2019

We haven't discussed Labor and Unemployment for 19 months.

(When looking at the following numbers, subtract U6 from Labor utilization, to get a feel for how well we are doing. The best it has ever been was somewhere near 67% and 7%, so 60%, total, would be a real goal.)

Our labor utilization rate is 61.3% and U6 unemployment rate is 11.1%. (50.2%)

If you look back in history, we were 64% and 7% (57%) before the pandemic, so we had about 7% to go to get back to pandemic conditions.

Now that we have to deal with Socialism, I will be surprised if anything gets better at all.

Labor Participation:
https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm
U3 and U6 unemployment rate:
https://www.bls.gov/charts/employment-situation/alternative-measures-of-labor-underutilization.htm

by TRex2 Fri Apr 02, 2021 6:42 pm

The Bureau of Labor Statistics publishes every month, and this month the numbers read labor utilization rate of 61.5% and U6 unemployment rate of 10.7, so that gives us 50.8% or about 0.8% movement towards our goal of 60%. In the extremely unlikely event we maintained this growth, we would reach our pre pandemic level in just under a year.

The recent stimulus bills did not get the $15 an hour minimum wage, nor has the administration gotten any tax increases through, yet, so I do expect some growth this year. And, while the most recent stimulus and any further stimulus will result in inflationary pressures, we shouldn't see much of those come to fruition until next year.

by rick1 Fri Apr 02, 2021 7:41 pm

I agree with ya TRex, except for a couple of things. Inflation has been here since last year, and has gotten a little worse since then, but won't last long, for now. A 2X4X8 costs $6.00 now and that's the cheapest, $5.99/lb for a junk chuck roast and gas, well, it's jumped $.75/gallon here in the last 2 months.

The U.S. dollar has declined somewhat, but not a lot, yet. Next year, watch out, I think we are in for a good recession, but not as bad as 2008.

Another stimulus package, yep, I think they'll pass two of them, even if they have to end the filibuster. Then watch the dollar drop, inflation rise for (next year).

I look at it this way, my dad used to say, "it's pay me now or pay me later, it doesn't matter, but you're going to pay me".

by TRex2 Thu Jun 03, 2021 6:01 pm

The U.S. dollar has declined somewhat, but not a lot, yet. Next year, watch out, I think we are in for a good recession, but not as bad as 2008.

Another stimulus package, yep, I think they'll pass two of them, even if they have to end the filibuster. Then watch the dollar drop, inflation rise for (next year).

The dollar index isn't declining because they compare the dollar to other currencies, and other countries are in worse shape than the US, thanks to Trump.

Yes, inflation is here, and it looks like it will get worse over the next 18 months.

by rick1 Thu Jun 03, 2021 6:44 pm

TRex2 wrote:
The U.S. dollar has declined somewhat, but not a lot, yet. Next year, watch out, I think we are in for a good recession, but not as bad as 2008.

Another stimulus package, yep, I think they'll pass two of them, even if they have to end the filibuster. Then watch the dollar drop, inflation rise for (next year).
The dollar index isn't declining because they compare the dollar to other currencies, and other countries are in worse shape than the US, thanks to Trump.

Yes, inflation is here, and it looks like it will get worse over the next 18 months.

Stock Market channel said today that inflation hasn't been this bad in 30 years. I don't think it is, but I'm not the stock market channel either.

by TRex2 Thu Jun 03, 2021 7:42 pm

Shadowstats dot com has been showing inflation at 8% to 13% (depending on which methodology) for the past few months.

Inflation charts are good for seeing what the inflation rate was, but to see where it is going, you need to look at the money supply. Shadowstats shows a 33% increase in M2 and about 50% increase in M1 money supply.

Money supply shows how much money can chase the available goods, and the "available goods" can be found here:
https://www.bls.gov/opub/ted/2020/manufacturing-labor-productivity-decreased-15-point-5-percent-in-the-second-quarter-of-2020.htm

Manufacturing output is was down 47% second quarter of 2020. That is a lot less goods, being chased by more money: a perfect recipe for inflation.

by TRex2 Wed Jul 21, 2021 5:57 pm

Here is an interesting take on how collapse happens.
(The mechanisms underlying the collapse.)

https://www.shtfplan.com/headline-news/how-breakdown-cascades-into-collapse

Put another way, the economy’s as a network appears decentralized and robust, but this illusion vanishes when we consider how the entire economy rests on a few unstable nodes.

One such node is the delivery of gasoline and fuels. It’s such an efficient and reliable system that 99.9% of us take it for granted: there will always be plenty of gasoline at every station, the tanks of jet fuel will always be topped off, and so on.

The 0.1% know that this system, once disrupted, would knock over dominoes all through the economy.

Another key weakness is the entire system’s reliance on debt, leverage, and speculation. Few seem to understand that physical production and delivery systems can grind to a halt for financial reasons–for example, lines of credit being pulled, a counterparty to some arcane commodity swap goes under, taking the presumably solvent corporation down with it, and so on.

The more debt that’s been piled up, the greater the instability of the entire system. Risk always appears low until the system destabilizes, and then all the hedges fail and risk breaks out, flooding through the entire financial system.

by TRex2 Sat Jul 24, 2021 2:10 pm

Biden says gov spending prevents inflation.
Yep, just like heavy rains prevent floods. Rolling Eyes

https://www.nationalreview.com/news/biden-argues-massive-government-spending-will-help-fend-off-inflation-not-exacerbate-it/

President Biden argued that a massive influx of government spending bill will help fend off inflation, in a speech on the state of the economy at the White House on Monday.

The White House has dubbed the $1.2 trillion bipartisan infrastructure bill that Senate Majority Leader Chuck Schumer plans to bring to the floor this week — and the $3.5 trillion budget resolution that Democrats plan to pass in the coming days without Republican support — the “Build Back Better” package. Biden said Monday that the two bills will help prevent, rather than exacerbate, runaway inflation.

by TRex2 Fri Apr 22, 2022 6:20 am

Some issues with the Federal Government's ever increasing deficits are coming to light.

Has anyone noticed a change in the annual mailings from the SSA?

I have heard that they used to reference "if the trust fund runs out"

but now the wording imply's that running out is inevitable (or has happened) and mentions Congress will have to approve SSA distributions in the future.

I stress that this is just something I heard, and haven't done my own research on it.
But it seems plausible.

Here is an article from last year, on the subject:
https://www.reuters.com/business/finance/pandemic-accelerates-depletion-us-social-security-trust-funds-treasury-2021-08-31/

by rick1 Fri Apr 22, 2022 3:00 pm

TRex, according to this article, social security isn't going broke. I remember that to have your social security tax paid in for the year, you have had to make $20,000, now to have it paid for the year, you have to make well over $100,000.

Meaning, you're paying more into social security so people like me and my wife keep getting a monthly check.

https://www.forbes.com/advisor/retirement/social-security-bankrupt/

by TRex2 Fri Apr 22, 2022 4:48 pm

rick1 wrote:TRex, according to this article, social security isn't going broke. I remember that to have your social security tax paid in for the year, you have had to make $20,000, now to have it paid for the year, you have to make well over $100,000.

Meaning, you're paying more into social security so people like me and my wife keep getting a monthly check.

https://www.forbes.com/advisor/retirement/social-security-bankrupt/

From Your Link:

To wit: The Social Security Board of Trustees recently put out a press release for its annual report on the long-term finances for the Social Security trust funds. The headline stated “Combined Trust Funds Projection Depletion One Year Sooner Than Last Year.”

Specifically, the report stated that the Old Age and Survivors Insurance (OASI) Trust Fund, which helps pay the benefits for current retirees (among other eligible Americans), was scheduled to be depleted in 2033, a year earlier than was believed last year.

Yet in a tweet on their write-up of the report, the New York Times began “Social Security will be depleted in 2033…”

But, of course, Social Security isn’t going to be depleted in 2033; it’s simply the OASI Trust Fund that will be. And should that actually happen, retirees would still receive 76% of their benefits. That’s because your monthly check is paid for by the payroll taxes of current workers as well as from the trust.

In other words, as long as there are Americans to work (and pay taxes), Social Security will continue to pay out benefits, even if they’re somewhat reduced from current levels.

So, while it won't stop payments completely, payments after 2033 will be less.

I see multiple routes: they can cut payments, outright, but I don't see that happening.
They can force means testing (they already do that, somewhat, in the calculations in personal income tax) or they can increase inflation on everyone, so that the whole population has less real income.

I suspect they will do a combination of those.

by rick1 Mon May 09, 2022 11:33 am

Do you know somebody that went through the great depression? Both my parents grew up during the depression and they kept that depression on their minds throughout their lives so us kids would have a better life.

Did people prepare for the great depression, did they prepare for the great recession? Here's what people did during the great depression, some real rough times, from happypreppers.com:

https://www.happypreppers.com/Depression.html

by **ReadyMom** Mon May 09, 2022 12:06 pm

No, but my parents childhood was during WWII, in England! Pretty bad then, too. I grew up learning to save everything to reuse and to make 'something' out of 'nothing'.

I remember my Uncle telling us about holding onto an orange that he got from his military duty in 1 country and taking it back to England, during a quick visit, for his brother, and it was a treasured treat!

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