OOGABOOGA
Check the weather & it’s gettin real sussy outside
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Alright so a couple of users requested that I make a thread on my economic predictions for the next few years because I mentioned that I expect the economy to crash worse than it has in centuries quite soon. This will be bad news for many people, particularly those living in heavily populated areas, relying on unproductive/unnecessary jobs, and disconnected from their source of food. However, this may be good for you if you educate yourself and learn how to weather the storm. This will be a long read so if you're a lazy cunt drop a dnr idgaf. If you stick around you will have a better grasp on economics than most graduates with economics degress. Enjoy.
Part 1: Definitions
There are a lot of young guys on here so my expectation is that most of this forum knows fuck all about economics. So I'll start with some vocab so you know what I'm talking about.
-Inflation: "A general increase in prices, or decrease in the purchasing power of money." Basically money becomes less valuable. This is why boomers are out of touch with young generations. It's because since 1913, the value of the dollar has lost over 96% of its value. When your dad/uncle/grandpa tells you about how at your age he was out working everyday for $3/hr to buy a house at 21 with no degree, it's because $3 in 1960 is worth more than $25 now. (this is also why minimum wage laws are stupid but I can explain that later)
-Interest: "money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt." When you take out a loan and accrue debt, there is a set interest rate on that money you borrowed. Interest is the money you have to pay in exchange for what you borrowed. This is why there are 30+ year olds who took out 100k in student loans, have paid more than 100k in interest, and still owe 100k+. In the Bible it is known as Usury, and is a sin. Jews are historically associated with banking, largely because they did not feel compelled to follow that rule.
-Interest Rates: "the proportion of a loan that is charged as interest to the borrower." These rates vary depending on the type of loan and the company lending, but all are based on the rate set by the Federal Reserve, which I will explain later. In the past, you would deposit much more money in savings accounts, because you would be paid interest by the bank in exchange for lending them your money, which they would invest to try and turn a profit. Normal interest rates are imperative to a healthy economy, because they incentive saving and investment, instead of spending and debt. Some rates are fixed, some are variable. If you have seen The Big Short, you may recall that autistic Christian Bale predicted that when variable rate mortgages increased from their initial rates to 7%, a large enough portion of homeowners wouldn't be able to pay that the banks would run out of money, crashing the housing bubble.
-Note: A note is an instrument of debt. In accounting, notes payable is money your company owes, and notes receivable is money owed to your company.
-Liabilities: Financial obligation, debt. The US government owes over 23 trillion dollars, and that number is climbing exponentially.
-Unfunded Liabilities: Future financial obligation, money promised but not yet owed. The US government has well over 200 TRILLION DOLLARS in unfunded liabilities. This is the money that retirees have been promised in the form of social security, pensions, etc. If you've ever heard someone say that social security is a ponzi scheme, this is why. None of us will ever receive a penny in this form, but uninformed gen z, millennial, and gen x voters still vote for the guy who promises more free money from the government.
Part 2: The Federal Reserve
The Federal Reserve of the United States was founded in 1913, and although there are many conspiracies surrounding its creation and function, I will just stick to publicly accepted knowledge. The Federal Reserve was founded by leaders of the big banks of the time, the most notable of these being John Pierpont Morgan, of JP Morgan Chase Bank. They were looking for a way to gain more power and control over the economy by collaborating with the government, so that they could ensure their own profit.
Having gone through government schools, you probably think that the Federal Reserve is an essential part of keeping our economy afloat, with no ulterior motives of its own. You think it's a branch of the US government that works to keep our economy afloat by controlling interest rates and the supply of money in circulation. This is not true. Despite its name, the Fed is neither a reserve nor is it federal. It is it's own corporate entity that runs the economy of the US, and therefore, the world. They change the interest rates in accordance to the economy, but they also have the power to print money out of thin air. Look at this dollar bill.
You may notice that at the top of the dollar bill it says "Federal Reserve Note." If you recall the definition above, you know that a note is an instrument of debt. So why is every dollar bill an instrument of debt towards the Federal Reserve? It is because the primary role of the Fed is to print money out of thin air, and then lend it to the U.S. Government. That's right.
You may have heard that we are in debt to China, and that they are going to destroy us. However, a simple google search of where we owe our money shows:
Here are the top 10 countries that the US owes the most money to:
Part 3: The Last 20 Years Explained
After the 2001 Dotcom bubble burst, the economy was destroyed due to massive speculation in worthless tech companies. When the bubble burst, nearly all tech startups went under, causing all of the money invested through the stock market to disappear. In an attempt to encourage recovery, the Federal reserve cut interest rates all the way down to 1%. This encouraged massive borrowing, leading to a boom in real estate speculation. Massive real estate development took place, funded by debt taken out on low interest rates.
Then banks started speculating on derivatives. A derivative is a contract between two parties which derives its value/price from an underlying asset. The most common types of derivatives are futures, options, forwards and swaps. Description: It is a financial instrument which derives its value/price from the underlying assets. Basically, banks were betting with each other on the increase in value of real estate. In the Big Short, the protagonists do the opposite and get laughed at, only for the banks to realize their mistakes when it is too late to get rid of their bets. As interest rates rose, so did the interest on all of these mortgages, which homeowners soon could not afford.
As mortgages went unpaid, homes lost their value, and the derivative market crashed with them. Banks failed, companies went broke, and families went hungry. The economy was in a free fall. So what did the Fed do? They cut interest rates all the way to 0%, opting to give away debt for free instead of letting the big banks fail, taking the entire economy with them. But even this wasn't enough, so what did they do? They invented quantitative easing. Sounds complicated but it's not. Here's the definition on wikipedia: "Quantitative easing, also known as large-scale asset purchases, is a monetary policy whereby a central bank buys predetermined amounts of government bonds or other financial assets in order to inject liquidity directly into the economy." In layman's terms that means the Fed printed trillions of dollars out of nothing, and gave it to the banks in the form of bailouts. Free money to erase their fuck ups, so that they can keep on having their financial party on the backs of US citizens.
In a normal recovery, the Fed would gradually increase its rates back to normal, after a brief period of low rates serving as a debt injection to resurrect the market. But this wasn't a normal crash, so that's not what happened. The federal funds rate remained at 0% for 7 entire years. The economy was so broken that in spite of the cheapest debt in history, we experienced the weakest recovery in history. In this time, massive amounts of personal, corporate, and government debt was accrued.
After years of this policy, the Federal Reserve has made an attempt to normalize rates, but could hardly break 2% without putting significant stress on the economy. Since then, rates have been decreased again, and quantitative easing has resumed. But why are they taking recovery policies if the economy hasn't crashed, and we are still in recovery?
Part 4: The Near Future
The truth is, our economy never recovered from the 2008 Recession. For a recovery to occur, the banks would've had to crash, making the recession much worse for everyone in the states and abroad. But at least there would've been a real recovery. Since being bailed out, banks have grown even larger, the derivative market has crossed over a quadrillion dollars in nonexistent value, the government has more than doubled its debt, corporations are in more debt than before, and the large majority of people have lost much of their purchasing power. Meanwhile, during the same period my banker Dad more than doubled his income to something like 500-600k/yr including his bonus. This can't go on for much longer.
(Pls don't roast my subhuman handwriting)
We are stuck in this cycle. The Fed cut rates after the 2001 crash, leading to more borrowing. Then there was too much debt to pay for so after the crash, they needed to drop rates even lower, and for much longer. In the last few years the tried to raise rates again, but they've realized that they can't do it without the economy crashing even worse than 2008. Such a crash would be disastrous, but it is actually the best possible outcome for us.
Path 1: Collapse. The banks all go under, heavily leveraged corporations(leverage=debt) also go down, and cities go to ruin. This will be far worse than the great depression if the Federal Reserve steps back and lets the market naturally adjust itself by getting rid of the debt and building back up again without it. Reminder, this is the better option. But reality check: it's not about what's best for the people, it's about what nets the banks more money.
Path 2: Hyperinflation...
Part 5: Hyperinflation
"In economics, hyperinflation is very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as they usually switch to more stable foreign currencies, often the US Dollar."
All our lives we've been raised to believe that the US is the untouchable world leader. The land of the free and the home of the brave. We've also been raised by Hollywood to think that every opposing country is fed tons of propaganda until they worship their government in spite of corruption, malevolence, and greed. But not us right? Come on.
The truth is that we're just the same as any other country, just more powerful at this point in time. Why? Because after WW2 the majority of the developed world was destroyed and had to rely on the US for production. We were a nation of production and export, and became very wealthy because of it. Since then we've become the opposite, a nation of imports and consumption. We hemorrhage away our money every year by fighting useless wars, buying foreign-made products, and working unproductive desk jobs for a company that wouldn't survive without its debt.
The banks are milking us for every bit of profit they can, and as the peoples' financial fears grow, so do the promises made by our government. Whether it be free health care, free college, free housing, free food, free whatever, people want it and the government can't afford it. But that's what gets votes. In the next decade, the boomers will retire. They will stop paying income taxes, and start receiving massive government benefits. Corporations and citizens will become reliant on more and more debt to keep themselves afloat in an economy becoming less and less productive.
They will beg the government for more money, electing more and more socialist leaders. Government spending will grow at an even faster rate, and the money will all be printed by the Federal Reserve. Interest Rates will hit rock bottom permanently, because neither the market nor the government can afford interest payments. The Fed just keeps on printing an profiting, for no work, until there are so many dollars circulating around a weak economy that the dollar is essentially worthless. At this point, the dollar will lose its standing is the leading currency for trade, and the American Empire will fall.
The same story repeats over and over throughout history, so its no wonder the Bible declared usury illegal. In fact, nearly the same timeline is what brought Rome to economic ruin, allowing them to be easily conquered. The United States will likely not make it more than a few decades before it has been dethroned from its seat as ruler over geopolitics and the world economy, and will eventually be yet another memory in the history books. A memory of a country that grew from nothing to the greatest power the world has ever seen, only to be eaten alive by debt and greed.
"Give a man a gun and he can rob a Bank. Give a man a Bank and he can rob the world."
@LordNorwood @maxmendietta @Gorilla @cocainecowboy @Lorsss @Pendejo @Fuk @Sergeant @Ritalincel @Gudru @PrettyBoyMaxxing @Tony @Goblin @Petsmart @CupOfCoffee @Alarico8 @Butthurt Dweller @SirGey @OwlGod @Deliciadecu @Lifeisgood72 @LookistWorld @Dogs @Blackout.xl @Chadelite @KEy21 @6ft5manlet @6ft1 @RichardSpencel @her @KrissKross @Dyorotic2 @moggingmachine @SHARK @Playboypuertorican @Gosick @SixFootManlet @TubOfLard @Rob Paul'sHeight @Dr Shekelberg @AleksVs
Part 1: Definitions
There are a lot of young guys on here so my expectation is that most of this forum knows fuck all about economics. So I'll start with some vocab so you know what I'm talking about.
-Inflation: "A general increase in prices, or decrease in the purchasing power of money." Basically money becomes less valuable. This is why boomers are out of touch with young generations. It's because since 1913, the value of the dollar has lost over 96% of its value. When your dad/uncle/grandpa tells you about how at your age he was out working everyday for $3/hr to buy a house at 21 with no degree, it's because $3 in 1960 is worth more than $25 now. (this is also why minimum wage laws are stupid but I can explain that later)
-Interest: "money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt." When you take out a loan and accrue debt, there is a set interest rate on that money you borrowed. Interest is the money you have to pay in exchange for what you borrowed. This is why there are 30+ year olds who took out 100k in student loans, have paid more than 100k in interest, and still owe 100k+. In the Bible it is known as Usury, and is a sin. Jews are historically associated with banking, largely because they did not feel compelled to follow that rule.
-Interest Rates: "the proportion of a loan that is charged as interest to the borrower." These rates vary depending on the type of loan and the company lending, but all are based on the rate set by the Federal Reserve, which I will explain later. In the past, you would deposit much more money in savings accounts, because you would be paid interest by the bank in exchange for lending them your money, which they would invest to try and turn a profit. Normal interest rates are imperative to a healthy economy, because they incentive saving and investment, instead of spending and debt. Some rates are fixed, some are variable. If you have seen The Big Short, you may recall that autistic Christian Bale predicted that when variable rate mortgages increased from their initial rates to 7%, a large enough portion of homeowners wouldn't be able to pay that the banks would run out of money, crashing the housing bubble.
-Note: A note is an instrument of debt. In accounting, notes payable is money your company owes, and notes receivable is money owed to your company.
-Liabilities: Financial obligation, debt. The US government owes over 23 trillion dollars, and that number is climbing exponentially.
-Unfunded Liabilities: Future financial obligation, money promised but not yet owed. The US government has well over 200 TRILLION DOLLARS in unfunded liabilities. This is the money that retirees have been promised in the form of social security, pensions, etc. If you've ever heard someone say that social security is a ponzi scheme, this is why. None of us will ever receive a penny in this form, but uninformed gen z, millennial, and gen x voters still vote for the guy who promises more free money from the government.
Part 2: The Federal Reserve
The Federal Reserve of the United States was founded in 1913, and although there are many conspiracies surrounding its creation and function, I will just stick to publicly accepted knowledge. The Federal Reserve was founded by leaders of the big banks of the time, the most notable of these being John Pierpont Morgan, of JP Morgan Chase Bank. They were looking for a way to gain more power and control over the economy by collaborating with the government, so that they could ensure their own profit.
Having gone through government schools, you probably think that the Federal Reserve is an essential part of keeping our economy afloat, with no ulterior motives of its own. You think it's a branch of the US government that works to keep our economy afloat by controlling interest rates and the supply of money in circulation. This is not true. Despite its name, the Fed is neither a reserve nor is it federal. It is it's own corporate entity that runs the economy of the US, and therefore, the world. They change the interest rates in accordance to the economy, but they also have the power to print money out of thin air. Look at this dollar bill.
You may notice that at the top of the dollar bill it says "Federal Reserve Note." If you recall the definition above, you know that a note is an instrument of debt. So why is every dollar bill an instrument of debt towards the Federal Reserve? It is because the primary role of the Fed is to print money out of thin air, and then lend it to the U.S. Government. That's right.
You may have heard that we are in debt to China, and that they are going to destroy us. However, a simple google search of where we owe our money shows:
Here are the top 10 countries that the US owes the most money to:
- Japan ($1.11 trillion)
- China ($1.05 trillion)
- All Other Countries ($416.0 billion)
Part 3: The Last 20 Years Explained
After the 2001 Dotcom bubble burst, the economy was destroyed due to massive speculation in worthless tech companies. When the bubble burst, nearly all tech startups went under, causing all of the money invested through the stock market to disappear. In an attempt to encourage recovery, the Federal reserve cut interest rates all the way down to 1%. This encouraged massive borrowing, leading to a boom in real estate speculation. Massive real estate development took place, funded by debt taken out on low interest rates.
Then banks started speculating on derivatives. A derivative is a contract between two parties which derives its value/price from an underlying asset. The most common types of derivatives are futures, options, forwards and swaps. Description: It is a financial instrument which derives its value/price from the underlying assets. Basically, banks were betting with each other on the increase in value of real estate. In the Big Short, the protagonists do the opposite and get laughed at, only for the banks to realize their mistakes when it is too late to get rid of their bets. As interest rates rose, so did the interest on all of these mortgages, which homeowners soon could not afford.
As mortgages went unpaid, homes lost their value, and the derivative market crashed with them. Banks failed, companies went broke, and families went hungry. The economy was in a free fall. So what did the Fed do? They cut interest rates all the way to 0%, opting to give away debt for free instead of letting the big banks fail, taking the entire economy with them. But even this wasn't enough, so what did they do? They invented quantitative easing. Sounds complicated but it's not. Here's the definition on wikipedia: "Quantitative easing, also known as large-scale asset purchases, is a monetary policy whereby a central bank buys predetermined amounts of government bonds or other financial assets in order to inject liquidity directly into the economy." In layman's terms that means the Fed printed trillions of dollars out of nothing, and gave it to the banks in the form of bailouts. Free money to erase their fuck ups, so that they can keep on having their financial party on the backs of US citizens.
In a normal recovery, the Fed would gradually increase its rates back to normal, after a brief period of low rates serving as a debt injection to resurrect the market. But this wasn't a normal crash, so that's not what happened. The federal funds rate remained at 0% for 7 entire years. The economy was so broken that in spite of the cheapest debt in history, we experienced the weakest recovery in history. In this time, massive amounts of personal, corporate, and government debt was accrued.
After years of this policy, the Federal Reserve has made an attempt to normalize rates, but could hardly break 2% without putting significant stress on the economy. Since then, rates have been decreased again, and quantitative easing has resumed. But why are they taking recovery policies if the economy hasn't crashed, and we are still in recovery?
Part 4: The Near Future
The truth is, our economy never recovered from the 2008 Recession. For a recovery to occur, the banks would've had to crash, making the recession much worse for everyone in the states and abroad. But at least there would've been a real recovery. Since being bailed out, banks have grown even larger, the derivative market has crossed over a quadrillion dollars in nonexistent value, the government has more than doubled its debt, corporations are in more debt than before, and the large majority of people have lost much of their purchasing power. Meanwhile, during the same period my banker Dad more than doubled his income to something like 500-600k/yr including his bonus. This can't go on for much longer.
We are stuck in this cycle. The Fed cut rates after the 2001 crash, leading to more borrowing. Then there was too much debt to pay for so after the crash, they needed to drop rates even lower, and for much longer. In the last few years the tried to raise rates again, but they've realized that they can't do it without the economy crashing even worse than 2008. Such a crash would be disastrous, but it is actually the best possible outcome for us.
Path 1: Collapse. The banks all go under, heavily leveraged corporations(leverage=debt) also go down, and cities go to ruin. This will be far worse than the great depression if the Federal Reserve steps back and lets the market naturally adjust itself by getting rid of the debt and building back up again without it. Reminder, this is the better option. But reality check: it's not about what's best for the people, it's about what nets the banks more money.
Path 2: Hyperinflation...
Part 5: Hyperinflation
"In economics, hyperinflation is very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as they usually switch to more stable foreign currencies, often the US Dollar."
All our lives we've been raised to believe that the US is the untouchable world leader. The land of the free and the home of the brave. We've also been raised by Hollywood to think that every opposing country is fed tons of propaganda until they worship their government in spite of corruption, malevolence, and greed. But not us right? Come on.
The truth is that we're just the same as any other country, just more powerful at this point in time. Why? Because after WW2 the majority of the developed world was destroyed and had to rely on the US for production. We were a nation of production and export, and became very wealthy because of it. Since then we've become the opposite, a nation of imports and consumption. We hemorrhage away our money every year by fighting useless wars, buying foreign-made products, and working unproductive desk jobs for a company that wouldn't survive without its debt.
The banks are milking us for every bit of profit they can, and as the peoples' financial fears grow, so do the promises made by our government. Whether it be free health care, free college, free housing, free food, free whatever, people want it and the government can't afford it. But that's what gets votes. In the next decade, the boomers will retire. They will stop paying income taxes, and start receiving massive government benefits. Corporations and citizens will become reliant on more and more debt to keep themselves afloat in an economy becoming less and less productive.
They will beg the government for more money, electing more and more socialist leaders. Government spending will grow at an even faster rate, and the money will all be printed by the Federal Reserve. Interest Rates will hit rock bottom permanently, because neither the market nor the government can afford interest payments. The Fed just keeps on printing an profiting, for no work, until there are so many dollars circulating around a weak economy that the dollar is essentially worthless. At this point, the dollar will lose its standing is the leading currency for trade, and the American Empire will fall.
The same story repeats over and over throughout history, so its no wonder the Bible declared usury illegal. In fact, nearly the same timeline is what brought Rome to economic ruin, allowing them to be easily conquered. The United States will likely not make it more than a few decades before it has been dethroned from its seat as ruler over geopolitics and the world economy, and will eventually be yet another memory in the history books. A memory of a country that grew from nothing to the greatest power the world has ever seen, only to be eaten alive by debt and greed.
"Give a man a gun and he can rob a Bank. Give a man a Bank and he can rob the world."
@LordNorwood @maxmendietta @Gorilla @cocainecowboy @Lorsss @Pendejo @Fuk @Sergeant @Ritalincel @Gudru @PrettyBoyMaxxing @Tony @Goblin @Petsmart @CupOfCoffee @Alarico8 @Butthurt Dweller @SirGey @OwlGod @Deliciadecu @Lifeisgood72 @LookistWorld @Dogs @Blackout.xl @Chadelite @KEy21 @6ft5manlet @6ft1 @RichardSpencel @her @KrissKross @Dyorotic2 @moggingmachine @SHARK @Playboypuertorican @Gosick @SixFootManlet @TubOfLard @Rob Paul'sHeight @Dr Shekelberg @AleksVs
