How long before the next recession hits?

I don't know but I think it's going to be a bad one that lasts longer than the typical 18 months.

I’m putting my house on the market after Labor Day. Several people with savvy business instincts have told me just after the first of the year is when things will get dicey.

And election years are always volatile. This one will be off the charts.

Sooner or later, its a cycle right? We really have not had inflation for decades.

I'm hopeful it hits in the run up to the election. That way, the Creamsicle Caligula is sure to lose.

R3 I guess the housing market doesn’t count as an inflation marker, at least according to you.

Bump

Our entire monetary/macroeconomic theory is completely (and obsessively) oriented to something that hasn't happened in 40 years—inflation. "Ironically," at the same time, the only metric of economic health is a mindless devotion to unlimited GDP growth. Neither is in any way appropriate to the current global economy. It's like living in a dream. More narrowly, I too am hoping for a recession, ASAP, and the last job numbers were truly awful, so we may be on our way. But not to inflation.

What would anyone suggest to do with cash?

Would it be better to buy property or what?

It depends on the time frame for when you need the money, R8. If you're young and your retirement is a decade away or more, go ahead and invest in the stock market, preferably with a total market index fund. If you're close to retirement, you might want to put it into a bond fund or into a high-yield savings account, 2.25% or more.

How much of your savings percentage wise would you put into the total market index fund, R9?

Also, I was thinking of buying an investment property, R9, in a resort area - is that a bad idea at the moment (I'm asking anyone who knows)?

Trump and his Trumptards will keep cooking the books until he leaves office, and then truth will out. And the stupid voters still blindly believe the GOPS when they lie through their teeth that they are deficit hawks. Fuck them!

Trump is reportedly not worried about a massive US debt crisis as he'll be out of office by then

US debt sits at about $21 trillion, and in a few years the US could be paying more in interest on that debt than on the military or on Medicare.

The Treasury Department estimated in October that the federal government would issue $1.34 trillion in new debt during 2018 — a 146% jump from 2017 and the highest amount of new debt issued since 2010.

What does that mean for Americans, R11, in terms of, what should we be doing with our savings?

Should we invest overseas and where?

Are we headed for a housing crash? Will it be global?

R11 No party ever worries about debt when they are in power. Republicans only care about the debt when a Democrat is in office, and the Democratic Party only cares when a Republican is in office. That is how it has been my entire life. Republicans, who were fine with Reagan/Bush debts, suddenly cared about Clinton debt, then they didn't care about W. Bush's debt, but cared again when it was Obama. Democrats who were fine with Clinton's debts, were aghast at W's, but were fine with Obama's. It is largely the same with war, as long as your guy is the one leading the war, there is no problem.

[quote] Democrats who were fine with Clinton's debts, were aghast at W's

Take your anti-dementia drug, gramp. Clinton's debts? Oh dear....

Economist Mike Kimel has noted that the former Democratic Presidents (Bill Clinton, Jimmy Carter, Lyndon B. Johnson, John F. Kennedy, and Harry S. Truman) all reduced public debt as a share of GDP, while the last four Republican Presidents (George W. Bush, George H. W. Bush, Ronald Reagan and Gerald Ford) all oversaw an increase in the country's indebtedness.

R14 I wasn't so much speaking about the country's overall debts, as to his spending. And, he was largely able to reduce debt not because he wanted to, but because he was faced with a GOP controlled Congress for six of the eight years he was in power, plus the fact that we spent less on the military due to the end of the Cold War, and tax revenues increased due to the boom of the 1990's.

r8 I've been hanging onto gold. I'm selling my house and relocating out of the country until this "uh-uh! I claim executive privilege! No collusion, nothing to hide, but I claim executive privilege" shit is done and the Trumpanzees finally figure out they've been lied to.

The US government can always blame China when this debt shit hits the fan:

The United States allowed China to become one of its biggest bankers because Americans enjoy low consumer prices. Selling debt to China pays for federal spending that spurs U.S. economic growth. It also keeps U.S. interest rates low. But China's ownership of the U.S. debt is shifting the economic balance of power in its favor.

Despite its threats, China will continue to be one of the world's largest holders of U.S. debt.

Thank you very much for the accumulation of debt!

More government bonds cause higher interest rates and lower stock market returns. As the U.S. government issues more Treasury securities to cover its budget deficit, the market supply of bonds increases. "When you have more of something, it gets cheaper," says Jim Barnes, director of fixed Income at Bryn Mawr Trust. In bonds, cheaper means lower prices and higher interest rates.

June 2020

No one knows, historically it should have already happened and it will happen at some point, this is the longest we have gone without a recession. No knows how severe it will be either. If someone claims they know they don't, they suspect but they don't know.

Since it is inevitably going to happen, I just hope it happens several months before the election, that is the only thing that will turn some Trump supporters against him, clearly his traitorous behavior won't.

Too long, if you ask me (privately).

[quote]No party ever worries about debt when they are in power.

That's incorrect. George H. W. Bush raised taxes because of the deficit and debt. So did Clinton, finally bringing things back into balance. And Obama reduced the deficit by nearly 2/3 during his time in office, not to mention that his big initiative, the ACA, was fully paid for. It wasn't until George W. Bush that Republicans decided that the deficit and debt didn't matter, something that Republicans today still believe, given their ridiculous tax proposals.

Moreover, you're ignoring changing circumstances. I'm fine with increasing deficits during the downturns, e.g., when Obama first took office. I'm not okay with increasing deficits during the upturns, e.g., with Bush and Trump.

r11 after next year, doesn't become the Democrats fault since they control the House (purse strings)? With all of this Trump mania, no one is being held accountable for the debt. Democrats don't appear to have any interest in addressing this topic, but an election is around the corner, as always, so I guess we are stuck with this cycle of useless spending. At least if we had more social programs i could justify the dept.

Weren't the Clinton tax cuts a result of Newt's master plan in the House?

[quote]How much of your savings percentage wise would you put into the total market index fund, [R9]?

Again, it depends on your time frame and your need. If you're in your 30s and you're going to retire in 30 years and this is all about retirement, meaning that you won't need the money until you retire, put damn near everything into the fund and leave it there.

But let's say that you're in your 50s and you're going to retire in 10 to 15 years, then I'd put 30 to 40% in bonds and the rest in the market. Or let's say that you expect to be drawing on some portion of these funds for emergencies, home improvement projects, a new car, etc., then put whatever you think you'll need into a high-interest savings account or money market fund or CD and put the rest into the market.

It also depends on your tolerance for risk. Are you going to freak out when you lose 25% of that money when the market has a major correction? Then don't go so heavily into the market and stick with safer investments.

[quote]Also, I was thinking of buying an investment property, R9, in a resort area - is that a bad idea at the moment (I'm asking anyone who knows)?

I can't help you with that, as that's outside my experience.

[quote]Weren't the Clinton tax cuts a result of Newt's master plan in the House?

Clinton didn't cut taxes; he raised them. And Gingrich campaigned heavily against them, insisting that Clinton was going to destroy the economy.

Next recession? Hopefully before April 2020, farmers will be hit the hardest.

The Economist (which most of us read) just had an article about a new algorithm for predicting a recession. Bottom line is that the algorithm suggests that the chance of a recession in the next year is just 10%. Given the ongoing strength of the economy, my guess is that when a recession does occur it will be mild.

R18, that simply isn't true, as anyone who has followed bond markets in the US and Europe for the last decade, and in Japan for two decades, would attest. Record high government bond issuance and deficits in the wake of the Great Recession haven't led to higher interest rates, and they haven't led to higher inflation. There are any number of reasons why, but people need to recognize that economic reality has changed.

Whenever a democrat is in the White House we'll see another recession dear.

Trump Warns of Epic Stock Market Crash If He's Not Re-Elected

June 2020 is too late, R19. I would love Dec 2019, but think it'll be a few months later.

R29, the Republicans leave a mess and Democrats have to clean it up. Repeat, [italic]ad nauseam[/italic].

The Economist didn't predict the Great Recession of 2008 either.

So the reception to today's negative forecasts helps explain why so few forecasters called 2007 or 2008 right. Some of us spotted straws in the wind but fell far short of anticipating the full horror. Indeed, had any economist in early 2007 predicted the effective collapse of much of the banking sector, and the deepest recession since the 1930s, they would have faced either deep scepticism or similar accusations of "talking the economy down".

Peter Schiff predicted the 2008 Recession. He seems a little looney though, telling everyone to buy gold coins (which, of course, he sells).

A lot of people predicted the 2008 recession, R32. Schiff is libertarian and a member of the Austrian Economics school of thought and he's gotten far more wrong than he has right including, for example, predicting the total collapse of the dollar and massive hyperinflation. He claims that all "fiat currency" will collapse and that all paper money will be worthless, leaving only gold as having any value.

Basically, Schiff and others like him have been predicting collapse every year since the founding of the Federal Reserve, and redoubled their predictions after the U.S. abandoned the gold standard. He's the proverbial stopped clock that is right twice a day (once, if it's a 24-hour clock).

He has also predicted for over a decade now that China was going to destroy the U.S. currency and that we would have an intense bear market during which gold prices were going to climb to $5000 an ounce. In 2009, he said:

[quote]"An inflationary depression is going to be a protracted period of economic decline accompanied by rapid increases in consumer prices. So, it’s going to be something like the stagflation of the 1970s, only much more stagnation, or outright contraction of the economy, with the cost of living increases even more rapidly than it did then.”

That was ten years ago. Basically, he has absolutely no idea what he's talking about and his predictions are worthless.

I loved this one quote about Schiff:

[quote]Accordingly, Peter Schiff could be considered the male version of a "financial Kim Kardashian."

Sorry, R35 was a response to R34 rather than R32.

What about the inverted yield curve that was all the rage a few months ago?

It's still there, R38, and still being taken seriously.

[quote]In the US, whenever the yield curve has inverted in the past 60 years — with only one exception in the late 1960s — a recession has followed. That is some record! Even more remarkably, the yield curve seems to have offered guidance about future economic activity since the 1850s. It has also worked in more recent cycles in many other economies.

But there is also reason to question just how much of a predictor it is today:

[quote]There are, however, reasons for questioning whether today’s recession risk is exaggerated in this calculation.

[quote]Long bond yields represent the expected forward path for short rates plus a risk premium, or term premium. Because of reduced inflation risk, this term premium has dropped by around 1.5 percentage points since the early 2000s, which implies that the yield curve is more inverted, for any given path for expected short rates, than it might have been in previous eras. Research has not clearly established whether this drop in the term premium reduces the reliability of the recession signal from the yield curve.

...

[quote]In summary, FOMC members will enter their crucial policy meeting next week with their yield curve and credit spread models indicating that recession risks are running at 13-29 per cent, which is somewhat more elevated than normal. There may be mitigating factors, connected to the unusually low term premium, which might be distorting these signals. Nevertheless, the committee would be unwise to ignore the information in the yield curve, and is quite unlikely to do so.

Thank you, R39.

I just hope the recession comes when we need it. I’m already hearing that Trump supporters who own businesses (logging) in WV are being ruined by Trump’s tariffs. Just need nationwide devastation to finish him off.

[quote] R8: What would anyone suggest to do with cash? Would it be better to buy property or what?

[quote] R10: How much of your savings percentage wise would you put into the total market index fund, [R9]?

I’m 70% in cash, 30% in mutual funds, and I want to move more into cash. I think things are too unstable right now to be investing in the market.

I have no idea about real estate.

[quote]...and the Democratic Party only cares when a Republican is in office.

BULLSHIT! Do you just pull this shit out of your ass?

Both Clinton and Obama were hugely successful in lowering the deficit and Bill Clinton even ran a small surplus his final year in office!

Recessions are sometimes precipitated or exasperated by a shock of some kind. 9-11 combined with the dot-com bust to cause a severe recession in 2000-2003.

The failure of a number of Wall Street banks in 2007-2009 made the Great Recession that much worse.

In all fairness, Trump is a “fucking idiot”, as his staff attests. There are a million different stupid things he could do to precipitate a crisis that quickly leads to a loss of confidence and economic chaos. For example:

Limited or total war with Iran

More tariffs, farm failures, grocery inflation

Casual use of an atomic weapon

Preventive war with North Korea

Defection to Russia

Winning re-election

Any of these, and more, could cause a financial panic.

China will not take the shit from the US lying down. And if it must go down, I feel that it will go nuclear option and dump US Treasury bonds, thus all hell breaks loose.

A key difference, though, is that China is more likely to be the epicenter of the storm.

“Sustained growth in China was the other reason that we didn’t have a re-run of the Great Depression. If China hadn’t focused so much on credit creation, I think we would have had a much tougher time globally. It was the stimulus package that worked,” Ferguson explained.

I think it already started because gold has gone up about $100 in the last few weeks

William Devane must be lactating.

You're smart, R7.

I’m waiting for the vacation home market to tank in Palm Springs so I can swoop in and pay cash on a bargain basement MCM home.

R7 and R15 would seem to represent the extremes of the spectrum of acuteness attracted by DL.

I can not afford to retire!

We do need to reduce our debts. We can repeal Trump‘s Tax cut; repeal Dubya’s tax cuts; go back to the Clinton tax rates; reinstate and further raise the inheritance/dynasty tax. That’s revenue. As for spending, we can decrease the size of the military, and work towards a peaceful solution to our differences with Iran, for starters.

It's here. We're living the dream.

It's all Obama's fault!

Or Hillary's fault.

One or the other, we can't remember.

The Federal Reserve left interest rates unchanged yesterday, and they hinted that economic weakness may prompt them to lower rates at their next meeting. They had been raising rates and letting go of assets acquired as a result of Quantitative Easing.

That implies that a recession is more likely this year, than usual.

The congregation is asked to remain seated until the end of the recession.

I have to imagine the next recession will hit between this September and the following September.

R56 how could you be able to pinpoint the timing so precisely?

This was posted on another thread but is more relevant here =

Hmm. The stock market is at record highs. A good time to sell. As long as the dollar remains a valid currency.

If the Russians dropped a trillion dollars in counterfeit notes over Manhattan, we might be in for crippling inflation. But you can’t plan for every contingency.