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107 sats \ 2 replies \ @vijo 10 Jul 2022 \ on: Plans for coping with a recession? bitcoin
I honestly think recession fears are mostly overblown and caused by the constant negative media barrage to get more clicks/views...
Will we have a few bad months/years? Most definitely. Will Central Banks countersteer if things get too bad and open the infinite money valves again? Yeah, what other choice do they have?
The National Bureau of Economic Research dates recessions on a monthly basis back to 1854; according to their chronology, from 1854 to 1919, there were 16 cycles. The average recession lasted 22 months, and the average expansion 27. From 1919 to 1945, there were six cycles; recessions lasted an average 18 months and expansions for 35. From 1945 to 2001, and 10 cycles, recessions lasted an average 10 months and expansions an average of 57 months.
Bad months (ie recession) when economic fundamentals are this bad can runaway into depressions. You're kind of assuming we know how to avoid them because we haven't had one in our lifetimes - and we are primed for one IMO.
I agree though that money printing will resume eventually, but that just creates another problem. As inflation does, it will make the economy feel like it's growing - and many people will feel relieved, specifically asset owners - but it will accelerate wealth inequality. So then we'll need a treatment for that which is likely debt forgiveness and UBI, which will definitely lead to even more inflation.
Regardless, the fundamentals of the economy are in rough shape; it's inflation or recession and possibly depression. Either is nasty and requires caution for me because I run pretty lean financially.
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Bad months (ie recession) when economic fundamentals are this bad can runaway into depressions. You're kind of assuming we know how to avoid them because we haven't had one in our lifetimes - and we are primed for one IMO.
Good point, I really cannot imagine a depression. Central banks have always intervened as long as I've been on this planet.
I agree though that money printing will resume eventually, but that just creates another problem. As inflation does, it will make the economy feel like it's growing - and many people will feel relieved, specifically asset owners - but it will accelerate wealth inequality. So then we'll need a treatment for that which is likely debt forgiveness and UBI, which will definitely lead to even more inflation.
Yeah, the inflation ponzi can only go so far. Hopefully Bitcoin lives up to its role as a hedge against this scenario.
Regardless, the fundamentals of the economy are in rough shape; it's inflation or recession and possibly depression. Either is nasty and requires caution for me because I run pretty lean financially.
Agreed. Let's hope it doesn't get too bad.
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