Economy: Rather Crash & Burn or Slow Burn

Problem is I think A requires some kind of massive shock, and who knows what that would be. Maybe mass unrest after the next election. Or student loan payments have a massive ripple effect combined with commercial real estate bomb bursting.

B is the more likely outcome as it seems like the markets are finally coming to grips with long term raised rates and are slowly winding down to reality.

This:

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Rip the band aid off now and deal with hardship sooner

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Does not necessarily mean this:

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get through the rough times quicker.

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will happen. One could argue that acute systemic shock to the financial system would have severe unintended consequences. I would take a somewhat controlled burn over uncontrolled chaos.

Fait accompli, B is already the course. If A was rightfully chosen, then the proverbial band-aid would have started in 2021. But rather, the current administration spent that entire first year in office gaslighting and saying massive inflation and supply chains were just transitory with no Fed hikes, look away nothing to see here. Then Powell was handcuffed in 2022 mid-term election year from doing what he really needed to do, which would have been minimum 100 to 200 basis pts hikes at every single meeting...not merely 25 or 50 bps here and there.

I've been saving for a crash. With an overinflated market, I'm in the hold position.

Not to get philosophical, but we've been doing the slow burn since the 90's. Low interest rates, QE since 2008, and fiscal spending way beyond our means is the only reason it doesn't seem like we are worse off - and your portfolio's are high.

It all, unfortunately, ends in a crash of epic proportions. But the stock market may be up after it. Sounds strange, I know, but it may seem like we've recovered because your statements may have the same numbers, but you won't be better off.

For example, the "Great Recession" was low interest rates and government backed loans (to simplify it) and a lack of oversight of the products being created to take advantage of this policy backdrop. Ends in a crash that took out many longstanding strong institutions and a ton of people lost their jobs, but the banks and a lot of the institutions were bailed out with money we didn't collect in taxes and then to make sure the pain went away we started massive QE programs. Continue slow burn...

The problem isn't solved, it just got bigger and more regulated so we can blame greedy corporations (that they'll spend your grandkids money to bail out) or the other political party depending on who's in power when the music stops.

:stepsoffsoapbox:

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I would rather A. You can't begin to fix things until the event has run its course. D

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What exactly needs to be fixed?

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the federal government either has to cut spending, raise taxes, or the economy has to grow at a faster rate than the debt expansion.

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Raise taxes? You serious Clark? How bout this, Potato comes out and crosses the aisle and declares that he was wrong about his war on fossil fuels and all these green unicorn energy initiatives replacing O&G. Congress can then enact legislation putting us back into the driver's seat re-establishing transportation pipelines and cutting all the red tape/burdensome regulations. You know, simple shite versus raising goddamn taxes throwing us into Carter level stagflation.

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What exactly needs to be fixed?

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The insane amount of deficit spending by the federal government and the massive credit card debt being run up by consumers.

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Street Hawk 12:33am

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What's with drunk posting past midnight on a Saturday night on the Money Board of all places? Have some respect for yourself and this Board, take your drunk arse to the OT.