The Financial Collapse of 2001 Unwinding Message Board

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Strategies & Market Trends : The Financial Collapse of 2001 Unwinding

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To: John Vosilla who wrote (1809)	1/31/2019 12:20:29 AM
From: elmatador	Read Replies (1) of 13803

So what is the end game? No end game. Perhaps reallocation of capital on a global basis. Economists have failed miserably in understanding how the economy works at the micro level, at the very grassroots. I never believed in end games.because the world economy will have to keep producing goods and services to keep people, clothed, fed, healthy and educated. There will still be an economy based on covering 7.5 billion people's basic needs. There will be perhaps less capital for the likes of Musk and Bezos to send rockets into space. RECESSIONS ARE MADE OF THESE (keeping governments and the politicians out of it for a moment) Middle class is hit by low growth prospects They cancel the gym, the extra curricular activities for kids and hobbies go. Stick longer with cars Lower the costs or postpone vacations Postpone getting married and having babies As result consumption and service sector is hit hard The Rich stop buying houses on the beach or summer cottages. Reconsider high cost tertiary education for the kids. Get more conservative with their investments Capitalists rein capital in and that results on cancelling factory expansions and opening new ones. Banks cannot charge high interest rates R&D budgets are trimmed. Companies freeze hiring Realoccate capital from industries with low growth prospects and place in the recession proof ones Why the above do not cause a Global depression and reset? Because the recessions carry, within it, the seeds of the economic growth Recessions can't last too long because what people use is subject to wear and tear. Repressed demands are too tempting to by pass ! That capital that was reined in is burning capitalists' pockets Salaries got low and people accept less money for their work Newly graduates throw their net wider Clothes, shoes get old Kids grow need new clothes. House repairs cannot be postponed You need new tyres and a new car. People who postponed marriages and babies now want to go ahead with that. Now government enter the picture: Governments hate recessions because there is less taxes entering their coffers. Anything that creates growth equals more money in entering the treasury. Government start facilitating. Capitalists and governments work in tandem. Repressed demand and government and capitalists working in tandem kickstart economic growth once again.

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