The Era Of Cheap Money Is Ending: "This Is The Calm Before The Storm"
By Tyler Durden
Submitted by Mac Slavo via SHTFPlan.com,
We’re living in the calm before the storm.
That much everyone can sense. The stock market highs and holiday spending spree will soon be over, the inauguration will presumably go as planned, but that’s when everything could start to go off course.
The only question is how the storm is going to stir into a frenzy – there will be a pretext of some kind. What seems certain is that it is past time to get ready for a difficult period. This could be the big, slow squeeze and the long winter.
The economy became immune to stimulus and quantitative easing; the market can only be propped up so long, and the realities of raised interest rates a matter of timing for the Fed to decide. Now, President-elect Trump provides the catalyst necessary for a dramatic rise and fall in the economy.
With the force of the economic avalanche that is poised to fall upon us all, the policies and actions of President Trump will do little to stem the tide of what is already coming; for better or worse, there is little that Trump himself can do even though it may fall squarely on his administration.
There are many putting out the talking points now; the warnings are reaching a crescendo.
Jay L. Zagorsky, Economist and Research Scientist at Ohio State University, is predicting a recession for 2017, in spite of glowing outlooks, that could dominate headlines:
My outlook for 2017 and beyond is that the U.S. economy will likely see another recession.
[…]
It could be a sudden trigger like the collapse of Lehman Brothers in late 2008 or just a general loss of confidence.
[…] At the end of very long expansions, banks and finance companies are willing to lend to almost anyone because they become overly optimistic. Some of this willingness to lend carelessly is currently seen in U.S. car loans.
[…] like a game of musical chairs [….] suddenly “the euphoria becomes a panic, the boom becomes a slump.”
Recession, of course, is a euphemism for something much more far reaching… yet the sense of true panic is there. This could be bad.
Regardless, people across the spectrum are warning about the financial blowback that is likely headed our way. Many prominent economists are currently signalling either slow growth, or the onset of a crisis that no Trump could contend with, as RT notes:
Many of the experts said the global trade slowdown, seen during the slight recovery from the financial crisis that started nearly a decade ago, could worsen.
Emerging economies are expected to remain vulnerable… accelerating inflation and a soaring US dollar among the risks to the economic balance.
Dollar strength, weakening other currencies, will influence how emerging markets manage relatively higher inflation, as well as falling business confidence, they said.
[…]
“Mr. Trump and his team have promised growth of 3.5 to 4 percent or more, which we see as ‘magical thinking’ unless accompanied by accelerated productivity growth,” said Michael Carey, …read more
Source: The Era Of Cheap Money Is Ending: "This Is The Calm Before The Storm"
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