First of all, lets us discuss the basis of economics which is inflation, recession, and depression.
Inflation means that things are getting more and more expensive or in other words, our buying power diminishes.
Inflation can be further divided into cost-push inflation and demand-pull inflation.
In demand-pull inflation, everyone is rich and they are paying more for the price of goods or in other words they are bidding up the price of goods. Which are very very classical and very unlikely to happen in the current scenario.
In cost-push inflation, the cost is rising and the seller has no choice, but to increase the price of their goods or they would suffer losses. In every transaction, every seller and buyer objective is profit. If the cost in the supply chain increases the cost to the ultimate customer would also increase eventually due to pass-over cost leading to cost-push inflation. This is the type of inflation happening worldwide.
Recession, on the other hand, means that the economy shrunken and the buying power had diminished, and there is negative growth for two consecutive quarter due to short term debt cycle which is within 10 years time frame.
Depression means that the recession is so bad due to the long term debt cycle which is within the 70 years time frame.
Stagflation means inflation and depression happen at the same time. Inflation happens at the supply side and depression happen at the demand side. Because of the high cost of living and not many people having money to buy due to unemployment. This is what happens to America and the world over.
Back in America, the debt burden is too high. Currently, the Debt Ceiling is over 20 Trillion and if you stack a US 1 dollar bill from the earth, you can build a bridge to the moon.
Keynesian Growth Theory is based on:
1) Spend all the American has
2) Borrow all the American can - local or sovereignty
3) Print all the money - rob by inflation
4) Austerity measures - taxes and taxes.
*Do you know that it is cheaper to produce goods overseas like in China (10% tax and lower labor cost) than in America (30% tax).
So, how a Keynesian settle a recession:
1) Cut spending
2) Austerity measures - Hair-cut for debtors, with payment by tax-payer money.
3) Transference of Wealth from the "Have" to "Have-not"
4) The "Magic Printing Press"
*In 1929, the US President did all three above except number 4 and still failed. The great depression, only settle after 10 great years and World War II.
*In 2008, Barack Obama did the number 4 and succeeded to treat the symptoms but not the diseases with printing trillions of dollars.
*By 2023, Trump would probably need to do number 4 and treat the symptoms again with the printing of quadrillion dollars before bringing a dollar to oblivion and to its knee. Why is this so?
Comments:
This is because Stagflation and cost-push inflation will push nearly everyone (99%) out of money, dried their saving and everyone will be in need of money (like oxygen for survival) due to Medicaid and bankruptcy will be a common word around - "spreading like wild-fire", leading to worldwide depression and "multiplier-effect" of the depression will lead eventually to deflation and most sellers had no choice but had to do the most sensible thing, which is, to sell cheaply their goods or face bankruptcy. So, deflation set in and a hard time for everybody except if you diversify your asset class.
Then Trump would blow his Trumpet and print Quadrillion money leading to "Hyperinflation"
So, the only way to survive this eventual catastrophe is something of everything - "ground, grab, gasoline, gun, and gold."
"Fate favor those who are prepared."
Yours Sincerely,
Dr Lion.
Inflation means that things are getting more and more expensive or in other words, our buying power diminishes.
Inflation can be further divided into cost-push inflation and demand-pull inflation.
In demand-pull inflation, everyone is rich and they are paying more for the price of goods or in other words they are bidding up the price of goods. Which are very very classical and very unlikely to happen in the current scenario.
In cost-push inflation, the cost is rising and the seller has no choice, but to increase the price of their goods or they would suffer losses. In every transaction, every seller and buyer objective is profit. If the cost in the supply chain increases the cost to the ultimate customer would also increase eventually due to pass-over cost leading to cost-push inflation. This is the type of inflation happening worldwide.
Recession, on the other hand, means that the economy shrunken and the buying power had diminished, and there is negative growth for two consecutive quarter due to short term debt cycle which is within 10 years time frame.
Depression means that the recession is so bad due to the long term debt cycle which is within the 70 years time frame.
Stagflation means inflation and depression happen at the same time. Inflation happens at the supply side and depression happen at the demand side. Because of the high cost of living and not many people having money to buy due to unemployment. This is what happens to America and the world over.
Back in America, the debt burden is too high. Currently, the Debt Ceiling is over 20 Trillion and if you stack a US 1 dollar bill from the earth, you can build a bridge to the moon.
Keynesian Growth Theory is based on:
1) Spend all the American has
2) Borrow all the American can - local or sovereignty
3) Print all the money - rob by inflation
4) Austerity measures - taxes and taxes.
*Do you know that it is cheaper to produce goods overseas like in China (10% tax and lower labor cost) than in America (30% tax).
So, how a Keynesian settle a recession:
1) Cut spending
2) Austerity measures - Hair-cut for debtors, with payment by tax-payer money.
3) Transference of Wealth from the "Have" to "Have-not"
4) The "Magic Printing Press"
*In 1929, the US President did all three above except number 4 and still failed. The great depression, only settle after 10 great years and World War II.
*In 2008, Barack Obama did the number 4 and succeeded to treat the symptoms but not the diseases with printing trillions of dollars.
*By 2023, Trump would probably need to do number 4 and treat the symptoms again with the printing of quadrillion dollars before bringing a dollar to oblivion and to its knee. Why is this so?
Comments:
This is because Stagflation and cost-push inflation will push nearly everyone (99%) out of money, dried their saving and everyone will be in need of money (like oxygen for survival) due to Medicaid and bankruptcy will be a common word around - "spreading like wild-fire", leading to worldwide depression and "multiplier-effect" of the depression will lead eventually to deflation and most sellers had no choice but had to do the most sensible thing, which is, to sell cheaply their goods or face bankruptcy. So, deflation set in and a hard time for everybody except if you diversify your asset class.
Then Trump would blow his Trumpet and print Quadrillion money leading to "Hyperinflation"
So, the only way to survive this eventual catastrophe is something of everything - "ground, grab, gasoline, gun, and gold."
"Fate favor those who are prepared."
Yours Sincerely,
Dr Lion.
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