Trump's war in Iran is going to sweep us all into the gutter.

Oil prices have started to come down for a worrisome reason. It's like the tide going out along the seashore, an ominous phenomenon heralding the approach of a tsunami that wipes out everything. The aftermath will be a global economic wasteland.

The largest oil shock in history caused prices to surge. Now they're so high that they have inducing "demand destruction." As a result of the acute energy commodity shortages stemming from the closure of the Strait of Hormuz, oil appears to have reached a point where it is now so expensive that overseas businesses and households have begun curbing investment and consumption. That means slower economic growth that is expected to bring about a depression far worse than the last one: The Great Depression in 1929.

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sree251 · 41-45, M

@BizSuitStacy

So your rationale is because the economy is good, it's gonna be bad? 🙄

I am no economist. I am reporting what the economists are saying.

The primary cause of the crash of '29 was due to so many investors over extending themselves and were unable to cover margin calls.

Like I said, I am no economist. I am just hanging out here where losers gather to kill time.

The cause of the housing market crash of 2008 was caused by the government forcing banks to loosen their lending requirements to buyers who otherwise wouldn't qualify because of the risk of being unable to pay their mortgages. Look up the Community Reinvestment Act and redlining (thank you Jimmy Carter and Bill Clinton). Not only did many more investors qualify for loans, lenders increased the amounts people could borrow against their income. The demand for housing rose, in entity dropped, driving housing prices up. Loans were bundled together into MBSs, and then the foreclosures began. Crash!

Yeah, that is what we all learn from watching movies.

So, tell us about the market fundamentals now that are going to cause the next crash.

You will have to consult Professor Jeffery Sachs on this. I watch his podcasts. Do you?

BizSuitStacy · M

@sree251

Umm...no. I was the IT manager for a fortune 500 consumer lender, responsible for their systems and compliance reporting.

Econ 101...the demand curve for petroleum is inelastic. This is the exact opposite of the "demand destruction" theory, as the entire world dependent on petroleum and there is no legitimate alternative.

The all time high for crude oil is $147 per barrel in 2008. Crude is currently running about $92 a barrel. You absolutely no idea what you're talking about.

sree251 · 41-45, M

@BizSuitStacy

The all time high for crude oil is $147 per barrel in 2008. Crude is currently running about $92 a barrel. You absolutely no idea what you're talking about.

Ok, man. I am not denying your opinion. How old are you anyway?

whowasthatmaskedman · 70-79, M

@sree251 This situation is complex. Way more complex than the '29 crash, although all the factors that started it are present. Also more complex than the housing bubble collapse. Although all the factors that created that are also present and were never dealt with the first time. So the numbers are bigger and badder than ever and the few guardrails that were there have been removed. Way more complex than the economic downturn caused by the Spanish Flu global pandemic, . And close on as bad as the rise of a Dictator in Europe, removing assistance from all those who needed it and raising poverty and crime..
And this time its all coming at once..And all the nasties from each of those will land to a greater or lesser extent on everyone.. And much of the washout will land on America as an economy and a nation. Because they have the most to lose..
And thats a fact, Jack!😷

sree251 · 41-45, M

@whowasthatmaskedman

And this time its all coming at once..And all the nasties from each of those will land to a greater or lesser extent on everyone.. And much of the washout will land on America as an economy and a nation. Because they have the most to lose..
And thats a fact, Jack!😷

Sounds right. I am just bracing for a meteor strike stocking up on canned beans, brown rice, pasta, paper towel, toilet paper, and enough ammo to protect my stash from the likes of @BizSuiStacy and @Gibbon.

BizSuitStacy · M

@sree251 they let you have guns in Pakistan? 🤣

whowasthatmaskedman · 70-79, M

@sree251 I know this is a matter of personal choice. But wouldnt it be safer to simply be elsewhere when it happened?😷

sree251 · 41-45, M

@whowasthatmaskedman

I know this is a matter of personal choice. But wouldnt it be safer to simply be elsewhere when it happened?😷

Where? The entire planet will be affected by the economic depression. No place is safe except off-grid on a vegetable farm.

whowasthatmaskedman · 70-79, M

@sree251 Up to a point thats true. Its complicated. But the crib notes version is that the $US has been artificially kept afloat by prinint money for over a decade now. since "Quantitative Easing"in fact. about 2011. Now thats all very well under Keysian economics, but the rules are it can only go on for so long, it should be aof r a constructive purpose. And the money has to be paid back eventually.
If all three of those conditions arent met, then the debt leaks into the system in the form of diluting the value of the currency. Thats inflation if it happens with the national economy.. Or devaluation of the currency if the nation spends up on imports. Those are just economic facts. And America has broken all three of those rules. The longer you keep printing, the less effective it is in saving the economy..And you reach the point where inflation becomes hyperinflation. America being the international reserve currency and gaming the international banking system allowed it to go on longer than most. But the grip in that title has slipped and the other nations are now buying from each other without paying America a commission. In a recession/depression the volume of trade drops. That hurts everyone.The nations that import more than they export get hurt more.. And the country whose currency fewer people want get hurt the most..America will soon have a drop in domestic comsumption in real terms. Get less revenue for the goods it expoerts and pay more for the goods it imports. Do I need to connect that to employment and conditions and from there to taxation revenue?
America is agoing to be hurt as badly as any other banana republic. Even the Tourism is stuffed..