10 Economic Experts are Saying of When and Why the U.S. May hit the Next Recession ( Who Controls All of Our Money? )

> Economic Collapse > 10 Economic Experts are Saying of When and Why the U.S. May hit the Next Recession ( Who Controls All of Our Money? )

What is Economic Collapse
An economic collapse is a breakdown of a national, regional, or territorial economy that typically follows a time of crisis. An economic collapse occurs at the onset of a severe version of an economic contraction, depression, or recession and can last any number of years depending on the severity of the circumstances. An economic collapse can be unwarranted or momentous with several events or signs leading to recessionary characteristics.

Understanding Economic Collapse
Economic theory outlines several phases that an economy can go through. A full economic cycle includes movement from trough, to expansion, followed by a peak, and then a contraction leading back to a trough. An economic collapse is an extraordinary event that is not necessarily a part of the standard economic cycle but can occur drastically at any point leading to contraction and recessionary phases.

Unlike contractions and recessions, there is not necessarily a definitive determination of a collapse but rather labeling of a collapse by economists and government officials. An economic collapse is usually brought on by extraordinary circumstances that may or not be coupled with already contracting economic statistics. When an economic collapse occurs it typically leads to rapidly contracting economic data which then quickly leads to a recession.

An economic collapse is also often followed by several interventions. Banks may close to curb withdrawals, new capital controls may be enforced, and in some countries, an overthrow of the government may happen. Generally, in nearly all cases of an economic collapse, some types of government changes are made by identifying the key factors leading to the collapse and integrating new legislation that mitigate the factors from occurring again.

There are consequences to these actions. When more loans are given out, more money is created, causing the rest of the money circulated to be worth less, this is known as inflation. Inflation is the tax we all pay for the fraud of money printing. Inflation is also the reason that in 1950, the average home cost $7,000 and the average car $2,000. As long as we keep the current system in play, things will continue to seem as though they increase in price, but truly it’s just an effect of our money being worth less.

How to be prepared for a food crisis?

Food Crisis queuing case of a food shortage you should be aware that grocery stores only have about 3 days of food in stock. People will rush and buy as much as they can so probably the food will vanish in less than a day or hours. So if anything was to disrupt the food supply chain for an extended period of time, there would be chaos in most communities. It’s very important to start preparing NOW. There are several ways to start. The choice you make should depend on the event you are preparing for. Of course the best way is to prepare for all scenarios including long periods.

The Dark Truth on Debt
As mentioned previously, central and commercial banks can create money like a magic trick in the form of loans. The process creates more than new money, it creates Debt. When you take a loan from the bank the bank gives you the money and they record that as a negative asset on their books. Under the central banking system debt is actually money, some experts believe that if there were no debt in the system there would be no money. Essentially, instead of gold backing our monetary value, it is now Debt.
We currently operate under what is widely known as the debt-based monetary system, this system has a requirement that debt continues to grow. The system relies on people getting further into debt which in essence creates more money into the system.

The U.S. economy is growing at a fast clip, and the bull market is entering its ten year. But some economists are starting worry over rising interest rates and a negative signal from the bond market called a “flattening yield curve.”

“The yield curve—with one exception in 1966—has basically predicted every recession,” Natixis Chief Economist Joseph LaVorgna told CNBC . “If the curve inverts let’s say in October, history would say the earliest you’d have a recession would be next summer, next August. And the latest would be August of 2020.”

“Now it’s possible that this time is different and the curve might be sending a different signal because long rates are relatively low,” LaVorgna added.

In May, the U.S. economic growth rate hit 4.1 percent for the second quarter, its fastest pace in four years. And the stock market is poised to make history Wednesday, when the nine-year bull market is supposed to become the longest in U.S. history. Here’s what 10 economic experts are saying of when and why the U.S. may hit the next recession.

Examples in History
History provides some of the best examples for factors that can cause an economic collapse. Different from contractionary economic periods, an economic collapse typically has its own special circumstances and factors. Oftentimes these factors are mixed with many of the macroeconomic factors that occur in contractions and recessions such as hyperinflation, stagflation, stock market crashes, extended bear markets, and unbalanced interest and inflation rates. Furthermore, collapses can also occur from extraordinary government policies or troubled international market activity.

In the United States, the 1930s Great Depression was a prime example of an economic collapse with several extraordinary factors of its own that led to a great deal of reform across the country. The 1929 stock market crash was a key catalyst for the collapse. As a result, what followed was sweeping regulatory reforms affecting the investment and banking industries, including the Securities Exchange Act of 1934. Overall, economists reported that the 1920s collapse was highly caused by a lack of government involvement in the economy and financial markets.

The 1930s Great Depression lasted three and a half years, wiping out more than a quarter of U.S. GDP. In addition, unemployment during the Depression surpassed 24%.

The 2008 financial crisis was a crisis with several economic concerns falling below the radar, undetected until fallouts and bankruptcy began. The bankruptcy of Lehman Brothers was the tipping point. Overall, the factors involved in the 2008 crisis included extremely loose lending and trading policies for institutions which led to large losses from defaults and mismanaged proprietary trading activities. Similar to the 1920s collapse, the 2008 collapse also resulted in legislation reform, primarily in the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The 2007-2009 Great Recession lasted less than two years and the U.S. only experienced six quarters of negative GDP growth totaling just over 5% from its peak. The 2008 Recession also saw unemployment reach a high level of approximately 10%.

Across the global most investors are also aware of the many international collapses that have occurred throughout history. The Soviet Union, Latin America, Greece, and Argentina have all made headlines. In the cases of Greece and Argentina, both were brought about by severe issues with sovereign debt. In both Greece and Argentina, sovereign debt collapses led to consumer riots, a drop in the currency, international bailout support, and an overhaul of the government.

THEY WANT YOU TO BE POOR –

How Does the Fed Control Money?
The Federal Reserve and other Central Banks control money by adjusting its supply and adjusting how much it costs to borrow money (also known as the interest rate). These tools give the Federal Reserve free will to create booms and busts within the economy.

Let’s examine a real-life example from the year 2000. Federal Reserve Chairman Alan Greenspan reduced interest rates to 1%. This was done in an effort to fight recession caused when the Dot Com bubble burst, encouraging people to borrow money. 1% interest rate obviously means huge savings on repayment of a large investment like a home and hadn’t available since the 1950’s. Greenspan did this to create a ‘Wealth Effect’. People would start to buy houses because it was cheap to borrow money, with more people buying houses the price of houses would increase. This would create a scenario by which people would feel wealthier and spend more money in the economy.
Greenspan’s idea succeeded, but it was what you would call an overachiever. With too many people borrowing money they ultimately couldn’t afford the housing bubble eventually burst in 2008. This is a typical Keynesian approach and a prime example of what can go wrong when governments interfere with the economy.
Summary
I think I can summarize this entire article with a quote from James Garfield, 20th President of the United States:

Whoever controls the volume of money in our country is absolute master of all
industry and commerce…when you realize that the entire system is very easily
controlled, one way or another, by a few powerful men at the top, you will not
have to be told how periods of inflation and depression originate.

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