If you had pulled out of the market at the end of 2018 expecting a bigger drop, guess what, you would have missed one of the fastest market comebacks.
The scenario being discussed is just one possible outcome. There are numerous other outcomes as well. You can off course bet on this scenario and pull your money out of the market, and if the crash occurs, you can tell everyone about how to timed the market. Or you might be the person who lost big time.
Looking at the author's bio, I'm not sure how he is any more qualified to make a statement on this than any other random person on the street.
> Charles Mudede—who writes about film, books, music, and his life in Rhodesia, Zimbabwe, the USA, and the UK for The Stranger—was born near a steel plant in Kwe Kwe, Zimbabwe. He has no memory of this birth, but he does remember noticing himself in the mirror for this first time—it happened on May 3, 1972. Mudede is also a filmmaker: Two of his films, Police Beat and Zoo, premiered at Sundance, and Zoo was screened at Cannes. Mudede has written for the New York Times, Cinema Scope, Ars Electronica, C Theory, and academic journals. He also wrote the liner notes for Best of Del Tha Funkee Homosapien: Elektra Years. Mudede has lived in Seattle since 1989.
What bugs me about these doomsday articles about how Americans are unprepared is that they never mention what Americans ought to be doing. Saving more money? Sure. But what exactly am I supposed to be investing in / divesting from / etc?
Until you are old, basically investing is better than not. When you are old short term dips start to matter. Prior to that, the market eventually goes up.
Whenever someone tells you "the only solution is..." You can just write them off. There's never only one solution to any problem, let alone one where the problem is purely speculative.
Did he change the article? Here's what I saw at the end:
>If monetarism goes, then the only peaceful political solution to the crisis will be a massive social Keynesian program like the Green New Deal. If this happens, those who hated Obama's mild stimulation packages will look back at those days with nostalgia. A brave New Deal will necessarily place democracy at the center of society, not markets.
The New Deal may have been heavily inspired by socialism, but I wouldn't go so far as to call it communism/socialism.
A good read on QE is Currency Wars by James Rickards. It isn't written as a dry traditional economic book while covering the monetary history of last 2 centuries. I suspect the book is not mentioned often being published in 2012 it predicted the destruction of the dollar by the QE policies. The predictions of the book can still become reality because QE is a monetary experiment which increases the supply of money at unprecedented level.
Creating money out of thin air and holding more than 4 trillion dollar [0] on assets is not a healthy situation for the FED. [0] https://fred.stlouisfed.org/graph/fredgraph.png?g=lFm1
Money is created out of thin air every day. That's how banking works.
There are hundreds of T of undervalued assets around the world. You can buy a beautiful castle in Sicily for $100. The Fed's holdings are nothing.
The assets on the Fed balance sheet are also largely inert. Like the archeological underpinnings of a skyscraper. Dig and you will find interesting things, could put them into museums. But they do little from a structural perspective.
The translation of capital into productive work and actual value worldwide is still extremely inefficient. This inefficiency is the guard against inflation.
Pay more attention, as always, to actual businesses, their P&Ls, projections of future cash flows.
Readit News
If you had pulled out of the market at the end of 2018 expecting a bigger drop, guess what, you would have missed one of the fastest market comebacks.
The scenario being discussed is just one possible outcome. There are numerous other outcomes as well. You can off course bet on this scenario and pull your money out of the market, and if the crash occurs, you can tell everyone about how to timed the market. Or you might be the person who lost big time.
As with all speculation...only time will tell
That said if the market shoots up and you hold on, you didn't gain anything either. No gains or losses until they are realized.
Dead Comment
> Charles Mudede—who writes about film, books, music, and his life in Rhodesia, Zimbabwe, the USA, and the UK for The Stranger—was born near a steel plant in Kwe Kwe, Zimbabwe. He has no memory of this birth, but he does remember noticing himself in the mirror for this first time—it happened on May 3, 1972. Mudede is also a filmmaker: Two of his films, Police Beat and Zoo, premiered at Sundance, and Zoo was screened at Cannes. Mudede has written for the New York Times, Cinema Scope, Ars Electronica, C Theory, and academic journals. He also wrote the liner notes for Best of Del Tha Funkee Homosapien: Elektra Years. Mudede has lived in Seattle since 1989.
A little out of his league i would say.
>If monetarism goes, then the only peaceful political solution to the crisis will be a massive social Keynesian program like the Green New Deal. If this happens, those who hated Obama's mild stimulation packages will look back at those days with nostalgia. A brave New Deal will necessarily place democracy at the center of society, not markets.
The New Deal may have been heavily inspired by socialism, but I wouldn't go so far as to call it communism/socialism.
I think a bigger criticism of this article is that it's basically a derivative of this article: https://www.politico.com/agenda/story/2019/05/29/the-feds-da...
Money is created out of thin air every day. That's how banking works.
There are hundreds of T of undervalued assets around the world. You can buy a beautiful castle in Sicily for $100. The Fed's holdings are nothing.
The assets on the Fed balance sheet are also largely inert. Like the archeological underpinnings of a skyscraper. Dig and you will find interesting things, could put them into museums. But they do little from a structural perspective.
The translation of capital into productive work and actual value worldwide is still extremely inefficient. This inefficiency is the guard against inflation.
Pay more attention, as always, to actual businesses, their P&Ls, projections of future cash flows.