{"id":60880,"date":"2021-12-10T20:51:14","date_gmt":"2021-12-11T01:51:14","guid":{"rendered":"https:\/\/olduvai.ca\/?p=60880"},"modified":"2021-12-10T20:51:14","modified_gmt":"2021-12-11T01:51:14","slug":"the-next-recession-heres-when-the-everything-bubble-will-burst","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=60880","title":{"rendered":"The next recession: Here\u2019s when the \u2018everything bubble\u2019 will burst"},"content":{"rendered":"
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The next recession: Here\u2019s when the \u2018everything bubble\u2019 will burst<\/a><\/h3>\n<\/header>\n<\/header>\n
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In October 20XX. That\u2019s not a typo. To reach the best guesstimate of when the next recession will begin, we need to understand how the Federal Reserve creates unsustainable booms and why the next bust may be just around the corner.<\/p>\n

A caveat is in order. As physicist Niels Bohr exclaimed, \u201cPrediction is very difficult, especially if it\u2019s about the future.\u201d Nevertheless, I will weigh in fearlessly with my 10 cents. The Fed\u2019s inflationary policies have increased my two cents fivefold. Maybe the next cryptocurrency is on the horizon: My 10 Cents.<\/p>\n

If a dog can have a crypto, why can\u2019t a retired finance professor who\u00a0warned the public<\/a> that prices were about to accelerate due to the Fed\u2019s inflationary policies in the spring of 1976 have one?<\/p>\n

Consumer\u00a0prices rose<\/a>\u00a05.7% in 1976, 6.5% in 1977, 7.6% in 1978, 11.3% in 1979 and 13.5% in 1980. Talk about being right on the money!<\/p>\n

As inflation was galloping throughout his presidency, then President Jimmy Carter appointed Paul Volcker, a former banker and U.S. Treasury official, in 1979 to halt the multiyear price spiral. Volcker succeeded spectacularly. Consumer prices rose 10.3% in 1981, revealing how inflation momentum can continue for a while before the Fed\u2019s tight money policies slay the inflation dragon. In 1982, prices rose 6.1%, 3.2% in 1983, and (miracle of miracles) only 1.9% in 1986, a year before Volcker stepped down as Fed chairman and was replaced by Alan Greenspan.<\/p>\n

To accomplish what was considered at the time improbable due to high inflation expectations, the Volcker-led Fed\u00a0raised the Fed Funds Rate<\/a>\u2013the rate banks borrow from each other for overnight loans\u2013to 22% by December 1980. The cost of Volcker\u2019s tight monetary policies necessary to halt the dollar\u2019s slide was back-to-back recessions: a short downturn 1980 and then another one, 1981-1982. A case can be made that one long recession occurred that in effect lasted three years, from January 1980 to November 1982.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The next recession: Here\u2019s when the \u2018everything bubble\u2019 will burst In October 20XX. That\u2019s not a typo. To reach the best guesstimate of when the next recession will begin, we need to understand how the Federal Reserve creates unsustainable booms and why the next bust may be just around the corner. A caveat is in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2026,17853,303,426,534,32279,1264,3650],"class_list":["post-60880","post","type-post","status-publish","format-standard","hentry","category-economics","tag-consumer-prices","tag-everything-bubble","tag-fed","tag-inflation","tag-monetary-policy","tag-murray-sabrin","tag-recession","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60880","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=60880"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60880\/revisions"}],"predecessor-version":[{"id":60881,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60880\/revisions\/60881"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=60880"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=60880"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=60880"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}