What will trigger this recession or coming recession

[Jinyansg]

I was having a discussion with a group of friends over dinner a couple of days ago.  We agreed that there will be a recession or we are in The Eye of the storm. Our disagreement was on what will trigger the recession. The previous recession was due to the Lehman Brothers saga. My question to BWs is what will trigger the next recession?

Edited August 18, 2022 by Jinyansg

[Guest Fake HC]

World war 3. If china wants to do something stupid as to territorial invasion and deploy its men to Taiwan shore. WW3 begins. Now economical stance dwells between china and taiwan. Not like Russia and Ukraine. Ukraine isn’t as economic influence as Taiwan is. So between Russia and Ukraine. Crypto drop alot already. And many rug pull. But one thing you can sure of is Singapore will have more investors from china in event china civil wars. And also if India and china rise tensions, Singapore will have more investors coming in from india as well.

[Guest Hc fake]

Any countries having war conflicts Singapore properties will soar damn high. Which will result super high inflation in Singapore. All buildings and units will be bought but emptied. While rental will soar higher. People wage will be supressed. Singapore will eventually be a capitalist countries for rich men.

[singalion]

On 8/18/2022 at 11:17 PM, Jinyansg said:

I was having a discussion with a group of friends over dinner a couple of days ago.  We agreed that there will be a recession or we are in The Eye of the storm. Our disagreement was on what will trigger the recession. The previous recession was due to the Lehman Brothers saga. My question to BWs is what will trigger the next recession?

 

The actual trigger was the Covid pandemic...

 

Real reason behind the issues are logistic issues. 

 

Manufacturing is disrupted, prices of goods required in manufacturing are soaring. ...

 

The origin of the current inflation rate are in fact lash and wrong fiscal policies 15 years back that took the tools of Central banks out of their hands to reign in curbing inflation. 

 

My personal prediction is that won't be any real tragic recession, in particular if people/journalists/politicians wouldn't talk every day about recession. 

 

Not every tightening in money supply ended in a recession. 

 

 

[lonelyglobe]

On 8/19/2022 at 8:23 AM, Guest Hc fake said:

Singapore will eventually be a capitalist countries for rich men.

SG is already a playground for the rich,  as to the recession, u worry also Recession,  dont worry also Recession,  so why worry for something that u have no control over? 

[fab]

Instead of a coming recession, I am more concerned about the current inflation. 

[sgmaven]

On 8/19/2022 at 10:18 AM, singalion said:

 

The actual trigger was the Covid pandemic...

 

Real reason behind the issues are logistic issues. 

 

Manufacturing is disrupted, prices of goods required in manufacturing are soaring. ...

 

The origin of the current inflation rate are in fact lash and wrong fiscal policies 15 years back that took the tools of Central banks out of their hands to reign in curbing inflation. 

 

My personal prediction is that won't be any real tragic recession, in particular if people/journalists/politicians wouldn't talk every day about recession. 

 

Not every tightening in money supply ended in a recession. 

 

 

Unfortunately, not all governments and their politicians were fiscally-prudent during the pandemic. While I understood the large scale relief to individuals and businesses during the start of the pandemic (when the virus was still new and not well understood, with no vaccine available), many governments have continued to "print money" to fund relief programmes. I guess the politicians think that this will ingratiate them with the voters, but they don't really consider the long-term consequences of this, since many politicians don't expect to be around to have to clean up the mess.

[singalion]

On 8/19/2022 at 4:26 PM, sgmaven said:

Unfortunately, not all governments and their politicians were fiscally-prudent during the pandemic. While I understood the large scale relief to individuals and businesses during the start of the pandemic (when the virus was still new and not well understood, with no vaccine available), many governments have continued to "print money" to fund relief programmes. I guess the politicians think that this will ingratiate them with the voters, but they don't really consider the long-term consequences of this, since many politicians don't expect to be around to have to clean up the mess.

 

But I don't think government spending would trigger a recession. so from an macroeconomic standpoint the reason should be different.

 

When the (independent) Central banks started their expansive policies and initiated the bond buying, they failed to scale it down on a much earlier state.

 

There have been many economists who already a long time back predicted the inflationary effect of quantitative easing policies.

 

 

Quantitative Easing as a Highway to Hyperinflation

https://www.worldscientific.com/worldscibooks/10.1142/8797#t=aboutBook

 

November 2013

 

This book addresses the topical issue of whether the current environment in the US and other major countries, where quantitative easing is used to boost the economy, is conducive to the emergence of hyperinflation. This is a controversial and highly debated issue. Using both economics and history, the author challenges the view that quantitative easing will not lead to hyperinflation and argues that hyperinflation, or at least high inflation, is likely to appear eventually.

 

(Just one voice, there have been many).

 

 

After the Covid pandemic, both came together (too low interest rates and a demand surge) and created the record inflation...

 

If the independent Central banks had reduced the quantitative easing policies and bond buying measures at an earlier stage, in my economic view probably the inflation has not reached the record numbers... and in fact if it had happened in 2017/2018 the central banks had had better tools to counter the effects of Covid on the economy.

But the Central banks kept borrowing cheap despite the economy had for long overcome the Financial crisis.

 

[sgmaven]

You were talking about price-rises... And I think the printing of money, and the war in Ukraine are both reasons for the historic rise in prices.

 

As for recession, I think it is a combination of things. But I think a big part was the governments' collective failure to punish the bankers for the GFC... This left a system that still rewards greed, with lots of problems with oversight. More recent issues uncovered in Europe are just the tip of the iceberg.

[singalion]

On 8/19/2022 at 4:53 PM, sgmaven said:

And I think the printing of money, and the war in Ukraine are both reasons for the historic rise in prices.

 

However, most countries with an independent Central Bank (FED, ECB etc) governments are not printing money.

 

For Europe the payouts during the Covid pandemic weren't that extraordinary. You have to look it covers 27 countries.

1. €100 billion - Support to mitigate unemployment risks in an emergency (SURE)
2. €200 billion - Pan-European guarantee fund for loans to companies (European Investment Bank)
3. €240 billion - Pandemic crisis support for member states (European Stability Mechanism)

 

Energy price increases will contribute to price increases in other areas. As to my knowledge the rising energy prices amount to a large part of the inflation.

 

 

[singalion]

On 8/19/2022 at 4:53 PM, sgmaven said:

But I think a big part was the governments' collective failure to punish the bankers for the GFC... This left a system that still rewards greed, with lots of problems with oversight. More recent issues uncovered in Europe are just the tip of the iceberg.

 

I never understood why the European Union (Commission) and the States did not enforce a repayment of the aids given during the Financial crisis, when the economy turned back again.

 

The banks got monies from the tax payers but never learned any lesson.

 

That was totally unfair to the people who suffered the most during the Financial crisis having their shares or retirement savings minimised by reckless bankers.

 

The banks should have been forced to channel funds back after they had been stabilised.

 

 

Edited August 19, 2022 by singalion

[sgmaven]

On 8/19/2022 at 5:17 PM, singalion said:

 

I never understood why the European Union (Commission) and the States did not enforce a repayment of the aids given during the Financial crisis, when the economy turned back again.

 

The banks got monies from the tax payers but never learned any lesson.

 

That was totally unfair to the people who suffered the most during the Financial crisis having their shares or retirement savings minimised by reckless bankers.

 

The banks should have been forced to channel funds back after they had been stabilised.

 

 

Exactly! And the same issues with greed repeat themselves!

[sgmaven]

On 8/19/2022 at 5:17 PM, singalion said:

That was totally unfair to the people who suffered the most during the Financial crisis having their shares or retirement savings minimised by reckless bankers.

Don't forget the many foreign students studying in universities, who had to curtail their studies because their parents lost so much money in the crash that they were unable to fund their education.

[sgmaven]

I was in London as a student during the AFC, and I saw first-hand, the result of the AFC on students. Many could only just pack up and go home, unable to continue their studies. No doubt, the same would have happened with the GFC.

[Why?]

On 8/18/2022 at 11:17 PM, Jinyansg said:

I was having a discussion with a group of friends over dinner a couple of days ago.  We agreed that there will be a recession or we are in The Eye of the storm. Our disagreement was on what will trigger the recession. The previous recession was due to the Lehman Brothers saga. My question to BWs is what will trigger the next recession?

Announcement of a GST hike. Nobody wanted to purchase useless & fake pricey products and services today, which resulted in more businesses closing and increased dissent in the garment, which might not be a terrible thing to have more opposition gaining traction into parliament. I firmly trust that nature will take its own course.  You just wait and see for yourself. 

[Guest Guest]

What will trigger this recession or coming recession? Biden lor. What else? Proven fact already. 

[sgmaven]

Frankly, the world economy is already teetering towards a recession. The question is what will be the proverbial hair that breaks the camel's back? Who knows? Who would have predicted the failure/collapse of Lehman Brothers? Similarly, the AFC was already on the cards, before it actually happened. However, no one predicted what was the actual trigger that caused things to cascade and fall like a house of cards.

[sgmaven]

I watched a video about becoming an expert on a subject. It showed that even the top money managers were not as able as the standard S&P500 to have a steady track record on returns on investments. This is because money markets are influenced by many factors, and incidents are rarely repeated. Experts in other fields, like chessmasters and surgeons, on the other hand, have the chance to repeatedly practice with the same scenarios (practice makes perfect). That is why the same can be said about "experts" in global politics. How many predicted that Russia would actually invade Ukraine in Feb 2022?

[Steve5380]

While we individuals are helpless in controlling inflation and recessions, there is an individual smart action.

 

This is to learn to be frugal and survive.  Our physical body is detached from any other physical object, material.  Even if we can find gold and bury it in the backyard, assuming we have a backyard,  metals and other objects can lose value in a recession.   So what is important is:  have a source of food, and preserve health.

 

If we have to lose everything, what matters is what we preserve in our head,  what we are able to do.   If we are completely ignorant and cannot do anything,  how about becoming a monk?

[sgmaven]

I agree about being frugal, although not to be obsessive about it either. Life is to be enjoyed as well...

 

Mental health is important as well, and many tend to neglect that when times are bad, ending up in depression.

[Steve5380]

On 8/19/2022 at 1:48 PM, sgmaven said:

I agree about being frugal, although not to be obsessive about it either. Life is to be enjoyed as well...

 

Mental health is important as well, and many tend to neglect that when times are bad, ending up in depression.

 

The ability to be frugal is a practical skill.  but frugality should not be a virtue.  Any self-flagellation is completely wrong.  Healthy frugality does not need to go in the way of happiness,  because pleasures are not essential for happiness.  While lack of pleasures is acceptable,  any induced pain should be rejected.

 

Bad times can affect with serious depression those who are not prepared for it.  Healthy frugality can prevent depression and lead to satisfaction and pride.