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NFT: What would it take for the US economy to crumble overnight?

SGMen : 6/28/2018 9:56 am
For those with some understanding of economics and how our country currently stands (National Debt is HUGE), I have a question: what would it take for the US economy to crumble almost overnight?
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RE: An..  
BrettNYG10 : 6/28/2018 12:12 pm : link
In comment 14001351 FatMan in Charlotte said:
Quote:
event that could cause the grid to go out could result in a close to immediate destruction of the economy, but other than that, there's little to suggest something could have such a catastrophic impact.

Even a stock market crash like that from 1929 wouldn't probably be immediate crumbling


Ted Koeppel recently wrote a book on this - I attended a talk where he touched on the book but haven't read it myself yet.
Does a country..  
FatMan in Charlotte : 6/28/2018 12:30 pm : link
exist that solves the problems of their people or where the people solve their own problems??

To that end, US citizens have solved a ton of problems throughout history. While we aren't perfect, to make it sound like all of the people sit on their hands and expect somebody else to do everything for them is quite the broad stroke.
I know some of really like discussing this stuff  
gidiefor : Mod : 6/28/2018 12:33 pm : link
but I am issuing a warning -- I've deleted at least 12 comments on this thread already -- if this thread keeps straying into politics it will get deleted
some of you  
gidiefor : Mod : 6/28/2018 12:33 pm : link
that is
The same thing that crumbled other major powers?  
Boatie Warrant : 6/28/2018 12:38 pm : link
-over spending (not spending correctly) under taxing (wrong taxes to the wrong population)
-Military over reach
-under funded Military (he who has biggest stick makes the rules)
-Over reliance on global partners
-Over population ("The trouble with Scotland...is that it's full of Scots.")
-Mishandling foreign trade (who's our buddy today instead of who's going to stay our buddy)

Just some thoughts from past failed world powers
now 2 more  
gidiefor : Mod : 6/28/2018 12:43 pm : link
folks don't seem to be able to control themselves -- next one does it
It is important to remember that the market is not the economy  
Bergen346 : 6/28/2018 12:48 pm : link
9/11 did result in a sell-off and minor recession but GDP only contracted 30bps and the recession lasted 8 months. That is less than half as long as the 07/08 recession of 1.8 years.

The Atlanta FED just released their projected Q2 GDP estimate at 4.2%. For the US to enter into a massive recession at this point in time you would have to see a serious collapse of international economies, which would then trickle its way to the U.S. - but even so, that would take time as our economy is fairly self sufficient - 70% of our economy being the US consumer.

It is safe to say based off of recent economic date that the US economy will continue to grow over the next few years. Could a natural disaster cause market declines, yes, but it is unlikely to take this growing economy off course. Fundamentals look strong.
gidiefor  
10thAve : 6/28/2018 12:50 pm : link
If it happens again rather than delete, can you lock the thread? Those comments will be gone but the thread will stay, as there is some interesting and informative contributions.
RE: now 2 more  
njm : 6/28/2018 1:02 pm : link
In comment 14001637 gidiefor said:
Quote:
folks don't seem to be able to control themselves -- next one does it


Might I suggest that your definition of political is quite a bit broader than what was previously used. So be it.
Not sure the US economy could  
section125 : 6/28/2018 1:37 pm : link
crumble "overnight" where it would be unrecoverable, short of a worldwide catastrophic event and even then we would likely be the country to withstand it.

As to China, they need us (consumers) a lot more than we need them (suppliers). The inconvenience of a different supplier or increase in costs because of shifting to another supplier would be minor. Like Japan in the 70's, China is built on a house of cards. China has been surviving by cheating and stealing from other countries businesses and intellectual property. Even now they are trying to steal natural resources from Viet Nam, Philippines, Borneo and other South China Sea nations by building artificial islands and then claiming the waters in between as EEZs.

IMHO
Interesting discussion.  
baadbill : 6/28/2018 2:02 pm : link
Nassim Nicholas Taleb's book "The Black Swan: The Impact of the Highly Improbable" is an absolutely fascinating read. It's very deep. I first read it a little over 10 years ago and I'm getting ready to start reading it - in the next month or so - for the 4th time.

In its simplest terms, he posits that "history" is dominated by the occurrence of very improbable (unforeseen) high impact events.

The really fascinating aspect of his thesis is human kind in every society proceeds through life as though life changing improbable events are very unlikely. When in truth, highly improbable impact events occur regularly.

According to Talib's thesis, the destruction of the US economy - were it to happen - will be caused by unanticipated and unforeseen event(s).
I think a sickness like a bird flu...  
bw in dc : 6/28/2018 2:09 pm : link
that becomes a worldwide pandemic would cripple the economy.

While I'm not very fond of our government's spending habits I think places like the HHS, CDC, NHI, etc should always be priority spending.

On the debt, it is dangerously high in my view. I think it's the highest ever - next to WWII spending? - as a % of our economy. Fortunately, we own 70% of our debt. In theory, a China or Russia could wreak havoc by suddenly dumping our bonds. But that would be a very stupid move and highly unlikely. They need our debt, for example, to deal in trade and keep their currency stable.
RE: I know some of really like discussing this stuff  
SGMen : 6/28/2018 2:16 pm : link
In comment 14001618 gidiefor said:
Quote:
but I am issuing a warning -- I've deleted at least 12 comments on this thread already -- if this thread keeps straying into politics it will get deleted
Yes, I noted in my initial question that politics IS NOT what this thread is about. It is for me (and those I share some takeaways with) to LEARN.

Love my BBI, 20+ years and counting!
This is fun  
WideRight : 6/28/2018 2:17 pm : link
We can see where gidie "line in hte sand" is by what he keeps and deletes....

And thanks for the warning, i had no idea this would be something you dissaprove of
I was shocked...  
Dan in the Springs : 6/28/2018 2:24 pm : link
that my comments were deleted. I made absolutely no mention of any political party, any office, any politician, any political stance or position on any policy whatsoever. I can only guess I got deleted because I mentioned the U.S. Government.

Hard for me to decipher what's allowed and what isn't. I understood clearly how some earlier posts were deleted as they were clear rules violations, but my own posts seemed entirely within bounds as far as I could tell.
Dan - How is a comment about the US Government  
gidiefor : Mod : 6/28/2018 2:29 pm : link
not political?
ANY thread  
UESBLUE : 6/28/2018 2:31 pm : link
about the economy, the climate, health and or social matters is a prescription for disaster here and has been for many yrs. Its bascially Giants football, what bands are you listening to and where is the best pizza. Take it for what it is.
RE: Dan - How is a comment about the US Government  
Dan in the Springs : 6/28/2018 2:56 pm : link
In comment 14001758 gidiefor said:
Quote:
not political?


I didn't mention anything about a political party, a political policy, a politician, or a branch, division, appointment, or even a function of the government. The government is a system made up of many entities, but not all of it is political. At least not that I'm aware of in the sense that has been banned here.

Serious question - is the Post Office political? What about the military, or the labor department or the federal reserve? Perhaps within certain contexts I suppose, especially when discussing policy or other news-related controversies.

And it's not that I didn't only not mention any of the banned items but I didn't insinuate or hint at any either. My intent/viewpoint was an entirely apolitical one, just a historical one. I'm surprised it offended anyone and/or surprised that it crossed the boundary for what is allowed. I honestly did not intend to do that - only wanted to discuss potential risks to our nation's economy and prosperity from a historical perspective.

Sorry for breaking the rules. I guess I couldn't help myself.
I would've thought that a political post...  
FatMan in Charlotte : 6/28/2018 3:12 pm : link
is one that injects a bias or invokes a party or makes a disparaging assumption about a political figure.

I didn't think discussing the Government in the macro sense would even come close to being political. It would be like saying a thread on Anti-trust topics would be political. Or discussing NASA.

Talking about Gov't actions to avoid a financial collapse isn't political. It's institutional. Neither Dan nor njm had political posts, both were pretty informative, yet they were removed.
A  
AcidTest : 6/28/2018 3:29 pm : link
massive grid failure is not hypothetical, it is inevitable. It's called a Carrington Event. It's a massive coronal mass ejection that creates an EMP that fries electronics, including the power grid. We almost got hit with one in 2012, which would could have caused as much as $2.5 trillion in damage. A cyber attack might be able to do the same, but that seems less likely since the attack would have to destroy the entire grid simultaneously.

Carrington Event - ( New Window )
Yolu really can't call..  
FatMan in Charlotte : 6/28/2018 3:40 pm : link
a Carrington Event "inevitable". If one were to hit today it would be devastating. But in the historical perspective, the window for it causing damage is quite small.

If it had hit in the 1300's for example, the impact would be negligible. If it hits in 2200, it might be too. We don't know where technology will advance to. There may come a day where the technology used is EMP-proof or at least where the impact will be minimal.

Saying something in inevitable implies that it will certainly happen without any way to avoid it.
Massive solar events haven't fried the grid before, either  
jcn56 : 6/28/2018 3:52 pm : link
They've taken out large swaths, without a doubt. And I'm sure it would be no picnic if a large section of the grid near a major metropolitan took a hit. But even though a recovery would be expensive and painstaking, it wouldn't be catastrophic.
RE: FMIC hit it....A massive extended power grid failure  
mrvax : 6/28/2018 3:59 pm : link
In comment 14001426 AnnapolisMike said:
Quote:
Either due to terrorism or a massive Geomagnetic Storm (solar storm) which damages a significant portion of the power grid. Imagine the NE US without power for several days or weeks.


Yes. Powerful well placed EMPs could cause havoc to not just the economy but all electronic devices.
It's  
AcidTest : 6/28/2018 4:03 pm : link
inevitable.

The question is whether we will be adequately prepared when it occurs, and if not, how much damage it will do. Those are unknowns, but there doesn't seem to be much concern about it, despite the 2012 near miss, which would have been much stronger than the original CE in 1859. It's also likely to do enough damage to significantly damage large sections of the grid.

Link - ( New Window )
A massive solar storm..  
FatMan in Charlotte : 6/28/2018 4:10 pm : link
Is most definitely not inevitable.

Heck, even from the article, it points out that the probability of a solar storm with at least the power of the Carrington Event hitting Earth is only 12 percent.

Solar storms with less effect may not do much harm at all. Even Carrington Events could hve limited impact depending where they hit.

Quote:
Like many natural phenomena, the frequency with which solar storms take place scales as an inverse power of the severity of the event. But the sheer number of large storms over the last 150 years suggests the Carrington Event is unlikely to be an isolated occurrence.

Calculations by solar scientist Pete Riley, at Predictive Science Inc, suggest the probability of a solar storm of at least the power of the Carrington Event hitting Earth in the next 10 years is around 12 percent (“On the probability of occurrence of extreme space weather events”, February 2012).

While not high, a 12 percent probability hardly qualifies as a “low-frequency” or remote-probability event.


As stated - it shouldn't be classified as a remote-possibility event. It also shouldn't be classified as inevitable.
Although not a true "prepper"  
Don in DC : 6/28/2018 4:21 pm : link
I do have emergency supplies and equipment set aside, along with a "go bag", in the event of substantial civil turmoil or the need to evacuate the DC metro region.

The reasons I had in mind for setting my family up with these emergency supplies have mostly already been discussed: a dangerous pandemic, a large and lengthy power outage, significant disruption in the food supply chain, political disturbances leading to open conflict.

Any of those could cause a dramatic contraction in economic activity, and potentially structural collapse of the banking system.
RE: RE: Dan - How is a comment about the US Government  
gidiefor : Mod : 6/28/2018 4:27 pm : link
In comment 14001780 Dan in the Springs said:
Quote:
In comment 14001758 gidiefor said:


Quote:


not political?



I didn't mention anything about a political party, a political policy, a politician, or a branch, division, appointment, or even a function of the government. The government is a system made up of many entities, but not all of it is political. At least not that I'm aware of in the sense that has been banned here.

Serious question - is the Post Office political? What about the military, or the labor department or the federal reserve? Perhaps within certain contexts I suppose, especially when discussing policy or other news-related controversies.

And it's not that I didn't only not mention any of the banned items but I didn't insinuate or hint at any either. My intent/viewpoint was an entirely apolitical one, just a historical one. I'm surprised it offended anyone and/or surprised that it crossed the boundary for what is allowed. I honestly did not intend to do that - only wanted to discuss potential risks to our nation's economy and prosperity from a historical perspective.

Sorry for breaking the rules. I guess I couldn't help myself.


Dan, I'm not going to continue this debate at length -- but you made critical comments about the government. The only logical extension/inference from there is who's in power that runs it - and that's the very the nature of politics, because politicians are elected to be in charge of government.

Also I'll note that it's a lot easier for us to just delete a thread that's straying into politics then get involved in this kind of discussion of what exactly was political about what you said. I believe it was political for you to criticize government.

We deleted comments that could be construed as political from the thread so it could stay up. Is that an acceptable solution? From our perspective hairs can always be split over our judgment -- and now this thread is becoming an opportunity to discuss what the moderators did to it - oy vey!
It's  
AcidTest : 6/28/2018 4:50 pm : link
12% per decade. Major CMEs also happened in 1859, 1921, and 2012. That's enough to say it's inevitable. It's also inevitable that the Yellowstone caldera will erupt, and a meteor the size of the one that wiped out the dinosaurs will again hit Earth. But those events are extremely infrequent. CMEs happen with enough regularity that we should be concerned.

What is not inevitable is catastrophic damage. That could be avoided if we were prepared. But the general lack of concern suggests that we won't be. We're not likely to spend the billions required to prepare for and prevent the damage.

Link - ( New Window )
Your interpretation of..  
FatMan in Charlotte : 6/28/2018 4:52 pm : link
math and what makes something inevitable is quite off.

Not all solar storms are Carrington Events.

It isn't inevitable that a Carrington Event will hit. Likely, not inevitable.
Not  
AcidTest : 6/28/2018 5:02 pm : link
all solar storms are CEs, but the one that missed in 2012 was even stronger than than the CE in 1859. We are also so grossly underprepared that even a CME that wasn't quite as strong as the CEs of 1859 or 2012 would still likely do a significant amount of damage. And at some point we will be hit by a CME as strong as the CEs from 1859 or 2012, and not in a 1,000 years.
Sorry, I didn't think I was criticizing this or any other government..  
Dan in the Springs : 6/28/2018 5:58 pm : link
I thought I was answering a hypothetical question about what would bring the economy down, and by extension bring the government down.

Used to be I worried about unintentionally offending posters, now I'm unintentionally offending moderators. I respect you a lot, it's a thankless job, one that I wouldn't want.

It's in these situations that I'm reminded how much better off I am when I lurk and not post. Everyone else too I imagine. I don't think I contribute anything of value here anyway.
RE: RE: Or so I've heard  
johnnyb : 6/28/2018 6:10 pm : link
In comment 14001332 SGMen said:
Quote:
In comment 14001328 allstarjim said:


Quote:


.

Interesting. The Chinese are the "biggest" threat to America or so I've been told.

I have an MBA but it was in Human Resources not Finance / Economics. I'm in the midst of a discussion with folks about our future as a country. I've been "told" that the Chinese would be cutting their own throats as much as ours if they worked to unfold us. But I'm not sure exactly how and such which is why I ask.


When you sell anything 'in mass', the price goes down, and the value of your remaining bonds are worth less than they were.
RE: Sorry, I didn't think I was criticizing this or any other government..  
gidiefor : Mod : 6/29/2018 6:56 am : link
In comment 14001942 Dan in the Springs said:
Quote:
I thought I was answering a hypothetical question about what would bring the economy down, and by extension bring the government down.

Used to be I worried about unintentionally offending posters, now I'm unintentionally offending moderators. I respect you a lot, it's a thankless job, one that I wouldn't want.

It's in these situations that I'm reminded how much better off I am when I lurk and not post. Everyone else too I imagine. I don't think I contribute anything of value here anyway.


Dan - you are a respected poster on this website (especially when it comes to football), that's why I'm taking the time to try and explain this. However respectfully -- please email me if you wish to discuss this further
RE: RE: Sorry, I didn't think I was criticizing this or any other government..  
dorgan : 6/29/2018 7:17 am : link
In comment 14002107 gidiefor said:
Quote:


Dan - you are a respected poster on this website (especially when it comes to football), that's why I'm taking the time to try and explain this. However respectfully -- please email me if you wish to discuss this further


Dan,
don't do it. He only wants you to email him so he can get your personal info to stalk you, then seduce you. I fell for it once. He's relentless.
So, in summary, from my perspective and understanding  
SGMen : 6/29/2018 7:54 am : link
While any global pandemic or catastrophe could plunge us into a deep depression or worse, overall, the United States actually isn't in bad standing when compared to countries like say China.

So should our goal be to reduce national debt or just keep going like we have been cause other countries essentially will still use us as Reserve currency? (I ask "tongue in cheek" almost.....)

I think we need to address WASTE and overhaul our IRS tax system, but hey, its just my little ole opinion. :)
The dollar will not continue to be the world's reserve currency  
WideRight : 6/29/2018 8:47 am : link
If we decline to be a prominent trading partner.

Its more likely that as China becomes the worlds largest economy and the world's dominant force in trade, whether it's "free market" or not, that their currency will replace ours.
RE: The dollar will not continue to be the world's reserve currency  
SGMen : 6/29/2018 9:08 am : link
In comment 14002137 WideRight said:
Quote:
If we decline to be a prominent trading partner.

Its more likely that as China becomes the worlds largest economy and the world's dominant force in trade, whether it's "free market" or not, that their currency will replace ours.
It is certainly possible that this could occur. My friend Vinny was a hedge fund owner and had an office on Park place until a few years ago when he sold his business.

One thing he did tell me is that "China is a MESS...corrupt..." so if they ever fix their internal issues and get to where the world can trust (have FAITH) that they will REPAY than yeah, I guess anything is possible.
RE: RE: FMIC hit it....A massive extended power grid failure  
Percy : 6/29/2018 11:27 am : link
In comment 14001443 pjcas18 said:
Quote:
In comment 14001426 AnnapolisMike said:


Quote:


Either due to terrorism or a massive Geomagnetic Storm (solar storm) which damages a significant portion of the power grid. Imagine the NE US without power for several days or weeks.



The market remained closed after 9-11 for a almost a week.

So in your scenario, the outage would have to last more than a week?
I was going to toss in this same answer -- but I don't think it would take a week for this to crash the market. Crashing the economy as a whole is something else again. If the outage was for several weeks -- kind of unimaginable -- that would probably do it.
RE: The dollar will not continue to be the world's reserve currency  
giants#1 : 6/29/2018 11:39 am : link
In comment 14002137 WideRight said:
Quote:
If we decline to be a prominent trading partner.

Its more likely that as China becomes the worlds largest economy and the world's dominant force in trade, whether it's "free market" or not, that their currency will replace ours.


Between the shale/oil boom and our influence with the Saudis, the rest of the world will still need to play nice with us. (in my non-expert opinion)
RE: RE: The dollar will not continue to be the world's reserve currency  
SGMen : 6/30/2018 11:01 am : link
In comment 14002364 giants#1 said:
Quote:
In comment 14002137 WideRight said:


Quote:


If we decline to be a prominent trading partner.

Its more likely that as China becomes the worlds largest economy and the world's dominant force in trade, whether it's "free market" or not, that their currency will replace ours.



Between the shale/oil boom and our influence with the Saudis, the rest of the world will still need to play nice with us. (in my non-expert opinion)
Yeah, I can see a lot of merit with your opinion.
Boatie  
XBRONX : 6/30/2018 11:29 am : link
Underfunded military? Where did you come up with that one?
Ok, not US economy, but the entire world economy...  
baadbill : 7/1/2018 8:31 am : link
This was referenced in an article on my news feed this morning...

Quote:

Nasa estimates the total value of resources locked in space rocks is £522 quintillion - equivalent to £75 billion ($100 billion) for each person on Earth.

A company could send a small space probe to intersect with asteroids as they pass near Earth, and mine them for these resources.

Experts have warned that doing so may destroy commodity prices and cause the world's economy to collapse.


PS: I thought of this thread when I read the above... but I guess it wouldn't cause the US economy to crumble "overnight" unless the asteroid crashed into earth.
Link - ( New Window )
RE: I think a sickness like a bird flu...  
Milton : 7/1/2018 9:03 am : link
In comment 14001734 bw in dc said:
Quote:
that becomes a worldwide pandemic would cripple the economy.

No way, man! - ( New Window )
Extreme weakness in the dollar due to inflation  
Ira : 7/1/2018 9:22 am : link
and the balance of payments.
RE: Boatie  
Boatie Warrant : 7/2/2018 7:35 am : link
In comment 14003053 XBRONX said:
Quote:
Underfunded military? Where did you come up with that one?


As an example of what brought down paste world powers and could be a major factor in what could bring down the US economy? I think it is a major factor. Again, He who has the biggest stick makes the rules.
RE: RE: I think a sickness like a bird flu...  
SGMen : 7/3/2018 8:50 pm : link
In comment 14003377 Milton said:
Quote:
In comment 14001734 bw in dc said:


Quote:


that becomes a worldwide pandemic would cripple the economy.

No way, man! - ( New Window )
Any pandemic / major illness which kills millions or billions would certainly crash economies, including ours.
RE: RE: RE: I think a sickness like a bird flu...  
section125 : 7/3/2018 9:10 pm : link
In comment 14006093 SGMen said:
Quote:
In comment 14003377 Milton said:


Quote:


In comment 14001734 bw in dc said:


Quote:


that becomes a worldwide pandemic would cripple the economy.

No way, man! - ( New Window )

Any pandemic / major illness which kills millions or billions would certainly crash economies, including ours.


Disagree on a medical cause. That opens the door for big pharmas to make big money among other industries.
RE: RE: RE: Sorry, I didn't think I was criticizing this or any other government..  
EricJ : 7/3/2018 10:51 pm : link
In comment 14002111 dorgan said:
Quote:



Dan,
don't do it. He only wants you to email him so he can get your personal info to stalk you, then seduce you. I fell for it once. He's relentless.


Bill Cosby does it by e-mail now too...
Boatie  
XBRONX : 7/4/2018 7:05 am : link
Some of the worlds strongest economies have no military
RE: Boatie  
section125 : 7/4/2018 8:03 am : link
In comment 14006269 XBRONX said:
Quote:
Some of the worlds strongest economies have no military


Aside from maybe Switzerland, I cannot think of another. And even they have a military for border defense.

But I agree with your sentiment.
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