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The Fed canít rescue us from the coming supply-shock recession
MarketWatch ^ | 08/24/2019 | Nouriel Roubini

Posted on 08/24/2019 7:14:48 AM PDT by SeekAndFind

There are three negative supply shocks that could trigger a global recession by 2020. All of them reflect political factors affecting international relations, two involve China, and the United States is at the center of each.

Moreover, none of them is amenable to the traditional tools of countercyclical macroeconomic policy.

The first potential shock stems from the Sino-American trade and currency war, which escalated earlier this month when President Donald Trump’s administration threatened additional tariffs on Chinese exports, and formally labeled China a currency manipulator.

The second concerns the slow-brewing cold war between the U.S. and China over technology. In a rivalry that has all the hallmarks of a “Thucydides Trap,” China and America are vying for dominance over the industries of the future: artificial intelligence (AI), robotics, 5G, and so forth.

The U.S. has placed the Chinese telecom giant Huawei on an “entity list” reserved for foreign companies deemed to pose a national-security threat. And although Huawei has received temporary exemptions allowing it to continue using U.S. components, the Trump administration this week announced that it was adding an additional 46 Huawei affiliates to the list.

The third major risk concerns oil supplies. Although oil prices CL.1, -0.37% have fallen in recent weeks, and a recession triggered by a trade, currency, and tech war would depress energy demand and drive prices lower, America’s confrontation with Iran could have the opposite effect.

Should that conflict escalate into a military conflict, global oil prices could spike and bring on a recession, as happened during previous Middle East conflagrations in 1973, 1979, and 1990.

All three of these potential shocks would have a stagflationary effect, increasing the price of imported consumer goods, intermediate inputs, technological components, and energy, while reducing output by disrupting global supply chains.

(Excerpt) Read more at marketwatch.com ...


TOPICS: Business/Economy; Culture/Society; Editorial; Foreign Affairs; Government; News/Current Events
KEYWORDS: 2020election; boycotts; chamberofcommerce; chamberofcommunism; china; communism; currency; dnctalkingpoint; dnctalkingpoints; election2020; energy; fakenews; fed; fud; liberalmedia; marketcrock; marketwatch; mediawingofthednc; notnews; nourielroubini; partisanmediashills; presstitutes; recession; redchina; roubini; sanctions; smearmachine; tariffs; tds; trade; trumpeconomy
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1 posted on 08/24/2019 7:14:49 AM PDT by SeekAndFind
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To: SeekAndFind

So what’s the option? China is the Monster and the globalist elitists are the Dr. Frankenstein’s who created it. Would China be a “competitor” for leading the industries of the future but for its theft of our innovation via its lack of respect for our IP?


2 posted on 08/24/2019 7:21:32 AM PDT by FlipWilson
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To: SeekAndFind

More BS scare talk. Any recession we have will be brought on by the machinations of the Federal Reserve. Fortunately it appears Trump is controlling them nicely. Look for Trump to force Powell to lower rates to near zero.


3 posted on 08/24/2019 7:21:44 AM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped)
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To: Georgia Girl 2

RE: Look for Trump to force Powell to lower rates to near zero.

And with that, who’s going to want to put their money in the bank?

There will be mass withdrawals to other assets like ... WHAT?


4 posted on 08/24/2019 7:23:10 AM PDT by SeekAndFind (look at Michigan, it will)
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To: FlipWilson

RE: So what’s the option? China is the Monster and the globalist elitists are the Dr. Frankenstein’s who created it.

The option is to continue fighting this trade war and see who wins this war of attrition. Mark my words — THERE WILL BE PAIN on both sides.

And oh yeah, we better hope that any recession that occurs will be AFTER the 2020 elections. A recession that occurs before November 2020 will make Trump vulnerable.


5 posted on 08/24/2019 7:25:01 AM PDT by SeekAndFind (look at Michigan, it will)
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To: SeekAndFind
The author forgot the Dems and their propaganda arm (the media) talking the economy into a recession.

Also, why does the author seem to imply that all of these things will only negatively affect the U.S. and not China?

I remember when Nixon was negotiating with the Soviets. Any "stall" in the talks had to be immediately rectified and "got back on track" by the U.S. making a concession of some kind. All the Soviets had to do was sit back and wait for us to out-negotiate ourselves...

6 posted on 08/24/2019 7:25:15 AM PDT by jeffc (The U.S. media are our enemy)
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To: SeekAndFind

What a load of poop!


7 posted on 08/24/2019 7:25:27 AM PDT by <1/1,000,000th%
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To: <1/1,000,000th%

RE: What a load of poop!

Can you elaborate?


8 posted on 08/24/2019 7:26:06 AM PDT by SeekAndFind (look at Michigan, it will)
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To: SeekAndFind

More wishful thinking

Imagine President Lizzie Warren, Joe Biden, or Bernie Sanders in charge


9 posted on 08/24/2019 7:27:23 AM PDT by silverleaf (Age Takes a Toll: Please Have Exact Change.)
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To: SeekAndFind

Democrats are at war against the United States every bit as much as German Nazis and Soviet communists were in the 20th century. At this point in our history, they are much more dangerous to the survival of our country. Democrats and their puppetmasters in the media will go to any lengths to destroy the Constitutional republic as we know it, including propaganda such as this designed to get RINO’s panicking, siding with Democrats to destroy capitalism.

Keep in mind that politics is war without noticeable bloodshed. Tariffs are, in fact, an instrument that bridges a gap between politics and war, insomuch as it forces country’s governmental leaders / dictators to alter their actions in line with the United States, and should be considered just as much of a tactic that we use to leverage our sovereignty. Obviously, the ultimate tariff is offensive military attack against the other country, which would not be tolerated for the most part.

To wit: If the United States had a super-majority of Freedom Caucus conservatives in both chambers of Congress as well as the presidency, and the governorships of most of the populous states were conservative along with their legislatures, then absent nuclear hostilities there would be no more war on the planet within a couple of generations, and real peace backed by the strength of individual convictions, morality, and fortitude. The same goes for economics.


10 posted on 08/24/2019 7:27:47 AM PDT by GOP Congress
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To: silverleaf

RE: Imagine President Lizzie Warren, Joe Biden, or Bernie Sanders in charge

That’s the author’s point — IT IS INEVITABLE regardless of who is in charge.


11 posted on 08/24/2019 7:28:17 AM PDT by SeekAndFind (look at Michigan, it will)
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To: All

Nouriel Roubini sounds like a Rat operative to me.


12 posted on 08/24/2019 7:29:33 AM PDT by gibsonguy
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To: SeekAndFind

The article in no ways explains what a “shock” is or how it specifically effects the economy. It simply enumerates several items it think will contribute to the “shock”.

So, it is nothing but scare mongering.

poop,shite,BM,defecation,discharge,dung,excrement,excretio,fecal matter,feces,feculence,deuce,manure,number two,stool,waste.


13 posted on 08/24/2019 7:30:26 AM PDT by CodeToad ( Hating on Trump is hating on me and Americans!)
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To: Georgia Girl 2

“Look for Trump to force Powell to lower rates to near zero.”

Zero interest rates in an environment in which the real inflation rate (not the govt manipulated CPI) is about 8%. There’s the formula to help the what is left of the middle class save for retirement or for currently retired seniors to live on their savings. Zero interest rates will force middle class savers and senior retirees into risky stock investments. This will benefit Wall Street, not the struggling middle class.

The US government and the Federal Reserve have been at war with savers since the George W. Bush administration.


14 posted on 08/24/2019 7:30:58 AM PDT by Soul of the South (The past is gone and cannot be changed. Tomorrow can be a better day if we work on it.)
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To: SeekAndFind

Gloom, despair, and agony on me
Deep, dark depression, excessive misery
If it weren’t for bad luck, I’d have no luck at all
Gloom, despair, and agony on me


15 posted on 08/24/2019 7:32:41 AM PDT by Moonman62 (Charity comes from wealth.)
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To: SeekAndFind
Halfway down the real BS floats to the surface...

Permanent shocks

After all, the negative supply shocks from a trade and technology war would be more or less permanent, as would the reduction in potential growth. The same applies to Brexit: leaving the European Union will saddle the United Kingdom with a permanent negative supply shock, and thus permanently lower potential growth.

"After all" is not a convincing argument for Nouriel Roubini is CEO of Roubini Macro Associates and professor of economics at the Stern School of Business, New York University, it is much more an indicator of the hidden proglib sneaking out from behind the curtain.

.

16 posted on 08/24/2019 7:33:21 AM PDT by TLI ( ITINERIS IMPENDEO VALHALLA)
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To: SeekAndFind
The second concerns the slow-brewing cold war between the U.S. and China over technology...China and America are vying for dominance over the industries of the future: artificial intelligence (AI), robotics, 5G, and so forth.

*************

The trade war is just the tip of the iceberg. We are confronting and fighting China on many different levels now and the "competition" won't be resolved anytime soon, unless of course a Democrat is elected president in 2020. Then its game over for us.

That's what China is banking on.

17 posted on 08/24/2019 7:33:40 AM PDT by Starboard
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To: Soul of the South

The US government and the Federal Reserve have been at war with savers since the George W. Bush administration.

...

I suggest you find country with the best policies for savers and then move there.


18 posted on 08/24/2019 7:36:36 AM PDT by Moonman62 (Charity comes from wealth.)
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To: SeekAndFind

BS article. Add to the pile of “coming recession” scare scrap heap.


19 posted on 08/24/2019 7:38:35 AM PDT by hotsteppa
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To: SeekAndFind

The FED is not the rescuer. The FED and the Federal Government are the perps. Government constantly being portrayed as “rescuing” us from the government’s own disastrous acts.


20 posted on 08/24/2019 7:39:29 AM PDT by Jim W N (MAGA by restoring the Gospel of the Grace of Christ and our Free Constitutional Republic!)
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