Thread: DreamboatAnnie's Account Talk

I was thinking about what is different now as opposed to 2008 in causing market turmoil and drops. The most evident to me: the pandemic, baby boomer retirements, and the "woke and green" agenda which have and are affecting US policies, regulations and the economy. Taken together, these are causing inflation. These are just my takes on this.

Pandemic - caused drop in labor force participation now coming back but slowed by extra unemployment paid. That has now gone, but some employees did not come back, and others retired due to age or due to issues with employment conditions.

Baby Boomer Retirement - BBs born from 1945 to 1962*, with bulk born towards end of this period*. Many have retired but many will retire in next 1-6 years*, that will continue to cause labor issues and more demand than supply and thus cause more inflation as wage rates go up further and those rates will be fixed/permanent. The FED interest rate hikes will not directly cause this type of inflation to go down directly or quickly. To do so would be painful.

Pain through Recession: To drive down inflation, Fed aims to increase Fed rate. To do it, they would need to increase rates high enough to cause product pricing to go high enough to drive down demand/get us to stop buying stuff. Businesses would be forced to increase prices to stay in business if they rely on loans to fund business operations/equipment/vehicles, etc., which would be going up due to the higher interest rates. Plus consumers buying houses/vehicles would have higher costs to buy items so they would hold back on buying on credit, so those sectors would suffer. Then when our consumer demand drops, businesses will go out of business and people will lose their jobs. So, when we see the unemployment rates start to go up due to people losing jobs because businesses are going out of business, we will be in full recession. Possible fix: Implement immigration policy for legal immigration that would have increase labor force and possibly drive down less skilled labor rates and have payments into
Social security to fund baby boomer SS payouts. But this would need to be LEGAL immigration.

Woke/Green agendas - This is causing increased regulation or policy changes that restrict or slow drilling which in turn is causing fuel prices to go up for gasoline and natural gas, due to lower supply. The Fix: Get rid of policies that are preventing drilling and production in US and pipelines.

MAIN point: While Pandemic and Woke/green agendas maybe remedied by time and political action, the labor supply will not be remedied without politicians on both sides taking action. Baby boomers are continuing to leave the workforce! There is a huge gap forming in labor.


*-https://www.theepochtimes.com/where-..._medium=search