Wednesday, March 18, 2020


If the U.S. economy were to collapse, it would happen quickly. No one but deliberate and angry China would predict it. The surprise and PANIC factor is, itself, one of the causes of such a potential collapse. The signs of imminent failure are difficult for most people to see, despite our November election that's looming (i.e. hint, hint). Most recently, the U.S. economy almost collapsed on September 16, 2008. That's the day the Reserve Primary Fund “broke the buck (no pun towards political pundit pal Buck Sexton)”— the value of the fund’s holdings dropped below $1 per share. Panicked investors withdrew billions from money market accounts where businesses keep cash to fund day-to-day operations. If withdrawals had gone on for even a week, and if the Fed and the U.S. government had not stepped in to shore up the financial sector, the entire economy would likely have ground to a halt. Trucks would have stopped rolling, grocery stores would have run out of food (and toilet paper), and businesses would have been forced to shut down. That's how close the U.S. economy came to a real collapse— and how vulnerable it is to another one. Hmmmmm, will the U.S Economy Collapse? The U.S. economy's size makes it resilient. It is highly unlikely that even the most dire events would lead to a collapse no matter how many hospitals lack respirators for the elderly. When necessary, the government can act quickly to avoid a total collapse. yup. For example, the Federal Reserve can use its contractionary monetary tools to tame hyperinflation, or it can work with the Treasury to provide liquidity, as during the 2008 financial crisis. The Federal Deposit Insurance Corporation insures banks, so there is little chance of a banking collapse similar to that in the 1930s. The president can release Strategic Oil Reserves to offset an oil embargo. Homeland Security can address a cyber threat. The U.S. military can respond to a terrorist attack (ummm, why didn't we shut down when 3000 of us died at 9-11??!! sickening) transportation stoppage, or rioting and civic unrest. In other words, the federal government has many tools and resources to prevent an economic collapse. bye ...

#eat me