How many months left until recession?

[Febo]

I found this picture on reddit. Now it is clear to me why Trump wanted interest rate to decline more. He will have slim chances for re election if recession hit already this year. Sadly recession this or next year will not help Bitcoin at all. We might even see new bottom.

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[exstasie]

I found this picture on reddit. Now it is clear to me why Trump wanted interest rate to decline more. He will have slim chances for re election if recession hit already this year. Sadly recession this or next year will not help Bitcoin at all. We might even see new bottom.

The S&P 500 was just making new ATHs last week, so let's not jump to conclusions yet. A lot needs to happen before we can pronounce the beginning of a recession. It could be next year. It could be three years out. Preferably, it'll wait until after Bitcoin's next bull cycle completes, like next year or 2021, because I agree a deep recession and crash in the equity markets would be bad news for Bitcoin.

[Baofeng]

Maybe we need to look at the factors that can contribute to a recessions, so for me the biggest one will be the stock market slumping. Can someone predict by just looking at the graph?



Source

Well it could affect bitcoin market as well, but there are some proponents that a stock crash could also mean a positive net effect for us.

[BTC Future]

While a possible recession, might initially hurt the price of Bitcoin, I strongly believe that it will actually push the price into new all time highs after a while.
Bitcoin was created as a counter-measure for recession which we haven't experienced since it's inception.

Without being a market expert my thoughts are that at first a lot of highly speculative funds will sell Bitcoin, while trying to figure out which is their safest strategy (as in 2008-2012 recession most funds, moved into gold and bonds of countries with low debt/GDP ratio like Germany). My plan is to buy as many Bitcoin possible by that point.

The fear of bank restrictions and capital controls will actually create a strong buying sentiment for Bitcoin.
At this point Bitcoin will be validated as the safest method to move money around the globe. It will help corporations keep their business running and have access to the flow of money that banks will be probably start to cut. There are also laws in crisis hit countries, that instantly empty accounts if a business or individual is delinquent.

The reason Bitcoin was created was to give an answer to problems like these. Noone wishes for a recession but we have to be ready, especially after 10 years of recovery and booming markets.
I think that Bitcoin will be a useful tool to overcome a recession faster and with less consequences for the world.

[Thirdspace]

if the US is heading into a recession, wouldn't bitcoin get appreciated more? 
people will want to move their money out of stock market to other assets, gold, etc
and bitcoin may be one of the options, this will drive bitcoin price up
so that means now is a good time to buy bitcoin before people moving their money into bitcoin

[exstasie]

if the US is heading into a recession, wouldn't bitcoin get appreciated more? 
people will want to move their money out of stock market to other assets, gold, etc

Bitcoin investors say this all the time, but history shows the opposite. Recessions (and especially financial crises) are not just declines in the stock market. They are global economic contractions where money flows out of virtually all assets. In 2008, gold crashed 34% in 7 months, and that was in the middle of a raging bull market.

Unless the USD is actually collapsing, then cash remains king in a recession.

[Febo]

if the US is heading into a recession, wouldn't bitcoin get appreciated more?  
people will want to move their money out of stock market to other assets, gold, etc

Bitcoin will act in recession totally similar as Gold did in previous ones. Just that since is way more volatile the initial price decrease will look more like a total crash.  In case of recession people need founds to save their investments. So they sell what is easiest to sell first. Bitcoin and Gold are one of such liquid assets.

[beonline]

That's a good topic you raised there. Trump wanted to reduce the interest rates and as I know Fed did it a couple of days ago. But if you think about it, BTC was made especially for times like crisis. How will it meet the crisis, no one knows. It was created after the crisis of 2008. But will people really store their money in Bitcoin if the economy will fall? I doubt they will. Probably it will be USD, CHF, and JPY as always.

[deisik]

That's a good topic you raised there. Trump wanted to reduce the interest rates and as I know Fed did it a couple of days ago. But if you think about it, BTC was made especially for times like crisis. How will it meet the crisis, no one knows. It was created after the crisis of 2008. But will people really store their money in Bitcoin if the economy will fall? I doubt they will. Probably it will be USD, CHF, and JPY as always

It is unlikely Bitcoin is going to prosper in an all-out economic crisis or even meltdown

It is an effective hedge against minor currency devaluations in not so important countries (think Venezuela here), but if the major economies like those of the US, EU and China are going to suffer in a major way (and probably crash one after another in a domino-like sequence), all speculative assets will invariably hit the canvas. In such tumultuous times investors always move their capital to less risky assets (and Bitcoin is not one of them)

[The Sceptical Chymist]

Now it is clear to me why Trump wanted interest rate to decline more. He will have slim chances for re election if recession hit already this year.

Hmm.  That sounds like a rational explanation, though I'm not sure how much total control the president has over changing interest rates, but I'm not naive enough to think that he doesn't have any pull with the Fed. 

Dropping interest rates now is kind of just prolonging the inevitable stock market correction or crash, and things will probably be nice and rosy for a while...until they're not.  I didn't think we were headed toward a recession, though.  The economy seems pretty good right now and has been for quite some time.  The stock market, on the other hand, is probably very overvalued at this point.  Not sure what the average P/E is, but I suspect it's high.

[STT]

The FED and the state are separated for important reasons, the chief would rather fall on his sword then receive orders like that.   His job is not to be a puppet, he is the fail safe part of the balance of checks and measures.
 Its in very poor taste to challenge or compromise that relationship.   Trumps dialogue of open criticism is so far out of protocol its unprecedented.
   The point was the data is showing contraction is possible even probable which is not a scenario once started that the FED can then easily control, with a government so largely in debt and deficit already it is dangerous to say the least to have such little leeway.

FOREX > Bonds > shares.    The stockmarket is just the tail end of a bull whip, its not a determining factor in causing recession.

He will have slim chances for re election if recession hit already this year. Sadly recession this or next year will not help Bitcoin at all. We might even see new bottom.

That would be the main reason for not being elected.   Apparently the last one term president suffered this fate, Bush snr. was tied to the early 90's economy which was harsh as I remember.

Really BTC price I see going with monetary expansion globally or not.   Since they continually print money its hard to see a scenario where BTC must fall, as we see already the first reaction is to ease interest rates early.    The FED is acting fast here, because too little too late would play out very poorly for them in terms of control.

[LoyceMobile]

Isn't it much more worrying the interest didn't reach it's precious high before they start reducing it again? I see an overall decline in peaks, doesn't that mean the economic boom was less strong than the previous one?

[tbone777]

Unfortunately a lot of companies will die during new recession. Crypto startups may too

[figmentofmyass]

the difference this time is we aren't on the cusp of a financial crisis, with banks failing left and right, liquidity crises, etc. so i'm not sure the comparisons to 2008 are appropriate yet. the stock market is not in panic mode, and the consensus seems to reflect that mentality:

The widely expected quarter-point decrease was the Fed’s first since it slashed rates to near zero in 2008. But unlike those cuts, which were intended to rescue a failing economy, Wednesday’s move was seen as a precautionary effort to protect the United States from slowing growth in China and Europe and uncertainty over President Trump’s trade war.

“The outlook for the U.S. economy remains favorable, and this action is designed to support that outlook,” the Fed chair, Jerome H. Powell, said at a news conference after the decision. The cut, Mr. Powell said, was “intended to ensure against downside risks from weak global growth and trade tensions.”

It was a turning point, but one that disappointed both markets and Mr. Trump, who were hoping for a bigger rate cut. The Fed, which dropped its target rate to a range of 2 percent to 2.25 percent, stopped short of signaling the beginning of an aggressive rate-cutting campaign.

[deisik]

Now it is clear to me why Trump wanted interest rate to decline more. He will have slim chances for re election if recession hit already this year.

Hmm.  That sounds like a rational explanation, though I'm not sure how much total control the president has over changing interest rates, but I'm not naive enough to think that he doesn't have any pull with the Fed

If I'm not mistaken, it is the POTUS who appoints (nominates) the chairman of the Fed

So it can be taken for granted that he does have a mighty say in these matters. The current chairman, Jerome Powell, is Trump's man obviously as he was nominated by the latter. It was the previous chair, Janet Yellen, nominated by Obama, who openly defied Trump and his economic platform. I remember there were discussions here about this, the point being that Trump couldn't remove Janet until her term was officially over (which it is by now)

[alter-securities]

As somebody said: when everyone talks about upcoming crisis - there will be no crisis, but when everyone forgets about it - crisis will come. I might be quoting it wrong, but I also believe that nowadays as literally everyone knows about economic problems, everyone is prepared and tries to mitigate it - there is little chance of significant recession occurring. Temporary minor decline - possible, but not recession. And surely the countdown is not for months, but rather for few years.

[rdluffy]

You know, I've been hearding more and more news and studies about the new crisis, and I'm worried, because it's not only unknow people who are talking to this, it's trustable people
No matter which country will be the first, the whole world is going to suffer, and I'm do my best to be prepared to face this

There are tons of money created from nothing, stocks are in a infinite uptrend, and here in my country there are a lot of bad companies receiving millions of investment, but they are not sustainable companies, this is very bad to the whole market

I don't know what will happen to companies like Uber, Tesla, Facebook and so many others when crisis hit us

[Febo]

Isn't it much more worrying the interest didn't reach it's precious high before they start reducing it again? I see a overall decline in peaks, doesn't that mean the economic boom was less strong than the previous one?

Yes, they have little firepower to fight recession. Many believe this will be the last recession and after it economists will forget about Keynes and revive Hayek. https://www.youtube.com/watch?v=d0nERTFo-Sk Economy is not as strong as in early 2000 because recession of 2008 was never really cured.

As somebody said: when everyone talks about upcoming crisis - there will be no crisis, but when everyone forgets about it - crisis will come. I might be quoting it wrong, but I also believe that nowadays as literally everyone knows about economic problems, everyone is prepared and tries to mitigate it - there is little chance of significant recession occurring. Temporary minor decline - possible, but not recession. And surely the countdown is not for months, but rather for few years.

When you have no weapons to fight it does not matter much if you know the enemy is at the gates. Just look at the graph. Normal interest rates should be from 2-5% and crisis used to start when were above 5%. Now are at 2% and in Europe at zero.

[1Referee]

There are tons of money created from nothing, stocks are in a infinite uptrend, and here in my country there are a lot of bad companies receiving millions of investment, but they are not sustainable companies, this is very bad to the whole market

Nothing goes up endlessly. There will be a point at which the stock market will go down and keep doing that possibly for years. All this money needs to be paid back, and when the first major stocks show signs of weakness, the rest will follow. Stock multiples are insanely high. The price can take a 50% hit and the multiples are still on the higher side. That's pretty scary.

I don't know what will happen to companies like Uber, Tesla, Facebook and so many others when crisis hit us

They (Tesla and Facebook) will become so cheap that I will consider taking a long term position in them. Every business with fundamental value will survive. Where people think the end is near, smart money comes in and positions itself in a market people don't want to touch even with a 10 meter pole.

Also, if we do face a recession that hits the global economy, even Bitcoin and Gold might not be as good as a safe haven. Dollars pay bills and debt; investors/avera joes/institutions will sell what they can to obtain dollars and fulfill as much of their obligations as possible.

[beonline]

That's a good topic you raised there. Trump wanted to reduce the interest rates and as I know Fed did it a couple of days ago. But if you think about it, BTC was made especially for times like crisis. How will it meet the crisis, no one knows. It was created after the crisis of 2008. But will people really store their money in Bitcoin if the economy will fall? I doubt they will. Probably it will be USD, CHF, and JPY as always

It is unlikely Bitcoin is going to prosper in an all-out economic crisis or even meltdown

It is an effective hedge against minor currency devaluations in not so important countries (think Venezuela here), but if the major economies like those of the US, EU and China are going to suffer in a major way (and probably crash one after another in a domino-like sequence), all speculative assets will invariably hit the canvas. In such tumultuous times investors always move their capital to less risky assets (and Bitcoin is not one of them)

I don't think those economies will collapse. There will be some recession but not a collapse. Safe haven currency and treasuries will be the best things to store your money in, I believe.