Stock Market Tanking

[treee]

(12-20-2018, 06:57 PM)6andcounting Wrote: It's cyclical, but still trends upward over time. The bigger the growth cycle doesn't necessarily mean the downturn will be that much bigger. The downturn and it's severity has to do with inflation. Inflation goes up when the economy goes up and the Feds try to slow inflation by raising interest rates. (and when the economy is doing poorly, interests rates are dropped low to help the economy, but it raises inflation.) The argument against raising rates is that inflation is not a problem and continuing the growth is worth while. When inflation gets out of control is when the market is going to take the biggest hit. 


For example, Obama's quantitative easing was ridiculed for it's 3% inflation, but the market sored like 40% that year as part of the recovery. In turn when the recovery basically stopped and things became stagnant, Obama bragged how low he got inflation. The real control of the economy is within the Fed and politicians talking points just follow suite. 

I guess my perspective is after having gone through a recession that severe, I think 'stagnant' is a bit overly pessimistic and 'stabilized' a more appropriate perspective. I'll take steady economic growth over volatility any day.