We all know another recession is coming at some point.
Economies are cyclical. Bust always follows boom in the same way that winter follows summer.
We very nearly had a recession in early 2016. I remain impressed how it was averted then by the application of tremendous amounts of newly-printed-from-thin-air money. It took several trillions of dollars globally, but it worked (if we can call enabling the global economy to take on additional $trillions in debt that will never be repaid ‘working’)
That was an early demonstration of the awesome power trillions of printed dollars can bring to bear in reversing a credit downturn that had already gathered steam.
The reason it did, I suspect, is because it went directly to the main transmission mechanisms of the overly-financialized economies of both the US and China.
China’s transmission belt of financialization is its real-estate market. Or ““market”” we might say because it’s heavily government-subsidized, even to the tune of Chinese government agencies buying unsold units directly.
The US’s transmission belt of financialization is its equity ““markets.”” It, too, is government-subsidized overtly via the Federal Reserve due to the twin effects of interest rate suppression, which shoves money over into stocks, and the effect of pushing so much money out into the financial system that it has to go “somewhere” and do “something.” A lot of that “something” has equated to “Buy stocks!”.
Indirectly, the Fed — also aided and abetted by the Trump Administration’s corporate tax cuts — has engineered the perfect landscape for financial engineering by US corporations. This has led to a huge raft of corporate buybacks of their own shares in what has been poorly phrased by the press as “returning money to shareholders.”
No; that’s not the case.
by adam-taggart-2 
