The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

NOTABLE! The Coming Recession (2019-2020?)

c4n

Full throttle
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 30, 2017
192
484
231
Europe
It seems like here in Europe the banks are competing on who will give more credit to people who cannot afford to pay it off and regulators are getting more and more nervous. With interbank rates remaining negative (and likely going further down) people are getting into debt at 7% rate like crazy.

I am seriously thinking of transferring a good chunk of my money reserves into physical gold because on the other hand people still have way too much cash in bank deposits in my country. If people start panicking and withdrawing hard cash, the banks will have no choice but to impose strict withdrawal limits (good luck getting your money out then).

I was wondering how much of your net worth do you keep in gold? Around 5% seems to be the "standard" recommendation, does anyone have any different thoughts or thinking process?
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Last edited:
OP
OP
JScott

JScott

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Speedway Pass
Aug 24, 2007
4,165
7,798
1,731
3Q19 GDP released this morning... Far short of what was promised last year based on the tax cuts, but a good bit above recent expectations, and right in line with what we've seen for much of the recovery since 2011...

 

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
826
1,832
542
Nikiski, Alaska
It seems like here in Europe the banks are competing on who will give more credit to people who cannot afford to pay it off and regulators are getting more and more nervous. With interbank rates remaining negative (and likely going further down) people are getting into debt at 7% rate like crazy.

I am seriously thinking of transferring a good chunk of my money reserves into physical gold because on the other hand people still have way too much cash in bank deposits in my country. If people start panicking and withdrawing hard cash, the banks will have no choice but to impose strict withdrawal limits (good luck getting your money out then).

I was wondering how much of your net worth do you keep in gold? Around 5% seems to be the "standard" recommendation, does anyone have any different thoughts or thinking process?
The total amount of debt has exploded since the last recession in 2007-2008. I too am worried about the health of the International banking system. So, that brings in the question as to when the debt cycle is going to tank. It usually runs in 70 to 100-year cycles -- last time was the 1930s. It's much longer than the business and the real estate cycles -- but its downside hits a lot harder and the results last a lot longer. Some thought that it hit its nadir in this last recession, but then debt levels soared again to new highs almost immediately -- rather than completing a correction. Most in the know think that big dog is still out there.

I agree that one needs to have physical assets like gold and RE. You're right about the banks. They won't have the reserves to even start to meet the demand. They'll be awash in bad paper and non-performing assets. It will be particularly painful for everyone who doesn't see this coming. We're already at a peak in the business and RE cycles right now. What if all three cycles hit their downturn at the same time? Talk about hurt...

Personally, here's how I'm preparing. I'm trying to get debt-free. And I'm talking about business debt on my RE -- I conquered the personal stuff long ago. Since I provide low to moderate-income housing and such, I'm making very conservative decisions on everything. I have been through several business and RE cycles over my career, so I have a good idea of how this all works. Slow and steady win the race. So does providing basic services. Like I remind my husband about our self-service Laundromat -- everyone has to wash their clothes sometimes...
 

Everyman

Get To The Choppa!
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Dec 31, 2015
232
412
215
Ireland
It seems like here in Europe the banks are competing on who will give more credit to people who cannot afford to pay it off and regulators are getting more and more nervous. With interbank rates remaining negative (and likely going further down) people are getting into debt at 7% rate like crazy.

I am seriously thinking of transferring a good chunk of my money reserves into physical gold because on the other hand people still have way too much cash in bank deposits in my country. If people start panicking and withdrawing hard cash, the banks will have no choice but to impose strict withdrawal limits (good luck getting your money out then).

I was wondering how much of your net worth do you keep in gold? Around 5% seems to be the "standard" recommendation, does anyone have any different thoughts or thinking process?
Ireland has already implemented a lot of restrictions after 2007 - you cannot withdraw more than 500E a day from an atm to avoid a bank run. And there are more...

As for gold it depends how much assets you have. 5% shouldn't be advised without disclosing the total 'amount'. E.g. I know someone who holds around 50% in precious metals (physical). And is wealthy. And well-educated in terms of finance. He doesn't own his house due to inflated RE prices currently (it's cheaper to rent).

As it is a bit 'delicate' subject I would suggest revising your own 'financial statement' and how much you are comfortable with keeping. I wouldn't advise anything less than 30% in precious metals and the less you have the more PM you should keep. But you should get advice from a pro (not a 'pro').

If we lived in a 'normal' world I would bet that RE will go down to 10-30% of the initial price on average, in the next couple of years. But unfortunately this is not the case and probably there will be regulations introduced to prevent from selling/buying. Like with gold in 1933 in the US... well...
 

PizzaOnTheRoof

1% Better Every Day
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Jul 30, 2018
699
1,537
477
Texas
Ireland has already implemented a lot of restrictions after 2007 - you cannot withdraw more than 500E a day from an atm to avoid a bank run. And there are more...

As for gold it depends how much assets you have. 5% shouldn't be advised without disclosing the total 'amount'. E.g. I know someone who holds around 50% in precious metals (physical). And is wealthy. And well-educated in terms of finance. He doesn't own his house due to inflated RE prices currently (it's cheaper to rent).

As it is a bit 'delicate' subject I would suggest revising your own 'financial statement' and how much you are comfortable with keeping. I wouldn't advise anything less than 30% in precious metals and the less you have the more PM you should keep. But you should get advice from a pro (not a 'pro').

If we lived in a 'normal' world I would bet that RE will go down to 10-30% of the initial price on average, in the next couple of years. But unfortunately this is not the case and probably there will be regulations introduced to prevent from selling/buying. Like with gold in 1933 in the US... well...
PMs sounds great but I’m holding cash for opportunities come the next recession.
 

MJ DeMarco

Administrator
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 23, 2007
29,325
101,577
3,751
Fountain Hills, AZ
Looks like the US consumer as well as US corporations who are in charge of hiring still haven't got the memo that we're steaming toward a recession.


ISM manufacturing also ticked up as did construction spending.

Markets in record territories.
 

nitrousflame

Silver Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Aug 7, 2012
280
524
250
33
Minneapolis, MN
American companies picked up the pace of hiring in October, suggesting the worst might be over for the economic slowdown,” said senior economist Sal Guatieri of BMO Capital Markets.
Well, there you have it, looks like the slowdown might be over. Surely we can pack up and close this thread.
 

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
826
1,832
542
Nikiski, Alaska
Looks like the US consumer as well as US corporations who are in charge of hiring still haven't got the memo that we're steaming toward a recession.


ISM manufacturing also ticked up as did construction spending.

Markets in record territories.
You're right. They didn't get the memo. The normal pattern would have caused the peak a while ago -- but the expansion is still going. There are several factors we haven't had before -- since the numbers have been tracked. The unemployment numbers are also interesting since there were a LOT of people who were sitting it out -- they had quit looking for jobs a long time ago -- and they are now reentering the jobs market messing with the numbers. This is the first time in 75 years that we've been energy independent. We're are no longer hostage to that mess in the Mideast. And that's just 2 of those economic issues that are outliers right now.
 
OP
OP
JScott

JScott

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Speedway Pass
Aug 24, 2007
4,165
7,798
1,731
Not so fast. Patterns are patterns -- with a few deviations. I think we should all wait and see where the numbers go. History is pretty useful for predicting the future.
I think he was being sarcastic... :)
 

Don't like ads? Remove them while supporting the forum. Subscribe.

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
826
1,832
542
Nikiski, Alaska
I think he, was being sarcastic... :)
Possibly... but it's not a bad idea to expose our younger members to some of these concepts. When I was young and didn't understand, it felt like these downturns fell on us unexpectedly and randomly. It was like a car, full of hell, fell out of the sky onto my head. I didn't know these events were regular cycles and that they could be tracked. That data could then be used to make financial plans. By taking advantage of the nature of those cycles, one could use that knowledge to build wealth. No one around me where I grew up had a clue how it all worked. We knew how to get a job, go to work, and collect a paycheck.
 

MakeItHappen

Silver Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Apr 12, 2012
482
797
302
Here is a quote by Warren Buffett:
"Be fearful when others are greedy and greedy when others are fearful.”

This is just a thought but... I hear more and more people talking about the crash that is coming soon. Random people with no investment background.
It seems that more and more people are being fearful.
 

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
826
1,832
542
Nikiski, Alaska
Here is a quote by Warren Buffett:
"Be fearful when others are greedy and greedy when others are fearful.”

This is just a thought but... I hear more and more people talking about the crash that is coming soon. Random people with no investment background.
It seems that more and more people are being fearful.
We have crazy people here in the USA who are running around, spouting hate against capitalism, and talking about draconian taxes against wealthy people. And these crazies are running for major offices. If I was part of the 1% I'd be scared too. I've never heard this type of talk openly bantered around.
Also, this is the longest expansion we've had. People are constantly asking if this is the peak. Cycles are normal. You talk about a crash -- AKA a financial contraction. A short term business contraction is not a huge problem. It's normally short-lived. I've lived through several of those.
Due to the oppressive overall debt levels, I'm more worried about a contraction in the domestic and international debt markets -- that could last decade or more in recovery time. The debt market runs in 75 to 100-year cycles. That could also trigger rounds of de-inflation, which would be very disruptive. The last time that happened was the 1930s.
There are some issues of concern. We'll see where all of this goes. Personally, I'm concerned enough to make changes. I'm working very hard to pay down debts, especial for my investments.
 

Kid

Bronze Contributor
Speedway Pass
Mar 1, 2016
505
429
225
We have crazy people here in the USA who are running around, spouting hate against capitalism, and talking about draconian taxes against wealthy people.

I've never heard this type of talk openly bantered around.
Basically populism mixed with communism. Not directly experienced with it but fallout of communism is something few countries still suffer from (even if they declare being democratic).

Now we got populism added to it.
 

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
826
1,832
542
Nikiski, Alaska
Basically populism mixed with communism. Not directly experienced with it but fallout of communism is something few countries still suffer from (even if they declare being democratic).

Now we got populism added to it.
I'm not sure what to call it. But, it started with the elite class wanting to appear to "understand" and relate to the have-not class of people. It's a power consolidation thing. They thought they knew better than the average Joe, and they were going to fix things. Now, the elites are worried that what they started is out of control. And the wall of anger they've created is directed straight back at them, their lifestyles, and their money.

The disconnect is interesting to me. These high and mighty elites are lecturing the masses on how they should be living and thinking -- while the elites are jetting around on private jets and staying in 5-star accommodations to deliver their silly message. Go figure. Talk is cheap, but it sure can create a firestorm.
 
  • Like
Reactions: Kid

Kid

Bronze Contributor
Speedway Pass
Mar 1, 2016
505
429
225
I'm not sure what to call it. But, it started with the elite class wanting to appear to "understand" and relate to the have-not class of people. It's a power consolidation thing. They thought they knew better than the average Joe, and they were going to fix things. Now, the elites are worried that what they started is out of control. And the wall of anger they've created is directed straight back at them, their lifestyles, and their money.

The disconnect is interesting to me. These high and mighty elites are lecturing the masses on how they should be living and thinking -- while the elites are jetting around on private jets and staying in 5-star accommodations to deliver their silly message. Go figure. Talk is cheap, but it sure can create a firestorm.
This is very good observation.

When you look at thing that communism supposed to be solving is exactly the same. In times around 1800 people suffered a lot from owners of factories etc. - 12h or more days of work, no free weekends, no social security, very low pay, not to mention no medical aid. And whole families worked like this including children, while factory owner was living as rich as it was possible back then.

The problem is that all "parties" that promised masses that ruining rich and giving country to people, abused their power.
People changed being oppressed by one group (early captialists) to being oppressed by new group - politicians.
 
  • Like
Reactions: WJK

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
826
1,832
542
Nikiski, Alaska
This is very good observation.

When you look at thing that communism supposed to be solving is exactly the same. In times around 1800 people suffered a lot from owners of factories etc. - 12h or more days of work, no free weekends, no social security, very low pay, not to mention no medical aid. And whole families worked like this including children, while factory owner was living as rich as it was possible back then.

The problem is that all "parties
We've come a long way with social programs since then. But, the human race has always faced the same challenges. Our brains have been the same size for thousands of years. And today we're seeing the same reaction in several different developed countries -- where the working class is rising up against big brother governments.
 

James Fend

Gold Contributor
FASTLANE INSIDER
Speedway Pass
May 4, 2009
1,308
1,710
521
Las Vegas, NV
This is just a thought but... I hear more and more people talking about the crash that is coming soon. Random people with no investment background.
It seems that more and more people are being fearful.
This. I'm not the strongest when it comes to technicals, theories, etc. but I sure can read the hell out of humans and sentiment.

This "breakout" from all time highs has just begun. Markets will continue flying for at least 6+ months until Fear is eased from those "normal Joes".

In addition to Fear, there is Greed as well. Greed comes in hidden forms during high Fear states. In our particular case; there is much Greed from those sitting in cash and those who liquidated various assets to prepare to pounce on a recession. "Normal Joes" somehow "preparing" for a recession and ready to be on the "right side this go around". In addition; there is a TON of millennials sitting back waiting on whether or not to buy a house. Over the next 6 months; they will eventually give in. The moment I see more and more of my peer generation finally buy their house and I know that they are not Prime.. is the moment the recession will be around the corner.

In addition; this is talking from a weekly candle scale.

From a monthly candle: Depression.

The scary part is what I forsee in our human sentiment in our long term monthly candles. I think we are in the THRILL stage of the expansion. Next up after this upcoming "correction recession" will be the EUPHORIA stage. When we feel invincible and the market will never ever be weak again..

DEPRESSION. We are essentially in the mid stage of the "Roaring Twenties" right now.. Main factor was the creation of the Internet that caused the economic boom. When we look back at our time era.. I'm almost for certain it will be labeled around "internet something".
 

MJ DeMarco

Administrator
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 23, 2007
29,325
101,577
3,751
Fountain Hills, AZ
From sentiment / contrarian theory, it holds that instead of a crash, we might see a 20% gain in the next year. Whenever everyone is talking about X, usually Y -- the opposite -- happens.

In any event, the economic facts (negative interest rates, slowing worldwide growth, topsy prices) don't justify these prices... which also somewhat makes the contrarian theory the most likely outcome.

I just don't see the SPX above 3000 by the time the election rolls around... too many moneyed interests want the current administration to fail, from billionaires to corporate media to tech companies. That's a significant headwind, not to mention to the other factors.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

  • Like
Reactions: Kid

James Fend

Gold Contributor
FASTLANE INSIDER
Speedway Pass
May 4, 2009
1,308
1,710
521
Las Vegas, NV
In any event, the economic facts (negative interest rates, slowing worldwide growth, topsy prices) don't justify these prices... which also somewhat makes the contrarian theory the most likely outcome.
Agreed! This state of "things keep going up illogically with red flag fundamentals everywhere" is one of my indicators to "feeling" when we are nearing the top of any asset.

No big fan of Trump, but at this point and what I see of the future possibilities.. I think it's his election to lose. With that said, I do think we reach a big resistance point as you mentioned before the election; if I think the election will go the way I think it will, post election that resistance likely to get destroyed through. Then not too long after... what I call the "long tippy top wick"lol.

Sleeper* Breakout: If somehow a Real trade deal comes through before.. which I doubt as like many mentioned before.. China is just stalling til next year.
 
  • Like
Reactions: WJK

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
826
1,832
542
Nikiski, Alaska
From sentiment / contrarian theory, it holds that instead of a crash, we might see a 20% gain in the next year. Whenever everyone is talking about X, usually Y -- the opposite -- happens.

In any event, the economic facts (negative interest rates, slowing worldwide growth, topsy prices) don't justify these prices... which also somewhat makes the contrarian theory the most likely outcome.

I just don't see the SPX above 3000 by the time the election rolls around... too many moneyed interests want the current administration to fail, from billionaires to corporate media to tech companies. That's a significant headwind, not to mention to the other factors.
I'm beginning to think that you might be right. The economy might hang in there for another year before it starts to contract in this cycle. I checked on a stock that I've been holding for a proposed mining project, and there's no news -- we won't know anything from the Corp of Engineers until at least next quarter -- but, the stock is going up anyway. Huh?

About your "headwind" -- I wonder if the moneyed people will change horses or simply sit this out. What can they do about silly people who keep talking about wealth taxes and such? And some of those on the very left want to take the tech companies apart, piece by piece. I don't know where the guys with the bucks are going to land on any of these issues. I do know that it's hard to support someone with a stated objective to take your money away, both in life and death!
 

socaldude

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Jan 10, 2012
1,351
3,071
786
Mexico
From sentiment / contrarian theory, it holds that instead of a crash, we might see a 20% gain in the next year. Whenever everyone is talking about X, usually Y -- the opposite -- happens.
When I think of this thread I also think of what happened to Ray Dalio in the 80s when he tried to predict a depression by going all in with Gold and Bonds. Instead the market went straight up for the next 15 years.

He said something like even though international debt was high the money poured into the US and drove the dollar up and allowed the fed to lower rates without causing inflation.

Does history repeats itself? It depends. It depends if a new crucial variable is introduced.

With economics we are talking like a sh*t ton of variables its difficult to predict.

My guess with this market, so far every sell off has been bought by the bulls. And we still have a trade war pending so 2020 is in for a wild ride as the market will take very seriously any negative announcements. You are probably better off not holding any positions over the weekend and so far most announcements have been on Sundays.
 

WJK

Gold Contributor
Speedway Pass
Oct 9, 2017
826
1,832
542
Nikiski, Alaska
When I think of this thread I also think of what happened to Ray Dalio in the 80s when he tried to predict a depression by going all in with Gold and Bonds. Instead the market went straight up for the next 15 years.

He said something like even though international debt was high the money poured into the US and drove the dollar up and allowed the fed to lower rates without causing inflation.

Does history repeats itself? It depends. It depends if a new crucial variable is introduced.

With economics we are talking like a sh*t ton of variables its difficult to predict.

My guess with this market, so far every sell off has been bought by the bulls. And we still have a trade war pending so 2020 is in for a wild ride as the market will take very seriously any negative announcements. You are probably better off not holding any positions over the weekend and so far most announcements have been on Sundays.
We have a lot fewer stocks available with a lot more money chasing them. The USA is the place to invest with most of the rest of the world being soft. We'll see how long this horse keeps his legs under him...
 
OP
OP
JScott

JScott

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Speedway Pass
Aug 24, 2007
4,165
7,798
1,731
I'm completely making this up (I'm no expert on trade policy or the Chinese trade strategy), but purely from a game theory perspective, it seems to me that China's best move is to just wait until the next election to put any stake in the ground regarding a trade deal.

Of course, they aren't just going to refuse to negotiate, as that will cause short-term pain between now and next November. Instead, it's in their best interest to act like they are willing to negotiate in order to appease the current US administration and minimize trade pressure between now and then.

If I were China, I would continue to point out how important it was to have a trade agreement, how dedicated I was to working something out, continue to engage in negotiations, but then always find a reason to come back to the table before putting anything in writing. (i.e., exactly what they're doing.)
Today's news...

 

Create an account or login to comment

You must be a member in order to leave a comment

Create account

Create an account on our community. It's easy!

Log in

Already have an account? Log in here.


Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Sponsored Offers

Lex DeVille's - Advanced Freelance Udemy Courses!
-- HALLOWEEN SPECIAL STARTS TODAY! Get any of my courses at Udemy's current best price through Friday! Use code: HALLOWEEN Use any of the links...
Top Bottom