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American economy in 4 easy steps.


               
2025 Oct 15, 4:26am   346 views  9 comments

by FortWayneHatesRealtors   follow (3)  

1) Rapid credit expansion – Government or lenders flood the market with cheap money (rate cuts, subsidies, or easy fraudulent lending).
2) Asset inflation – All that cash chases limited assets, pushing prices far beyond fundamentals. (“Free money, let’s party, buy now or be priced out forever”)
3) Risk transfer to investors – The originators cash out early, while investors are sold the dream of endless returns. (“I win now, you hold the bag.”)
4) Default wave when reality sets in – Prices correct, borrowers can’t pay, and the whole structure unwinds. (“Too bad - so sad, but rich get bailed out”)

This pattern held true every time:

- Savings and Loan Crisis
- Dot-com bubble
- Enron
- Housing bubble (Patrick started this site back then)
- Global financial crisis
- Bernie Madoff
- Tech unicorn boom
- For profit college scams
- Covid stimulus and PPP scams (Trump is jerk for that one)
- 2021 meme stocks
- Crypto to the moon
- pandemic housing bubble
- used car loan bubble
- Obamacare insurance subsidies bubble
- economy ran on paying businesses to service illegals bubble

These are just the once I remember, there's probably way more than that. But I come to realize our entire economy is ran on financial scams, from one scam the next, from one bubble to the next.

Comments 1 - 9 of 9        Search these comments

1   GreaterNYCDude   2025 Oct 15, 5:12am  

We have lurched from bubble to bubble for at least thirty years, probably more. Given that the stock market is at or near all time highs in part due to the AI Bubble, at some point market will crash / correct, government will pick winners and losers (via select bailouts), average joes will get screwed (again) rinse and repeat.

The only good thing is, everytime the market cycles, it never goes back to zero, so my 401(k) balance is healthy. If anything, the crashes are buying opportunities for those who are smart and have deployable cash on the sidelines.

You can hate the rules of the game but unless you are in a position of power to change them, best you can do is understand the game and take advantage when you can.
2   HeadSet   2025 Oct 15, 7:23am  

GreaterNYCDude says


those who are smart and have deplorable cash

Interesting term, "deplorable" cash. You likely meant "deployable," but ironic with today's politics.

GreaterNYCDude says


You can hate the rules of the game but unless you are in a position of power to change them, best you can do is understand the game and take advantage when you can.

Correct.
3   Glock-n-Load   2025 Oct 15, 7:27am  

GreaterNYCDude says

We have lurched from bubble to bubble for at least thirty years, probably more. Given that the stock market is at or near all time highs in part due to the AI Bubble, at some point market will crash / correct, government will pick winners and losers (via select bailouts), average joes will get screwed (again) rinse and repeat.

The only good thing is, everytime the market cycles, it never goes back to zero, so my 401(k) balance is healthy. If anything, the crashes are buying opportunities.cor those who are smart and have deplorable cash on the sidelines.

You can hate the rules of the game but unless you are in a position of power to change them, best you can do is understand the game and take advantage when you can.

This is inherently fucked though. The gamers are at the top and, if given enough time, all shall fall….except the top gamers.
4   Glock-n-Load   2025 Oct 15, 9:09am  

The game is morality vs immorality. If you’re just going to play the game, morals be damned, then you’re on board with shit like this also…


5   SharkyP   2025 Oct 17, 8:49am  

The Democrat minions are fond of crying “The stock market is rigged!” Republicans bad! They are too stupid to realize Pelosi and others have become quite rich playing the game.

I got scalded in the dot.com bubble. I’m out of ai stocks…too frothy.
6   Eric_Holder   2025 Oct 17, 12:23pm  

GreaterNYCDude says


We have lurched from bubble to bubble for at least thirty years, probably more.


Way more. There was a railroad bubble between the end of the Civil War and the panic of 1873. And there was another bubble in land prices which ended in panic of 1837.

PS. The whole boom-and-bust cycle thing was the major point of criticism of Capitalims by Marx and Marxists-Leninists. Judging by what they built they think stable universal poverty is better than unequal prosperity based on booms and busts, LOL.
7   Patrick   2025 Nov 11, 1:38pm  

FortWayneHatesRealtors says

- Covid stimulus and PPP scams (Trump is jerk for that one)




8   AD   2025 Nov 29, 12:28pm  

FortWayneHatesRealtors says


Risk transfer to investors


Yes, one case study is WeWork.

https://en.wikipedia.org/wiki/Adam_Neumann

.
9   AD   2025 Nov 29, 8:10pm  

Glock-n-Load says

We have lurched from bubble to bubble for at least thirty years, probably more. Given that the stock market is at or near all time highs in part due to the AI Bubble, at some point market will crash / correct, government will pick winners and losers (via select bailouts), average joes will get screwed (again) rinse and repeat.


As Patrick posted in another discussion thread, its better to be invested in the stock market.

The compound annual growth rate (CAGR) of the S&P 500 over the last 30 years (1995–2025) is about 10.9% per year with dividends reinvested, and about 8.2% per year after adjusting for inflation,

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