If The Stock Market Crashes Do Pensions go Bust? Yes and No! The real question to ask is what will be the government’s response to a Stock Market Collapse – December 22, 2021,

Because the U.S dollar is the world’s reserve currency by CHOICE, the U.S dollar is the Fiat Monetary system. Rule by Fiat means rule by decree, example if I’m the ruler of the world, I can command $2000 US dollars can buy 1 ounce of Gold. Why most people respect the U.S dollar is because the U.S dollar currently is a symbol of FREEDOM as well as leadership. But I want you to keep in mind that fiat money is worthless without confidence.

In a real market economy stock markets, main street markets, individuals, and business people are allowed to go bankrupt if there isn’t enough demand for their ideas and labor and during the good times they lived beyond their means. The beauty of a FREE market economy is that there’s ALWAYS demand for something even during economic downturns.

Government Regulations KILL DEMAND, as an example to prevent the Uber Application from bankrupting Taxicab companies, the government in certain jurisdictions stepped in and created regulations to save the Taxi services industry from going bankrupt. When technology is allowed it creates price deflation for consumers, I like to point out that Netflix saved consumers a lot of money on Rentals, and therefore Blockbuster which refused to change its business model went BANKRUPT!

Because Blockbuster didn’t have someone or the right people lobbying the government to create a regulation to finance it from failure, Netflix took all of Blockbuster’s market share. This was a rare case of free-market capitalism in the modern era in which PRICES were allowed to fall. Since the Obama administration, Stock market prices have not been allowed to fall and the reason prices haven’t been allowed to fall is because of deflation in prices historically leads to AUSTERITY MEASURES!

Austerity measures equate to the government shrinking in size. Barack Obama being the first Black President was the perfect person to make president during a stock market crash. There’s the history of racism in America and the corporatists and lobbyists used this to get a Wallstreet bailout. Yes, I’m well aware of Ben Bernanke’s role in all of this lowering rates to zero, quantitative easing, etc. But what I like to point out is what didn’t happen when the Stock market crashed in 2007-2008.

There were little to no regulation cuts, no austerity measures, in fact, Barack Obama added more regulations to the economy and this was the main reason why under 8 years of Obama the economy didn’t recover. Although not much better, when Donald Trump got elected, he cut regulations, and almost instantly the economy rebounded to the point that Jerome Powell began accelerating the raising of interest rates.

Many of us remember Donald Trump knowing that raising interest rates would calm the stock markets, calling out Jerome Powell to lower interest rates even going as far as to talk about trying negative interest rates. Trump loses the 2020 election and Joe Biden the new President via executive orders begins adding more regulations to the economy and because he added more regulations to the economy than even Barack Obama added, all of sudden the worst type of inflation began happening in America, which we all know as consumer price inflation.

Consumer price inflation is actually DEFLATIONARY for the economy, and there are two known ways to fight consumer price inflation the first way is austerity measures/cut regulations and government spending or keep regulations as they are and send people free money. Consumer price inflation is a sign the economy is has too many restrictions on it, restrictions cause shortages, not only shortages of stuff, shortages of labor.

If you’ve ever been to a socialist country, what may alarm you is how unproductive and unimaginative the people living under a socialist government are. The best socialist experiment to date has been the Republic of China and China’s version of socialism has Free Trade Zones (FTZs) which is one of their main drivers of growth, in these special economic zones, China allows fewer ECONOMIC regulations on its citizens than America allows on its citizens.

This one genius idea allows prices to produce to remain low. I bring this up because regulations on an economy force prices up and once prices are forced up the economy can not crash below the price of those regulations. So as an example if it costs me $0.50 to make a chocolate bar based on all the government regulations on the economy and the government decides to add more regulations to the economy, my cost to make that $0.50 chocolate bar will be forced to go up based on the new costs associated with producing the chocolate bar.

So if because of the new government regulations, my new cost to make a chocolate bar is now $0.75 cents, I have to raise the price I charge to the consumer. Now, sure the consumer can run to the government/regulator and scream foul but if I can’t make a profit to pay my expenses, there’s no reason for me to be in business? This is why as an example Venezuela had no toilet paper, the prior Venezuelan governments created so many rules and regulations for the producers of society that it became impossible to make a profit.

So instead of being in business, the business owners if their businesses weren’t nationalized closed their stores which first led to Venezuela being more dependent on imports but when the Venezuelan currency lost its fiat value, there was no incentive for business people to even import things to sell. Because after all the government had nationalized businesses the last time the businesses raised prices, so one would assume if businesses raised prices again they’d be punished again somehow.

I bring this up because if stock market prices fell, the market could correct the problem very easily, but what is likely to occur if the stock market crashes is that there will be calls for the government to create a new REGULATION! Meaning that the markets are going to wait around to see what those new regulations are going to be.

This delay is going to be the problem, however, I have to add that the fix is simple, yes your pension amount would go down, in a market economy but your purchasing power would go up. Now if you were spending beyond your means prior to the crash, that’s your problem, but if you were spending within your means, a stock market crash isn’t that big of a deal.

a stock market crash is only a big deal based on the regulatory environment. When the stock market crashes what you’ll want to pay close attention to is the government’s response to the crash, do they cut regulations or do they add more regulations? the Republicans actually did Barack Obama a favor by blocking most of his spending plans.

Joe Biden on the other hand as soon as he got into office began regulating everything, Barack Obama didn’t have a pandemic to deal with, well Joe Biden has made sure to add more regulations to the economy during a pandemic, which obviously leads to shortages, which has as an example pushed up the price for wages and energy prices.

So the consumer price inflation is entirely Joe Biden’s fault, but you see, that’s not the political narrative, and depending on the economists you follow, they will look at the data from a lens that coincides with their ideology. For this reason, when the stock market crashes, you’d be wise to pay close attention to whatever U.S President is in charge of the recovery and figure out if he or she in response is cutting regulations or adding on additional regulations.

More regulations equal bad, a massive cut to government red tape equals good!

Interesting times ahead!