Let's dive back into the topics I raised - sorry was quite busy lately ! **The Dot-Com Bubble and Shifting Economic Dynamics** By 2001, distrust in Asian markets led Americans to pour money into U.S. tech companies, inflating the dot-com bubble. When the bubble burst, the Federal Reserve repeated its previous strategy of lowering interest rates to inject cash and stimulate the economy. Disillusioned with the stock market, baby boomers turned to real estate investments—often relying heavily on leverage. As household debts grew, more families required two incomes, pushing many homemakers into the workforce. An aging population further strained the economy, with fewer workers and reduced spending by retirees. This slowdown highlighted how GDP, the Consumer Price Index, and money velocity are deeply tied to demographics.
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**The Globalization Shift and New Economic Pressures** With the fall of the Berlin Wall in 1990 and the end of communism, a new era of globalization took hold. In 1996, international trade agreements and the founding of the WTO (World Trade Organization) further opened markets, putting American workers in direct competition with those in developing countries. This led to mass outsourcing and a surge in automation, resulting in fewer jobs in developed countries—particularly impacting already debt-burdened populations.
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**The Rise of Financialization and Wall Street’s Reign** As social programs expanded, new credit support emerged to help low-income households buy homes, leading to mass indebtedness and placing Wall Street at the center of the economy. This era saw the rise of 401(k)s and savings accounts, driving a stock market boom that made it increasingly difficult for most people to invest, as wages stagnated. People borrowed more to chase rising asset prices, creating a cycle of inflation. To make investing accessible, stock indices were created, but health insurance costs also soared, pushing people to borrow further to sustain their lifestyle. This era fostered a stock market obsession and a “millionaire dream,” with Wall Street becoming the focal point. The market crash in 1987 followed, prompting the Federal Reserve to lower interest rates, paving the way for economic growth managed through interest rate policy.
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