GUEST POST from Don: Recession Indicators??

RECESSION INDICATORS??

STOP! This post is not about recession. It is about WHY the indicators have failed and what the future holds. (I will say this: 3 in 5 Americans believe we are in a recession. They are not wrong, and they are not right. Recently a local investment advisor who is interviewed on a radio station every month predicted a recession and has pulled back on business investments in tech. I am writing this in July by the way.) Although the subject is serious, I think there’s room for lightheartedness. I won’t be mentioning these things here, yet there are opportunities ahead for those who plan well.

Many indicators have been used in the past upon which experts have relied to make investment decisions. They rarely failed … until COVID, and post-COVID.

You will be reading and hearing in the next few months many things about the economy. One side will be pointing to indicators which “prove” the economy is in a shambles. The other side will proclaim the opposite. Do not believe either side. They are both wrong and both right.

The economy is both in a shambles and “doing great” and there is no contradiction in saying both.

The fact is COVID and the trillions pumped into the economy due to COVID have ripple effects which will continue to warp reality. First one way, then the other.

The government did the wrong thing when it shut down the economy for COVID. Almost every expert has said the same thing about it. It was ineffective at controlling COVID and created economic havoc. Products and services were held up by supply line disruptions. We couldn’t even buy toilet tissue, for goodness sake. Certain medicated shampoos have not been available until just recently, including an incredibly simple product with coal tar as the active ingredient. Have they solved the baby formula kerfuffle yet, I wonder? Further, there are some necessary prescription medicines which are still on back order. Those are all the result from breaking the economy even though we are three years out.

In any normal world that decision to close businesses should have caused an immediate economic depression. There would have been runs on banks (there were a few) and businesses going bankrupt (there were some) and farmers going bankrupt (some did) and a disruption in labor (there was).

That’s where a second government decision skewed the results. The government mortgaged the future and flooded the market with free money. I am serious that they indentured your children and grandchildren to debts they can not repay. In fact, they may not be able to pay the interest. This is not a joke, nor a political statement. It is the economic truth. The problem of the Social Security shortfall is small potatoes compared to the money printed to jet us past a major, crippling depression not seen since the 1930’s. That ghost won’t go away even by a major upturn in our current economy. We can’t produce enough goods and services in the next 20 years to even pay a tiny fraction of the principal. Maybe I should remind you that 20 years is a generation.

So, when they tell you that the indicators are “broken” don’t believe them. The indices just been temporarily twisted by those two unreal events. Those events tug at the indices and slide them in unusual patterns. Just as the unreal events were temporary, so the effects on the economic indicators will be temporary. Soon, much sooner than we would hope, reality will return and with it will come pain and suffering.

When the pain and suffering come there will be calls from some quarters to tax those who are then benefiting from the twists and turns (and some will). Russia a century ago went through something like this and the results were even more horrific. The wealthy and educated were tortured and executed. It seems that people get angry when they are hungry and poor.

So, yes. I am prophesying a bit of gloom and doom. There isn’t any other prediction which makes sense. Long economist predictions lay it out clearly. You can’t break the economy and then flood the economy with free money and expect no consequences. There are ALWAYS consequences and we haven’t seen them all yet … so they are yet to come. It is just a matter of WHEN and HOW LONG?

WHEN? That is where economists disagree most. Some say months. Others say four years. HOW LONG? Again, disagreement. Some say 6 months, others say 2 years. The next president, whoever that is, will be blamed. But the blame is not in the future, but the past. The blame should not be on the executive office, but the legislative. Worse, the blame should fall on the medical community for getting EVERYTHING wrong (masking, social distancing, closing schools, closing businesses, insistence on vaccinations … the only part of that which they did not know after 30 days was how ineffective the vaccinations would prove to be).  Then we also need to blame government for pushing the free cash flood to artificially buoy the economy.  Our “experts” got almost everything WRONG.  Worse, we have held none of them accountable for their absurd advice.

We trusted.  We obeyed.  We were duped.  And, in the end, it is WE who will pay the price for falling for the scam with run-away inflation, unemployment, and other harms.

Let’s be clear.  COVID was awful.  Lots of people died.  Those who died were predominately older, overweight, or in otherwise bad health.  Many were stacked in refrigerator trucks outside mortuaries.

My wife and I got it.  Worst virus we’ve ever had.  It couldn’t have come at a worse time…we were trying to sell our house two states away and buy one here.  I accepted that I could die.  I was weak and had a nasty cough and body aches that wouldn’t end.  An elephant sat on my chest.  As I said, it was awful.  

Nothing would have prevented COVID’s spread once it escaped that Fouchi-funded lab in Wuhan which created it (some deny that, I believe).  But that there was no TP at the store … that was preventable.  That churches and small businesses were shuttered … those were preventable.  That school children fell far behind in education … that was preventable.

Now that all that is “Cooked Into” the economy…what is to come is NOT PREVENTABLE.  There is no way to put a better “spin” on this.  There’s no need to blame those who were not responsible, but we should hold those accountable who did this to us.  They screwed up.  “Never again!” should be in our minds and on our lips.  

We haven’t seen the end of effects from those decisions.

[PLEASE NOTE that Don is always open to discussing the thoughts and opinions he shares here and welcomes comments as shared in the comment section. He doesn’t use other social media platforms and won’t see whatever you’d like to share with him if you post it elsewhere.
ALSO, Don is always open to offer his thoughts on various topics. If you have a specific request, you can let him know in a comment; he reads – and replies to – them all. ~ Sherry]

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