Economic Indicators, Led By Mortgage Rates, Are Flashing Red
Posted on 05/21/2022 11:10:22 AM PDT by Presbyterian Reporter
Then White House Press Secretary Jen Psaki said in October that inflation increases “will be transitionary.” But today, they have surpassed 40-year highs, and many believe the U.S. is already entering a recession or soon will be.
Psaki said in a press briefing Oct. 8 that “experts, including the Federal Reserve, OECD, and others” expected “inflation rises will be transitory, that they will come back down next year.” She said, “one of the best things we can do” to bring inflation down “is pass his agenda,” referring to the Build Back Better and infrastructure bills that cost trillions of dollars.
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More than seven months later, several business leaders say the U.S. already is in a recession or is heading into one after the Federal Reserve increased interest rates twice already this year and is expected to do so again.
Billionaire entrepreneur Elon Musk said the U.S. is probably already in a recession in a discussion with the hosts of the All-In podcast.
List: The Celebrities Who Love America Play Video “We probably are in a recession and that recession will get worse,” Musk said. … “There will probably be some tough going for a year, 12 to 18 months is usually the amount of time that it takes for a correction to happen.”
One of the hosts, CEO of The Climate Corporation David Friedberg, said, “it feels like it started. Technically we need two quarters of negative growth to be in a recession. But it feels like we’re in one. Feels like it started. The software businesses that we invested in are like the canaries in the coal mine. And there’s a lot of dead canaries.”
Musk also said, “The obvious reason for inflation is the government printed a zillion amount of more money than it had. The government can’t just issue checks for an excessive revenue without there being inflation. Velocity of money held constant.
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By subscribing, you agree to receive emails from ThePoliticalInsider.com and that you've read and agree to our privacy policy and to our terms and conditions. You further agree that the use of reCAPTCHA is subject to the Google Privacy and Terms of Use. “It’s hard to tell what Biden’s doing, to be totally frank,” Musk added.
Last December, in response to being asked when the next recession would be, Musk said, “Predicting macroeconomics is challenging,” but “around spring or summer 2022, but not later than 2023.”
Deutsche Bank economists said last month that a recession is “far from inevitable” because consumers and companies are “flush” with cash, Bloomberg News reported. “The U.S. economy is expected to take a major hit from the extra Fed tightening by late next year and early 2024,” they said.
Aeveral financial analysts spoke this week about an impending recession. Former Goldman Sachs CEO Lloyd Blankfein told CBS News’ Face the Nation a recession is “a very, very high risk factor,” CNBC reported.
A Morgan Stanley Wealth Management CIO on Monday projected a recession is 27% more likely in the next 12 months. On Tuesday, former Wells Fargo CEO Charles Scharft said at a Wall Street Journal event, “It’s going to be hard to avoid some kind of recession.”
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In April, inflation was reportedly 8.3%. However, many suggest it’s much higher, pointing to grocery and other costs being 20% more than they were last year and gas costing 50% more than it did a year ago in many parts of the country.
While Psaki pointed to 17 Nobel laureates having “conveyed in order to reduce the risk of inflation over the long term,” the spending bills needed to pass, it’s the federal government’s spending that’s creating inflation, critics argue.
“Mountains of money cause inflation,” Ron Surz, CEO of Target Date Solutions, argues in a report published by Nasdaq. “Inflation causes increases in interest rates, lowering bond prices” and increases interest rates, which “cause reductions in stock values.”
The federal government’s “all-in spending was approaching $13 trillion as of mid-2021. That’s more than the U.S. spent in its 13 most expensive wars combined,” he said.
This includes $5.2 trillion in COVID relief, $4.5 trillion for quantitative easing and $3 trillion for infrastructure. COVID-19-related funding cost more than World War II did in today’s dollars, $4.7 trillion, Surz added.
The Federal Reserve is “accountable to get inflation down to 2%, and that we have the tools and we have … the strong desire to get inflation under control,” Fed Chairman Jerome Powell told Marketplace. Getting inflation down to 2% “without having the economy go into recession,” or to keep “the labor market remaining fairly strong,” he said, “will also include some pain.”
“But ultimately the most painful thing would be if we were to fail to deal with it and inflation were to get entrenched in the economy at high levels, and we know what that’s like. And that’s just people losing the value of their paycheck to high inflation and, ultimately, we’d have to go through a much deeper downturn. And so we really need to avoid that.”
This is crazy. Read an article the other day saying 25% chance of recession in 2023. Wasn’t last quarter negatively and I’m willing to bet the next one will be also. Boom recession. Can I get my honorary economics degree?
“””opened my property tax statement for next year...
makes that 30.7% jump look like a rounding error.
50%
in 5 years my property taxes have almost tripled.”””
But last week I got the bill for next years house insurance and that was up 21.4%.
Food, shelter, and transportation costs are biting people in the butt.
And, of course, Biden’s open borders only makes food, shelter, and transportation costs higher for US citizens as these millions of illegals eat food, live in some sort of house, and transport themselves in some manner.
When are these smart economists going to tell us how much it costs to feed, shelter, and transport several million illegals each day in the USA?
My estimate is a cool billion dollars a day. Based on probably 20 million illegals or immigrants at a conservative 50 clams a day for food, free jet travel, free bus rides, housing, that loaded ATM card they are given at the border for incidentals, unlimited medical, Obama phones etc.
So easily a billion a day. And I bet I am -way- low.
“””My estimate is a cool billion dollars a day”””
I think you are in the ball park.
Another thing the smart economists need to look at is the cost of having millions of working age citizens sitting on their butts and not working, as well as, the millions of working age citizens employed by local, state, and federal government entities that are in totally useless and non-productive jobs.
The USA has more than enough workers to be extremely prosperous. The problem is that we are not willing to kick butt and tell the non-workers and the non-essential workers to go to work each day.
When are these smart economists going to tell us how much it costs to feed, shelter, and transport several million illegals each day in the USA?
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they saw what the government did to doctors and the truth about the wuflu.
Most Analysts are whistling past the graveyard.
Most city dwellers are going to riot and rob stores even more! Wait until they can't get baby formula, gas or meat.
Excellent point!!!
We are officially in a recession. Proof? I washed two of my cars yesterday instead of taking them to the local car wash. I am also now making my own coffee in the morning instead of buying it at 7-Eleven or Starbucks.
“””Proof? I washed two of my cars yesterday instead of taking them to the local car wash.”””
I was waiting to read that you washed your two cars before selling them so you could have money to buy coffee to brew yourself a cup. Thanks.
I am not a degreed economist, but what I do know is that Trump’s economic policies seemed to make sense and the results showed. The prior President who seemed to understand economics was Reagan.
I work in big-box retail. My company has been doing VERY well. But suddenly the store is almost empty on a sunny Saturday. This is abnormal and worrying.
I’m finding a lot of empty shelves in many of the big box realtors.
Recession? Only temporary.
The local paper publishes the tax receipts for area counties and towns each month. It is a good barometer of activity in a pretty real time basis.
Receipts are down about 6% and continuing to fall.
Food pantries are also experiencing empty shelves because people are not donating food like they used to.
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