Deepening Recession

BY PGF
3 months ago

I appreciate Herschel allowing the leeway to post items about the economy. Instead of posting articles about the sky falling and The Big Crash that’s always about to happen any day now (one day, those folks will be correct), we’ve tried to provide actionable forward-looking information to give you an indicator of what’s around the corner for the markets that affect you and your family. The object is to offer education and insight into the next several months so you can plan and prepare.

We’ve written a few posts, two here and here, using technical market analysis that pointed to the current recession. This recession we warned you about in the spring is underway (despite the fascists ‘official’ pronouncements to the contrary) and will worsen in the coming months. We predicted the current market downturn and recession based on the analysis of inflation and the formation of technical market patterns.

This time we’re looking at historical information. We’re predicting a stock market second leg lower soon, coupled with a marked economic downturn in the coming four to six months, give or take. The history is boring, and only wonks care, but the fed has been raising interest rates in recent months from the floor of near zero. This will cause a sharper downturn in the coming months into next year. Of course, everything could change tomorrow, but lower stocks and a deeper recession loom.

We think the last month or so in the stock markets have only been a short-term bounce in the ongoing drawdown, and new lows will be seen in the coming several months. As we’ve mentioned here at TCJ, these things create a feedback loop. Cause and effect get muddled, but the trend remains downward, as far as we can tell.

So far, the housing market has remained strong. We don’t think this will hold, again, using historical information. In my area, the housing market has been white hot. I know one gentleman who got 50k over asking before listing. The housing market has been pretty exuberant for the past couple of years in the country’s growing regions. That can’t last indefinitely. Housing is very likely to fall soon as well. Note: often, housing as a market falls relative to itself, which means that it levels off or goes to near zero growth in either existing home sales, new home builds, or both.

We just thought you should know so you can prepare.

———————-

More items of interest in economics:

This article at CNBC constitutes an informal pre-announcement from government outlets of the deepening recession.

Steve Hanke [Johns Hopkins University Economist ] says we’re going to have one ‘whopper’ of a recession in 2023

  • The U.S. economy is going to fall into a recession next year, according to Steve Hanke, a professor of applied economics at Johns Hopkins University, and that’s not necessarily because of higher interest rates.
  • “We will have a recession because we’ve had five months of zero M2 [ definition ] growth, money supply growth, and the Fed isn’t even looking at it,” he told CNBC’s “Street Signs Asia” on Monday.
  • Meanwhile, inflation is going to remain high because of “unprecedented growth” in money supply in the United States, Hanke said.

Hanke probably isn’t wrong, but he’s also running cover for the Fed. So, existing money supply problems will cause a deepening recession, coupled with, as we’ve pointed out at the top, rising interest rates just for fun.

Next, Oh, Look, Fox Business says digital infrastructure is arriving just in time; what a ‘coincidence.’

Federal Reserve says real-time payment system could begin as early as May 2023

A Federal Reserve official said the agency’s new real-time payments system FedNow is slated to launch as early as May 2023.

FedNow has been in development for around a decade and is supposed to allow banks to send payments to each other in real-time, thus allowing bank customers to send real-time payments to each other as well.

The system, which will operate 24 hours a day, seven days a week, is expected to be less expensive than wire transfer or debit card transaction fees.

But while FedNow has been in development, other banks and the cryptocurrency industry have been looking for other alternatives for real-time payments.

Just because the velocity of money will go real-time doesn’t mean anything will improve; in fact, crashes will be more sudden, if anything. And don’t try to withdraw all your money at once in real time. They say that’s a run on money, and very bad, so whatever you do, never use cash! Got it?

Tell your family you love them.


Comments

  1. On August 30, 2022 at 8:38 pm, George 1 said:

    Not an economist and I don’t play one on TV. I would note that the difference this time is that the powers that be are deliberately smothering economic activity by shutting off or severely limiting energy production, energy production being oil, coal and natural gas. I don’t count “Green Energy.” That sector is mostly gaian religious propaganda. That will have enormous effects on all economic activity, most notably food production, power generation and transportation.

    They are not only shutting energy production off at the source they are also ensuring investment in future energy production is not available. Note that by shutting down nuclear energy projects Jimmy Carter ensured that no new substantial investment in nuclear power generation would ever happen again. No one is going to invest enormous amounts of capitol in that area when a president can end it with the stroke of a pen with the investment totally lost.

    The same will happen with oil, natural gas and coal investment. No one will want to invest in future infrastructure when the powers that be can simply stop everything with a signature. Let’s see if the Keystone Pipeline ever gets going again.

  2. On August 31, 2022 at 9:00 am, Don't mind me said:

    Already happening in Europe. Eyes east, gentlemen and pay attention.

  3. On August 31, 2022 at 5:24 pm, Heywood said:

    Take a minute and look at stock ticker DRLL and Strive Asset Management. Itnis an anti-woke, anti ESG company. Do your own homework, but if you are fortunate enough to have a brokerage account or have some say in your retirement holdings, I suggest looking into this and the reasons WHY he created it. THIS IS NOT FINANCIAL ADVISE. But it is a plea to do what you can to help. Money doesn’t talk….it screams.

  4. On September 1, 2022 at 4:06 am, Chris said:

    Hey Fred!!
    CIII

  5. On September 1, 2022 at 7:43 pm, PGF said:

    Hey Chris.

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This article is filed under the category(s) Survival and was published August 30th, 2022 by PGF.

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