Last Friday a quiet economic release hit the wire from the Federal Reserve which is of critical importance yet ignored by the Bubblevisions, economic journalist world, and economy related blogosphere:
The chart from Trading Economics sums it up with a warning if you can see it:
Folks, this is disastrous news no matter how you cut it as the “consumer is strong” narrative does not fit this drastic revision downwards. If the consumer was “strong” then with the start of the summer travel season at the end of May along with increased inflationary pressures it either means consumers are cutting back, or those on the lower end of the economic spectrum have maxed out their credit lines.
The summer data readings will be crucial to verify this trend change one way or another but this is a distinct warning sign that things could be pointing to a much worse outcome than the “mild” recession the political elites and Bubblevision experts have been promoting.
The phrase “a recession if we are lucky” has been used several times by differing authors in articles throughout the financial media and economic blogosphere. Why would they say this unless the realization that the Burns like incompetence on display by Jay Powell and the Federal Reserve in parallel with a uniparty full of corrupt political leaders will result in another ultimate economic disaster.
In the late 1920’s as the financial system started to unravel, Herbert Hoover saw the potential for some of these problems and proposed modest modifications to the banking system to prevent the problems of that time from expanding to a point which destroys the credit creation mechanisms of America. The RINOs of that era and radicalized Democrats would have none of it and paralyzed the legislative branch to a point where the only economy related legislation that passed was the nightmarish Smoot-Hawley tariffs which only helped turn a deep recession into a global depression by creating a trade war.
Now look at today’s political parties. There is a split in the Republican Party between the populists and the establishment elite. The Democrats of today’s era would be equivalent to the Wobblies and Socialist Party of the early 20th century based on their current beliefs and behavior. The split between the two parties and the American people is now wider than it was in 1930 and worse, heading towards the same type of dysfunction last witnessed in 1859.
And we the people are to assume they will stop their games should the recession starting now turns into something worse?
Inflation is out of control and will remain so throughout the end of this year at a minimum. Interest rates are rising and when this filters down to the lower and middle classes, credit creation and consumer spending will come to a screeching halt. Shortages be it at the manufacturing level or the grocery stores are now an accepted part of life, yet the political economists refuse to recognize this fact as nothing more than a “transitory” problem.
Another major difference between the Great Financial Crisis the globe experienced in the late 2000’s versus now is that a new era has begun with the expansion of decentralized finance in parallel with the total loss of faith in the global central banks ability to manage each nation’s financial system. This is an undeniable fact as the people of the United States have lost total faith in the Federal Reserve and this despondency has been slowly spreading into the entire economic structure of the globe.
America, if we just get a 2007-2009 type of recession we would be damned lucky. The odds are something far worse is on the horizon, and the election of 2022 will be more of a parallel to the 1930 midterms where the Democrats seized power in the House of Representatives, but with the help of progressive Republicans basically seized the US Senate also. Sound familiar?
Thus even if the Republicans technically seize control of the Senate, progressive elites with the RNC will maintain the status quo leading to a disaster for the nation. Much like the 1931-1932 legislative session, any reasonable proposal for reform to restructure antiquated Federal oversight and undue influence in the economy will be stifled. This means that Senile Joe would become the equivalent of a Democrat version of Hoover, blind and incompetent with little ability to lead the nation out of what will become overwhelmed by economic decline and international crisis.
The United States is on a dangerous path where a garden variety recession may well be exacerbated into another credit crisis where the common man’s assets are destroyed in dollar terms while inflation makes the costs of the basics for survival unattainable for many. If the nation continues to follow this pattern, America could well head into another greater depression with unemployment well north of 20% and a banking system teetering on the precipice.
The rot which was created from 2000 to 2009 underneath the economy still exists and has not been liquidated which means today’s current crisis could cause the consequences of the Big Lie about our financial system to become exposed again. The bill for decades of fraud and largess may well be coming due finally as the attempted Great Reset may instead in the dissolution of America’s hegemonic globalist vision of a new international economic structure.
A recession if we are lucky.
A depression though, because that’s what America deserves.