The Deeper Dive: Record-Shattering Stealth Recession Approaching
Why we won’t see the next recession coming and why it may not be reported as a recession even if it is the worst recession since the Great Depression. (But YOU’LL certainly feel it in your bones!)
The next recession has all the ingredients to become the worst since the Great Depression because it will happened due to the collapse of the Everything Bubble—the biggest collection of major market bubbles in history. To size up the potential scale of this economic collapse, consider all the bubbles the Federal Reserve has inflated, each of which has expanded to a hot-air balloon size unseen heretofore:
- Another housing bubble like the solitary bubble that imploded into the Great Recession, but with prices now much, much loftier than anytime in history.
- A commercial real-estate balloon-size bubble rapidly losing altitude now due to the seismic demographic shift away from brick-and-mortar retail trade and away from office space in favor of more remote working.
- A maniacal stock-market bubble of froth built over more than a decade to reach valuations that have extended far above where they were at their peak when the dot-com crash hit or when the Great Financial Crisis plunged us into the Great Recession.
- The most gigantic bond bubble in the history of the world due to central banks—especially the Fed—sucking up more government and commercial bonds at very low interest than at any time in the history of the world. The collapse of this bond bubble will include the defaults of many zombie corporations, which means companies that were only able to survive due to very cheap interest on their corporate bonds being used to keep the lights on and the doors open, which all goes away.
