Economic Collapse is Stalking us Like Death
The exceptional degree to which the Fed has trapped itself (and all of us) in an economic death spiral is becoming evident everywhere now.
My longtime prediction that the Fed will not be able to kill inflation without destroying the economy is showing itself true in articles about hand-wringing from multiple directions today. The short of it is that the Fed either wins inflation but drives us deep into recession, or it rushes to bail out a collapsing economy but lights inflation fully back on fire again. Either route is bringing the collapse of the Everything Bubble that the Fed and multiple federal administrations created.
Let’s look at the concerns that are emerging from all over the financial realm in today’s news headlines to see what many are sensing and what the most reliable economic indicator is now screaming like a siren.
Let’s begin with the “creator” of the very accurate “Sahm Rule, which says that, whenever the unemployment level rises 0.5% from its one-year low, we are plunging into recession, regardless of what low level of unemployment we start from. This indicator has never been wrong as a timer, and we are right there! However, we already also dealing with very broken labor indicators. So, maybe we are well past a 0.5% rise or maybe still a touch under. Who can know when even Jerome Powell has said the government’s labor numbers are clearly wrong and when CNBC took the rare step of saying they looked “cooked,” though it’s not clear that Powell knows by how much or in what direction? Just clearly they don’t add up, but that has been my major warning of peril for a couple of years now.
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