A Little Too Late
When will a recession occur and when will the Federal Reserve change course on tightening? These two crucial concerns occupy the minds of economists worldwide as the Federal Reserve continues its quickest rate raise cycle since the stagflation crisis of 1980.
These questions have both straightforward and intricate answers: I believe the recession has already started. Second, even though they will likely temporarily cease tightening, the Fed WILL NOT change course.
For some time now, I have prophesied that the establishment will enter a phase of monetary tightening and will keep raising interest rates and reducing their balance sheets until the markets collapse and the system becomes unstable. The data indicates that components of a financial black hole have already been generated, and that forecast has thus far proven to be accurate.
The US is currently experiencing a recession, according to statistics that the St. Louis Fed has quietly released. This revelation was made public just before the new year, obviously to avoid receiving more press coverage. The announcement also comes just after the Philadelphia Fed reduced its expectations for labor growth in the second quarter, removing a staggering 1 million jobs from their initial projections.
The inference is that the Fed might have purposefully overstated the gain in employment. Why? Because the central bank wants to keep tightening and needs positive results to support rate increases. Why is the elite so adamant on deflation now, more than ten years after QE and loose money, is the question we need to ask ourselves.
Has a crash been scheduled for 2023? Perhaps. If so, it may start in earnest as the Fed reaches a 5% interest rate. (I have been preaching ‘Safety’ for some time).
Does this indicate that the central bank will return to stimulus policies? Not at all. I think the Fed will temporarily halt raising rates at 5%, but stimulus won't come back. Additionally, if price inflation stays strong, a pause in rises does not always signal that tightening will resume. Remember that the official 2% inflation objective set by the Fed is something we are still far from achieving.
Additionally, since the 2008 credit crash, the Fed has generated incalculable trillions of dollars. In the name of the coherent economic reaction, they created nearly $8 trillion in just 2020 and 2021, all as a result of pandemic lockdowns that never should have occurred. The volume of dollars in circulation worldwide is staggering, and inflation shows no signs of abating any time soon. _ Rockwell
What Is Happening With Housing?
This is getting relentless: Sales of previously owned houses, condos, and co-ops fell by 1.5% in December from November, the 11th month in a row of month-to-month declines, and by 34% year-over-year, to a seasonally adjusted annual rate of sales of 4.02 million homes, roughly matching the lockdown-low in May 2020, and beyond that the lowest since the depth of Housing Bust 1 in 2010, according to the National Association of Realtors today.
Priced right, just about any home will sell, but sellers are not wanting to price their homes right. And potential sellers are sitting on their vacant homes, hoping for a quick end to this downturn, or they’re putting it on the rental market or try to make a go of it as a vacation rental, rather than dealing with the reality of a mind-blowing housing bubble that has loudly popped.
Actual sales in December – not the “seasonally adjusted annual rate” of sales – fell 36.3% year-over-year, to 326,000 homes (from 513,000 homes a year ago), according to the NAR.
The median price of all types of homes whose sales closed in November fell for the sixth month in a row, to $366,900, down 11.3% from the peak in June. This drop whittled down the year-over-year gain to just 2.3%, from a year-over-year gain of 16% in the spring of 2022. - WolfStreet
Job Losses Are In The News
Google parent Alphabet Inc.’s CEO sent a note to employees Friday announcing the elimination of 12,000 jobs, as a response to economic changes over the past two years.
The move—coming two days after a similar number of job cuts from Microsoft—will affect both U.S. and overseas employees.
“Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today,” Alphabet and Google CEO Sundar Pichai wrote.
“As an almost 25-year-old company, we’re bound to go through difficult economic cycles. These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities,” he wrote. - The Epoch Times
There Will Be Brighter Days
It is necessary to remember that investment markets have cycles, much like electricity.
