The top 4 reasons we are heading into a depression. I have been crowing to everyone for a while now about the coming depression. Many are now saying we are already in a recession. Headlines like this one from the USA TODAY Another Recession in 2022? And that’s a question. How about this one from fortune.com Wall Street Titans Warn a Recession is Imminent…We can argue at length and severity ad nauseum about all the information in these articles. But, I have cobbled together about 3-4 instances that might trigger the new Depression of the 21st Century. Not all of them are inflation.
Governments have mostly kicked the can down the road to so many of these problems. This in itself has created major risks that make another crisis inevitable. The risks are growing even more acute.
There is a ton of economic data that doesn’t exactly inspire confidence in the U.S economy,
and While plenty see at least a resurgence of economic woes that we saw in the 1970s
Many analysts are moderating their opinions about GDP, gross domestic product
expectations are now looking to fall instead of stay steady or increasing.
Inflation of course which many experts now say will stay high through this year and maybe as far
as 2024 will be the biggest killer of the economy even if other factors stay steady.
The numbers say it is bad, with 40-year highs and now the Fed is raising interest rates as a normal adjustment to try and slow the pace. We will see many more raises this year. Even CNN if you can believe it is saying be prepared for Recession Shock as a headline from a Bank of America warning. Here is a quote from the Bank of America Chief investment strategist. "'Inflation shock' worsening, 'rate shock' just beginning, 'recession shock' coming,"
He basically covered the effects that we see the most putting a strain on everyone in America.
Also in the article, they said Global growth expectations will be plunging to record lows soon.
They keep telling us that the unemployment rate is spectacular at 3.5%. I would agree generally yet I see that we soon will have responses to inflation with people buying less, traveling less due to high gas prices, and generally the economy slowing to a crawl at best. Inflation leads to a domino effect that can not be stopped. Inflation has now been ramping up for a year now. Since President Biden took office. Yes exactly what we all said would happen. But Americans' confidence in the economy has been tanking to 11-year lows as individuals can see what is really happening to them. All of the Presidents experts can not understand why the leaders of these fortune 500 companies are viewing the opposite trend. Why Inflation. We the people know this to be true also. Inflation can kill a nation. This is just the first problem that will push us into a depression.
The second is a global war, or just us getting into the war in Europe, Taiwan, and or Isreal to name just a few. You think the shelves are starting to get lonely now, just wait till we plunge into a war we can’t afford and don’t want to be in. I can see plenty of rioting coming from both sides of the political aisle when President Biden believes that he will gain favor if we go in to help Ukraine. It is something I am sure they are contemplating. They never make a decision without thinking about what people will think of it. War unfortunately does get some people on board with any administration. If the war goes nuke even in a small way we will plunge the entire globe into a depression that will see people starving in places that will not be able to obtain food easily. We will suffer but should be able to make it if we all work together. Unless a strike hits our country. Then all hell literally may break out.
Thirdly I believe high oil prices will be highly recessionary, destroy oil demand and slow down a lot of economies. The conflict in Ukraine is putting many Countries into a bad position as they rely on Russia for their energy needs. Shutting down Nuclear plants and attempting to go green has pummeled the people of Germany and France. If that supply is pulled chaos will ensure all through the European continent and eventually the world. It is amazing that if you tie yourself into other countries, you will take down the entire ship if you or a few of you fail. America does not have to do that if we open up every source we can use. This might make it a little easier on us. But if this administration continues to force-feed people electric cars and solar panels before they are economical and can sustain us. Then we will crash also. So the oil and greenies will push against each other and could throw us easily into depression as the people are the ones to feel the outcome. Not the elites.
History tells us we need to prepare. Notice these 3 causes to the Depression in the 1930s.
1st. Vulnerabilities in the Global Economy. In this timeframe, people were recovering from WW1, and countries’ high inflation helped lead to the downturn. Sound familiar we are coming out of a global pandemic and things seem good but we are struggling with the same inflation problems that helped lead to the Great Depression.
2nd. Financial Speculation
Everyone thought they could get rich as economies bounced back from WW1. Wall Street gambled with investors buying stocks on margin. This may not be happening now with the margins buying. But look how high the market continues to go now despite global problems. Very similar to what happened 100 years ago.
3rd. Blunders by the fed was the third problem.
There was a drastic 67 percent increase in the money supply in the 1920s. That policy led to declining interest rates. So that encouraged people to over-invest. Then a bubble in the stock market occurred. The fed began to increase interest rates to correct the out-of-control market and inflation. Boom the market couldn’t take it and a crash occured.
After the Wall Street Crash weakened the economy, President Hoover still signed the Smoot Hawley Act into law in 1930. The law raised U.S. tariffs by an average of 16 percent. This was trying to protect Americans from the competition with foreign countries. But the move backfired when other countries put tariffs on U.S. exports. Continuing the depression economics.
Singularly each problem might make it through time with only a small inconvenience, but put together the Depression occurred. Do you see a few of these problems happening now?
Yes, interest rates beginning to rise, inflation is high, cheap products from other nations stealing jobs from the US couple this with Declines in consumer demand, financial panics, and misguided government policies and you can see a perfect storm headed our way.
So the Fourth problem I have heard from a few futurists. A combination of High Tech like AI and robotics taking over all we do. Also potential water problems in the coming years. Add in People overpopulation and any of the other problems we have covered and the globe is in the crosshairs of depression.
The backlash against democracy will reinforce this trend. Government leaders on both sides of the aisle seem to love it when economic weakness, mass unemployment, and rising inequality strikes. The current administration is thinking of how they can take control when things go badly soon. Heightened economic insecurity will lead to them wanting to take power from the people and bring it to the government.
Look I have not even covered The Great Reset, where our elites gather at Davos. There, they planned to have much of this economic downturn thrust upon us so they can take more control and lead to a Utopia. That is actual people trying to force us into a depression to take control. Maybe next time I will speak solely on the Great Reset. Out in the open and close at hand….
As usual, this leads me to ask you to get ready for a downturn at the least. Depression is where I think we are headed, but if it is only a recession you will be prepared for both. Get your bills straightened out. Prepare with some extra food. Look to help your family, then friends, and then neighbors. I surely believe our elderly will say they are OK but please keep an eye on them.
Here is the good news. We just celebrated Resurrection Sunday. So the reality is we have God on our side. Look Yes, we may not like the outcomes of many of the problems we have talked about. But, we have comfort in knowing that Jesus died for us so that we need not worry anymore.
So Find Jesus if you have not! He will give you solace in knowing that you are loved and cared for. If you are Burdened by any problem, trust Jesus, the only Truth that can carry you through the troubles we endure!