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The Republican Party is the party of civil rights and the four F’s: faith, family, freedom and fairness.
The Democratic Party is the party of the four S’s: slavery, secession, segregation and socialism (Quote By Author Michael Scheuer).
Thursday, June 16, 2022
You Think Times Are Hard Now? Buckle Up, Buttercup
BY ATHENA THORNE |P J MEDIA
(AP Photo/M. Spencer Green, File)
Anyone who’s been an adult for a while easily predicted the consequences of the Democrats’ disastrous spend-a-palooza as they clamped down on healthy productivity because of COVID-19 panic. We can just as easily see what’s going to happen in the next year or two, too. And I hate to break it to you, but it’s going to stink for a while.
I should point out that I’m not any sort of a credentialed expert, just someone who pays attention, knows a little history, and has been around long enough to pick up on a couple patterns. I also read what the actual experts have to say. Put it all together, and here are some of the sorry conditions likely headed our way:
High Prices Aren’t Going Anywhere
When the government dumps an extra 20% of the GDP into the economy, no one should be surprised that dollars don’t buy as much. And that currency flood doesn’t just dry up overnight. The Federal Reserve has begun the painful process of jacking up interest rates to tighten things up, but the first two installments don’t seem to have had any effect in slowing down the worst inflation since 1980. The Fed is going to have to suck a lot more air out of this balloon to bring it down. And someday, when inflation is beaten back to two or 3%, the new baseline cost of food and fuel will be here to stay.
Oh, and the independent factors making fuel super-expensive aren’t going to be fixed so long as Democrats control anything, which means everything else will still cost more to produce and deliver.
Interest Rate Hikes
As already discussed, the Fed will keep cranking up interest rates for the foreseeable future, in order to get inflation back under control. So far this year, we’ve had a 0.25% hike in March and a 0.5% increase in May. The June hike will be announced Wednesday afternoon, and it’s widely expected to be a whopping 0.75%, with some even floating a nightmare scenario in which the Fed cranks it up a full point. I do hope you weren’t carrying any revolving debt.
One of the immediate effects the new, higher rates have is to drop the value of real estate and other high-ticket property that is generally purchased with a loan. The good news is that this won’t harm anyone who has already completed any large purchases they needed to make. The bad news is that people’s net worth will be dropping as their equity devalues, and anyone who was planning to sell or rent out a property is looking at a 5% – 10% decrease from last year’s prices.
In addition, the COVID-inspired changes in work habits have left a whole lot of office space vacant, leading the commercial market to sag as well. Real estate is a large enough sector that its floundering will have repercussions in other areas.
There’s not a day that passes lately that my inbox isn’t full-up with news of CEOs, banks, and investors predicting a major global recession. But you don’t need to be an economics expert to know that recessions tend to follow inflationary periods. Back in April, I asked, How Bad Will the Biden Recession Be? Since then, conditions and opinions have only consolidated, landing solidly in the recession column. The U.S. GDP contracted 1.5% in the first quarter of this year. Between inflation, interest rates, and fuel prices, companies have less to spend on anything, so strong enough growth to pull us back into positive territory isn’t likely just now.
Inflation, interest rate hikes, sagging real estate values, recession — no one wants to hear all that bad news, and that includes the stock market. On Monday, the S&P 500 plummeted almost 4%, and the slide continued into Tuesday. The index currently sits at 22.2% below its record high earlier this year, officially putting us into a bear market.
Sinking markets don’t just hurt wealthy Wall Streeters; they hurt retirees, employees of devalued companies, the government’s ability to collect tax — and anyone who relies on income streams from any of those sources.
Scarcity and Hunger
From construction supplies to baby formula, there just isn’t enough of everything. There are a lot of reasons for this that have been building up over a long time, but the problems listed above, combined with that pesky war in Eastern Europe and the sanctions right-thinking nations have heaped onto the situation, are going to exacerbate the issues.
In summary, sorry to be such a Debbie Downer, but I haven’t seen much optimism (or reason for it) anywhere. Even more scarce are competent leadership and common sense. So long as everyone wants to prioritize green fantasies, ESG scores, and social Marxism and no one wants to be serious, we’re going to be in the stew. Stock up on essentials.