A lot of the talking heads on television seem to think that the threat of a recession has passed.
So exactly why have these talking heads come to such a ridiculous conclusion? Well, they figure that if a recession hasn’t started by now we are probably in relatively good shape. In other words, they are speculating instead of conducting a hard analysis of the numbers. And the numbers are clearly telling us that economic conditions are rapidly getting worse. Of course the U.S. economy has been on shaky ground for quite some time. We had a recession in 2020, we had another recession in 2022 (although the Biden administration refused to officially acknowledge it), and now it appears that we are entering yet another one. In fact, if the Biden administration was giving us honest numbers, they would show that we are already in a recession right now. But it won’t be too long before things will be so bad that even the numbers given to us by the Biden administration will clearly show that we have entered a new recession.
It is just a matter of time.
There is one extremely important indicator that has been absolutely screaming that a recession is coming.
10-year bond yields have now been below 3-month bond yields for 212 trading days in a row, and such an inversion has “telegraphed the last eight recessions”…
But for 212 straight trading days, no matter what the indicators have said, the Treasury market has delivered what is widely understood as a starkly different message: The economy is veering toward a contraction, since 10-year yields have held below 3-month ones. Such an inversion telegraphed the last eight recessions. And on Thursday, the market surpassed the 1980 record to hold that way for the longest consecutive daily stretch since Bloomberg’s records begin in 1962.
Does anyone out there actually believe that this indicator will be wrong this time around?
Of course it won’t be wrong.
But there have been times when the inversion has happened quite a bit before the recession arrived…
Moreover, the yield curve sometimes inverts long before a contraction. In July 2006, the 10-year yield started holding consistently below the 3-month rate, but the downturn didn’t start until December 2007.
It appears that something similar is happening now.
A very painful storm is going to hit our economy.
It is just going to take some time to fully play out.
Other numbers are telling us the exact same thing.
For example, the Conference Board’s index of leading economic indicators has experienced a losing streak that we haven’t seen since just before the Great Recession…
Many mainstay economic indicators measure the past. So-called leading indicators reflect what likely lies ahead. The Conference Board’s U.S. Leading Economic Index for July marked its 16th consecutive drop and its longest losing streak since the run-up to the Great Recession in 2007 and 2008.
Of course most Americans don’t need to be told that rough times are coming, because they can clearly see what is already happening when they walk the streets of their local communities.
Earlier today, I came across an article about the horrifying homelessness crisis that the Las Vegas strip is now dealing with…
The iconic Las Vegas strip has seen a surge in homeless people sleeping on the sidewalks and in makeshift tents as the city grapples with an affordable housing crisis. New images taken by DailyMail.com show people curled up in the sidewalk and outside store fronts – with some keeping their minimal belongings in trolleys and encampments.
Sadly, city after city all over the nation is dealing with similar conditions.
One of the reasons why homelessness is spiking is because housing has never been more unaffordable than it is right now.
CNBC recently interviewed one woman in California that is paying $1,600 a month to live in a tiny home that is “smaller than the average parking space”…
Sung Yoo pays $1,600 per month to live in a 140-square-foot tiny home in Santa Monica, CA. She says the experience has helped her save money and become more mindful. Her tiny home, designed by architects at Minarc Design, is located about an eight-minute drive from the beach and smaller than the average parking space.
This is the future that the elite envision for us.
They want to herd all of us into “mega-cities” and have us live in tiny compartments like rats.
The woman that lives in this tiny home is not exactly poor. In fact, she was previously paying $4,500 a month for her apartment in New York…
Sung moved into her tiny house following a major transition in her life. Living in the tiny home has helped her realign with her values, get grounded and become more intentional in her life. Previous to living in her tiny home, Sung lived in New York City for over 18 years where she paid $4,500 a month for her apartment.
$4,500 may sound like a lot of money to you, but the truth is that such rents are typical in New York City today.
In fact, the median rent in Manhattan has now reached $4,370 a month…
The median rent in Manhattan in August was $4,370 a month, unchanged from the record high in July, according to data from brokerage firm Douglas Elliman and the appraisal and research firm Miller Samuel. Average rents also held their record, at $5,552 a month.
Needless to say, the cost of living has become extremely oppressive in many other ways as well.
At this point, the price of groceries has risen to absolutely absurd levels.
The rate of inflation had moderated for a few months, but now it is starting to accelerate once again.
A big reason for that is the fact that the price of oil has been going up…
Oil prices climbed to their highest level of the year this week, extending a rally that has put a return to $100 a barrel sharply into focus. Indeed, some analysts believe crude prices could hit this milestone before year-end.
Unfortunately, I fully expect the price of oil to continue to increase.
In turn, this will cause everything else to rise in price, and our standard of living will get even lower.
And this is happening at a time when economic conditions are rapidly deteriorating all around us.
The months ahead are not going to be fun for most Americans, and the long-term outlook is even worse.
I would encourage you to do whatever you need to do to prepare for hard economic times, because all of the major indicators are all pointing in the same direction.