When the CEO of the largest criminal bank tells his investors to brace themselves for an economic recession, they better move to higher ground. However, he’s just talking about the negative economic consequences of the Federal Reserve tightening the money supply by increasing rates and selling the assets they’ve accumulated over the past several years – mainly mortgage-backed securities. As a result, the FED is removing liquidity and stifling wage growth in response to inflationary pressures.
However, that is not all of our problems. We are facing a global reckoning caused by many poor decisions in our past. Call it karma or a tsunami of shit – both are fitting. Multiple causes converge around the same time, bringing us a complete mess.
Energy Prices Will Continue To Soar
Not being able to act politically due to corruption of the entire political class will have consequences that are magnified due to our proxy war with Russia and subsequent sanctions against Russian oil. We are experiencing skyrocketing gas prices which will continue to soar. We failed to become energy independent and did not shift to alternative energy sources. This will have negative consequences over time. Europeans will feel this most strongly, but US citizens will suffer – mainly the working class.
Those who have refused to lighten their carbon footprint will feel the most pain among us.
Food Prices and Scarcity Will Increase
Along with energy prices, this economic recession will see food becoming scarce causing prices to rise. In addition, the global South faces droughts and enormous heat waves negatively impacting growing seasons. We also have the war in Ukraine blocking grain shipments throughout the world. Those who can get the food will pay higher prices. There will be some who will have to ration or go without.
Housing Bubble Will Burst
The justification of the FED for buying trillions of dollars in mortgage-backed securities from the financial oligarchs was to increase the liquidity of the economy. The propaganda newspapers then wrote there was too much liquidity in the economy causing inflation, or prices to soar due to demand. This is basically bullshit. Prices of goods and services have increased but not due to demand. Monopolies across our industry sector have allowed corporations to raise prices.
All the lending for housing at low-interest rates caused values to increase. The buyers of homes are not just individuals. We shall see who the true buyers are short as the housing crisis picks up steam during this economic recession. I suspect that many of the homes were purchased by institutions which is why the FED has so much paper on its balance sheet.
The FED increasing interest rates while stopping the easy money pumped into the economy will be a double whammy for the economy. Wall Street has become addicted to the free-flowing of cash from the FED. Pulling that away from the gamblers and banksters will cause plenty of stress. Adding higher interest rates will them into the unknown.
Closing
The Ukrainian War has been very bad timing in the FED’s business cycle. The FED has been priming the economic pump since 2008 to avoid an economic recession. Barack Obama had a chance to correct the madness, but he cowered to Wall Street allowing Citigroup to direct his administration. He won’t feel the pain with presidential perks and a lofty Wall Street speaking fee of $500,000.
Donald Trump was going to “drain the swamp!” He too cowered to the oligarchy while paying lip service to his salivating fans. The media has done its job by casting the blame on Russia or any other bogeyman they can instead of holding the real villains accountable. The yachts will be cruising the Caribean when the economy tanks.
Adding a little mystery to the already bleak picture is China. The United States treats Taiwan as its independent entity instead of recognizing the “One China doctrine.” The potential consequences are sanctions and cutting off trade. Taiwan will be de-militarized by China just like Russia is doing in Ukraine right now.
What happens with a complete de-dollarization as the world’s reserve currency?
I’ll be writing again before those consequences unfold but it will only bring more pain to US and European citizens. The folks who can least afford to get hit economically will feel it the most.
