by trufeats
A recession is on the horizon imo. It’s difficult to tell exactly when it will “show” due to the Fed’s 0% fractional reserves and setting/creating low interest rates. But all the signs are SCREAMING economic peak. The government is trying it’s best to delay/prevent the problem, but the problem is they’re only focused on increasing demand — and not increasing supply. Increasing demand without increasing supply is just going to cause more inflation.
There’s no telling how long before the numbers actually start to show that we’re entering a recession due to the government’s interference. Could be months – could be years. Who knows.
The catalyst for most recessions is high inflation or unexpected inflation. This causes businesses to up their prices to try and be consistent with inflation, which also increases inflation and causes less people to purchase their products/services. It also causes workers to demand higher wages to be consistent with inflation — this causes 3 things to happen.
1) Workers may choose not to work for less than they believe they should get, causing a reduction in the labor force. This lowers GDP and decreases production of companies, reducing supply. This further increases inflation due to lower supply
2) Businesses may enact pay cuts or not give raises. This might mean some people can’t pay their bills or will save more of their money rather than spend, which harms the economy.
3) If businesses decide to give raises, they have to let go of other workers to do so. This increases the unemployment rate in the form of “structural unemployment” which is indicative of a recession. It also decreases production of items, causing a supply shortage and increasing prices
Here’s what makes me believe we are at an economic peak, about to have a recession:
• Most people are expecting inflation and inflation has already been high for the past year
• The labor force has been decreasing in size
• Employees want raises due to inflation
• Employees are leaving, many because they believe they aren’t being paid enough (a KEY indicator)
• Employee strikes are rampant
• There’s a supply shortage of many items
• People seem to be saving much more than before (compared to spending)
• The Producer Price Index is EXTREMELY high, and Consumer Prices haven’t yet risen to reflect the producers’ prices. This will come soon enough