There is some ominous future looming….even if the reassurance from the president….the near future does not look like it will be as bright as he predicts…..
A new economic projection contradicts President Biden’s hopeful forecast of a minor recession, at worst, ahead for the nation. A Bloomberg Economics model shows the likelihood of a recession beginning at some point before October 2023 at 100%. Until now, the model had the chance of a recession at 65%, Bloomberg reports. With the midterm elections less than a month away, Biden dismissed a downturn as unlikely in a CNN interview last week. “I don’t think there will be a recession,” the president said, per CNBC. “If it is, it’ll be a very slight recession.”
Other forecasts, including Bloomberg’s, have been less certain. An unrelated Boomberg survey of 42 economists found the likelihood of a recession in the next 12 months has risen 10 points in the past month, to 60%. The change in the forecast was attributed to widespread worsening among the data used as the model’s inputs. The model uses 13 macroeconomic and financial indicators in predicting the chance of a recession occurring at points from one month to two years from now. More generally, Bloomberg attributed the growing chances of a downturn to inflation and concern that the Federal Reserve will keep raising interest rates.
An old economic foe has returned and will do little to raise the hopes of the American people…..that old foe is stagflation.
Inflation is back, and it is rising sharply, especially over the past year, owing to a mix of both demand and supply factors. This rise in inflation may not be a short-term phenomenon: the Great Moderation of the past three decades may be over, and we may be entering a new era of Great Stagflationary Instability.
Unless you are middle-aged and gray-haired, you probably hadn’t heard about the term stagflation until very recently. You may have barely heard about inflation. For a long time, until 2021, inflation—the increase in prices year to year—was below the advanced economies’ central banks’ target of 2%. Usually inflation is associated with high economic growth. When aggregate demand for goods, services, and labor is strong, coupled with positive animal spirits, optimism about the future, and possibly loose monetary and fiscal policies, you get stronger than potential economic growth and higher than target inflation. Firms are able to set higher prices because demand outstrips supply, and workers receive higher wages given a low unemployment rate. In recessions, on the other hand, you have low aggregate demand below the potential supply of goods, which leads to a slack in labor and goods markets, with ensuing low inflation or even deflation: prices go down as consumers’ spending declines. Stagflation is a term that refers to high inflation that happens at the same time as stagnation of growth or outright recession.
Nothing in economics is showing any good….we are headed for disaster…..and with that will come a change in government and a change that will not be good for the country.
But the GOP is hoping for a recession….makes running for office a dream.
I Read, I Write, You Know
“lego ergo scribo”
8 thoughts on “A Dim Horizon”
Yes, we have seen this movie before –the economy comes and goes –and of course the SOB wing-nuts want to see anything that can harm the country and consolidate their power. My great hope is that when the disaster the right-wing asswads want to fervently finally takes hold, it will destroy as many of their kamaradden as it does everybody else’s. That will be my one consolation.l Even if I suffer desperation and desolation I will take great pleasure in gloating whenever I see one of their arrogant idiotic kind suffering the same fate. I believe they would be the Christian thing for me to do. I wouldn’t urinate on one of them if he or she was on fire.
A recession will hurt more Americans…..they only winners are on Wall street. chuq
When I was young, I never thought I would be glad to be old. Now I am old, I am glad that I won’t live to see it all fall apart.
Best wishes, Pete.
The economic future just adds to the general doom & gloom in the country. Whichever way this election ends up will make the political divide head more into anticipated civil strife.. then the next one two year away. World politics.. and mostly Russia in their war, will continue to affect our economy directly or not. The public is tired of politics… tired of mistrusting government… tired of the idiots representing the “other”. The growing fear of even going to the local store, mall, or church, and not being a victim of a random shooter. Guns are everywhere and humans own them. Mental health is off the charts. Covid is still lurking about, and very likely the next disease is mutating somewhere yet waiting to surface. A lot of domestic civil stress is percolating under the surface. I’m generally an optimist on many things, but I am even having considerable difficulty finding anything positive in the near future.
Random acts of civil violence will grow (name your cause.. mental health, politics, etc.), and Right Wing nutjobs will start randomized political assassinations and/or bombings to lash out… fomenting more public fear to even go outside.
Other than that, have a nice day. 🙂
Oh.. and let’s not forget the climate crisis going to get worse with devastation yet another economic drain around the world.
Doug so nice to see you again….hope all is well with you and yours. chuq
Thanks, old chum. All is indeed well. Just a leave of absence. Gotta walk away sometimes. Rest assured I read it all. I hope things have mellowed a bit for you.
They are so-so…..but I understand….I walk away every day at 5 or 6 and stay away until I get up later….I look forward to your comments and your posts to come. Be well chuq