'Tis Only My Opinion!™
December 2022 - Volume 42, Number 12
The economy is faltering ...
You can look at almost any economic metric
and find that recent months have been deteriorating. To name just a
few -- Retail Sales, Interest Rates, GDP, Housing Prices, Auto
Sales, Used Car Prices & Delinquencies, Freight Rates - both domestic
freight and overseas container rates, Unemployment, Bankruptcies,
etc.
That is even if you look at the real numbers
before the government massages the data. It hardly matters which
series you take a look at.
If, however, you look at the same data
from Shadow Government
Statistics, the economy is not just faltering but could be
headed towards a depression in 2023 and beyond.

With the FED on a mission to reduce
inflation to a 2% annual rate, the major sectors in the economy are
not only faltering but headed towards major angst for investors.
Of course, when inflation stays at a 2%
rate for a decade, what really happens is that you have
just depreciated the dollar and your net worth by 17.8%.
But -- no problem
-- you are now in a higher tax
bracket.
Higher interest rates are destroying the
cash-poor. And Powell promises more hikes going forward.
Housing is headed toward a major downturn
while home costs are doubling. However, we are beginning to see home
prices in many markets starting to show significant downward
pressure as asking prices are cut.
Increased auto loan rates are finding used
car prices falling and loan delinquencies rising.
The lower and middle class are turning to
credit cards to meet their current living expenses. Credit-card debt
will have increased about $110 billion during the 2022 which is an
annual record.
The lower and middle class are seeing rising
credit-card rates at a time when credit-card debt is trending
upward. Interest rates on credit cards averaged 16.3% in December
2021 have risen to 19% today.
Many pundits are hoping for year-end retail
sales to fuel a Christmas stock market rally.
However, with the situation in Europe and
the Ukraine, problems with supply-chains, and a increasing lay-offs
being announced, it is no wonder that the economy is facing major
headwinds.
Meanwhile, the Biden administration
continues to increase the federal debt and it will shortly pass $32
trillion and with the economy coming under pressure, one must wonder
when the "Minsky Moment" will arrive.
As we enter December 2022, a good outlook
would be for only a "faltering economy" ... a more realistic is for
a major recession that might trigger that "Minsky Moment."
Remember to:
Keep It Safe, Simple and Stay Focused!
But then 'Tis Only My Opinion!
Fred Richards
December 1, 2022
www.adrich.com
www.strategicinvesting.com
Corruptisima republica plurimae leges. [The
more corrupt a republic, the more laws.] -- Tacitus, Annals III 27
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