FedEx CEO Says Global Recession Coming

There are a bunch of moving pieces in all of this, and unfortunately none of them are good.

Fed chairman Powell has already stated he will hike interests rates even more after his initial rate hikes. While this doesn't mean much to the average person, the reality is mortgage companies will also raise their interest rates making home ownership unattainable. To make things worse, the US Government will now service their $30,000,000,000,000 (that's alot of zeros) national debt with this higher interest rate. How will they service this debt? Either cutting spending (which they will never do) or tax us back into prosperity.

Tack on the fact that borrowing money is now more expensive, corporations
will quit borrowing to reinvest into their companies and cut labor to save money.

Couple that with the fact that 87% of all the money in current circulation was printed in the past two years along with supply chain issues from China's lockdown, and you got the perfect storm that we are heading into a seriously bad recession.

I am convinced this will be a very tough winter for many of us.

 

IMO the higher interest rates are good medicine to take. We've learned a lot of bad habits in the last forty years with all the deficit spending (thanks, boomers). Past time we think about this novel concept called a budget surplus. Yeah it will sting but the longer we wait, the more it will sting. Personally, I hope Powell goes completely nuclear with rates.

Besides it's not all bad. Equity prices move opposite rates. Everyone comlaining about housing costs, well your time is coming. I'm already scoping out land for an all cash or nearly all cash purchase to hunt on.

Because over the last twenty years I haven't been spending more than I earn; I've been saving.

Like a responsible adult.

 

If you can pay cash for a home, not only are you leveraged really well financially, but it would most definitely benefit you to wait for the housing market to crash (which it will). The problem is, the average mortgage payment has almost doubled over the last two years. So if the feds keep hiking interest rates, everyone else that might have a small down payment won't be able to afford their mortgage.

The key issue I have with your argument that is worth pointing out is the US now has an enormously large national debt vs what they had in the 1980s. Government and its spending was much smaller back then, so when Paul Volcker raised the interest rates to about 20%, the American people where in a much better position to service the national debt. There is absolutely no way we could come anywhere near to even paying the interest on $30 trillion.

As for the sting you mentioned. This should have been handled when GW Bush was in office. Instead he dropped interest rates and every President after him did the same to prop up the stock market. This bubble economy is decades in the making and we are so over leveraged that we have no other option than to let it collapse.

Sure one administration or the other will get the blame when this house of cards collapses. But the reality is that everyone has their hand get caught up in this cookie jar and a little bit of everyone was to blame for this.

 

funny thing is I have never seen a politician vote in the same way to spend tax money as they spend their own.

 

Because that is what we are told. Meet the new boss. He's richer and smarter than you.

 

yEs.

 

Only difference between the US and everywhere else is we vote in our tyrants. Term limits could resolve most of the problems we have.

We now have the type of government that our Founding Fathers warned us about.

 

i dont like seeing the world economy be bad. even if i am doing well, it still makes me feel sideways to think of others suffering.

i remember working alot all through 2020 and it felt really eerie. i also felt bad for everyone, and it contributed me consider quitting my job. even as a working person things felt odd. like i'm one of the very few who can pay for my costs of living and everyone else can't, like some kind of a clown world.

 

"Comedy is when you break your neck. Tragedy is when I stub my toe."

-Mel Brooks

 

I was responding to the comment you apparently edited. Lol