09 Jan Bonus Episode: “Urgent global and national efforts”
The IMF and the World Bank, both of which are functions of the UN, are telling you what’s on the horizon. So are the fat cats and corporate raiders.
But hey – I’m sure that two-bit realtor still trying to convince you to buy an overpriced house or that hustler encouraging you to “buy the dip” is probably a more accurate resource than the power brokers who are literally communicating the agenda to you. *she said, sarcastically*
Links I mention:
Need more? Email me: https://causeyconsultingllc.com/contact-causey/
Transcription by Otter.ai. Please forgive any typos!
Welcome to the Causey Consulting Podcast. You can find us online anytime at CauseyConsultingLLC.com. And now, here’s your host, Sara Causey. Hello, Hello, and thanks for tuning in. I wanted to hop on and record a quick bonus episode. Because I feel like there are two basic camps shaping up around economic commentary. One camp is, hey, wait a minute, things are looking tough. We hear about more layoffs every day. I haven’t seen grocery store prices going down, I have not seen the inflation abatement that everybody’s talking about. I failed to see how wages reducing is a good thing. It costs more to heat the house now than it ever has. I think maybe we’re in for a doodoo storm. Then in the other camp, you have, oh, well, no, now we might have a slight recession, we might have a slow session, we might have us a little bump in the road for three to six months. But it’s going to be all right, the Fed is going to take care of us and we’re going to have a soft landing. And in my mind, you have to decide which camp you believe. And maybe the truth lies somewhere in the middle. I always say like Dennis Miller, it’s just my opinion. And I could be wrong. Maybe the truth is somewhere between the two camps, and nobody’s exactly getting it right. I don’t know, I’m not an economist, I don’t sit on the web. I’m not a billionaire or a hedge fund manager for billionaires. I don’t rub shoulders with these power brokers that night and smoke a cigar and drink a brandy with them and talk about the world’s agenda. I’m not privy to that information. I just consider myself to hopefully be an intelligent human being who’s lived this before, and is capable of reading the tea leaves. And the job market is my Bellwether. I’ve been in it every day. For more than a decade. I’ve been through the boom and bust cycles in more than one industry. And it felt folks, it’s not looking good to me. So as you can clearly tell I’m in the camp of people that are like, wait a minute, I think things are getting tough. And I believe that the preponderance of evidence shows us that this notion of well, we would just never, you know 2008 Oh, my God could totally not happen again. I don’t think we’re in for a soft landing. I don’t think we’re in for a slow session, whatever the hell that even is. And in my mind, the more verbal linguistics and gymnastics that people have to do, making up kitschy terms and bending the English language into a pretzel, the more that they have to do that in an effort to keep everyone placated and mollified. The more I worry, because when something is true, then you don’t have to stretch anything out. You don’t have to create a language pretzel in order to defend it, or to try to deflect from it ooh, look over here at this shiny object. Don’t pay attention to the actual data. I always tell you, I believe it’s important to watch what the fat cats do. Pay attention to what they say behind closed doors to the shareholders, the board of directors, the investors, the people that they believe are important, and to whom they actually answer what they say on public to try to keep people in bread and circus mode and not worrying about the economy, not thinking about good preparation, and planning ahead, forecasting for the future doing what you can to not be caught off guard and a poop storm. That’s irrelevant. To me. It’s just noise. It’s just static. It’s fun to poke fun at it, and laugh sometimes at the complete absurdity of it. You know, I’ve used the analogy before that if we were sitting here with a marker board coming up with a dystopian novel, something that was going to be kind of a comedy or satire. We couldn’t do a better job than some of these knuckleheads out in the media are doing. And so, in speaking of power brokers and people who actually do have some control over the agenda, an article popped up on Saturday January 7. World Bank to warn of global recession risk and economic outlook. I’ll drop a link of course please check it out for yourself. You will see in black and white here. Here it is. The World Bank is concerned that further adverse shocks could push the global economy Gonna be into recession in 2023, with small states especially vulnerable. The warning is contained in an abstract for the bi annual Global Economic Prospects report due for release on Tuesday and visible on the group’s open knowledge repository website. All button long enough to say this information is being placed where you can find it. Now, you might have to dig a little bit for it, but you can find it it’s not completely impossible. But yet Think about how many individuals you know that they’re more concerned about celebrity gossip, where they’re more concerned about something happening on reality show than they are about this. It’s easier to go to Google trending and look at whatever it is they want you to be distracted by instead of going. Holy crap, the World Bank is saying a global recession is coming. Even without another crisis, global growth this year is expected to decelerate sharply reflecting synchronous policy tightening aimed at containing very high inflation, worsening financial conditions and continued disruption from Russia’s invasion of Ukraine. The World Bank said that’s pretty scary, too, isn’t it, even without another crisis. So even if there’s not anything else that comes along to jostle the economy around, we’re still heading into a crap storm. urgent global and national efforts are needed to mitigate the risk of such a downturn as well as debt distress in emerging market and developing economies. That’s abbreviated as EMD. So if you hear that, again, that’s what it means emerging market and developing economies, where investment growth is is expected to remain below the average of the past two decades. The Washington based lender said, it is critical that E M. D policymakers ensure that any fiscal support is focused on vulnerable groups, that inflation expectations remain well anchored, and that financial systems continue to be resilient. It said. Similar demands have been made by central bankers from around the world as they aggressively raise interest rates to ease price pressures, while governments support businesses and households by containing energy costs. Now, what we’re about to delve into next, International Monetary Fund managing director Kristalina Georgieva started 2023 with a warning that the world faces a tough year tougher than the year we left behind. 1/3 of the global economy will be in recession because the US the EU and China are all slowing down simultaneously. She told CBS is Face the Nation in an interview aired on January 1 and quote now does that sound to you? You make up your own mind you formulate your own opinion here does that sound to you? Like the World Bank is saying everything’s gonna be alright. Now y’all might have you a little slow session. You might have three to six months of it being a little uncomfortable, but it’s going to be okay. That’s not what I took out of that article. So to go to another un institution, the IMF is saying something similar. Third World in recession this year, IMF head warns. I’ll drop a link to this as well. It’s on the BBC and you can find this for yourself. Please read it. A third of the global economy will be in recession this year. The head of the International Monetary Fund or IMF has warned Kristalina Georgieva said 2023 will be tougher than last year as the US EU and China see their economy slow. It comes as the war in Ukraine rising prices higher interest rates and the spread of COVID and China weigh on the global economy. In October the IMF cut its global economic growth outlook for 2023. We expect 1/3 of the world economy to be in recession. Miss Georgieva said on the CBS news program Face the Nation. Even countries that are not in recession, it would feel like recession for hundreds of millions of people, hundreds of millions of people. Christina L. An economist at Moody’s Analytics in Sydney gave the BBC her assessment of the world economy. While our baseline avoids a global recession over the next year. Odds of one are uncomfortably high. Europe, however, will not escape recession and the US is teetering on the verge she said. I don’t know about that. The IMF cut its outlook for global economic growth in 2023 in October due to the war in Ukraine as well as higher interest rates as central banks around the world attempt to rein in rising prices. Since then, China has scrapped its zero COVID policy and started to reopen its economy even as Coronavirus infections have spread rapidly in the country. Miss Georgieva warned that China the world’s second largest economy would face a difficult start to 2023. For the next couple of months, it would be tough for China. And the impact on Chinese growth would be negative, the impact on the region will be negative, the impact on global growth will be negative. She said, the IMF is an international organization with 190 member countries. They work together to try to stabilize the global economy. One of its key roles is to act as an early economic warning system. That’s interesting, is it not? Miss Georgie of his comments will be alarming for people around the world not least in Asia, which has endured a difficult year and 2022. I don’t know about that, because I just think so many people are asleep. So many people walk around, stupefied. They would rather tell you about celebrity gossip and silly nonsense than any of this, they’re not going to be alarmed by it until it happens. We are so far removed from the same kind of ethos that a lot for a lot of us, our grandparents, great grandparents and so on, had about staying prepared, making do doing without using something until it’s worn out, not always having to replace everything. If you can fix it or mend it. We’re way away from that. Just and there’s almost no comparison people are so accustomed to just in time delivery and methodology, being able to just get anything that you want at the click of a button. I don’t think people are going to be alarmed by it. And that’s sad because they should be. Inflation has been steadily rising across the region, largely because of the war in Ukraine, while higher interest rates have also hit households and business. Figures released over the weekend pointed to weakness in the Chinese economy at the end of 2022. The official Purchasing Managers Index for December showed that China’s factory activity shrank for the third month in a row and at the fastest rate in almost three years as Coronavirus infection spread of the country’s factories. In the same month home prices in 100. Cities fell for the sixth month in a row. According to a survey by one of the country’s largest independent property research firms China index Academy on Saturday and his first public comment since the change in policy President Zhi Jing ping, called for more effort and unity as China enters what he calls a new phase. So this is interesting, you know, because we’ve heard entities like Blackrock use the term new regime. Now we have Zhi Jing ping saying new phase, it seems to me that something’s brewing up here. Maybe you feel differently, I don’t know. But I think it’s worth paying attention to this. The downturn in the US also means there’s less demand for the products that are made in China and other Asian countries, including Thailand and Vietnam. Higher interest rates also make borrowing more expensive. So for these reasons, companies may choose not to invest in expanding their businesses. The lack of growth can trigger investors to pull money out of an economy. And so countries, especially poor ones have less cash to pay for crucial imports like food and energy. And these kinds of slowdowns. A currency can lose value against those of more prosperous economies, compounding the issue, the impact of higher interest rates on loans affects economies at the government level too, especially emerging markets, which may struggle to repay their debts. Again, I kind of think we can see what’s coming here. I really do. I’m gonna be careful about how I say this. But I mean, it definitely seems that these emerging markets are going to get steamrolled. Not that we want here in the US too. I mean, they want your stuff as well. But this this sounds bad. For decades, the Asia Pacific region has dependent on China as a major trading partner and for economic support in times of crisis. Now, Asian economies are facing the last economic effects of how China has handled the pandemic. The manufacture of products such as Tesla electric cars and Apple iPhones may get back on track as Beijing in zero COVID. But renewed demand for commodities like oil and iron ore is likely to further increase prices just as inflation appeared to have peaked. Yeah, China’s relaxed domestic COVID restrictions are not a silver bullet. The transition will be bumpy and a source of volatility at least through the March quarter, Miss l said Bill Blaine, strategist and head of alternative assets at shard capital described the IMF warning as a good Wake up and smell the coffee moment. Which should be I mean, if somebody hasn’t been awake before now, it this should be like an old shit moment for them. Will it be I highly doubt it? I highly doubt it. You labor markets around the world are fairly strong. No, they’re not. The kind of jobs being created are not necessarily high paying, and we’re going to have a recession. We are not going to see interest rates fall as rapidly as the markets think he told BBC Radio four’s today program. Well, there we go. Yeah, the closest that I’ve heard to this kind of commentary here in the States was somebody that was on CBS News on Friday evening that said, Well, I mean, this recession seems to be impacting the high paid white collar workers, whereas those other like lower level hospitality and fast food jobs are kind of okay. Yeah. Meanwhile, McDonald’s is talking about layoffs. I can’t imagine that they won’t wind up automating more functions in more of their facilities. I think that’s the wave of the future. And I think this so called labor shortage is being used as a justification for that. That’s just my opinion. And that’s what I see happening. But yes, they’re trying as best as they can to do away with the high paying jobs and leave scraps for us little people. That’s going to create a whole series of consequences that will keep markets on tenterhooks, so for at least the first half of 2023, in quote. Okay, so we have the IMF, the World Bank, both of which are functions of the UN telling you what they see on the horizon. And if you want to sit back and naively say, Well, I mean, okay, a third of the world, I mean, that doesn’t seem as bad as the Great Recession, maybe there’s still some hope of a soft landing, maybe there’s still some way to not have another Oh, eight through 2010 moment. Let’s go over to Wikipedia, and visit the timeline of the Great Recession. I’ll read one year before the maximum in q1 of 2008, only six countries were in a recession, Iceland, Sweden, Finland, Ireland, Portugal and New Zealand, the number of countries in recession was 25 by q2 of 2008 39, by q3 of 2008 and 53 by q4 of 2008. At the steepest part of the Great Recession and q1 of 2009. A total of 59 out of 71 countries were simultaneously in recession, the number of countries in recession was 37, by q2, of 2009 13, in q3 of 2009. And 11 in q4 of 2009. One year after the maximum and q1 of 2010, only seven countries were in recession, Greece, Croatia, Romania, Iceland, Jamaica, Venezuela, and Belize in quote. These things can jump up rapidly. I’ve called it a slow roll down a bad Hill. The idea of the snowball starts out small, but as it rolls down the hill, it turns into an avalanche. I mean, that’s the thing. Only six countries were considered to be in a recession in q1 of 2008. By q2 It was 25. q3 It was 39 and q4 It was 53. By q1 of 2009. It was 59. So in my mind, if they’re telling you a third of countries are going to go into a recession times are going to be tough, and you need to be preparing for that. How bad will it really be? I’m not doing this to scare you. I’m not doing this to try to create fear porn or a doomsday mentality. I have never once sat here and said we’re going into the Thunderdome. The Apocalypse is upon us. Armageddon is going to happen tomorrow, you better just bend over and kiss your butt goodbye because the whole shebang is about to collapse. I don’t believe that. No offense if you believe that this is a free country, and that’s completely your prerogative. That’s not what I think. We’ve been through these economic cycles before. And I have my own opinions as to whether they happen organically or by some kind of magic. They just happen and golly, gosh, gee bang whiz, we can’t imagine why. Or whether they’re engineered and artificially manipulated, so that the elites can take whatever the hell they want and keep the little guy suppressed. You know, you make your own judgment on that. Choose Your Own Adventure, if you will. I’m not saying it to scare you. I’m really saying at this point that if you are trying to get that job loss Survival Plan roughed out, maybe you’re trying to get more than one income stream, you’re saving your money. You’re not out running up credit card debt and buying frivolities and have a oh well, whatever type of mentality I guess if it happens, I’ll deal with it then I guess when the recession is knocking on my door, I guess I’ll deal with it then. If you’re doing things to adequately prepare, in my opinion, don’t allow somebody else to make you feel foolish about that. The analogy the old parable about the grasshopper who’s saying all summer, there’s a reason why we have those stories. There will be people in your circle of friends and family, who are like the grasshopper that saying all summer, instead of being bothered to stockpile a little bit of extra food and water in case of an emergency to have an emergency heat source in case the grid goes down, or their heating system is so freakin expensive. They have difficulty running it enough. They’re not going to plan ahead for any of that stuff. Now they do have time to tell you everything that Harry and Megan and the royal family are doing. They have plenty of time to tell you all kinds of other stuff about celebrity gossip. Everything that happened with their Facebook friends that day, but they don’t we’re on Tik Tok. I think all the youngsters are over on Tik Tok. Now, they can watch 8000 tiktoks in a day, but they can’t be bothered to do anything else that might actually help them. So if you’re in that category of person that’s like, Hey, I don’t know for sure what’s on the horizon. But my spidey senses are telling me it doesn’t feel good. And I want to be as prepared as I can be going into this mess. So that all survive it and not have everything repoed I salute you. I really do. I think you’re on the right track. I don’t give advice. I can’t tell you what to do. But in my opinion, you’re already head and shoulders above the people who just simply don’t see this coming. Stay safe, stay sane. And I will see you in the next episode. Thanks for tuning in. If you enjoyed this episode, please take a quick second to subscribe to this podcast and share it with your friends. We’ll see you next time.