12 Mar “Not going to be pretty”
Image by Peggy und Marco Lachmann-Anke from Pixabay
“The billionaire cofounder of Home Depot compares the Fed to ‘the gang that can’t shoot straight’ and says the coming crash is ‘not going to be pretty’” –https://fortune.com/2023/03/09/home-depot-cofounder-ken-langone-recession-inflation-fed-interest-rates-mistakes-economy-crisis/
No, it’s not going to be pretty.
“Ken Langone thinks the Fed messed up and millions of Americans will have to pay the price. The billionaire investor and Home Depot cofounder describes inflation (which came in at 6.4% higher than a year ago in January, the latest reading) as being ‘out of control’ and sees little way for the central bank to rein it in without raising interest rates more and hurting the economy—something that needs to be done, he believes.” -Fortune, Ibid.
Yes. Millions of Americans will have to pay the price. And yes, inflation appears to be out of control. But did The Fed mess up? 😒 I mean, really? I’ve gotta tell ya, I’m pretty much done with this narrative of, “Oopsy daisy! We goofed this one up. Oh, fiddlesticks.” IMO, these boom/bust cycles do not happen on accident! You can either believe the people running the economic show are morons who don’t understand simple economics at all, which seems to be a favorite of both neocons and neolibs alike. Or you can assume this is being engineered on purpose so that the poor get poorer and the rich can raid the till over and over again unmercifully.
“Hyper-Elites Are Desperate For a Recession Because They Want to Buy Your Assets for Cheap
Recessions are part of the business plan for the great reset to serfdom” –https://survivingtomorrow.org/hyper-elites-are-desperate-for-a-recession-because-they-want-to-buy-your-assets-for-cheap-1e8800f836
YES. EXACTLY. Recessions are part of the plan! They don’t happen as freak accidents, people.
“‘Frankly, I don’t know how you avert a serious financial crisis where we are right now,’ Langone told Fox Business on Wednesday. ‘If and when the big crash comes, it’s not going to be pretty.’
He added, ‘The poor people, the little people, the people living from paycheck to paycheck, they’re the ones that get hurt the most.'” -Fortune, Ibid.
Agreed. I also don’t know how we could avert a serious financial crisis. Each day brings more shadows of 1982, 2000, and 2008. And it will be not only the working class and working poor who are hurt the most but anyone living paycheck-to-paycheck going into this downturn. That’s a lot of people. The majority of Americans, in fact, and that includes people making six figures. The question that lingers for me is: do they want to avert a serious financial crisis? Мне кажется нет. It seems to me: no.
“The way Langone sees it, the central bank made a key mistake in 2021 by not raising interest rates to quickly beat inflation, which was already more than double its 2% target. He likened Fed officials to incompetent criminals in The Gang That Couldn’t Shoot Straight, a 1971 movie starring Jerry Orbach and Robert De Niro.
‘My problem with the Fed, overall, is there’s too many academics in the mix,’ said Langone. ‘I think if you had more businesspeople involved or people with business backgrounds, I think you might see a different dialogue and different decisions.'” -Fortune, Ibid.
It’s easy to paint these officials as financial Keystone Kops and push the narrative of incompetence. Frankly, I think most people would rather imagine incompetence than evil, unbridled greed. I’m not sure we can argue that The Fed is simply too full of academics and that good, old-fashioned businesspeople would solve the issues better. There’s quite a revolving door amongst Corpo America, Wall Street, and the Beltway, so . . . I don’t think staffing The Fed with more “businesspeople” is the answer.
“In 2021, the Fed believed that inflation was a temporary effect of the economy reopening after the height of the pandemic, despite warnings from economist Jeremy Siegel and others that it should tighten monetary policy.” -Fortune, Ibid.
We were told that inflation was transitory many times. So . . . do you think The Fed didn’t really know what they were doing or do you think they knew exactly what they were doing? It feels a lot like we’ve seen these artificially manipulated markets before and the crashes that occur afterwards.
If that wasn’t clear enough, his speech in the sequel remains one of my favorite distillations of the nightmare we saw in ’07 and ’08:
Someone reminded me the other evening that I once said, greed is good.
Now it seems it’s legal!
But folks, you know it’s greed that makes my bartender buy three houses he cannot afford with no money down. And it is greed that makes your parents refinance their 200,000 dollar house for 250K, and then they take that extra 50K and they go down to the shopping mall and they buy a plasma TV, cell phones, computers and an SUV. And hey, why not a second home while we are at it. Because, gee whiz, I mean we all know the prices of houses in America always go up. Right?
And it’s greed that makes the government of this country cut the interest rates to 1% after 9/11 so we can all go shopping again.
–https://causeyconsultingllc.com/2023/02/24/gordon-gekko-tried-to-tell-you/ emphasis mine
Cut interest rates. Stir up FOMO and YOLO. Get people shopping again. Stir up craziness in both the housing market and the job market. Tell people the economy needs the stimulation again since the lockdowns caused damage. Print up fiat currency and hand it out like candy.
“This week, Federal Reserve Chairman Jerome Powell told Congress the central bank might need to hike interest rates higher than expected to beat inflation—and took some heat from lawmakers.
Massachusetts Sen. Elizabeth Warren, a Democrat, asked him, ‘If you could speak directly to the 2 million hardworking people who have decent jobs today, who you’re planning to get fired over the next year, what would you say to them? How would you explain your view that they need to lose their jobs?’
Powell responded that inflation is ‘extremely high, and it’s hurting the working people of this country badly—all of them.’ He asked Warren, ‘Will working people be better off if we just walk away from our jobs, and inflation remains 5%, 6%?'” -Fortune, Ibid.
Privately, he might say, “Well, I mean, these people were warned if they cared to listen.” I know I’ve been on this blog and on my podcast for months now warning you.
When CBS News reports that The Fed wants to crash the job market and INCREASE UNEMPLOYMENT, it’s worth taking note.
“With an additional million or two people out of work, the newly unemployed and their families would sharply cut back on spending, while for most people who are still working, wage growth would flatline.”
In other words: a lot of people will be unemployed and those who still have jobs will see their wages stagnate. IMO, you have a window of time to prepare for this reality and being naïve about it is not a great idea.
You can read the entire story here:
https://www.cbsnews.com/news/fed-interest-rate-hikes-unemployment-increase-layoffs-inflation/
-“⚠️ Crashing the Job Market ⚠️” published on October 4, 2022 https://www.buzzsprout.com/1125110/11431131
I hope none of this information is brand new to you.
“‘Borrowers are getting closer to the financial edge,’ Kathleen Engel, a law professor at Suffolk University, told Bloomberg.
Langone said Wednesday, ‘The American people need to understand there’s no pain, no gain. Maybe we’re going to put 2 million people out of work, but I don’t know any way around dealing with the problem of inflation and the tragedy of what comes with inflation.'” -Fortune, Ibid.
And there’s the rub. Golly gosh, we hate to do it, but we gotta crash that job market. Again, I hope none of this is taking you by surprise.
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