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Urgent Follow-Up…Please Read!

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This is a follow-up to a recent economic series < click here to read that series >

The evidence is piling up; consumer confidence and consumer sentiment have fallen sharply, retailers like Lowe’s, Home Depot, Walmart, and AutoZone are noticing families cutting back, and inflation continues to erode purchasing power by nearly 4% annualized. With Treasury yields recently reaching 5.2% on the 30-year Treasury, their highest level in 19 years, interest costs on our national debt could double household obligations over the next decade, crowding out government spending on essentials like Social Security, Medicare, and defense.

Reduce dependency as soon as possible. Build resilience as quickly as is reasonable.

These warnings are grounded in today’s realities…ignoring them could leave you exposed to forces beyond your current ability to control.

What I am saying is…do not delay increasing self-reliance.

Let me explain a few things…

Over the past several weeks I’ve been watching a growing number of economic indicators begin flashing warning signs. Consumer confidence has weakened sharply. Consumer sentiment has dropped to levels that suggest most Americans are increasingly worried about their financial future. Whether those concerns ultimately prove justified or not, the fact remains that millions of people are becoming more cautious with their spending…that is VERY clear.

That caution is beginning to show up in the real world.

Major retailers are reporting changes in customer behavior. Families are delaying purchases, postponing home improvement projects, repairing items instead of replacing them, and focusing more of their budgets on necessities. When companies such as Lowe’s, Home Depot, Walmart, and AutoZone all begin reporting similar trends, it deserves our attention.

At the same time, inflation continues to pressure household budgets. While the official numbers may show inflation has moderated from its peak during the Biden years, inflation has been rising over the last 1-1/2 years. Many families know from personal experience that groceries, insurance, utilities, property taxes, housing costs, medical expenses, and everyday necessities remain significantly more expensive than they were only a few years ago.

Now another warning light is beginning to flash.

Treasury yields recently climbed to levels not seen since before the 2008 financial crisis. Most Americans never pay attention to Treasury markets, and under normal circumstances there would be little reason to. The problem is that the federal government now carries such a large debt burden that even relatively small increases in borrowing costs can translate into enormous increases in interest expenses.

To put the problem into perspective, on a national debt approaching $40 trillion, every quarter-percent increase in borrowing costs eventually translates into roughly $100 billion in additional annual interest expense.

That’s how little room for error now exists.

Those interest payments do not create new roads, strengthen national defense, improve infrastructure, or provide additional services. They simply service existing debt. Every dollar spent on interest is a dollar that cannot be spent elsewhere or used to pay-down our ballooning national debt.

None of these developments, by themselves, guarantee an economic crisis. But taken together, they paint a picture that deserves serious attention…and there’s a lot of downside risks…we won’t call it a “crisis” yet.

Consumer confidence is weakening. Households are cutting back. Inflation continues to strain budgets. Government debt is becoming more expensive to finance. Financial markets are beginning to take notice.

Could conditions improve? Yes, maybe. I am not sure…but my personal outlook isn’t real positive.

Could policymakers make wise decisions that help stabilize the situation? Certainly…okay, maybe. But they don’t have a particularly good track record in wise decision making. I would hope they make wise decisions, but who knows.

But hope is not a strategy. Preparedness is.

That is why I continue encouraging families, your family, to become more self-reliant. Pay down debt where possible. Build emergency savings. Grow some of your own food. Learn practical skills. Strengthen relationships with family, friends, neighbors, and your community. Reduce unnecessary dependencies wherever you can.

Look, I’m seeing a lot of things moving in the wrong direction all at the same time. Maybe I’m wrong…I hope I’m wrong…I pray I am wrong. But I’m not going to bet my family’s future on me being wrong. And believe me, I don’t think you should bet your family’s future on it either.

None of those actions I am talking about become less valuable if the economy improves.

I’ve been around long enough to watch economic cycles come and go. I’ve watched good times. I’ve watched hard times. I’ve watched people dismiss warning signs because they believed someone else would fix the problem, or because they assumed tomorrow would look a lot like today.

Sometimes it does…sometimes it doesn’t.

When warning signs begin piling up, the people who start preparing early generally have options. The people who wait for absolute proof often find themselves reacting instead of planning.

Maybe conditions improve…I sincerely hope they do.

But if conditions deteriorate, and I believe there is a real chance they will, you’ll be very glad you started preparing before everyone else realized there was a problem.

Pay attention. Increase your self-reliance. Reduce unnecessary dependencies. Build resilience.

Do this not out of fear…not out of panic…but out of love for your family, your community, and the people who depend on you.

This came in after the original article was written, I will make it brief:

  1. Trump’s National Economic Council Director Kevin Hassett painted a rosy picture of the economy Sunday, downplaying Americans’ growing pessimism about the economy amid high gas prices and rising inflation as the Iran war goes on.

“Look at what’s happening to real wages,” Hassett told ABC News’ “This Week” co-anchor Jonathan Karl, claiming “really positive news” about the economy was being ignored. “On balance, real incomes, real wages are going up.”

Yup, he is 100% correct! But here is was the little weasel liar didn’t say…real wages were up 3.6%…and inflation was up 3.8%. Yeah, that means real wages are FALLING compared to prices going UP.

In real everyday language…your purchasing power is falling…your dollars are buying less and less. Exactly what I’ve been telling you has been going on for the last 56 years. And this is how these lying bastards politicians lie to you every day…they think you are nothing more than a dumb-ass uninformed citizen. But we are NOT! We see their lies and we know they are liars…and they are covering up the truth.

This is what it means in real terms…let’s say last year you made $60,000, with the “increase in real wages” you now make $62,160. But all of life’s essentials now cost $62,280. So you lost ground…you lost purchasing power of $120 from last year. Your paychecks aren’t going as far as they did last year…you are economically more poor.

And this administration jackass calls it “really positive news“ ! ! !   Insanity and lies are now commonplace.

  1. US citizens are placing the US economic problems squarely at the feet of the current administration…as they should, it’s their decisions that are causing the bulk of the real problems.

 

 

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References

 

One response to “Urgent Follow-Up…Please Read!”

  1. rghatch Avatar
    rghatch

    As a response to the points that you have been giving in this article, it does remind me of a quote from Earnest Hemingway’s novel: The Sun also Rises and also the old saying of boiling a frog.
    This process of economic decline has been going on for a long time. The incremental steps on the spiral downwards have been well moderated by the politicians and the media, lulling the public back to sleep every time a warning alarm goes off that something isn’t right. The net effect is that the public has become like the proverbial frog in the pot slowing coming to boil. By the time the temp gets high enough to kill, the frog won’t be able to respond.
    Once the trap has been set and the door has closed and people finally come to an “awakening to a sense of their awful situation,” it is too late.
    Now comes the quote:
    The character Mike Campbell in the 1926 novel “The Sun Also Rises” was asked about money troubles and responded with the following vivid description:
    “How did you go bankrupt?” Bill asked.
    “Two ways,” Mike said. “Gradually and then suddenly.”
    “What brought it on?”
    “Friends,” said Mike. “I had a lot of friends. False friends. Then I had creditors, too. Probably had more creditors than anybody in England.”

    So, as we slowly are getting boiled, the economy is going down the drain slowly enough to not raise a widespread alarm.
    Then, once the trap has been set, there is no more need to lull the masses — and then it will be sudden!

    Reply

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