Recession 2020: The Last Warning & How to Protect Yourself

What do these four men share in common? They can’t speak truthfully about our economy.

Did Clinton warn us about the tech bubble he created with market malfeasance and the housing bubble he inflated with his modifications to the Community Reinvestment Act and repeal of Glass-Steagall?

Did Bush warn us about the housing collapse when he inherited the housing finance monstrosity and failed to get congress to reform the FHA in 2003?

Did Obama or Trump warn us about the debt, social insurance, demographic, and pension bubble, which now looms above us like a carrion scavenger?

Of course they didn’t. So why do we treat them as though they will ever speak economic truth? When politicians open their mouths and speak economics, we should take them as seriously as we take bubbly cheerleaders when our team is losing 52-3 in the fourth quarter.

A Conflict of Interests in the Chattering Class

From their high perch upon the camera-infested podium, each one of these politicians relentlessly preached, “Our economy is strong!” And the majority of hapless Americans were shocked when it blew up in their faces.

Then came the rhetorical opportunists – "positive" pastors, priests, journalists, educators, politicians, activists, and entertainers alike. Even bank executives calculate how to deceive with rhetoric, rather than speaking the truth in plain terms.

Truth, realism, and honesty are bad for business in a society of charlatans, profligates, debtors, rhetoricians, and dreamers.

In the aftermath of economic crises, they point their fingers at their scapegoats to gain influence by exploiting confusion. They preach their unjustified interpretations of the economic events for their own institutional goals, even though wise people remember that they were silent and complicit with the economic rot like most of their neighbors.

The President has a particular liability when speaking of the economy. From the office of the POTUS, a word of negativity honesty about our financial position could make American workers and businesses sustain additional losses, exacerbating a tenuous economic order. It is therefore understandable that they cannot be honest about the economy. Do we want them to open their mouths and make things worse?

If we understand this, then why do we even take them seriously when they say a word about the economy? If they lack the moxie to lead honestly and with integrity, they should get out of the way.

To shore up their cowardice, our spineless elected officials should at least use their influence to empower private surrogates – who will tell the truth about the economy and make the right things happen. Instead they act to continually drive us deeper into debt, enlarging the government, nonprofit, regulatory, banking, and real estate Goliaths.

Recession is Coming

I cancelled a video shoot last Monday. The meteorologists said that it was going to rain. They were wrong! It was a beautiful day. Economic predictions are similar – you should not disregard them because they are occasionally wrong. Alvarism focuses on historical analysis and eternal principles that bring financial resilience. We keep our eye on the economic weather. Some analysts are even arguing (with good justification) that the upcoming events in the 2020s will be as severe as a global depression.

Most economists are predicting recession in 2020 or 2021. A recent WSJ survey of economists left 45% asserting recession in 2020, and another 40% asserting 2021, Raghuram Rajan included. Kudlow and other Trump officials disagree. They’re part of the 15% of dreamers, with pom-poms flailing!

As a reminder, Kudlow, Trump’s magnificent “expert,” pulled the wool over Americans’ eyes in 2007 as well. “No recession,” he said! Remind me why our politicians appoint such failures to the highest offices?

I predicted the 2008 recession without a PhD in economics. To be fair I did have three years of advanced engineering economics (a complex discipline), MBA studies, and ten years of job experience. Even so, the young Thomas Kurek should not have been more prescient and effective than the current economic advisor to the president of the US.

History will be unkind to them. Their excuses and scapegoats when it happens will be pathetic and dishonorable misdirection, just like the “Wall St Greed” false narrative of 2008. We cannot afford to ignore the sobering truth. We need Economic Sovereignty quickly.

No president could have changed this course, but Trump will be the fall guy for The Great Correction when it hits. The army of economic propaganda, which keeps the finance industry surging, is weaving the noose upon which Trump will hang. Although impotent without the American people and congress to make a real change, Trump’s fictitious “successful economy” will be assailed as a lie, and Republicans will be blamed for the problems through 2024, just as Bush was blamed from 2008 to 2012.

Economic Rot Indicators, Plain to See

But we should not fixate upon recessions. We should act to mitigate them always. The fact is – our economy is rotten as it is. Value is distorted in utilities, healthcare, mental health services, labor markets, real estate, finance, and government services. The erosion of human potential and resources persists during the path to recession, rather than occurring all at once when capital realigns to reality.

As a reminder – a person who needs to borrow from tomorrow for what they can’t afford today, is not “strong,” “successful,” nor “prosperous.” They are mendicant. They borrow because they are not prosperous. They sacrifice their future on the altar of the present. As Benjamin Franklin said, they are empty sacks, which cannot stand upright.

But just how bad is US debt serfdom? What facts are the economic cheerleaders hiding from you this time?

The elderly are broke: nearly half of the elderly have no retirement savings. Does that sound like a prosperous nation to you?

The young are broke with no assets: millennials owe more than a trillion in debt for education. They don’t even have debt for assets like businesses and houses. They agreed to pay academic snake oil saleswomen a fortune, for what purpose? A third of them are underemployed after college.

Even worse, many speak of forcing innocent taxpayers to bail them out of their wicked scam! They are not even demanding universities and professors foot the bill for false advertising and useless services sold to them. They want their innocent and responsible neighbors to shoulder the burden of their destructive choices. Apparently the years of indoctrination and expenditure at university did not give these young adults any knowledge of ethics, logic, or economics. This is our “excellent economy” at work!

Women are broke: we see reports that tell us “female heads of households have more income…” I suppose feminists want us to believe that women are doing so well, as a result of “equality.” What they don’t tell us in those reports is that if they took away the income women receive from alimony, child support, and daddy government (leeching from their neighbor taxpayers), women would be broke as dirt.

Only 30% of mothers can afford not to work. That is not an indicator of a prosperous society. The chosen few mothers who can afford not to work are amongst the most advantaged people on the planet in this global economy. Obtaining income from pilfering innocent taxpayers and productive ex-spouses is the task of criminals and totalitarians, not honest, prosperous, and noble people.

What a shame that we live in a society in which spouses cannot stand hand-in-hand with the mothers of our children, and support them fully as they give their unmatched love and attention to their children.

Powerful companies are fleeing: companies like JP Morgan are already building corporate offices in low cost localities, preparing to flee from the metropolitan economic monsters in the coming recession.

YIELD CURVE INVERSION: every yield curve inversion since 1956 has indicated recession. The average time to recession is 16 months. If the average holds, we will have recession between October 2020 and January 2021.

Trade disagreements: in light of the yield curve inversion, the US-China trade disagreement has a high probability of producing a demand shock that will eviscerate consumer liquidity and spending

Trade deficit reduction: contrary to the Trump administration’s claims, the trade deficit narrowed because of shrinking US consumption, not because of impressive US exports

Chief Financial Officers predict recession: 2/3 of them say it will hit by summer 2020.

Total debt per family (private, corporate, state, local, federal government debts combined): $875,011

Total private debt (student loans, mortgages, car loans, credit cards) – $13 trillion

Corporate debt has doubled: since the last recession, corporate debt has doubled to $9 trillion. This has been robbing you massively. If you are a productive person with a responsible business and earnings, every one of your dollars has been competing with the flood of debt-dollars spent by debtor corporations, institutions, and governments. Would you like to do their bidding so you can get contracts to stay in business? Or would you like to innovate with capital from private visionaries in the upper middle class? The corporate debt spike is another indicator of a looming recession.

Business inventories have risen: prior to recessions, businesses can’t sell the inventory their projections told them to buy. Goods pile up in warehouses. That is happening now.

Small business: the same patterns of employment decline in small business occurred in March 2008

The federal government debt – $22 trillion

Operating profits of businesses: plummeted!

Social insurance bankruptcy: $126 trillion in unfunded social security and Medicare promises alone! Did the retirees pay for it? No! They did not pay enough! And a large share of what they did pay went to “the poor” in these redistributive social insurance schemes that they entrusted.

Welfare and transfers unopposed: any attempt at curbing the $3 trillion transfer monstrosity is met with hysteria and paranoia. There is no political willpower to reconfigure valuation of the basics of living. If they stopped stop inflating cost of living with subsidies, perhaps low income citizens could afford the dignity of self-sufficiency.

Pension scams: In private corporate stock options (ESOP), if the company can’t deliver on the promises, the workers get nothing. It’s a perq. It’s not a promise. Pensioners apparently think they’re more special than private workers, floating above us like angels. They can promise themselves riches in retirement and then consign everyone’s children to debt serfdom in order to maintain the scam.

Pension funds across the US are going broke, and they are robbing our children to protect the lie. Imagine if private corporations could force you to pay their retirees for the empty promises they made to themselves.

Bankrupt cities: local governments like Chicago are drowning in the red to maintain inflated labor costs, government programming monstrosities, and pension scams.

Tyrannical states: states like California, in true dirigiste style, handcuffed their utilities and commodities businesses from mitigating natural disaster and power disruption. They did this in the name of “social justice” for “the poor” and with lies to the middle class to keep their costs down, and to pursue “environmental justice.” Now their states are burning and people are living with brown-outs. No electricity to power their electric cars? Progress! What a great economy!

Delinquencies and consumer spending: alarming delinquencies on auto and student loans, along with business and spending retractions continue.

50% of people over the age of 64 are STILL PAYING THEIR MORTGAGE: does that sound like prosperity to you? People who haven’t long to live, are still trying to finish owning the roof over their own heads! Dirt-poor peasants who built their own log cabins were wealthier than half of these elderly debt-serfs.

Even worse – there is a strong possibility that Trump and the banking criminals will erode the value of the dollar to rob every productive, honest, and responsible citizen on behalf of the profligate parasites who have already leeched from us all! Note – I disagree with the author that buying crypto is the solution to dollar devaluation.

The economic interventions of Obama, Pelosi, and complicit Republicans has FAILED: This is not capitalism. This is democratic socialist dirigisme defined. They spent $33 trillion on financial repression (QE), maturity extensions, bailouts of TARP, TGLP, TGLF, HAMP, HARP, Bear Stearns, AIG, GM, et. al.

What did we yield in turn? A meager $3.87 trillion in economic growth since 2009. We robbed ourselves of $8.53 for every $1 of “growth.” When you hear politicians speak of “growth” remember these facts and laugh in their face. Then vote them out of office.

To show that responsibility has not increased in ten years, observe the desperation of our central bank in its latest liquidity crisis. They even plan on establishing a standing repo facility in 2020.

Welfare and employment reveal desperation: 22% of real disposable income is welfare, redistribution and social benefits. Got it? One-in-five dollars are unearned, seized from production and given straight to consumption.

Unemployment or Labor Force Participation? The much hailed “low unemployment,” is a sleight of hand Obama also exploited. Alvarism put together “the labor aggregate” in the book Economic Sovereignty. It synthesizes part time labor, unemployment, labor force participation, and age demographics falling outside of those figures. It is the true measure of how much labor the American people deliver.

The unemployment rate is a rigged number which relies upon the government speculating about “who is actually looking for a job.” I suppose they think that people who have given up shouldn’t be counted. I suppose they think that people struggling to get more than 20 hours a week should count the same as a person working gainfully at 50 hours a week. They are deceiving you with the unemployment rate. Look to the labor aggregate from Alvarism.

Global economic policy certainty plummets: despite Bloomberg misinforming its sycophantic democrat readers about “Obama-era economic growth” (we already reviewed Obama’s robbery of $33 trillion for a $3.87 trillion resultant “growth”), the research cited highlights a key indicator of economic doom. Successful economies are stable and predictable. They do not thrive on information asymmetry and confusion. The reason governments and major institutions are floundering in stupidity and confusion, with low predictability is because the history of their decisions has produced information asymmetry, and perversion of valuation.

Resilient value in an economy leads to stability and certainty. Valuation is accurate, and productivity is correctly measured and remunerated. We enter a fog because of the army of shysters, swindlers, and incompetent economic idealists who buried the economic realists in their crusade of empty promises and Peter Pan delusions. The global citizenry swallowed the empty promises like children chomping sugar-laced Flintstones vitamins.

Homelessness is increasing: while 2/3 of homeless people owe their plight to a combination of drug addiction or psychiatric disorder, it is alarming that our municipal governments are so broke that they cannot take care of “the least amongst us.” Have we become so stupid and immoral that we think it’s compassionate to force our homeless to roam the streets in miserable “liberty” with medieval diseases, exposure, hunger, and loneliness? We refuse to arrest them and build institutions that can provide for them, until they can prove self-sufficiency? This “economically prosperous” nation prefers suffering of the homeless and feces in the streets to tough love and brotherly intervention?

Housing and rent prices perverted: purchase power parity and COLA is diverging across the USA, with the government providing incentives for people to urbanize and climb on top of each other into tiny urban apartments.

They claim to care about the environment. They are fools or liars - probably both. They do not incentivize digital workplaces, digital commutes, dispersed commercial zoning. They incentivize concentration of commercial activity, maximum commutes, and population density.

The impact is predictable. Costs in urban localities skyrocket and diverge from the rest of the nation – along with enlarged municipal tax revenues from all of the roaches climbing on top of each other to earn a living in the concentrated mob of workers.

They don’t really care that people have 10-20 fewer hours per week for their community and family while they waste their lives in transit.

They don’t really care about low income workers and students living in military-barracks conditions.

It’s all “successful economic progress” and “urban future utopia!” Get on board, roach! Climb into that urban office and feast on the high wage that will be spent on overpriced housing, food, taxes, services, and healthcare!

French G7 & Bloomberg deception: they call decades of dirigisme “capitalism.” There has not been “capitalism” in the West for generations. There has been one dirigiste program after the next. Now the dirigistes who gave us the debt, use semantic deception as they call the failures of their own economic interventions “capitalism.” They scare people with myths of non-existent income inequality that Alvarism irrefutably disproved in Economic Sovereignty.