by W. Kane, Forever Endeavor
Today we are shown headline after headline screaming, “Recession is here…Brace for a Crash…Markets Falling..” and it can be frightening. It’s scary to think that our economy is in trouble and we could lose our jobs, homes, or retirement savings. If you’re a working-class person like me, you’ve already been feeling the pain for years.
The temporary reprieve we experienced from the stimulus in 2020 and 2021 provided a band-aid, but the damage that would come from the actions of our government in the name of keeping us all “safe” would come back to bite us big-time. Not them though, oh no, their money is safe, and they’re perfectly positioned to profit off of the next crisis.
Declining real wages, the highest inflation in decades including skyrocketing prices in food and fuel, have all been added on top of the existing cost of living crisis. Financial milestones our culture values have steadily become more and more out of reach for many Americans. Housing is unaffordable, college tuition is far too high (causing the student loan crisis-paying for “education” that resembles indoctrination,) and the ability to save enough for retirement, meeting basic needs, have proven nearly impossible. What can we do when the deck is so clearly stacked against us? That is a tough question.
We know for sure, daddy government is NOT coming to save us this time—they may very well be purposely destroying our economy for their own gain—but that’s a topic for another time.
Market analysts, economists and traders are finally sounding the alarm bells for a coming recession in early 2023. Truth is, we were heading into one before the federal reserve started backtracking on the tightening back in 2019. Conveniently, along came Covid, and the lockdowns and halting of the world economy provided the best excuse ever for loose fiscal and monetary policy (money printer go brrrrrrerr.)
The fed got the green light to print trillions of dollars and the government, well they decided to “help” us—with stimulus. While they used a fraction of the trillions to support us, they also provided funds to businesses, many of whom did not need it. Some of the stimulus went to families who didn’t need it either—but that’s not even the worst of it. What was sold to the American people as a rescue plan was actually the largest transfer of wealth in US history!
Fast forward to 2022, we’re entering recession, stimulus is gone, and no help is coming. The money printing done to support the economy was the very thing that caused the massive inflation, and the fed told us it was “transitory.” Because they fell behind that inflation, they were eventually forced to tighten monetary policy. Now, they have increased interest rates at the fastest pace in decades, and continue to do so into a weak market. In recent press conferences, Fed chair Jerome Powell has even said that their goal is to “reduce demand,” and see a “softening in the labor market.” He is quite open in saying that their goal is to curb wage growth, reduce our buying power, increase unemployment, and crush the economy.
The “suits” go on TV day after day talking about how strong the labor market is, and how much savings we all still have—meanwhile, family-wage jobs are being replaced with increasing openings in leisure and hospitality, retail, and other low-wage, low-skilled jobs. Savings fell below pre-covid levels, and Americans are maxing out credit cards trying to stay afloat. The Fed is STILL tightening policy, as stocks fall, home equity is cracking, large companies are laying off workers, economists are screaming at them to stop before they go too far, and the entire world is preparing for recession.
The worry is that they’re behind, just like they were in fighting inflation, they’re tightening too much too fast. Many are pointing out that we have yet to feel the brunt of the rate hikes, balance sheet runoff, and overall tightening monetary policy. The argument amongst professionals far smarter than me is now about how severe the recession will be, and if the fed keeps moving at the current pace, it will become severe. Many say that the recession will be shallow, while others are calling for an all-out depression. The truth is nearly always somewhere in the middle.
What we do know is, the economy has come to rely on loose monetary policy in order to have growth. The stock market has become addicted to nearly 0% interest rates and having the fed as a backstop for all government bonds and mortgage-backed securities. That era is gone, at least for now. Since our economy, and the companies within it, rely so heavily on easy money, we will absolutely see pain in the economy and in our markets until the fed flips back to loosening policy—or at the very least, neutral, no more rate hikes, no more selling assets, and hopefully reducing interest rates again.
When that time comes, we will see stock prices sky-rocket, companies will hire workers, and we will get back to “normal.” The very same analysts, economists, and traders sounding the alarm on recession are thinking that we get a pause in rate hikes at the beginning of 2023. They do not expect rate cuts to come until far later, but hoping we see the “fed pivot” by the middle to end of next year. No one knows for sure how this will play out.
We do have to prepare if we haven’t already. We do have to try and make cuts in our own spending where possible. We need to start thinking about what we can live without, and reflect on whether or not we are living above our means. The harsh reality is, we will feel the bulk of the pain caused by the power-hungry elite, even though they chose to shut down the economy and print trillions of dollars. The game is, “privatize the gains, socialize the losses.”
If you have a business, or are thinking of starting one, recession can actually be a good thing depending on what product or service you are providing. If you can weather a recession and survive as a business, or get one off the ground in that type of environment, you can set yourself up for massive success once we come out on the other side of it.
If you are worried about losing your job, start attending a training program or learning new skills on your own that will make you valuable in the changing economy. Increase your income sources as much as possible. Grab a part-time job in the gig-economy. Jump on to TaskRabbit to do odd-jobs for people in your area. Start selling your old clothes or items that are in good shape but you don’t need anymore. If you have a talent or skill that people love to see or learn, create your own youtube channel, or tutorials to share with others. Stop buying frivolous nonsense!
If you can help it, forego that extra over-priced coffee, that useless plastic garbage that will break or need replaced (speaking mostly of toys,) or cut down your trips. Side note, we just finished up with Christmas, and my GOD, I cannot believe all of the worthless toys people got for my kids. How many dolls does a little girl need? How many plastic cars does my son need? We even got the same stuffed dog toy that talks for the third time, from the same person, for a third year in a row! Needless to say, our country and culture has a serious problem with materialism and commercialization of our holidays. There are so many more worthwhile things, including toys, that they could’ve got for my kids—or none at all would work too! I mean, we are struggling financially just like many out there, but the few that aren’t sure like to blow their money on ridiculous things. But I digress…
The time to be frugal is now. If at all possible, I will be saving money for a rainy day. If/when I have the money, I will stay cash heavy, invest in metals, or buy short-term bonds with a guaranteed yield while we wait for the fed to change course. When they do, and we get a bottom in the markets, you will have a nearly once-in-a-lifetime opportunity to buy in to great companies in the stock market at rock-bottom prices! The recession, though scary, will provide an amazing opportunity to re-skill, re-brand, or reward ourselves—preparing to build wealth!
My recommendation for the coming recession: look into learning about markets and investing. Look into improving yourself in order to be valuable in a competitive job market. Do not feel like you have to maintain the standard of living you have in previous years, and do not feel like you can’t make it through the upcoming economic pain. You got this! We got this! I am here to support you.
For more information on current events, news, markets, trading education & more, check out these sources:
https://www.youtube.com/c/breakingpoints
https://www.youtube.com/channel/UCLwNTXWEjVd2qIHLcXxQWxA
https://www.youtube.com/@MeetKevin
Forever Endeavor 