Today, in a special edition of this column are JWR‘s economic, finance, and market predictions for 2023 and beyond.
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Bottom line up front (BLUF), I believe that 2023 will be seen as a year of recession, layoffs, and stagflation. Consumer inflation will be rampant, but some assets will deflate, as the economy contracts. In the longer term, the recession starting in 2023 may develop into a general economic depression. Perhaps the era will someday be characterized as “The Depression of the late 2020s and early 2030s.” Now, for the details:
Precious Metals:
With inflation continuing at a rapid clip, I expect precious metals to outperform most other assets. If the expected recession is deep, then the monetary metals (silver and gold) will shine more than the industrial metals (platinum, palladium, rhodium, et cetera.)
A couple of wild cards are the ongoing war in Ukraine and the threatened war over the control of Taiwan. If either of those conflicts blows up into a regional or global war, then some of the more exotic and “strategic” metals that are crucial to high-tech weaponry (such as rhodium, ruthenium, and iridium) may go ballistic.
Global Economy:
The global economy is likely to slump in 2023 and 2024. Economies seem to be at a tipping point. I’m not the only economic commentator that is seeing this. Multinational corporations will have to be highly reactive or even predictive, in order to make a profit, in 2023. Mass layoffs will be the norm. Social unrest will follow. Wars will be useful distractions, to keep despots in their places of power.
U.S. Economy:
Here in the States, with a Democrat in the White House, the economy will stagnate, and inflation will continue. Stagflation will be the word of the day.
The deeply divided congress will enact very little new legislation. Just passing budgets will be a huge hurdle.
Mergers and acquisitions will proliferate, as big fish gobble up smaller, weaker fish.
There will be some massive layoffs, starting in the tech sector. As the economy grinds down into low gear, airlines, car manufacturers, banks, stock trading firms, and retailers will all announce major layoffs. Most folks will go into Hunker Down mode. A lot of 20-somethings will be moving back home to live with Mom and Dad. And whole families may be moving into Mom and Dad’s basement. The number of homeless people will surely increase, with a concomitant rise in street crime. Agitators from groups like BLM and Antifa will organize some huge protests, primarily in urban areas.
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