Today, I’m making a special post to this regular column, outlining my economic predictions for 2019:
JWR’s Economic Predictions for 2019
As we all know, a new Democrat Party-dominated congress will be seated on Thursday January 3, 2019. The actions of the 116th Congress are bound to have a profound effect on the U.S. economy. Given the history of profligate spending and public debt accumulation by both major parties, we can expect more of the same. And, in the event of a credit, bank, or stock market crisis, we can expect a Democrat dominated congress to spend even more.
An Economy in Recession
Here is my economic prediction for 2019 in just one word: Recession. To elaborate: The currently flattened yield curve will very likely soon invert–most likely in January of 2019. In recent decades, yield curve inversion has almost always been the sign of imminent recession. Remember: The “recovery” following the 2007-2008 global credit crisis was not a genuine market cycle recovery. Instead, it was a false recovery that was fueled by central banks setting artificially low interest rates. Therefore, I expect the nascent reversion recession to be deep and long. Plan accordingly.
The Fed: Higher interest rates, Then Lower
Regardless of the spending habits of congress, it is clear that higher interest rates are ahead. Unless there is a severe crisis, there will probably be three more rate increases in 2019.
The Federal Reserve private banking cartel has held carte blanche since 1913. They have manufactured inflation through a debt-based monetary system, in collusion with the U.S. Treasury. (The Treasury also benefits, since inflation is a a hidden form of taxation.) Since 1913, the purchasing power of the U.S. Dollar has declined 97%.
The Fed is presently unwinding their Quantitative Easing (QE) holdings. They’ve been inching interest rates upwards. They will continue to do so, until the Wall Street crowd screams. At some point, higher rates will push the American economy into recession. If the credit market and economy shut down, then the Fed will probably resort again to a Zero Interest Rate Policy (ZIRP). But I suspect that this will be the last time that this ploy will succeed. The Fed will have run out of arrows in their quiver.
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