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Early Warning Indicators: The Economy is Getting Worse, Not Better—4 Things You Should Know

Craig HueyCurrent Events, Economics, Inflation Leave a Comment

Don’t be fooled.

Biden and his Deep State bureaucrats…

Big Tech and the biased media…

They all are saying: “Don’t worry. Inflation is going down. The economy is getting better…. Don’t worry about the recession.”

Don’t believe it.

The amount of massive and historic money in circulation caused by government overspending is not going to be touched by the debt ceiling drama.

Here are 5 early warning indicators that point to the economy getting worse, not better.

  1. Inflation–
    Inflation has spiked 14.9% since Biden became president. The “official” rate of inflation is going down… But prices are not… In fact, many keep going up.The Fed raising interest rates is having a devastating effect on the economy… businesses, homebuyers, and wages. The theory is that raising rates will cause prices to go down, lowering inflation. We have now had 10 rate hikes, with another likely to come in June.Interest rates have increased in 1 year more than the previous 15 years combined!There is no logic or wisdom in this theory because, as history shows, as the government keeps overspending and the Federal Reserve keeps increasing the money supply, it devalues the dollar, which causes inflation, which raises prices.However, there has been some contraction in the money supply by the Fed, which is good but not enough. And the massive overspending by Biden and Congress is still spiked with historic new money in circulation (with more to come), which is causing the current inflation to continue.The lower “official” inflation rate is still far higher than what’s acceptable. Indeed, if we suffer from an inflation rate of around 5%, which is really an “unofficial” inflation rate of 10% to 12%, it hurts everyone—especially those on fixed incomes or retirement… and, of course, business owners.

If the Fed gets the “official” inflation rate to 3% or even 2%, it’s still too high.

That’s the problem with central planning, and that’s the problem with the Federal Reserve utilizing outdated, ideologically driven Modern Monetary Theory… It doesn’t work.

A clean sweep in the House, Senate, and Presidency, and a change in the Federal Reserve will be the only thing that can turn this economy around.

Besides inflation, there is…

  1. Mortgage Rates–
    The average mortgage rate is 15% higher than 1 yr ago
  2. Advertising early warning indicators
    As many of you know, I own an advertising agency and have been through 5 recessions.

What I’ve learned during these recessions is that the first thing businesses cut is their advertising budget and spending.

Indeed, before they lay off people and cut down on overhead, they will slash their ad budgets.

And many companies are doing that now…

How do I know?

Based on surveys and talking to other business owners, many have or are cutting their budgets.

But all you have to do is take a look at what’s happening to online advertising revenue and then go into Amazon’s first quarter, Google and YouTube.

Amazon’s first-quarter ad revenue results

Amazon’s first-quarter revenue slowed considerably. This was an early warning economic indicator that companies were spending less on advertising and consumers were spending less on products.

The only reason Facebook’s revenue wasn’t worse this quarter is because they received a tremendous amount of ad revenue from China.

But this is not all…

Google and YouTube revenue continues to plummet

Google ad revenue shrunk for the second consecutive quarter, and YouTube ad revenue fell by 3%, making three-quarters of decline.

The bottom line is that these early warning indicators, and many more, are all pointing to continuing inflation and economic decline.

I often call what we’re in now “stagflation,” where the economy isn’t moving forward but actually falls behind and eventually stalls… but inflation continues.

Don’t expect the economy to get better for the rest of 2023 or 2024. In fact, I expect the economy to worsen and inflation to continue to get worse… How worse? That depends on how much the government continues to spend and the money supply printed by the Fed.

  1. How do we turn things around? Only by defeating the Deep State bureaucrats, overspending politicians, and changing the Fed…And that requires:
  • A president with strength to make the necessary changes.
  • A Senate that will support a new president and downsize the government.
  • A House that will also support a new president and downsize the government.
  • It must happen in 2024.

You may read this also: Post-Election Conference for Investing, the Economy and Politics

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