The New Year brings a look of forward-looking economic perspectives from major financial institutions. Unfortunately, if the perspective of Bank of America Chief Economist Michael Gapen is reflective of the larger institutional analysis, the financial pretending is anticipated to continue.
[Side Note: Notice how they will all start talking about ‘deglobalization’ in 2023. There’s a reason for that that I will touch on in the IMF interview to follow]
Appearing on Face the Nation Gapen accurately indicates the U.S. housing market is already in a steep economic recession, housing prices falling rapidly with a considerable amount of distance to go (-30% range), and the overall housing market will likely be in this situation for around two years. On a macro level the Bank of America indicators line up with the general housing trajectory. From a lending standpoint, Gapen would have specific insight.
Beyond the housing sector, Mr. Gapen starts to get sketchy. He anticipates inflation taking 24 to 36 months to lower to the norm 2% range. That is generally in line with CTH expectations; however, nowhere in the analysis does Gapen even mention energy costs and the overall impact to the economy from energy policy. You will note this absence will be present in almost all financial punditries. Mentioning “energy policy’ as a cause of economic pain is a third rail amid his peer group; it is simply not permitted.
Astute readers will note the great financial and economic pretending that surrounds the Build Back Better and Green New Deal climate change agenda will not be discussed by anyone, ever. The massive price impacts, the supply side inflation pressures, are baked into the western global economic outlooks. It is strictly verboten to talk about climate change policy being stopped, modified, reversed or even, well, gasp, removed. WATCH:
[TRANSCRIPT] – […] BANK OF AMERICA CHIEF ECONOMIST MICHAEL GAPEN: Happy New Year as well. Thank you for having me on.
MARGARET BRENNAN: You know, a majority of voters polled by The Wall Street Journal say that the economy is going to look and feel worse in 2023. What is your forecast?
GAPEN: So I think that’s probably true. I think we’re in a situation where the risk of recession is high, may not be a deep and prolonged one. But we’re in a situation where the economy has recovered very rapidly from- from COVID, and it’s come with a lot of inflation. And the Federal Reserve is trying to slow down the economy, to bring inflation down. And in the past, more often than not, that’s coincided with some sort of recession in the US economy and the U.S. labor market. It’s not baked in. It’s not for certain. We may be able to avoid it, but I would agree that the outlook by most people who sit in the position that I do think 2023 could be a difficult year for the U.S..
MARGARET BRENNAN: So we may be able to avoid recession?
GAPEN: Yes.
MARGARET BRENNAN: Or it could be mild?
GAPEN: That’s right. So in the past, we have been able to raise rates, cool inflation, without pushing the economy into a recession. In the mid 1990s we were able to do it. It’s just that the path to that is very tricky and sometimes involves a little more luck than than it does skill. Many other times in the past, again, more often than not, when we’re tightening policy, pushing interest rates higher to slow down the domestic economy and bring down inflationary pressures, that often means we get a period of-of higher unemployment rates and what would be characterized as a recession. In this particular case, I think it doesn’t have to be deep. It doesn’t have to be prolonged. I think what we just need to do in some ways is take the edge off an economy that’s emerged from the pandemic with a lot of strength and brought too much inflation with it.
MARGARET BRENNAN: So we’re currently at an inflation rate of about 7.1%. There is, though, increased concern that that’s going to stay sort of sticky, stay where it is for a while. How long do we have to stomach higher prices? When does it feel better for the average American?
GAPEN: Well, I think we’re actually the evidence suggests we’re already past peak inflation. So the year on year rate of inflation should start to move lower. It already did towards the end of last year, and we think that will continue to happen. So right now, the trajectory is a more favorable one. It will probably take 2 to 3 years to get inflation back down to levels that we knew prior to the pandemic. In other words, low, stable and something we didn’t necessarily talk about because it wasn’t forefront on our mind. So I’d say directionally we’re headed in the right direction, but it may take another 18 to 24 months, maybe 36 months, to fully get us back to a situation where inflation doesn’t seem to be as pressing as it is today.
MARGARET BRENNAN: And that would get us to that 2% level that the Fed is targeting?
GAPEN: That’s right. So the Fed targets low and stable prices, low and stable inflation. They interpret that as roughly 2%. In essence, what they’re saying is we want inflation to be low enough where households and businesses don’t have to think about it when they’re making their their decision. So you and I aren’t here talking about inflation. So how low is low? That’s typically about 2%.
MARGARET BRENNAN: Although they admit they can’t control a lot of things at the Fed, like gas, like food prices.
GAPEN: Right.
MARGARET BRENNAN: Treasury Secretary Janet Yellen was recently quoted in an op ed that she- she penned as saying, times can be tough, but Americans are tougher. From the depths of the crisis. We have bounced back and the president’s economic plan has bolstered the US economy’s resilience to today’s global challenges. So that’s the political plan, the fiscal spending that Congress can- can help them out with. Do you think on that front, we are on a steady path forward?
GAPEN: I do. I think what we’ve seen, the change that we’ve seen from, say, the fiscal policy side of the US economy is one where industrial policy is creeping back in again, where we’re trying to align our public sector interests with our private- private sector opportunities, the CHIP Act and protecting the supply lines for- for chips, for example, is is one of those sectors-
MARGARET BRENNAN: For semi conductors.
GAPEN: That’s right. For semiconductors, for which is a hugely important process for electronics and autos globally. And second, the Inflation Reduction Act has many components of a clean energy policy. So I think from a medium term perspective, we’re seeing greater alignment again with political objectives, public sector objectives and then private sector opportunity. We haven’t done that in the United States for several decades.
MARGARET BRENNAN: But in terms of more support for those in the economy who are getting pinched the hardest right now, I mean, do you think that this is a time to pull back on fiscal spending? You know, the criticism after the fact was that the government pumped $6 trillion in two years and that added to to prices going up.
GAPEN: Right. And I would say the spending under the CHIPS Act or the Inflation Reduction Act isn’t, you know, it’s spread out over over many years. So I don’t really think it’s something that would be boosting the economy meaningfully in the short term. You’re right. A lot of the the legacy of prior fiscal policy is still on household balance sheets in the form of a lot of excess saving, and that is helping the economy to continue to grow and continuing momentum in the economy. So I do think it’s time where we, you know, from a public policy perspective are saying we need to take a step back a little bit. We need to moderate the economy and get rid of some of the inflation that that came about.
MARGARET BRENNAN: Tighten the purse strings?
GAPEN: That’s right. Yeah.
MARGARET BRENNAN: In your newsletter, Bank of America’s economists admit to to being wrong about 2022.
GAPEN: It happens.
MARGARET BRENNAN: But so were the central banks, as you all point out, central banks were about six months late in hiking interest rates, the Fed stands out like a sour thumb in largely dismissing the hardest labor market in many decades. So if if all the experts were wrong, why should the public trust that you’re on the right path now?
GAPEN: You know, I think that the narrative I would give is we- Public policy plan for the worst, hoped for the best with the pandemic and plan for the worst. So we didn’t get the worst outcomes of-of the pandemic. Right. Some of those that were predicted early on, but we put a lot of fiscal policy support in. We kept monetary policy easy and interest rates low. And we just we kind of got too much of a good thing coming out. So now we’re just we’re course correcting that. So, yes, we were wrong on how much inflation we- we got. We had to kind of keep revising up what what we were thinking. But now the idea is what? We just need to turn the needle a bit and bring it back down. So. But that’s not easy to do. It’s not easy. And it raises the risk of a recession, particularly in the labor market. But the right long term policy is to get inflation back down, Right? The policy mistake would be not addressing this. So it may mean some pain for the economy in the short run. But if the Fed is successful at bringing inflation down, that means it’s a very good outlook for the US economy over the medium term.
MARGARET BRENNAN: But pain in the economy, I mean, let’s let’s say what that is. That’s likely job cuts.
GAPEN: Likely job losses yes.
MARGARET BRENNAN: There are 6 million unemployed people right now with a jobless rate about 3.7%. That’s a very strong jobs market. Right. Where do you think that jobless rate is going to go? How much pain are you preparing us for?
GAPEN: Right. Part of the problem in the in the labor market right now is lack of available labor supply. We do think for about three and a half to 4 million workers short of where we were prior to the pandemic because of things like lack of immigration and early retirement and so forth. So this is why if we want to, you know, reduce a hot labor market, cool it down a bit, it may involve some job losses. It could come in places like housing. The housing sector is retrenching. It could come in manufacturing the good side of the economy, which was strong in prior years. And it may come in in professional and business services and finance and other sectors like that. We will, of course, see and again, a recession is not guaranteed, but services inflation is strong. And typically the way you bring services inflation down is to cool the labor market.
MARGARET BRENNAN: But how severe? I mean, in terms of when we’re talking about people, Senator Elizabeth Warren has said the Fed is pushing hard to get more people fired. She called it extremist actions to raise interest rates. You’re characterizing this as necessary so that it doesn’t get worse.
GAPEN: That’s right. The–
MARGARET BRENNAN: But they are trying to get companies to stop hiring.
GAPEN: They are trying to reduce demand for labor. Yes. And- and it’s a fine line to walk on how much unemployment you might get out of that. The Fed’s forecast project, the unemployment rate could rise about a percentage point to about 4.6%. Private sector forecasters will range from maybe four and a half to five and a half. So that’s a big move from where we are currently. But the 20 to 25 year average unemployment rate in the U.S. is about 6%. So it would be kind of getting things back up to maybe a more normal environment, which would still be a pretty good labor market, just not as- as hot as it is today.
MARGARET BRENNAN: You know, you’re talking about going back to sort of standard models, but I think it’s really interesting what you said about retirements, that skilled workers took themselves out or left the workforce, maybe not by their choice, during the pandemic. We’re also seeing, in particular in child care, a severe shortage of workers. And that’s driving up the cost of child care as well. When do those dislocations get any better? Because those are hard things to make up for.
GAPEN: They are. They typically take years to- to make better. And sometimes it involves changes in, say, fiscal policy or the public policy aspect, not necessarily monetary policy. The Fed can induce labor- labor supply, but things like provision of health care or universal pre-K, right? Some of these elements in what was the Build Back Better agenda could be things that induce participation, right? Make it easier for parents, mothers and fathers, to participate in the workforce. But these things take- take time. And inflation is high now. And- and the risk is that what appears or should be a temporary, several year, increase in inflation turns into something that’s more prolonged. So the Fed really can’t wait for that.
MARGARET BRENNAN: Excuse me. I’m just going to take a sip of water.
GAPEN: I will, too.
MARGARET BRENNAN: I have a catch in my throat. So let’s just pick up here. When you talk about monetary policy, you’re talking about what the Fed can do.
GAPEN: That’s right.
MARGARET BRENNAN: For consumers, when the Federal Reserve keeps rates higher for an extended period of time. For folks who don’t watch Jerome Powell as closely as you and I do, they see the impact in their credit card statement or in the mortgage rate if they want to go out and buy a new home. When those Fed moves go up, the cost likely will go up for those other things as well. So if someone’s looking at the housing market, wants to go out and buy a home right now, do they also have to wait the 2 to 3 years you referenced for inflation to come down before they feel like they can afford it?
GAPEN: Well, housing is under a tremendous affordability shock right now. As you know, home prices nationally are still up about 40% relative to pre-pandemic times and–
MARGARET BRENNAN: There’s a bubble.
GAPEN: Well, I–
MARGARET BRENNAN: Jerome Powell said it was a bubble.
GAPEN: Well, okay. I would disagree with- with that. And mortgage rates are high. They’re- They were over 7%. They’re now above 6%. So, yes, I think the- home prices are starting to come back down. But, yes, it will take time to cool down the housing market and return affordability. Is it- Is it two years? You know, I don’t know, but it could be 12. It could be 12 months. Could be 24 months. Yes. The housing market currently is- is in its own recession at present. Activity has really slowed down, particularly as mortgage rates rose. It’s one of the most interest rate sensitive sectors in the U.S. economy.
MARGARET BRENNAN: You also, on a global scale, have to take into account some of those shocks. War in Europe. China reopening with its going from COVID zero to an influx of cases potentially of COVID infections. How do you account for that?
GAPEN: Well, I- I’m actually a little benefitted by being the U.S. economist because we’re still a large, relatively closed economy. Those shocks elsewhere tend to affect us less and in some ways the weaker the rest of the world is, the better it is for the U.S. because soft growth globally tends to bring down energy prices. And we’re seeing that now. Gasoline prices, prices at the pump are, you know, around where they were prior to Russia’s invasion of Ukraine that actually supports consumer spending. So outside of that, though, certainly weaker growth means we have fewer places to export. So it weighs on growth through our trade channel. China’s reopening may actually start to push commodity prices higher. So it is, you know, it’s an all intricately linked system. And we just do our best to try and understand where these forces are at any point in time. But from the perspective of the U.S., we’re- we’re generally domestically driven, services oriented, domestically driven. Weakness in Europe or changes in China’s outlook, they don’t affect us all that much. It’s really about the domestic economy. And in fact, where are labor market conditions? Is the labor market hot? Does the labor market need more support?
MARGARET BRENNAN: I want to end on a positive note, if we can. I want to ask where you see sort of the best news in 2023. What makes you hopeful?
GAPEN: What makes me hopeful is not just in the U.S., but globally, central banks have gotten the message on inflation. They reacted very quickly. Inflation is now on- on a downward trend and we think that will continue. So we think we’re kind of past the peak worry in terms of- of inflation. And I suspect we will have this conversation less and less going forward. At least that’s certainly the hope. And the other area I would say is I’m still very optimistic about the long run prospects for the U.S. economy. And in that regard what I mean is, in a world where, you know, we’re pulling back from globalization a bit and we’re fracturing a bit, and- and it’s more about spheres of influence and major economic powers operating in their region.
MARGARET BRENNAN: You’re talking about China without saying China.
GAPEN: Yes and Russia. But also there’s a surge in Brazil and India. There’s a lot more players on the scene than there was in the past. And in a- if the world is breaking up a little bit, I think the positives of the U.S. actually become more positive. The U.S. becomes a better place for investment, returns to capital and the dollar’s strength in the world system will likely be preserved. So in some ways I think our positives become more accentuated in the current environment. So we’ve got a problem with inflation now. We will likely risk recession in 2023. But beyond that, I think it’s still a very positive outlook for the U.S.
MARGARET BRENNAN: All right. Thank you so much for sharing your outlook. [End Transcript]
The U.S-China dynamic is going to be very critical this year. PRO TIP – Anything sourced from China is going to be scarcer and more vulnerable to disruption. If you are associated with an industry that is dependent on Chinese goods, even as an employee – watch out. China’s manufacturing and distribution is going to be extremely sketchy due to severe domestic issues associated with COVID mitigation amid their vulnerable population. This is going to make the U.S and Canada issues with Mexico even more important.
I don’t drink, but if I did I would suggest a new drinking game.
Bottoms up every time some self-appointed expert or interviewer of self-appointed expert (s) starts a sentence with “So………..”
Separate thought: I’m so grateful for any and all transcripts. Trying to grasp the way they think is painful enough. It is more than I can endure to listen to them trying to defend the way they think.
The only way they are thinking is how to avoid talking about the real cause of inflation. BBB.
Porky Pig (er, Piglosi) knows the problem and knows that it is her delegation that has caused it. Two more days and the Wicked Witch of the West can be freed to testify before a real January 6th committee!!
That will never happen. Why?
It will take months for the RINOS to get their bearings…sucking the life out of all new incoming conservative house members, and that’s if there’s even an agreement on the speaker position.
Then when assignments are made for the House Committees, a January 6th committee and any talk of it will be squashed by the RINOS of “We must move forward, blah, blah, blah,” and MSM will be right there scolding and ridiculing all Republicans.
IF..IF..a committee is formed, Nanzi will step down representing San Fran, exiting to that no-show overseas money laundering Italy position it was rumored she would take, WHERE…WHERE..executive privilege will be announced by FJB as to why she can’t testify.
I have no hopes this upcoming con-gress will accomplish anything but a couple of good soundbites. The Cabal will ALWAYS protect their fellow Caballers.
The senate took care of funding the illegitimate junta so there’s nothing else for the establishment demoncrap-lites to do for 10 months.
Failure is not an option. No excuses will be accepted.
It’s just more propaganda covering for the climate change hoax agenda!
Milton Friedman: “…inflation does not come from trade unions. That doesn’t mean the trade unions aren’t grasping. Of course they are. But they don’t produce inflation for one simple reason. They do not own a printing press on which you can turn out green pieces of paper. The only such printing presses are in Washington. I say printing press. Of course, in the modern age, we do it in a more sophisticated way. We use bookkeepers and accountants and computers. But it comes down to the same thing. Inflation is made in Washington because only Washington can create money. And any other attribution of two other groups of inflation is wrong. Consumers don’t produce it. Producers don’t produce it. The trade unions don’t produce it. Foreign sheiks don’t produce it. Oil imports don’t produce it. What produces it is too much government spending and too much government creation of money and nothing else.”
I’ll take “So….” over the ubiquitous use of the term “like” any day of the week. If there’s one thing that’s going to push me over the edge some day, it will be this conversation “and he was like, and I was like and it was like”.
I know, it drives me nuts too! Sometimes I’ll say we’re not in Southern CA, enough with the valley girl talk please!! So far I think I’ve only heard one person using the “like” a LOT since moving to Texas & finally I said we’re not in CA, you sound like a valley girl!
Add some other things he’s done & said (he’s one of the people that rents one of the rooms in the house I do), plus I found out he’s vaxxed, has claimed he has a 140 IQ (someone replied here that’s potential), has almost no common sense, & doesn’t think things through. Once he started being rude & snarky (I figure he doesn’t like hearing some truth & called out on some things), I’ve been staying clear of him.
In ValSpeak…
https://funtranslations.com/valspeak
I know, oh, baby it drives me nuts too! Gag me with a SPOOOOON! Sometimes I’ll say us guys’re not in Southern CA, like enough with thuh valley chick talk please! Oh, wow! So far I think I’ve only heard one person usin’ thuh “like” a LOT since movin’ to Texas & finally I said us guys’re not in CA, like you sound like a valley chick! Oh, wow!
Add some other things that dude’s done & said (that dude’s one of thuh guys that rents one of thuh rooms in thuh pad I do), like plus I found out that dude’s vaxxed, oh, baby has claimed that dude has a 140 IQ (someone replied here that’s potential), oh, baby has almost no common sense, mostly & doesn’t think things through. Once that dude started bein’ rude & snarky (I figure that dude doesn’t like hearin’ some truth & called out on some things), mostly I’ve been stayin’ clear of that dude.
LOL!
In Arizona, we now have a “Governor” who talks like a Valley Girl with a thin, childlike, high-pitched voice.
Kind of like that “Professor” Ford???? Christine Blasey Ford?
Did Fraud Ford every clean her glasses? What a filthy ignorant pig
Rush used to discuss Ford’s speaking habits too. He especially emphasized her tonal uplift at the end of every sentence, as though it were a question.
Its called “uptalk”. Mostly an affectation of white regressive women, and those other people that pretend to be them.
That’s a pet peeve of mine; drives me crazy .
The corrupt media skewered Palin but are hands off Hobbs and Harris.
Hopefully, that “Governor” will be removed from office after a Kari Lake appeal to a higher court.
Obama !
Used and overused, the word – Look.
Cringe, like nails on a blackboard.
Did he ever start a sentence without using the L word ?
“No joke”
“i mean it.”
Oh, yes! As I repeatedly corrected my now grown granddaughters, “It isn’t
like anything; it is something.”
Adding “Ya know,” to “It’s like,”puts the spotlight on liberal education’s failure.
In addition to the “So…”, add every time they lie. Ever seen the movie “Liar, Liar”? I know I know it’s Jim Carrey & I can’t stand all of the woke Hollywood hypocrites nowadays, but it was hysterical. It was his boy’s birthday & cutting out some of the details, he makes a wish & gets it!!! Something to the effect of “I wish my father can’t tell a lie.” Well… his father is a lawyer, so it starts getting much better & watching the physical humor Jim used to be so good at & the words he chooses are the truth but people’s reactions to hearing the truth… Some take it a lot better than others, & watching the range of responses was interesting.
So, I can’t take Margaret Brennan any more than I could castor oil.
Castor oil is MUCH easier to swallow than anything spewing out of Margaret Brennan’s arrogant mouth.
Like totally.
Avoiding the elephant in the room 1. Of course higher input costs – energy – hit manufacturing and the supply chain – everywhere and are inflationary. 2. 1.7 trillion reasons more money printing will be more inflationary. 3. War is always inflationary – combined with money printing – turbo. And 4 slowing demand inflation fighting by the fed – will seriously overshoot and tank the economy. You could not come up with a more destructive and toxic policy mix if you tried. Pure crazy will be a shooting war with China – but no economic sanctions or embargo – ergo we can print money for both sides of the war!
No, not take a drink. Every time a gov dope pretends to have an answer and doesn’t, give him another booster jab. Soon we’ll be rid of them but they won’t be able to tell us why.
My gosh!! Some people surely have been drinking a lot of Kool-Aid methinks…
And I keep thinking about Lord Macmillan’s answer when asked what could throw his government of course…
“Events, dear boy, events.”
Yes, indeed…those do have a way of fouling the best laid plans of mice and (particularly) men.
And let’s pray globalists and their “climate change” eugenics as well.
I wonder how much consternation the brave Rhodesians caused that backstabbing traitor?
Ah yes…plenty I’m betting, Colkitto. Those pesky “events”, dear boy…
The Kool-Aid man icon should be on the UniParty flag that flies in Congress!
They’d only paint him with rainbow colours…
Both are insufferable douche nozzle’s.
I don’t even have to turn the sound on with these videos of the Mandarins. He has one of the best prototypical looks and body language of a congenital liar.
Put him at a used RV lot in Cape Coral and he’ll fit right in selling junk to snowbirds.
BRENNAN: In your newsletter, Bank of America’s economists admit to to being wrong about 2022.
GAPEN: It happens.
ME: Every single time.
The arrogance is beyond the pale.
BoA became a whore to the government in 2008 with TARP. I pulled my money out. When Merrill Lynch merged, I pulled my money out of there. Both still do what their pimp tells them to do.
5BY2531: Absolutely. All the major banks belong to Club Fed.
Back in 2011 for several months, I worked for a company which had a contract with Bank of America to handle their customer service incoming phone calls.
Wow, some of the customers were so stupid, I had one argue with me for 10 minutes, she apparently didn’t know how to subtract. Every time we performed money transfers for their customers, we were supposed to give the beginning & ending balances of both accounts. I still remember the amount she transferred $40 from checking to savings, so the checking acct balance was $139 & then $99. Nope, nada! I finally had an idea, if you have $99 & added $40, how much would you have? She quickly replied $139, then said oh, & hung up within seconds. Customers were constantly overdrawing their accounts when using their debit cards, they they didn’t seem to understand they had to have money in the account in the first place.
After seeing the inside workings & policies of BoA, I swore to myself I would NEVER have an account with hem or any other major bank. Since 2011, I’ve had accounts at credit unions.
Reminds me of the story about the Titanic after it hit the iceberg, the band was ordered to keep playing so the doomed passengers would not panic.
Exactly, and it is of great concern to me that TPTB will soon need a huge distraction to deflect the populace at large from focus too hard on their quickly evolving socio-economic ruin.
The distraction, when it happens, will be very big, very bad and very devastating.
“The *risk* of recession is high,” he says. Pure pretending, or is it delusional at this point?
It’s their new theme song.
He was vaxx damaged sadly and has been an advocate against vaxx mandates especially for where he performs. Always loved his Yardbirds work
Surely, these people don’t think that Americans are ALL THIS STUPID (or do they?). Who are you going to believe, these lying tools/fools or your own eyes? They hope the answer isn’t your “lying” eyes!
I’m pretty sure they don’t think all Americans are this stupid, just enough Americans are.
And that there is the rub. Too many citizens are SO ignorant of everything that is and has happened in the past 6 years, and even in the past 2 years. I am ashamed of the so-called citizens of the USA.
With what we have learned over the last 6/7 years, now just look back over the last 30/40 years with clear eyes and see how the MSM (TV in particular) has educated the populace with complete falsehoods. The whole Western culture is in a perilous state because the left has total control over the idiot box. Now, even cartoons attempt to distort perceptions of reality
“Every nation that rose to world power did so by protecting and nurturing its manufacturing base – from Great Britain under the Acts of Navigation, to the United States from the Civil War to the Roaring Twenties, to Bismarck’s Germany before World War I, to postwar Japan, to China today. No nation rose to world power on free trade. From Britain after 1860 to America after 1960, free trade has been the policy of powers that put consumption before production, today before tomorrow.
The historical record is clear. Nations rise on economic nationalism. They descend on free trade. ”
Pat Buchanan. Suicide of a Superpower
Goodness. Nice to know my little village could become a superpower if only we make everything right here and never trade what we’re efficient at making for what other people are efficient at making. Who knew communes were so effective?
“So I’d say directionally we’re headed in the right direction, but it may take another 18 to 24 months, maybe 36 months, to fully get us back to a situation where inflation doesn’t seem to be as pressing as it is today.”
Of course 24 to 36 months could involve the Advent of a new administration forged in openess and conceived in economic liberty. Maybe Donald Trump?
The right thing to do immediately, is to impeach Biden. He has not lived up to the Oath he took on Inauguration Day.
Next thing, Kamela is hamstrung as POTUS because she obviously has no clue. Then we impeach her as she has not even gone to the southern border, which she was named to control.
The mothers milk of our society is oil. Avoid the truth about bbb and we’ll continue in the same direction. That’s not inflation you see, it’s just price increases.
We can’t just go around harnessing what’s right below our feet…blasphemy, I tell you! /sarc 🤣
Tesla was robbed.
“Anything sourced from China is going to be scarcer and more vulnerable to disruption.”
Should there be a move on Taiwan, I’d expect there to be severe sanctions which would further disrupt supply chains.
82 Airborne slated (supposedly) to deploy (number unknown to me) to Taiwan sometime in February.
God please protect the troops in the 82 and the 101 Airborne as well as all the US Army, Navy, Marines, and Coast Guard.
And please God, can you give some common sense to Milley, Austin and the rest of the WOKE so-called leaders?
Chips will become a black market item.
A tough year ahead ? We have just the ‘ Fix ‘ for that ……. hello C.B.D.C. , central bank digital currency.
On a slightly different note , look up ” Bank Of America murals ” . Some very odd artwork at their HQ.
They are telling you something.
Vigilant Citizen . com / sinister sites
I’m afraid to look…
Brennan is an attractive, articulate woman, but boy does she carry water for the MSM globalists.
I am an investor and see discussion about the destructiveness of ESG frequently. Doomberg, the green chicken is followed by many and discusses this frequently.
When did Margaret Brennan start being concerned about “when it feels better for the average American?”
“… the Federal Reserve is trying to slow down the economy, to bring inflation down.”
That means people must become unemployed.
Very dismissive attitude from an anointed class member.
Remember that inflation is a monetary phenomenon–only. That is “counterfeiting as performed by the government: printing new paper where no labor or production has occurred”. You, the citizen, engage in counterfeiting, you go to jail, precisely because counterfeiting steals value from everyone else.
A reduction in energy availability is not inflationary, as the prices rise due to competition in demand against the lack of supply. That is not inflation. Where that leads is deflation, as the product and labor derived/supplied/enabled by energy will reduce commensurately.
He really said: Part of the problem in the in the labor market right now is lack of available labor supply.…because of things like lack of immigration.
We don’t have a lack of immigration- these people are crazy.
Business like to cry – ‘ we cant find any workers ‘ …. WAaaaaaa
but they will not adjust pay scale to reflect reality.
Don’t blame “businesses” for all of it. Consider the millions who dropped out of the workforce and are content to stay at home and suckle on the government teat. Cut the milk supply and force them to work….or move back to wherever the hell they came from.
In addition to that, Mike Adams recently interviewed Ed Dowd & how workers are just disappearing whether it was a death or now disabled & unable to work… The article covering the interview is titled:
“Warning from Ed Dowd: 7,500 Americans are killed or disabled EACH DAY as vax jabs take heavy toll… USA imploding under “decivilization” assault”
https://www.naturalnews.com/2022-12-29-ed-dowd-7500-americans-are-killed-or-disabled-each-day-vax-jabs.html
If you would like to listen to the interview, here’s the link & unfortunately I didn’t notice when it started. Usually Mike will talk for a bit & around the 30 min mark is when an interview starts.
https://www.brighteon.com/5d8c7046-3c45-4026-846b-c8565c8bbc0d
Don’t know about other states but the pandemic gravy train in CA ended in Sept 2021. After that, only folks who were regularly employed could file claims as usual. There’s welfare, yes, but compared to normal wages it’s a pittance; one would need to work the underground economy to match typical pre-pandemic wage levels.
The only thing I see that remains ‘pandemic’ is SNAP; it still has emergency benefits, mainly bringing those of us who don’t qualify for the max household benefit up to that level. USDA is extending that month to month as Brandon extends the emergency and not all states participate. I don’t believe CA does; only regular SNAP for those folks.
CA residents in certain income levels recently got the MCTR (middle class tax refund) of differing amounts depending on household size. Singles could get up to 350.00, etc, etc.
If there is a public benefit trough for former workers who have opted out I don’t see it. I’m old so on SS. I closed my business in protest and retired. I wouldn’t work for the Communists if they held a gun to my head. I’d rather be dead and take as many of them as possible with me. That’s a fact.
Fix bayonets!
I’m with you.
I run the fuel calc compared to working as a grunt carpenter during the Carter administration and today it’s just shy of 80 bucks an hour to buy the same fuel I bought for my hourly wage back then. It was as high as 120 recently.
I was a grunt carpenter putting myself through college back then. Not only could I live on the wage, I could pay cash for a college education, something relatively unheard of today for regular folks. Heck, I even saved enough to put a down payment on a house at the ridiculous interest rates back then.
Real wages in industry have been falling for decades, meaning compensation versus purchasing power and cost of living. That would include the huge swath of the lower and lower middle class. Hence, people take multiple jobs and/or have multiple household members working to make up the shortfall.
By ‘industry’ I mean people who make things; widget builders. We historically called them ‘blue collar’ though the realities transit across skillsets these days. If one looks around their home at ‘stuff’, industry made that stuff and industry repairs it, as example.
Their bogus justification of opening the floodgates for millions of illegals.
August 11 2021
From the link…
“Also, please understand when they say “inflation is transitional” or “inflation will spike and then come down to normal levels” what they are saying is that prices will massively increase right now, and then normal or slow price increases will return next year. This does not mean prices will come down, ever; a key distinction.
Inflation is the comparative measure of price increases now compared to a prior time (last year), usually expressed as a percentage. Ex. A lemon cost $0.49 cents last year (2020), and jumps to $0.89 cents this year (2021).
The lemon may only jump to $0.99 in 2022 (.10 more) and that is significantly lower inflation, but the price spike is perpetually built in. The same is true for gasoline, electricity, energy, etc.
A reminder of two primary precursor articles [Primary One and Primary Two] which outline the economic dynamic in play, and how we can look forward with accuracy to what is likely to happen. Despite the deflective talking points by the professional financial pundits, this massive spike in inflation is entirely predictable due to Biden economic policy and Biden monetary policy.
Keep in mind, the FED already said in April they would “support inflation”, that’s because – while they will not say it openly, they know there’s no way to stop it. The massive inflation is a direct result of the multinational agenda of the Biden administration; it’s a feature not a flaw, and it has nothing whatsoever to do with COVID.
Also keep in mind the first group to admit what is to come are banks, specifically Bank of America, because the monetary policy is the cause.
There’s no way around this. Despite the pundit and financial class selling a counter-narrative, home prices will crash and unemployment will go up.
I know this is directly against the current talking points, but the statistical reality is clear. CTH was the first place that said months ago that new home sales will plummet, that is starting to happen right now. There’s no way for it not to happen, the big picture tells us why.
You might remember, …
(more)
https://theconservativetreehouse.com/blog/2021/08/11/inflation-continues-to-crush-middle-class-july-inflation-5-4-percent-milk-8-percent-energy-23-percent-gasoline-43-percent/#more-215185
This is not normal inflation. This is deliberate immiseration.
In normal (supply-side) inflation, a corrupt government gives money to its cronies and then prints more to “pay” for it, so that everybody who owns some of the original money stock loses by the fraction by which that process increases it. But few people keep much of their wealth in the form of cash. More keep a good bit in interest-bearing deposits denominated in the national currency (for which the inflation rate tends to be added onto to the base interest). Even if wealth is narrowly defined as personal possessions (rather than including such things as expertise, technology and trust) and even if you say the government’s spending is 100% harmful (its beneficiaries use it to harm society rather than waste it), the loss in real wealth caused by this kind of inflation is generally small so long as the overspending is stopped. If it isn’t, people eventually switch to another currency, or even to barter if their government won’t allow real money.
In the current WEF “inflation”, governments have artificially and permanently raised the costs of energy and thus everything that uses it: food, transport, housing, manufacture, etc.. On top of this is thieving-plus-printing inflation, overgrowth of the safetyism apparat, uncertainty caused by in-your-face government malice, etc. — but the major problem is necessarily-skyrocketing real costs caused by government’s deliberate sabotage of the economy.
If the value of money is halved, it does not change the value of the rest of your wealth. That wealth will generate exactly the same amount of new wealth, it will just be denominated in the debased half-value currency. But if what can be bought with your wealth is halved (say by doubling the real cost of energy), then your wealth is only worth half as much. That’s what governments worldwide have done to us; that’s what they mean to keep doing to us. “You will own nothing and you will be happy. We will own everything — including you — because we are entitled to
helpabuse you for your own good.”The lower middle class is going to suffer hugely. Specifically the ones who work diligently yet do not qualify for handouts.
I am a prime example of that in 1985/86. As a RN and single mother of 2 adolescent daughters at the time, it was devastating. I “qualified” for nothing. – no free or even reduced school lunches, no free entry to the Town Rec programs. We just kept on going, and by the recession of 2008, I owned my own house and my daughters were on their way to Universities. And by the Grace of God go I and them.
“…home prices nationally are still up about 40% relative to pre-pandemic times …”
Curious: if times are hard for working Americans, what is in store for illegals flowing across the border.
Where do they live, when housing is up 40%?
Who is subsidizing them?
Ever think that institutional investors scrambled to vacuum up real estate because the assets are a hedge against inflation and that the govt would be subsidizing tremendous numbers of rentals?
Congratulations, now you know why a universal housing cost increase can occur and persist despite a recession.
Home purchase cancellations are above 15% for the second straight month.
https://www.cnbc.com/2022/09/26/home-buyers-are-canceling-purchase-contracts-what-to-know-before-you-do.html
I should add…
New home sale cancellations are not included in the reports the majority of analysts use to judge “New Home sales Strength”.
My wish for Christmas was to abolish the Fed, the media, the FBI, the CIA, the dept of education, HUD, and DHS. Didn’t come true.
Gee. How fortunate and grateful we should be. So inflation will go from 8% to 5%? to 3%? in 24 months . So in 2 more years prices will be up a total of almost 18% and the fed will tell us what a great job they did. And instead of all those moves all they had to do was allow oil companies to produce more and prices on everything would come down. And sadly ,all in the cause for a fake (climate change)agenda. P. Pray and help others and a Happy and Healthy NY to all.
This like all the rest of the issues with the economy are all created and not a mistake.
The only thing going for me is that my losses in the market will mean less taxes to pay.
Good thing we have millions of illegals and foreigners here to help!
They hate us
They are lying to us
They are frog marching us into a death spiral and they know it
they think we don’t know it but we do.
The only real question(s) now is – what do we do about it, how do we take our country back?
And IS IT EVEN POSSIBLE?
Throw off the central banks and have the government issue it’s own currency. JFK tried with executive order 11110 but we all know what happened there
Gapen said ” So in the past, we have been able to raise rates, cool inflation, without pushing the economy into a recession. In the mid 1990s we were able to do it.”
What he failed to mention was that in the mid 1990s, Republicans were in control of the House and the Contract with America was in place. Also, Clinton realized that the Democrats couldn’t continue spending like drunken sailors and between the Republicans and Clinton, they reined in spending to slow inflation. That is definitely NOT in play presently. Congress continues to spend like drunken sailors (Democrats aided by too many Republicans, particularly in the Senate). Inflation cannot slow down when the printing presses are running overtime at Treasury. Though there are still some presently in Congress who were also there when Clinton occupied the White House, either they didn’t get the message then or their memories are so short that they have forgotten how to get out of a mess they created! The new Republican House needs to come in with their scissors sharpened and start cutting on the waste in the budget. They can’t cut it all out (at least not in this session of Congress) but they can at least make a dent in the deficit and they don’t need to start in September. Now is the time for all good Congressmen to come to the aid of their country. Cut the pork. Cut deeply. Cut permanently.
ALL WE NEED IS A PRESIDENT TRUMP AND A DRILL BABY DRILL to turn things around fast.
Who will answer the question of how we will solve the problem of a debt of 32 trillion, interest payments that 15 months ago were negligible and now will total more than a trillion a year. ? When my ex sil. ,as a contractor who went bust in 2008, I would tell him he was in a (debt death spiral) he would look at like was lying to him. Why is it any different now.? Pray and help others.
I always like the question of “who do we really owe this money too?”
The same for the EU Bank. They will be crushing Italy pretty soon, mark my words.
did you (all of us) borrow that money? NOPE
should you (all of us) have to pay any of it back (to whom?) NOPE
I would answer simply with “it’s mulligan time” or simpler yet “forget about it” ( just like a Democrat politician, fake news and a soros AG , DA and Judge)
congress can create a new gold backed dollar (fundamental transformation) and we’ll go “forward”
(lib bzzz words, gotta love it when you can turn them around on them commies)
Gingrich also helped bring in NAFTA as free trade was the republican party platfrom.
And CFR Gingrich traitor was a big WTO supporter and helped make sure Clinton was not impeached for treason. They were CFR Globalist buddies working for the same criminal conspiracy
Yep, not a Clinton fan at all but I do seem to remember a very short period during the technology boom that the Fed even ran a fiscal surplus. However, and it’s a big however, back then, with the commercial internet in its infancy, we were still relying on media propaganda and the government numbers put out.
Looking back I couldn’t say with confidence I had a true grasp on any of it. I do know the 90’s were, historically, the most profitable era in my own manufacturing business. I was seeing the China thing though, and customers increasingly telling me they were going to China for parts. It was all downhill after that.
I have found that even a mention of “energy policy” with modifiers like “Biden” or “failed” on some of the discussion boards will bring out dissent trolls like ants to spilled syrup. It makes me wonder which federal agency is supplying them.
Take your pick
I have to admire the interviewer. She threw a bunch of hardball questions at this guy.
He came away looking like an equivocating know nothing. Which he is.
He, like all his economists buddies, hasn’t a clue what causes inflation much less how to lower it. But he does spout the feds Powell lines perfectly – more people need to lose their jobs, so they’ll have less money to spend. That effort will lead to confidence among people that inflation will be under control. At which point normal spending will take place. This passes for learned economic action.
With guys like this leading the pack, we’re in a heap of trouble.
But, he’s a banker. Bankers will never lose their jobs to improve the economy.
What did I just watch? Two blind people describing the pile they’re standing in.
When these people say things like ” Inflation is transitional ” , try to remind yourself and others that they play word games all the time.
The ” Transition ” is to a new world order / BBB / green new deal ‘ utopia ‘. That’s what they really mean.
MARGARET BRENNAN: In your newsletter, Bank of America’s economists admit to to being wrong about 2022.
GAPEN: It happens.
Yeah, S%*t just happens. Out of no where. Baffling. Until these F*^k nuts acknowledge the energy policy, I don’t think any of the have a clue what could happen.
2023 the years everything bubble implodes. It has been in the making for decades.
Since 2008 what has gotten better? Since 2008 Fed bailout and stimulus, now faster and faster collapse. No more slow motion burn.
We do not have to burn it down, they are! High speed collapse on the way. The only thing giving them pose (2nd Amendment) to think. Will the people rebel?
Keep on smiling on MSM, while you plan for the destruction of America fools!
Unfortunately, what I’m seeing, and reading, is citizens valiantly trying to adapt and overcome to survive on a personal level, rather than fight. IDK, I wonder if Washington and Jefferson and Hamilton, et al saw the same thing with the colonists versus the British. Hundreds of thousands focused on survival rather than fighting tyranny.
IDK, that’s just what I see and read. If things stay on their current track, IMO we’ll be adapting ourselves to feudalism before I’m dead and gone. I believe others call it ‘you will own nothing and be happy’. OK.
If you cannot survive on a personnel level, how would you be able to fight?
Back in the days of Washington Jefferson and Hamilton survival was away of life, not something they chose. They say only 3% engaged in the actual fighting to remove the tyranny of Britain. Vets make up 7% of the population/23 million. 148 million households have at least one firearm in the house. What % would the tyrants be facing in this day and age? If you are an American, you seriously do not understand America.
Tell me who will be happy to own nothing?
Great to be able to read the transcript, and IMAGINE them as they have this conversation.
I notice it seems like everytime he says “Covid” or the “pandemic” he halts ir stutters, and I imagine him winking as he says it.
,..the downturn because of (you know, wink, wink) Covid- covid er,…”
His pretending is obvious, as is how oblivious he is to the suffering of millions THEY perpetrated ON us with the scandemic OR the suffering that WILL be caused by adhering to the fake “clean energy” goal.
And no, He and THEY, including Margaret haven’t and won’t suffer from these policies, ….
cause they’re SPECIAL!
Winking or choking? I imagine the latter…
Let us rename the Potomac River to the Potemkin River. The DC cauldron must be reigned in.
This is the kind of analysis we do not see anywhere else. As I read CTH, it is so glaringly obvious that I wonder how I could have missed it. well done, CTH
“Beyond the housing sector, Mr. Gapen starts to get sketchy. He anticipates inflation taking 24 to 36 months to lower to the norm 2% range. That is generally in line with CTH expectations; however, nowhere in the analysis does Gapen even mention energy costs and the overall impact to the economy from energy policy. You will note this absence will be present in almost all financial punditries.
Mentioning “energy policy’ as a cause of economic pain is a third rail amid his peer group; it is simply not permitted.”
I also wonder how much of an impact our Sanctions on China will have on us. Especially chip manufacturing.
I see what is happening in Europe regarding their sanctions. Devastating.
India has overtaken UK in GDP ranking.
Those countries he mentioned….aren’t they all BRICS countries? And then he mentions de-globalization. Interesting………
Nowhere in the analysis does Gapen even mention energy costs and the overall impact to the economy from energy policy.
Astute readers will note the great financial and economic pretending that surrounds the Build Back Better and Green New Deal climate change agenda will not be discussed by anyone, ever.
This guys not an Economist he’s a liar.
From a real estate perspective…It will be a difficult year for blue states…red states not so much.
Blue states to be funded by the $$$-trillions grifted by Piglousi and CCP’s Bitch Mitch. Don’t forget the $$$billions in Ukraine kickbacks.
Actually, BofA’s economic forecasts have been the best of the major banks since Moynihan took over. Yes, the best of a bad lot perhaps. But, BofA isn’t ignorant of energy commodity issues. They bought one of Koch Industries’ commodity trading platforms about twenty years ago when that trading group was among the world’s very best and successful, and that group still is a part of BofA ML. And they’re not alone. Ed Yardeni, one of the most successful of economic and market forecasters, also leans to a soft landing in 2023. We shall see; it’s easy to predict the future, but the hard thing is to know what’s going on now.
I’ll never regret leaving the city girl life and moving to the countryside and starting a farm. Some days I tell myself, “I’m too old for this shite!!” I hauled 5 gallon buckets of boiling water out in the Arctic Blast blizzard to melt the ice in my cows’ water troughs so they could drink. That was tough. One thing I know though, is that in the coming days, my family will have plenty of food. I hope I die carrying pails full of milk in from the field. The Spring garden planning starts now.
And I’m with you Sharon. I don’t drink either, but it occurred to me that a drinking game would be fun and later we could go “cow tipping”. LOL.
My personal opinion: There’s still time to get out of the cities, even with high interest rates, and a rotten, lousy, economy. Not trying to be a Debbie Downer, but I believe it’s going to get worse before it gets better, and the last place you want to be when shite hits the oscillating device is in an urban area where desperate people do desperate things.
Love to all in this new challenging year ahead.
I don’t see it taking that much time to see inflation crash. I believe we will see disinflation and then deflation.
We are just about to start seeing the real impact of the March 2022 rate increases. We will then add the rest of the rate increases over the next few months.
Add the cost of labor going up and profit margins will begin to constrict. That will lead to layoffs (exactly what they have been wishing for throughout 2022) and pay cuts (I had a 40% cut in 2008). When that happens prices have to go down to be able to move inventory.
Thus inflation will slow from inflation to disinflation to deflation. And that will be where the Fed jumps back in with rate cuts and QE. That will not trigger the inflation. The Fed played that game for 10 years and couldn’t average above 2%.
The one thing that jumped out at me…is the time frames….anywhere from 24 to 36 months seems to be the main idea.
Right into election season.
Well what do you know – he’s quoting Putin.
Putin is saying the world domination of the dollar is being broken up by BRICS – Brazil, Russia, India, China, South Africa.
“GAPEN says: Yes [China] and Russia. But also there’s a surge in Brazil and India. There’s a lot more players on the scene than there was in the past. And in a- if the world is breaking up a little bit”
A little bit?
That’s BRICS minus SA he’s talking about
The way inflation is measured currently is BS, the explanations of the MSM why inflation is high is BS and the 2% original target — portrayed as some kind of holy grail normal target to get back to — is still stealing wealth from the middle class.
Reality is the only entities benefitting from inflation is the Government and the Banksters running the government. It is a tax by any other means for bad policy.
There’s going to be A LOT more of inflation as everyone is still in denial and making up BS reasons.
Happy new year 😀
This is the way……
https://legalinsurrection.com/2023/01/eastern-oregon-county-sets-vote-to-secede-becoming-12th-to-join-of-greater-idaho-movement/
It won’t happen in my lifetime but I saw the impetus long ago with the Jefferson movement and the later annex counties in parts of Oregon. New Idaho would need seaports and Reedsport and, especially Coos Bay, would fill that bill nicely. People likely don’t know that Coos Bay is a mere shell of the huge seaport it once was when Oregon was exporting natural resources by ship all over the planet.
Oregon is far redder geographically than even the map below shows but the way districting works the Communists control most of the counties in lesser Oregon. Hence, those counties are worthless for any secession movement until the Communists are dead and gone from this wonderful state.
“It is strictly verboten to talk about climate change policy being stopped, modified, reversed or even, well, gasp, removed.”
It’s a cheap dialectic trick the globalists are attempting. Every America First energy policy discussion should begin and end with action recommendations to reverse and remove the treasonous “Build Back Better” and “Green New Deal” heresies.
There must also be serious discussions about the arrests of those capitalist heretics promoting this sedition. Discussions must include:
1) the criminal and political crimes they are clearly guilty of,
2) the naming of those who are accused of this deception,
3) who is funding this seditious agenda and who will be subject to complete financial confiscations, and
4) publicity for the new security services and special courts needed to permanently address the “Build Back Better” and “Green New Deal” heresies, and other socialist crimes against humanity and Liberty.
Do not play their game. Make them play OURS.
What a lovely dream
Health sciences was my career, not economics, but the BS in opening statements in interview are evident to anyone.
Manufacture Covid crisis, destroy businesses, employment, import everything, budget shattering government spending, rip apart our border to bring in “voters” we are forced to support with our taxes, sweet talk the ignorant….
Just check the grocery receipts for of any average income earner. No further bureau or talking heads needed to assess this induced dilemma.
MAGGIE BRENNAN: THE AMERICAN TOKYO ROSE
She should be arrested, tried, convicted, and sentenced to execution.
https://www.fbi.gov/history/famous-cases/iva-toguri-daquino-and-tokyo-rose
All Citizens of Mexico know that the energy policies of the Communist Democrat regime are causing inflation. NOT PUTIN! They despise the illegitimate placeholder in the people’s casa!!!