{"id":1122308,"date":"2023-01-28T13:11:40","date_gmt":"2023-01-28T18:11:40","guid":{"rendered":"https:\/\/bugaluu.com\/news\/are-you-the-collateral-damage-of-central-planners\/1122308\/"},"modified":"2023-01-28T13:11:40","modified_gmt":"2023-01-28T18:11:40","slug":"are-you-the-collateral-damage-of-central-planners","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/are-you-the-collateral-damage-of-central-planners\/1122308\/","title":{"rendered":"Are You The Collateral Damage Of Central Planners?"},"content":{"rendered":"
\"\"<\/a><\/div>\n

Are You The Collateral Damage Of Central Planners?<\/span><\/p>\n

\n

Authored by MN Gordon via EconomicPrism.com,<\/em><\/a><\/p>\n

The Conference Board \u2013 a nonprofit think tank that delivers cutting edge research \u2013 recently\u00a0published<\/a>\u00a0its latest Leading Economic Index (LEI) for the United States.\u00a0 The findings were a giant bummer.\u00a0 In December, the LEI dropped for the tenth consecutive month.<\/p>\n

The LEI, if you\u2019re unfamiliar with it, consolidates various measures of economic activity, including credit, interest rate spreads, consumer expectations, building permits, new orders of goods and materials, and several other items, to assess which way the economic winds are blowing.\u00a0 Over the past six months, the LEI has fallen by 4.2 percent.\u00a0 This is the fastest six-month decline since the great coronavirus panic.<\/p>\n

This week, the Bureau of Economic Analysis provided its\u00a0advance estimate<\/a>\u00a0of Q4 U.S. gross domestic product (GDP).\u00a0 For the final quarter of 2022, real GDP increased at an annual rate of 2.9 percent.<\/p>\n

How could it be that GDP is expanding while the LEI is contracting?<\/strong><\/p>\n

The most probable answer we can think of is the massive expansion of consumer debt.\u00a0 For example, credit card balances hit a new record of\u00a0$866 billion<\/a>\u00a0during Q3 2022.\u00a0 That marks a year-over-year increase of 19 percent.<\/p>\n

Americans are borrowing from their future to make ends meet today.\u00a0 This may give GDP the appearance that it\u2019s expanding.\u00a0 But, in reality, the GDP expansion is merely a measurement of the rate that consumers are going broke.<\/p>\n

The fact is the U.S. economy is traversing headlong into a recession at the worst possible time<\/strong>.\u00a0 We expect things will get especially ugly, as consumers are operating in a world of chaos<\/strong>\u2026<\/p>\n<\/p>\n

World of Chaos<\/strong><\/h2>\n

In a centrally planned economy, decisions are not made between individuals through free market mechanisms.\u00a0 Instead, they\u2019re made by politicians and bureaucrats through policies of mass market intervention.<\/p>\n

The elites pass down their edicts.\u00a0 Thou shall not use gas burning stoves, for example.\u00a0 Or though shall burn corn in their gas tank.<\/strong><\/p>\n

The central planners, many of which are unelected administrators, force the decrees upon the populace.\u00a0 Programs, forms, penalties, and whatever else are imposed.\u00a0 Pounds of flesh must be exacted at every turn.<\/p>\n

The real tragedy, however, the very thing that makes ultra-mega governments possible, is the monopoly on the control and issuance of money that\u2019s granted to central bankers.\u00a0 Without the Federal Reserve, the central bank to the U.S. government, and its seemingly endless supply of fake money, it would be impossible for Washington to cast its wide nets across the entire planet.<\/strong><\/p>\n

Feeding the Leviathan is only a small part of what the Fed does.\u00a0 Through its control of the money supply the Fed causes a world of chaos to storm through the economy and financial markets.\u00a0 When the money supply is inflated, a false demand is signaled.\u00a0 Businesses and individuals change their behavior to exploit the apparent demand.<\/p>\n

Then, when the money supply is contracted, and the rug is yanked out from under the false demand, disaster strikes.<\/strong>\u00a0 Businesses go bankrupts.\u00a0 People lose their jobs.\u00a0 Stocks and real estate prices crash.<\/p>\n

In short, the Fed\u2019s money games make it exceedingly impossible for a wage earner to save, invest, and build real wealth.\u00a0 The uncertainty this provokes turns regular wage earners into speculators and gamblers.\u00a0 Here\u2019s why\u2026<\/p>\n

Uncertainty and Instability<\/strong><\/h2>\n

In a centrally planned economy, like America and most countries today, where people are compelled by legal tender laws to use fiat money, people must work, save, and invest with the recognition that the government will continue to arbitrarily change the rules.\u00a0 The Fed may command ultra-low interest rates one year.\u00a0 The next year it\u2019s jacking them up by hundreds of basis points.<\/p>\n

We know that central planners change course at whim and often for political reasons.\u00a0 Where did the most campaign contributions come from?\u00a0 Their decisions can be downright suicidal.<\/strong><\/p>\n

The 1930 Smoot-Hawley tariffs, for instance, turned a routine recession into the Great Depression.\u00a0 Likewise, Fed tightening of monetary policy in 1987 drove interest rates up and triggered a massive stock market crash.<\/p>\n

The great consumer price inflation of 2021 into the present marked the highest rate of inflation in 40 years.\u00a0 And now it\u2019s providing an instructive lesson to individuals and organizations about the uncertainty and instability that\u2019s inherent to centrally planned economies.<\/p>\n

As the Fed hikes rates and tightens its balance sheet in the face of a recession, many overleveraged businesses and individuals find themselves wholly unprepared for the central planner\u2019s new set of rules.\u00a0 Decisions were made in 2021 under a framework that\u2019s radically different today.<\/p>\n

Consider real estate investors.\u00a0 Over the last decade, as interest rates were artificially suppressed by the Fed, their businesses flourished.\u00a0 They could easily borrow money to buy properties to refurbish and resell at a profit.<\/strong><\/p>\n

But then raging consumer price inflation, which was manufactured by the Fed in the first place, became politically indefensible. \u00a0So, the Fed had to move to rein it in by restricting the money supply.\u00a0 This pushed interest rates relatively higher and undermined the real estate market.<\/p>\n

Investors who had planned for mortgage rates at 3 percent are being absolutely destroyed by mortgage rates at 6 percent.\u00a0 Suddenly their investments don\u2019t pencil out.\u00a0 Real estate agents and mortgage brokers may find the years ahead to be extraordinarily challenging.<\/p>\n

Are You the Collateral Damage of Central Planners?<\/strong><\/h2>\n

When the Fed inflates the money supply it also inflates asset prices, including stocks, bonds, and real estate.\u00a0 When it then yanks the rug, and contracts the money supply, businesses and investors face big losses.\u00a0 And employees become collateral damage.<\/p>\n

According to tech job tracker\u00a0layoffs.fyi<\/a>, there have been more than 200,000 technology jobs lost since the start of last year.\u00a0 What\u2019s more, in 2023 alone, not even one month into the New Year, technology companies have laid off over 67,000 employees.\u00a0 What\u2019s going on?<\/strong><\/p>\n

Right now, technology companies like Meta, Google, Microsoft, and Amazon, are discovering that the world they knew and loved over the last decade no longer exists.\u00a0 As the supply of money has tightened, and the flow of speculative money into technology stocks has dried up, these companies have learned they have far too many employees who produce far too little value.<\/p>\n

Coding senseless applications and widgets may be a viable job when there\u2019s a seemingly endless supply of the Fed\u2019s cheap credit being pumped into financial markets.\u00a0 Take the money away, however, and those jobs are incapable of standing on their own two feet.<\/p>\n

The point is in a centrally planned economy people are continually misled about how they should go about working, saving, and investing for the future.<\/strong><\/p>\n

Just asked the former code cruncher who was RIFed after two decades of Googling all day.\u00a0 They thought they were set for life.<\/p>\n

Instead, whether they know it or not, they\u2019re the collateral damage of central planners.\u00a0 Are you the collateral damage of central planners too?<\/strong><\/p>\n

*\u00a0 *\u00a0 *<\/p>\n

You may not know it.\u00a0 But you could unwittingly be wiped out be the schemes and designs of central planners.\u00a0 One way to avoid becoming their collateral damage is to significantly increase your wealth. \u00a0The decks stacked against you.\u00a0 But it can be done.\u00a0 If you\u2019re interested in learning how, take a look at my\u00a0Financial First Aid Kit<\/a>.\u00a0 Inside, you\u2019ll find everything you need to know to prosper and protect your privacy as the global economy slips into a worldwide depression.<\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nSat, 01\/28\/2023 – 17:30<\/span><\/p>\n

From:Zerohedge<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Are You The Collateral Damage Of Central Planners? Authored by MN Gordon via EconomicPrism.com, The Conference Board \u2013 a nonprofit think tank that delivers cutting…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1122308","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1122308","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1122308"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1122308\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1122308"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1122308"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1122308"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}