Consumer savings are expected to run out by Sept 2023
This might be the turning point for the US economy
A thread 🧵 pic.twitter.com/ZG1EkeDirO
— Bravos Research (@bravosresearch) July 5, 2023
3/ Hard economic data indicates the U.S. has so far avoided a recession, with yearly economic production remaining positive pic.twitter.com/OS44wBg44i
— Bravos Research (@bravosresearch) July 5, 2023
5/ 2 key factors have held up the U.S. economy:
1. High post-pandemic consumer savings
2. Strong labor marketHowever, these are expected to weaken in H2 2023
— Bravos Research (@bravosresearch) July 5, 2023
7/ High savings have helped consumers weather high inflation, tight monetary policy and economic weakening seen in 2022 and 2023
— Bravos Research (@bravosresearch) July 5, 2023
9/ During that period, retail interest spiked towards recessions, as most were expecting an imminent economic deterioration
The term "recession" hit record interest levels in June/July 2022 pic.twitter.com/nuBe2acIEQ
— Bravos Research (@bravosresearch) July 5, 2023
11/ By end of 2022, the savings rate dropped to historic lows as consumers tapped into savings due to a challenging macro environment pic.twitter.com/dnz3nFNoZz
— Bravos Research (@bravosresearch) July 5, 2023
13/ The second factor preventing a recession so far is the robust labor market, with unemployment at historic lows pic.twitter.com/biQKfPvpas
— Bravos Research (@bravosresearch) July 5, 2023
15/ Tight monetary policy has resulted in the deepest yield curve inversion since the 1980s pic.twitter.com/ftdSg8YIvh
— Bravos Research (@bravosresearch) July 5, 2023
Why the Official Data Shows There’s No Recession: Lacalle
Allow me to explain why we have not seen a recession yet despite the collapse in base money supply. We are witnessing the stealth nationalization of the economy. What does this mean? The stealth nationalization of the economy is burdening families and small businesses while leaving large corporations and governments unaffected. The decline in real disposable income, wages, and margins for SMEs is concealed by bloated government spending, masking the private sector recession. The rapid decline in global money supply and rising government indebtedness drain liquidity from the private sector. Central banks’ rate hikes negatively impact families and SMEs, while large corporations remain relatively unscathed. Inflation persists due to governments’ increased consumption of newly created money, maintaining imbalances. The current money supply slump and rate hike path are destroying the backbone of the economy, leading to stagnation without fiscal normalization.