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Numerous warning signs indicate the US economy is heading for a recession, just as Gen. Michael Flynn warned last month.
For starters, rising inflation due to a major rise in the money supply the past two years is starting to take its toll on the economy, especially as wages haven’t kept up.
“The massive monetary pumping by the Fed has likely undermined the pool of savings already. Consequently, the economic growth rate will likely weaken ahead,” writes Frank Shostak of the Mises Institute.
In other words, inflation has weakened savings, leading to a weakness in consumer’s purchasing power.
Market analyst Brandon Smith believes the Federal Reserve and the government’s response to rising inflation will make things worse:
Accelerated price spikes in necessities including housing and food will generate mass poverty and homelessness. There is no chance that wages will keep up with costs. The government might step in with more stimulus to help major corporations and businesses increase wages, but this would basically be the beginning of a universal basic income (UBI, or free money for everyone) and it would only cause more dollar devaluation and more inflation. They could try to freeze prices as many communist regimes have in the past, but this only leads to increased manufacturing shut downs because the costs of production are too high and the profit incentives too low.
Additionally, China has spent years creatively hiding debt, but now cracks in Chinese markets are growing, starting with China’s Evergrande real estate crisis.
“Originally brought to light by the then-Fitch analyst, Charlene Chu, China had long been hiding vast quantities of debt that it had accrued through a multitude of state-related businesses through a range of difficult-to-examine schemes, most notably back then ‘wealth management products’ (WMPs),” writes Simon Watkins of OilPrice.com. “…In practical terms, they were an amalgam of layers and layers of liabilities built upon the same underlying assets, much as was seen with subprime asset-backed securities that the Western banks had in 2007/08 in the lead up to the onset of the Great Financial Crisis.”
During a Nov. 13 interview with Alex Jones, Gen. Flynn warned the global economy was facing a major correction:
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