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Economist Who Predicted US Housing Bubble Issues Warning: “We Probably Will Have A Recession Next Year”

Mac Slavo
May 25th, 2017
SHTFplan.com
Comments (68)
Read by 8,221 people

dollardump

There’s really only one thing that has been keeping the US economy from melting down since the last recession. It’s the abundance of cheap money that has been flushed into the economy by the Federal Reserve. Until recently their interest rate was near zero, and has steadily climbed to a paltry 1% over the past couple of years.

This can’t go on indefinitely, because low interest rates tend to create bubbles. However, raising the interest rate isn’t going to have pretty results either, at least according to David Rosenberg.

He’s the chief economist at Gluskin Sheff, a Canadian wealth management fund. He’s also somewhat famous for saying that the US was in the midst of a housing bubble several years before it burst. So it’s safe to say that he knows his stuff.

During a recent interview, he revealed that out of the past 13 recessions, the Fed increased interest rates just before 10 of them. In light of that trend, he stated that we’re probably going to have another recession very soon.

“I think what people should be focused on is the shape of the yield curve,” Rosenberg said. “[Every] single inversion of the yield curve, where short-term rates go above long-term interest rates, has presaged a recession—every single time.

The three times where rate hikes did not lead to recessions, he noted, were due to the Fed stopping short of inverting the yield curve.

At the moment, Rosenberg suggested, “the yield curve is flat enough that if the Fed raises rates four more times, that’s all it takes. We probably will have a recession next year.

Looking at the dot plots shows that more than 50% of all FOMC [Federal Open Market Committee] officials are ready to raise rates four more times going into 2018, so “the risk isn’t necessarily high right now, but it is rising.”

This certainly won’t be an ordinary recession. For starters, the vast majority of the country hasn’t even recovered from the last recession. Our economy is like a wounded animal. It can’t take much more damage.

But it’s going to. The inflationary practices of the Federal Reserve has spawned multiple bubbles. And once they cut off the supply of easy money, those bubbles are going to pop. It’ll be like cutting off a junky. The results will be messy, and nothing will be safe. Bonds, stocks, real estate, and even the dollar will take a dive. The only asset that will be left standing is precious metals.

And in all likelihood, President Trump will take the blame for this mess. Everyone will forget that it was years of abysmal fiscal policy that got us into this situation.

Unfortunately, there is only one way out. Our country is going to have to bite the bullet, and endure a protracted economic correction that is probably going to hollow out our standard of living. In short, things are going to get a lot worse before they get better.

Read More:

‘The Everything Bubble’: Why The Coming Economic Collapse Will Be Even Worse Than The Last

Peak Stock Market Absurdity: “We Are In a Bubble Of Epic Proportions”

Multiple Bubbles Are Going To Bring America to Its Knees: “The Warning Signs Are There”

Pressure: “Culpable For Our Bubble Economy And Trying To Shift Blame Before A Collapse”

What Life Will Be Like After An Economic Collapse: “Things Just Gradually Get Worse…”

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Author: Mac Slavo
Views: Read by 8,221 people
Date: May 25th, 2017
Website: www.SHTFplan.com

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68 Comments...

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  1. More about economic collapse.

    I was thinking about an article regarding items for exchange other than gold, silver, or Bitcoin. I have something in my mind that is light and will fit into a wallet. Guess what’s in my wallet. What’s in your wallet ??

    __

    • CHoward it feels says:

      Ice cream, we should eat it while we can!

    • durangokidd says:

      “Unfortunately, there is only one way out. Our country is going to have to bite the bullet, and endure a protracted economic correction that is probably going to hollow out our standard of living.”

      Actually, no. 🙂

      The nation is ALREADY enduring a protracted economic correction that has hollowed out the standard of living of most of Americans; as the middle class has loss more than 40% of their wealth. The hollowing out of the American Economy has been well documented by Michael Snyder.

      You can’t squeeze blood out of a turnip.

      Any gains in housing values (mostly East and West Coasts) which represent the bulk of the “wealth” of the middle class in the “recovery” will disappear along with the dozens of underfunded public pensions.

      These are basically paper losses for those affected.

      The current “recovery” numbers are SKEWED by the wealth effect provided to the Uber Rich with low interest rates over an extended time frame. These investors will lose a sizeable portion of the current values in their equities positions, but will mitigate their losses by selling short.

      The SHARP correction will “justify” a tremendous tax cut across the board, after the first of the year, but corporations will benefit the most. Trump’s trillion dollar infrastructure development plan will jumpstart the economy after the crash in September.

      By September of next year, the TRUMP ECONOMY will be underway….. just in time for November elections. Yeah, you heard it here first. 🙂

    • In case you guessed sewing needles, you are right.

      People who don’t prep may or may not have sewing tools. For those who don’t, I know when and if we really do experience a true depression, recession, and/or hyperinflation; there will be many more people wanting to sew and especially repair torn clothing. I intend to carry packets of needles when dollars are worthless. They are light and easy to fit in a credit card pouch. Perfect item for barter.

      Condoms are another good item to use for barter.

      Any type of drug (aspirin or ibuprophen still in paper packets).

      Condiments packets – or – sugar packets – or – salt & pepper packets – would work.

      Any other ideas for something small and lightweight that you could put in a wallet and use as an exchange instead of money?

      __

      • Justice says:

        B from CA, like you said, Condoms are valuable and portable. No matter what people will always want to have coitus.

        • Justice says:

          B from CA, thanks for the heads up, as it were.

          I just went on Amazon and purchased Condoms. You got me thinking, just because I don’t want to have sex anymore doesn’t mean that other people won’t.

          Since, I believe we will soon be selling citizen ship to the Chinese I made sure I got the extra-small.

          On that note, I bid you all a fond farewell for the evening!

          • watching and waiting says:

            Condoms can also be used to fit over the barrel or flash suppressor of your favorite or no so favorite long gun in inclement weather, keep water out of the barrel.

            Condoms can also be used to cover a wound on a finger, thumb, toe so the ointment on the wound can do its job.

            Need to secure the condom so that it won’t slip off with a piece of tape,rubber band. Prick little holes so that some air can still get to the skin: Since they are supposed to be air tight and leak resistant.

            Amazing what yo can do with latex.

          • BlackMoe says:

            Just don’t mix those needles and condoms together. That could really ruin one’s day.

      • PO'd Patriot says:

        “We’ll probably have a recession next year”. Yeah, and Anna Nichole “probably” married for “Love”. Trouble is, when did we come out of the last one?

      • Archivist says:

        I stored needles, including upholstery needles, back in 1998.

        • Traitor Hator says:

          I put polyurethane glue on all seams expecialy boot seams . It keeps the threads from pulling. Gorilla glue or any silicon cauk. I like hook needles the best. See how many wars make shoes so valuable. Small feet are a definate advantage. You can wear any size.

      • Anonymous says:

        Just make sure you don’t put the condoms next to the needles ☺!

      • MS 19 says:

        B from CA: Condoms? Is that what you used for barter in prison?

        • Mountain Trekker says:

          While bow hunting with a buddy some 40 years ago he sliced his thumb on a broadhead and he had a bandaid in his wallet, sure saved the day. Ever since then I have always carry one or two in my wallet, they don’t take up much room but sure can come in handy. Trekker Out. Semper Paratus!

          • YellowPokaDotBikini says:

            Bandaids are made cheap. Unless they are the cloth type with good adhesive. You are better off wrapping a few twists of duct tape on an old credit card and using duct tape to cover and close a bleeding finger. The regular bandaid will fall off if it gets wet or from your sweat. You can cut part of the tail of your shirt to wrap your finger first to cover the wound, then apply the duct tape over the cloth. You will be good to go.

      • tbone says:

        I am not buying condoms from anyone who carries needles in his wallet!!!!

      • laura ann says:

        B from CA: small boxes of 22 ammo (plastic oblong boxes fit in pockets or handbags. Boxes of Altoid mints, other ammo (10 or 15) in zip lock bags, stevia packets, pocket knives, pens, etc.

  2. buttcrackofdoom says:

    i have been predicting a collapse for 12 years plus now. i hope he’s better at it than I am!

    • Justice says:

      Take heart ButtcrackofDoom, in Economics 10 years is often the smallest unit of measurement.

      We all know that it wont come down until they want it to come down. But the article correctly states, “During a recent interview, he revealed that out of the past 13 recessions, the Fed increased interest rates just before 10 of them. In light of that trend, he stated that we’re probably going to have another recession very soon.”

      Keep an eye on interest rates. If and when they continue to rise it will slam the breaks on the economy. It really is that simple. (The Bond markets will lead the way in the next crash. Or as we used to say at the SEC the next “Market Break”)

      All asset classes will collapse. How they respond will determine if we have hyperinflation.

    • Borodino says:

      Collapse happened sometime ago for the folks who camp out near Angel Stadium off the 57. Collapse is here, it’s now.

      • buttcrackofdoom says:

        that section of freeways is called the “orange crush”, where several freeways come together. i ride the 27 mile santa anna wash bike trail every year, and maybe 7 or 8 years ago i started noticing every single lane under that overpass is occupied by a homeless person…both ends of that 10 wide overpass…..but NOW, they aren’t even hiding anymore. as you drive the freeways in so cal, sometimes you can see DOZENS of camps….right out in plain sight. where i live in victor valley, when i go on a bicycle ride of 20 miles, i GUARANTEE you i can point out over a hundred homeless people…..yet we have simps here on shtfplan that INSIST that everything’s OOOHHHHKAY.PFFT!

        • Nomadic says:

          Illegal immigration has certainly been cause for a much tighter housing market.
          When you have multiple families cohabiting under the same roof .. it surely presents a challenge for those trying to compete individually in the same market

          ht tps://m.youtube.com/watch?v=RINuXucJHVA

    • Nailbanger says:

      Well bud, at least you havent been walking around San Bernadino with a sandwich board yelling about it for 12 years,,,,

  3. Grog says:

    FOMC is expected to raise the interest rate two more times this year, and will “monitor inflation”.

    http://www.politico.com/story/2017/03/federal-reserve-raises-interest-rates-2017-236087

    The economy could crash in two weeks, we don’t know. And when this happens, most people will be up the creek, because they’ve not cared about current events.

  4. Archivist says:

    “The only asset that will be left standing is precious metals.”

    How about groceries, water, ammo, etc.?

  5. Weapon says:

    There won’t be a collapse until Trump is no longer in office. He won’t shore up the elite’s assets or bail them out, they won’t pull the plug until he is gone and they have a crony back in office. Hit your knees in prayer, God in his grace and mercy just gave all us undeserving idiots more time to prep, spiritually and physically.

  6. MOCountryBoy says:

    I read a minimum of 10 stories a week on the economic collapse and have been reading them for 10 years. Let’s do this finally!

  7. ruckus says:

    Only a recession. Dagnamit.

  8. Nailbanger says:

    Recession?
    Who cares about a recession, i want to see a collapse that makes the great depression look like a vacation

    • MOCountryBoy says:

      My thoughts exactly!

    • BlackMoe says:

      That is precisely what this country needs. A big CTRL-ALT-DEL reboot of the whole system.

    • rellik says:

      Many times on this site I have wished for a depression, I don’t think we will see a hyperinflation, as we produce too much “stuff” and we could live without imports.
      Housing bubble is real and I hope it bursts. My property taxes go up guaranteed 3% per year minimum, because the law limits the raise to 3% maximum. My assessment is so much lower( about a third) of market value, it will take years for them to catch up and despite all odds property values keep going up here. I don’t know of anybody locally living here that can afford my place were I to sell it. That is a ridiculous situation.

      • Justice says:

        Rellik, I totally agree that property taxes will increase dramatically. That is why I want out of the State of Maryland. In fact, I wonder if it’s wise to own real estate at this time.

        I believe we are living in Bizzarro world, where up is down and bad is good, consequently when Bush said he wanted an “ownership society” (everyone to own a home) what they really wanted is for no one to own property. If you notice, ever since he made that statement, home ownership percentage have gone down. I read somewhere that they are at the lowest level in decades.

        • Justice says:

          More example of “Opposite World” in case anyone doubts the accuracy of my theory.

          Obama was going to be the “Great Uniter” but has left the country the most divided it’s been since the Civil War.

          Trump will “Make America Great Again” … we are DOOMED.

        • rellik says:

          It is always wise to own real estate. Debt free real estate.
          I have 5 acres, two houses, a large shop, and out buildings in a very very rural part of Hawaii. I have food, water, cesspool, plenty of wood and soon to be totally off grid, all solar powered. I am prepared.
          I don’t need to Bug out. I recognize most people cannot do what I have earned, life can be very tough. But always have some real estate that you own, so no matter what happens you will have a place. It is like when fighting a group, if you can’t run away, you back into a corner, it gives you an edge.

          • Rick says:

            Great place to be. I also have 5 acres in rural hawaii totally off grid and self sufficient. Mostly people laugh when you say one of the best BOL’s is Hawaii. 2500 miles from large population centers, good year round temps and although firearms laws aren’t the greatest. I can own pretty much everything I need and more. Only bad place would be Oahu.

            • rellik says:

              Most people ignore the firearm laws. Only stupid white Democrats register and most of them are on Oahu, everybody else has figured it out. Local police make it almost impossible to register your guns when you move here.
              They only do one per day, if at all.
              To all you mainland types, In Hawaii all guns need to be registered. You need to apply to the police for a permit to buy a gun. Nobody gets a concealed carry permit, even though the law permits it. You can’t be sued if you use a gun in self defense on your property and place of business as long as you did not start the fight.
              You can open carry on your property, place of business, place of Sojourn, or when out hunting, when you have a license. You can only hunt on Weekends.
              Hawaii is the ultimate BOL, but you will find it very expensive, and it takes years to get “accepted”.
              It has some real screwy laws. I’m hoping the Hudson bill passes.
              I’ll get a CCW from WA state and wave it in the face of my local police.

              • YellowPokaDotBikini says:

                The price of food in Maui is about twice the price than on mainland USA. From what I saw in grocery stores on a vacation trip. You live in Hawaii or on any island you better have about 2-4 years food supply put back. When the ships and planes stop arriving, all Hell will break loose. Pineapples are imported from Viet Nam cheaper than they can grow them in Maui. Still growing sugar cane I see. And the fish supply around the Islands is greatly over fished too. Did not see much of any game fish when scuba diving. Just ornamental fish mostly. And I did do a deep dive not just shallows. Lots of turtles, but I am sure they are protected.

          • Justice says:

            Relik, I hear what you are saying but I recently bought a good cot to sleep on just in case.

            My relatives will be unable to say we would love to take you in, but we don’t have a spare bed. I don’t need no sticking bed, I have my trusty cot!

  9. Anonymous says:

    What most don’t realize is we went over the “fiscal cliff” in 2008. The fed and the government has been playing economic parlor tricks to hide it. Basically we went over the cliff in 2008 but we just haven’t hit the ground …yet.

  10. Tom T says:

    What most don’t realize is we went over the “fiscal cliff” in 2008. The fed and the government has been playing economic parlor tricks to hide it. Basically we went over the cliff in 2008 but we just haven’t hit the ground …yet.

  11. Economist predicts a recession next year? No. According to the true unemployment numbers, we are in a depression already. And we have been for several years. Do you think the government will make it get better?

    • Copenhagen says:

      If the real unemployment rate was released it would cause panic.The unemployment rate is based off of those currently receiving unemployment benefits and does NOT include those who’ve exhausted their benefits or those that don’t have a job..It would be a safe bet to say the real unemployment rate is at least 40% here in the US if not higher..Pay attention next time your standing in line at the grocery store and notice how many shoppers swipe their EBT card when buying groceries..In my area for every 2 people that pay cash or credit card,there’s 8 that swipe their foodstamp card..Don’t believe what your told on TV,radio,etc.,a better indicator of how high unemployment really is is to simply look around you..

  12. Summit Defense says:

    Check out our channel. We will be covering aspects of survival soon.

  13. Traitor Hator says:

    O when sitting around a camp fire with a nylon goose down coat and the Sparks are burning little holes in it . Some silicon glue and little patches might be good?

  14. Aurelius says:

    Rosenberg,….that’s Irish isn’t it???

  15. RICH99 says:

    Next year …..hahahahahahaha …..these articles are getting ridiculous …. every year it’s NEXT YEAR

    • Justice says:

      Rich99, what is different now is that interest rates are rising. That IS a game changer because of the astronomical levels of debt.

      DO NOT dismiss this change of the economic landscape. In this environment interest rates are the MAIN/ONLY variable that matters.

  16. Free stuff (money, housing, health care, etc) is the free chese in the mouse trap. When the economy crashes it will be the trap door slamming all around you. Then to the FEMA camps you go.

  17. NOW it’s NEXT YEAR, what happened to this YEAR, this August-Nov?

  18. Gary says:

    Oh look! What’s that? Another “experts who supposedly predicted thus and such predicts again.

    It is just complete B’S. You know what we might ha e next year also? Some snow, some rain,partly cloudy, partly sunny skys too.

    This just such B.S. and I’m sick of it. The truth is you have been talking out of your rear for ever. Blah blah blah

  19. Brian says:

    The US economy feels like a skyscraper built by unskilled labor without engineering plans using materials from condemned buildings that have been torn down. Keep predicting a collapse and eventually you will be right.

  20. smooze says:

    Ya’ll said that shit last year….

  21. 2isone says:

    Every once in awhile, check out downdetector… SNAP/EBT complaints. Eye opening expose’ of complete dependence on the government dole.

  22. Mark Tinley says:

    This again, guys? They say this every year and nothing happens. The whole system is an illusion propped up by more illusions. Its never going to end unless a cataclysm strikes or the powers that be finally decide that it’s time to thin the herd. All of this is scripted. We have been placed in an alternate reality by the media and other “authorities”. We tend to believe all these experts who don’t even understand how the ruse actually works. They have spent generations and many billions of dollars putting the typical “murrican” into a hypnotic state. Nobody knows what’s real or what isn’t any more. Do you know the real reason so many school systems were promoting common core cirriculum? Do you know why they gave us all of these modern conveniences to pacify us? Friends, the rabbit hole goes much deeper than most people are willing to go.

  23. WhereEaglesDare says:

    Next year again? Wow…………….

 

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