Recession Is On The Way, Says Economists

I hate to be the bearer of bad news, but it looks like a recession is inevitable and on the horizon.

Economy :
According to veteran investor and bitcoin bull Michael Novogratz, who is also founder and chief executive officer of Galaxy Digital Capital Management LP, not only is the economy headed for a substantial downturn but a “fast recession.”

“The economy is going to collapse,” Novogratz told MarketWatch. “We are going to go into a really fast recession, and you can see that in lots of ways,” he said in an interview just before the Federal Reserve announced its biggest interest-rate hike in nearly 3 decades.

“Housing is starting to roll over. Inventories have exploded. There are layoffs in multiple industries, and the Fed is stuck,” he said, with no other choice but to “hike [interest rates] until inflation rolls over.”

We can thank the coronavirus pandemic for the current state of the economy and likely recession. The 18-month “shutdown” due to COVID has left the job market, housing, stocks, and more in a complete mess.

Stock prices are down more than 20% from their peak at the beginning of the year. Rental cars are nearly non-existent or at a cost of $100 per day due to low inventory and the unavailability of a required chip (made in Ukraine) for new vehicles. Gas is $5 or more a gallon. Groceries are getting low again. Baby formula and even tampons have both seen a shortage. Now, experts warn that we should not expect any of this to get better anytime soon.

“But with inflation sitting at a four-decade high, stocks and bonds falling, crypto on the verge of an all-out crash, the war in Ukraine raging on, and the Federal Reserve aggressively raising interest rates, this is one of the most difficult times in history for economic forecasters,” said Will Daniel of Fortune Magazine.

Or, in other words, strap in and prepare yourselves for the inevitable bumpy ride.  

So, what should you do to prepare for a possible recession? Here are a few key tips:

• If you’re waiting around to get a job, get one now with a stable employer. There are two openings for every person looking for work, but those openings will disappear quickly in a recession.

• Reduce your credit card, auto-loan, and payday loan debt. The Fed’s interest rate hikes are trickling down, and mortgage rates are nearing 6%. This is a bad time to borrow money and a lousy time to relocate.

• Stop spending and start saving.

• Do not panic sell if you have retirement savings invested in stocks and bonds. Ride the wave for as long as you can.

OK WASSUP! discusses Economic News:
Economists say a recession is on the way!