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Is The U.S. Economy On The Brink Of Yet Another Recession?

Francesco Abbruzzino, The Uncensored Report, LLC

 

Memories of the very painful recession of 2020 are still quite fresh, and now we are being warned to brace ourselves for the possibility of yet another recession in 2022.  Unfortunately, a lot of things are going wrong all at the same time.  The Federal Reserve and other global central banks are likely to continue to raise interest rates in an attempt to bring inflation down, a major war has erupted on the other side of the globe, and we are simultaneously facing an epic global energy crisis and an epic global food crisis.  The Biden administration had been promising us that better days were ahead, but instead it appears that a tremendous amount of economic trouble is on the horizon.

 

If you don’t want to take my word for it, perhaps you will believe Moody’s Analytics chief economist Mark Zandi

The risks of recession have risen quite considerably… With Russia invading Ukraine, the spike in oil and other commodity prices, inflation expectations have taken off here and the Federal Reserve, as we could see from [Jerome] Powell’s speech yesterday is now on high alert.

 

That certainly doesn’t sound good.

 

And legendary investor Carl Icahn just told CNBC that he believes that what we are heading into could be “a recession or even worse”

 

Famed investor Carl Icahn said Tuesday an economic downturn could be on the horizon and he is loaded on protection against a steep sell-off in the market.

 

“I think there could very well could be a recession or even worse,” Icahn said on CNBC’s “Closing Bell Overtime” to Scott Wapner. “I have kept everything hedged for the last few years. We have a strong hedge on against the long positions and we try to be activist to get that edge… I am negative as you can hear. Short term I don’t even predict.”

 

The Federal Reserve flooded the system with trillions of fresh dollars to help pull us out of the last recession, and that is one of the factors that has created a tsunami of inflation.

 

Now the Fed is under pressure to get inflation under control, but at the same time the U.S. economy is slowing down once again.  CNBC’s Jim Cramer is convinced that Fed chief Jerome Powell has been “dealt an insanely bad hand”

 

“Powell’s been dealt an insanely bad hand. So of course he’s fallen behind. Hence why he’s said that the Fed will move with alacrity from here on out,” the “Mad Money” host said. “So feel free to blame him for not seeing what was coming. If he has to do a [50 basis point interest rate hike], he will.”

 

“Never forget that Powell’s been asked to do the impossible here: Figure out how fast to raise interest rates when so many things should be slowing the economy and cooling inflation naturally, yet nothing has worked out the way we expected,” he added.

 

Perhaps Powell is holding a bad hand.

 

But to a very large degree it is a hand of his own making.

 

The Fed has gone absolutely nuts over the past two years, and now we are feeling the consequences on a daily basis.  For example, on Tuesday the average price of a gallon of gasoline in Los Angeles crossed the six dollar threshold

 

Los Angeles on Tuesday became the first major city in the U.S. to reach an average gas price of $6 or more.

 

As the price of gasoline shoots higher, criminals are increasingly drilling into gas tanks in order to steal fuel.  Here is an example from Ohio that I came across earlier today

 

The site user wrote: “My friend went to get into his work truck this morning and found that someone drilled a hole in the gas tank and stole all of his gas.”

 

Commenters suggested that the thieves drilled the plastic tank because he had a tamper-proof fuel cap.

 

The man could be left with a bill of $2000 to $4000 to replace the tank.

 

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