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Though the data has pointed to the USA already being in a recession, the head of the US Federal Reserve thinks he may help cause a recession:

Powell’s stark message: Inflation fight may cause recession

September 22, 2022

WASHINGTON (AP) — The Federal Reserve delivered its bluntest reckoning Wednesday of what it will take to finally tame painfully high inflation: Slower growth, higher unemployment and potentially a recession.

Speaking at a news conference, Chair Jerome Powell acknowledged what many economists have been saying for months: That the Fed’s goal of engineering a “soft landing” — in which it would manage to slow growth enough to curb inflation but not so much as to cause a recession — looks increasingly unlikely. …

“The chances of a soft landing,” Powell said, “are likely to diminish” as the Fed steadily raises borrowing costs to slow the worst streak of inflation in four decades. “No one knows whether this process will lead to a recession or, if so, how significant that recession would be.”

“We have got to get inflation behind us,” Powell said. “I wish there were a painless way to do that. There isn’t.”

Powell’s remarks followed another substantial three-quarters of a point rate hike — its third straight — by the Fed’s policymaking committee. https://apnews.com/article/inflation-jerome-powell-unemployment-government-and-politics-96092b0d276a604b3c1e83f44b8e2ec9?utm_source=homepage&utm_medium=TopNews&utm_campaign=position_04

Chairman Powell’s claim that there is not “a painless way” to get inflation behind us is not quite the case.

The government of the USA and various of its states could easily change rules to allow more drilling of oil off the Gulf and California coasts, as well as in Alaska, plus open the Keystone pipeline. That would result in a massive reduction in the price of oil and fertilizers, plus would also reduce transportation costs. The governments could also provide incentives for more food production, which would lower food costs.

Instead, the Fed plan is to increase interest rates (which have been artificially low) in an effort to slow down the economy and reduce wage demands.

Bloomberg put out the following this past Summer:

Is the US in a Recession Yet? What You Need To Know and How To Prepare

July 14, 2022

The dreaded R word has been thrown around a lot recently. … recession …

Here’s what you need to know about recessions and how to prepare:

What’s a Recession?

The official definition varies. Some define a recession as two consecutive quarters in which output declines. The National Bureau of Economic Research is technically in charge of declaring recessions, which it defines as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”

The committee meets in secret and is comprised of economists and academics, or “eggheads” according to one past member. It usually takes them about a year to decide on a recession call.

The length of a recession can vary widely. For instance, the pandemic-fueled recession in 2020 lasted only two months, while the Great Recession went on for about 18 months.

Are We In One?

It depends who you ask. …

For those concerned about layoffs, try to build up emergency savings of least three to six months of living expenses, experts say. If you do experience a job loss, remember you have options — there are still lots of openings.  …

What Else Can I Do?

The most common advice from financial experts: Don’t panic. …

Noah Damsky, a financial planner at Marina Wealth Advisors, recommends some overall “belt tightening.” Cutting down on discretionary expenses and boosting savings is always a good idea, but especially so when a recession might be coming. https://www.bloomberg.com/news/articles/2022-07-14/is-the-us-in-a-recession-how-to-prepare-for-economic-downturn

Notice also something from Fortune:

Prepare for a ‘long and ugly’ recession, says Dr. Doom, the economist who predicted the 2008 crash

September 21, 2022

Nouriel Roubini—a New York University professor and the CEO of Roubini Macro Associates—whose prescience of the 2007 and 2008 housing market crash earned him the nickname Dr. Doom—seems to have chosen a side.

In an interview with Bloomberg this week, Roubini said that a recession is likely to hit the U.S. by the end of 2022 before spreading globally next year, conceivably lasting for the entirety of 2023.

“It’s not going to be a short and shallow recession; it’s going to be severe, long, and ugly,” Roubini said.

The debt problem

To fend off rising U.S. inflation, the Federal Reserve has implemented an aggressive series of interest rate hikes to put the brakes on the economy. The goal is to engineer a soft landing for the economy, where inflation returns to the Fed’s target 2% annual rate, without triggering a prolonged economic downturn or significant rise in unemployment.

But with the current economic climate, the Fed’s soft landing goal is “mission impossible” according to Roubini, who sees the rapid rise in both corporate and government debt over the past year as a damning indicator.

During the 2008 recession, Roubini argued that large amounts of consumer and corporate debt had been mismanaged and neglected by credit agencies and the federal government, contributing to the downturn. In his interview with Bloomberg, he noted that very similar threats are facing the economy today. …

The “long and ugly recession” will also devastate financial markets, Roubini warned.

Worst-case scenario

But despite interest rate hike after interest rate hike, Roubini said that inflation in the U.S. could persist due to rippling supply-chain shocks from the pandemic, the ongoing consequences of the Ukraine war, and China’s zero-COVID policy continuing to slow economic activity in the country.

That combination of low economic growth and unyielding inflation could lead to a global worst-case scenario of 1970s-style stagflation, Roubini warned, where prices remain high but economies stagnate anyway. Institutions including the World Bank have warned multiple times this year that a return to 1970s stagflation remains a serious concern for the global economy. https://fortune.com/2022/09/21/long-ugly-recession-dr-doom-nouriel-roubini/

At over $30.9 trillion in debt, the USA has a major problem–and increases in interest rates make that debt raise even faster. And, by the way, the “Worst-case scenario” is much worse than Fortune is reporting about.

Notice also:

September 21, 2022

Federal Reserve rate hikes will add trillions to the national debt, according to an analysis by the Committee for a Responsible Federal Budget.

The Fed delivered another 75-basis point rate-hike during its September FOMC meeting this afternoon and made it clear that rates will be ‘higher for longer’ to fight persistently high inflation. According to the Committee for a Responsible Budget (CFRB), rate hikes will add another $2.1 trillion to the national debt over the next decade.

The debt current stands at $30.9 trillion.

Every increase in interest rate raises the federal government’s interest expense. So far in fiscal 2022, the US Treasury has forked out $471 billion just to fund the government’s interest payments.

To put that number into context, at this point in fiscal 2021 the Treasury’s interest expense stood at $356 billion. That represents a 30%  year-on-year increase. Interest expense ranks as the sixth largest budget expense category, about $250 billion below Medicare. If interest rates remain elevated or continue rising, interest expenses could climb rapidly into the top three federal expenses. …

Interest expense isn’t the only problem the Fed’s inflation fight creates for the US government. Along with raising rates, the Fed is shrinking its balance sheet. That means it’s not buying Treasury bonds. The federal government needs the central bank to continue buying Treasuries in order to prop up the market and enable its borrowing. Without the Fed’s intervention in the bond market, prices will tank, driving interest rates on US debt even higher.

Something has to give.

The Fed can’t simultaneously fight inflation and prop up Uncle Sam’s spending spree. Either the government will have to cut spending or the Fed will have to keep creating money out of thin air in order to monetize the debt. https://schiffgold.com/key-gold-news/interest-rate-hikes-will-add-trillions-to-national-debt/

That said, related to recession, Michael Snyder posted the following:

5 Things That You Should Start Doing Immediately To Prepare For The Severe Recession That Is Ahead

Do you remember what economic conditions were like in 2008 and 2009? Well, what is ahead of us is likely to be significantly worse. …

Well, the following are 5 things that you can do right now to get prepared for the severe recession that is ahead…

#1 Make Sure That You Have A Source Of Income

Last year, if you didn’t have a source of income it wasn’t that big of a deal.  … But now things are changing very quickly.  The number of job openings is plunging, and layoff announcements have started to spike. …

#2 Build Up Your Emergency Fund

When a recession hits, it is extremely important that you are able to continue to pay the bills no matter what happens. …

Now is the time to build up a very large emergency fund. Cutting your spending will help you to do that. …

#3 Get Out Of Debt

After you have built up your emergency fund, getting out of debt should be a high priority. …

#4 Stock Up On Essentials Now

Prices are going to keep going higher.

So that means that the things that you are going to need during the months ahead will not be any cheaper than they are right now.

Don’t spend money on unnecessary items, but for the essentials that you use on a regular basis it is a good idea to stock up right now while you still can.

#5 Maintain A Positive Attitude

This is so important.

Have you ever known anyone that was truly successful in life that had a negative attitude about everything? 07/13/22 http://endoftheamericandream.com/5-things-that-you-should-start-doing-immediately-to-prepare-for-the-severe-recession-that-is-ahead/

Yes, we should take physical steps and have the right attitude. Despite how the world views debt, it is good not to be in debt.

Nationally, more could be produced.

Yes, if there is more supply this would help reduce the inflation rate as well as generally improve the economies of those that produce more.

However, the Bible points to food shortages and food price inflation:

5 When He opened the third seal, I heard the third living creature say, “Come and see.” So I looked, and behold, a black horse, and he who sat on it had a pair of scales in his hand. 6 And I heard a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine.” (Revelation 6:5-6)

The prophecy of the third horseman of the Apocalypse is starting to come to pass.

If government leaders believed the Bible, they would be willing to take a lot of steps that they seemed to have overlooked.

That said, related to inflation, the Continuing Church of God (CCOG) put together the following video:

In the world, we see a lot of economic uncertainty.

There are recessions, sometimes stagflation, disasters, weather issues, wars, and even severe depressions that affect income and physical needs.

One can lose a job at almost anytime. There could also be health problems or even the death of the main income provider.

But there are things you can and should do.

Notice the following:

1 A certain woman of the wives of the sons of the prophets cried out to Elisha, saying, “Your servant my husband is dead, and you know that your servant feared the Lord. And the creditor is coming to take my two sons to be his slaves.”

2 So Elisha said to her, “What shall I do for you? Tell me, what do you have in the house?” And she said, “Your maidservant has nothing in the house but a jar of oil.”

3 Then he said, “Go, borrow vessels from everywhere, from all your neighbors — empty vessels; do not gather just a few. 4 And when you have come in, you shall shut the door behind you and your sons; then pour it into all those vessels, and set aside the full ones.”

5 So she went from him and shut the door behind her and her sons, who brought the vessels to her; and she poured it out. 6 Now it came to pass, when the vessels were full, that she said to her son, “Bring me another vessel.”

And he said to her, “There is not another vessel.” So the oil ceased. 7 Then she came and told the man of God. And he said, “Go, sell the oil and pay your debt; and you and your sons live on the rest.” (2 Kings 4:1-7)

Now, while the above involved a miracle, the concept of paying off debt and having savings is something God’s people should strive to do.

Notice also:

7 The rich rules over the poor,
And the borrower is servant to the lender. (Proverbs 22:7)

Instead of being in debt, God’s people should strive to save:

But they should also be givers and rely on God’s blessings:

8 “Will a man rob God? Yet you have robbed Me! But you say, ‘In what way have we robbed You?’ In tithes and offerings. 9 You are cursed with a curse, For you have robbed Me, Even this whole nation. 10 Bring all the tithes into the storehouse, That there may be food in My house, And try Me now in this,” Says the Lord of hosts, “If I will not open for you the windows of heaven And pour out for you such blessing That there will not be room enough to receive it. 11 “And I will rebuke the devourer for your sakes, … (Malachi 3:8-11)

4 Let each of you look out not only for his own interests, but also for the interests of others. (Philippians 2:4)

6 But this I say: He who sows sparingly will also reap sparingly, and he who sows bountifully will also reap bountifully. 7 So let each one give as he purposes in his heart, not grudgingly or of necessity; for God loves a cheerful giver. 8 And God is able to make all grace abound toward you, that you, always having all sufficiency in all things, may have an abundance for every good work. 9 As it is written:

“He has dispersed abroad,
He has given to the poor;
His righteousness endures forever. (2 Corinthians 9:6-9)

Yes, we need to also consider helping others.

And all should heed the words of Jesus:

25 “Therefore I say to you, do not worry about your life, what you will eat or what you will drink; nor about your body, what you will put on. Is not life more than food and the body more than clothing? 26 Look at the birds of the air, for they neither sow nor reap nor gather into barns; yet your heavenly Father feeds them. Are you not of more value than they? 27 Which of you by worrying can add one cubit to his stature?

28 “So why do you worry about clothing? Consider the lilies of the field, how they grow: they neither toil nor spin; 29 and yet I say to you that even Solomon in all his glory was not arrayed like one of these. 30 Now if God so clothes the grass of the field, which today is, and tomorrow is thrown into the oven, will He not much more clothe you, O you of little faith?

31 “Therefore do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ 32 For after all these things the Gentiles seek. For your heavenly Father knows that you need all these things. 33 But seek first the kingdom of God and His righteousness, and all these things shall be added to you. (Matthew 6:25-33)

4 “It is written, ‘Man shall not live by bread alone, but by every word that proceeds from the mouth of God.'” (Matthew 4:4)

Yes, we need to seek first the Kingdom of God. And the word of God says we should ttry not to be in debt, we should try to have savings, and we are to be givers.

All of these should be part of our preparations.

As far as other physical steps, you can see our article: Physical Preparation Scriptures for Christians.

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This entry was posted on Thursday, September 22nd, 2022 at 7:00 am and is filed under Prophecy.

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