Fed Chair Admits Bombshell

July 1, 2022

Leyendecker Executive Search

July 1, 2022

Ask not what your country can do for you—
ask what you can do for your country.

THOUGHTS FROM DOUG

It won’t surprise me if, in a quarter or two from now, the official recession counters look back on today and tell us we were already in a recession.

All inflation is transitory. What matters is the term of time. At the same time, all recessions are transitory. Again, what matters is the term of time.

Over the last 40ish years, we’ve been able to counterbalance any rise in commodity prices with the lower wage costs that came with globalization. But the era of ever-lower wage costs has come to an end.

While the G7 meetings were taking place, Argentina and Iran applied for BRICS membership. The BRICS include Brazil, Russia, India, China and South Africa. Are we seeing the future of trade here? Is it a coincidence that BRICS countries are not leading the movement to destroy hydrocarbons?

If the G7 significantly increases its cost of energy in order to eliminate hydrocarbons and the BRICS+ do not, then who has the economic advantage in goods production and transportation?

Let’s say the G7 applies a carbon tax on products that come from countries not toeing the climate change line. Are there products the BRICS+ countries need to sell us, or will they be fine just trading among themselves?

Prior to the 2008/2009 recession, the price of commodities like oil and gas went sky high. At the time, everyone thought there was a commodity shortage. Crude oil hit a peak of $140 in June of 2008. But six months later, in January of 2009, oil had fallen to around $40. Could something similar be happening today? Are investors again moving from financial assets to hard assets in anticipation of recession, or is there really a commodity shortage this time?

Given that globalization is starting to fall apart, one country in particular, and more than any others, seems to be in the catbird seat of future economic leadership and success. This country has a wealth of natural resources, leads the world in innovation and has a solid work ethic. If only their government would stop trying to run everything. Can you guess this country?

When there’s no common enemy, an enemy will be found from within. Up until Russia invaded Ukraine, Western countries were infighting. Now Russia has pulled the West back together with common purpose. Now NATO is bulking up its focus on not just Russia but China, too.

THE ECONOMIC VIEW

More than 8MM folks late on rent
As rents keep going up.

US retail sales fell in May
While durable goods orders rise
Consumer confidence lowest in a decade
We need gas prices to go down

Interest rates need to go higher
Suggests Bank of International Settlements.

THE INFLATION BOGEYMAN

Recession may not be here yet.
But stagflation is

Rail transportation costs rise
As global JIT world comes apart.
More supply chain disruptions coming

US export prices up 18.9%
As import prices rise by 11.7%
Is this a good thing?

THE LABOR VIEW

Gig work can be dehumanizing
‘Cause you don’t really belong.

State of the global workforce, 2022
Stress, stress, stress and apathy.

Key to effective leadership
Admit what you don’t know.