What’s an Austerity Hangover?

August 12, 2022

Leyendecker Executive Search

August 12, 2022

Cybercriminals are eating our lunch.
– Ex-CISA Chief Chris Krebs

THOUGHTS FROM DOUG

Peak inflation was always going to show up one day, but that’s less important than prices staying high while wages try to catch up.

New defense and trade agreements between countries seem to be showing up all over the place these days. Are countries starting to align in a new world order, with the Western allies against everyone else?

Employment isn’t supposed to boom when the economy is shrinking. That means we have a productivity problem. This means wages have to stop rising or companies will report lower earnings. Or it means prices will keep rising. Or it means layoffs are coming. Or it means the economy is about to boom. What do you think?

To “get out” of economic challenges, countries will surely have to deficit spend. This means already-high debt to GDP ratios in Western countries are likely going to go higher. Is this a problem?

Why do Democrats want to turn Trump into a martyr? Do they not understand the history of what happens when established power seeks to destroy an outsider with many firmly committed followers? The Bible has a couple stories about this.

Human influenced climate change is going to “destroy the planet” if we don’t do something to “save the planet.” These apocalyptic phrases have become quite common in our news over the last few years. But we need to get something clear:

Humans are not going to destroy the planet. The planet was here long before humanity arrived and will be here long after we leave. The planet really doesn’t care about us.

What these constant apocalyptic messages do is destroy the self-worth and sense of hope of humans who hear them every single day, especially our impressionable youth. Climate change fear mongering is unlikely to save the planet, but it may be one reason mental health issues are rising in our youth.

How many countries in the world like Sri Lanka are going to find themselves in economic trouble because they tried to “save the planet”? And as more countries “stumble” following Western “save the planet” policies, is the West going to lose “friends”?

Has the US fallen into a geopolitical and economic trap with China like the Europeans did with Russia?

THE ECONOMIC VIEW

US bankruptcies almost nonexistent
Home prices at record high
The calm before the storm?
Mortgage rates are rising again
As are jobless claims

After jobs boom
Fed governor says rates will keep rising
SF Fed president concurs, even after recent inflation data

What’s an austerity hangover?
Check out these charts

THE INFLATION BOGEYMAN

Global supply chain challenges are easing
Inflation “falls” to 8.5%
As inflation expectations decline
While wage growth supports inflation
Wages rise, as do consumer prices
Rents are still exploding
And egg prices are up 47%

Restaurant inflation is soaring
Subway makes a great sandwich!

Consumers opting for cheaper groceries
Are they allocating more money to vacations?

THE LABOR VIEW

Employers will do anything for Gen Z
How’s this going to work out long term?

Retirees may be getting a big raise
Social Security benefits set to rise.
Truck drivers already got a big raise