The Recession is Coming Our Way

The Recession is Coming Our Way - Todd Strandberg - https://www.raptureready.com/category/nearing-midnight/

 

There are growing signs that the global economic community is headed for a financial slowdown. Many economists are predicting that it is only a matter of months before we slip into a recession. The last time the US was in this type of slowdown was the end of 2008, which makes the current period of growth the longest in US history.

 

The greatest indication that we are headed for a recession is key financial indexes being down more than 20% from their January all-time highs. The global stock market has lost $8 trillion in market value since the beginning of the year.

 

The sudden loss of all this market-cap wealth has people wondering if we are in a correction, or the beginning of a bear market that would pop the current financial bubble. As great as the downturn has been, the stock market is still up massively from the lows of the last recession.

 

The stock of Amazon hit a high of $2,050 per share and currently trades at $1,470. Its low in 2008 was $42. Apple had a high in 2019 of $233 and $156. Its low in 2008 was $22. Graphic-card maker NVIDIA has been down sharply from its high of $292. It now trades at $133 and it would have to drop to $7 to reach its 2008 low.

 

The acting Treasury Secretary, Steven Mnuchin, tried to quash worries over plunging stock markets by calling all the big-banks. Mnuchin tweeted late Sunday afternoon that he'd called the chief executive officers of the nation's six largest banks and that those chiefs "confirmed they have ample liquidity available for lending to consumers, business markets, and all other market operations." His action was so unusual it triggered panic selling on Christmas Eve; the 650-point drop was the largest ever.

 

The markets have become so wild, the day after Christmas the Dow Jones rose 1,086 points.

 

Former Treasury Secretary Lawrence Summers says not to panic... yet. Still, he's increasing his prediction of a recession from "a bit less than 50%" to 60%. He also said, "Trump was wrong to treat euphoric markets as validating his policies. And his critics should not suppose that weak markets mean economic disaster is around the corner."

 

I have kept my eye on the ten 10-year bond for well over a decade. I wrote last year that the Fed simply cannot allow this bond to go any higher than 3%. The current rate on the 10-year bond is 2.80%, which is what it was four years ago. Since the Fed has raised rates two full percentage points in the last three years, basic math should have the 10-year bond at around 6%.

 

The bond market has been suppressed at low rates because normalized rates would create massive budget deficits. If bonds have an interest rate of about 5%, we would have $2 trillion-dollar shortfalls.

 

The Treasury is starting to have great difficulty in finding buyers for the current amount of debt. The day after Christmas, the Treasury sold $41 billion in 5-Year notes in what could only be called an abysmal auction. It has been the worst auction since July 2009. If we reach a point where the Treasury has to step in and have its primary-dealer banks buy its own debt, it will become clear that America is a Banana Republic.

 

There have been as many as 47 recessions in the United States, which averages a recession every five years. We are currently in the longest time-period without seeing negative growth in the economy. If I had no knowledge of Bible prophecy, I would say that our chances of having a recession in the near future are very high. We have a massive financial problem that I've listed in detail in previous articles. They fester and will eventually result in an economic meltdown.

 

The one thing that I find the most amazing is that recession is a constant threat to us, but it hasn't arrived. I think the rapture is the only explanation for the record period of financial tranquility. The storm is coming, but God has predetermined that it would be marked by a time of "think not" peace. I believe we are currently in that window.

 

"Therefore be ye also ready: for in such an hour as ye think not the Son of man cometh" (Mat. 24:44).

 

 

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