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G7Doug's avatar

The savings rate topped out 2 years ago with pandemic handouts and inflation topped out 2 years ago with supply chain issues. Corporations successfully used this to manage higher prices while the economy was in flux and that advantage has expired. Absent further stimulus, flat / negative volume growth will soon be met with flat / declining inflation and corporate sales will decelerate faster than most expect, resulting in the next recession.

The kicker: if the Fed keeps rates 4-6% (I think they should) even with a slowing economy, that $500K house that went to $1M 2 years ago, will need to come back to $500K before it's all over. My expectation is that they'll cave and housing won't come back enough to save the current generation of household formation.

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Bill Mazzacca's avatar

Glad to hear your on the road to recovery. Also, speaking of defense spending, check out this chart on NATO spending: https://www.visualcapitalist.com/breaking-down-1-3t-in-nato-defense-spending/. Seems like influence peddling costs a pretty penny.

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