Psalms 21:11 – “For they intended evil against thee: they imagined a mischievous device, which they are not able to perform”
People Wanted Endless Stimulus But Got Stagflation
Whelp, it’s 2023 and people wanted endless stimulus but got stagflation instead!
After more than $20 trillion in stimulus plans since 2020, the economy is going into stagnation with elevated inflation.
The result was disappointing and with long-lasting negative effects.
Weak recovery, record debt and elevated inflation. Of course, governments all over the world blamed the Ukraine invasion.
I think we all can agree that the economy was heading into a recession way before Ukraine became an issue.
Commodity prices rose from February to June 2022 and have yet corrected since.
Now we face a 2023 with even more disappointing estimates.
It’s no surprise what’s happening. Only a handful of countries are expected to reduce debt in 2023, with most nations continuing to finance bloated government spending with elevated deficits and tax hikes.
A world where governments are constantly eroding the purchasing power of currencies and slashing disposable income of taxpayers.
When will it end? How much more strain on the economy?
Conclusion
The narrative all over the world is to try and convince us that past-peak but elevated inflation is “falling prices” and that everything is good when debt increases.
There is no success in stagflation.
It is a process of impoverishment that hurts the middle classes immensely while the excessive government spending is never curbed.
2022 was the year that killed MMT, the science-fiction fallacy of Modern Monetary Theory.
Countries with monetary sovereignty like Japan or the UK found themselves in an unprecedented turmoil created by the illusion that rising deficit and debt would never cause significant problems.
It only took a few rate hikes to dismantle the illusion of perennial money printing as the solution to everything.
2022 also showed that it is false that massive deficits are reserves that strengthen the economy.
2023 is expected to be the year of stagflation.
There seems to be no incentive to reduce the fiscal and monetary imbalances built through two decades, and therefore the result will be weaker growth and impoverishment.
No government wants to acknowledge the risk of central banks reducing their balance sheet.
There is no quick fix, there is no soft landing and there is not a chance of solving the problem by keeping elevated deficits.
Unfortunately, when governments all over the world decided to “spend now and deal with the consequences later” they too voted to bring on the second Great Depression!
As always, keep Yahweh first, pay down your debts and prepare. Shalom
DISCLAIMER: I am not a financial adviser. This site is for educational purposes only. It is imperative that you do your own research. I am sharing my opinion from personal research and experience with no guarantee of gains or losses on investments, finance etc.
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