Yesterday I outlined that the Fed is once again lying to Americans about the risks they face.
The big lie of 2021 was that inflation was non-existent or “transitory.” We all know how that turned out. Inflation is at a 40-year high, gas is over $5 a gallon, and Americans have never spent more of their incomes on gas and food.
Now the Fed is back with another big lie. It’s the big lie of 2022: that the U.S. won’t enter a recession. For most Americans, the economy has been in recession for months.
The National Bureau of Economic Research (NBER) released a trove of data yesterday with its highly massaged GDP results. And BOY did it have some worrying stuff in it. Most worrying of all was the following:
Real Disposable Personal Income collapsed an incredible 12% in the first quarter of 2022. Even more incredibly, it has fallen in THREE of the last four quarters.
Unfortunately, it’s even worse than that. Look at the below table. Yes, you are reading that correctly, the collapse in Real Disposable Personal Incomes is larger than that which occurred during the 2008 recession.
This is why inflation is so devastating… because it destroys Americans’ pocketbooks. It’s also why every time inflation rises above 5%, a recession hits.
Remember, 75% of GDP is consumer spending. But if consumers have to cut back on their disposable spending because the basic cost of living (gas, food, etc.) is through the roof… you get a recession.
Like today.
So again, the Fed is LYING about the recession, just like it lied about inflation in 2021.
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