Authored by Jeffrey Tucker via The Epoch Times,

It’s a reasonable supposition that a recession will become obvious to all by next summer. It will then be declared by year’s end. The following year it could become backdated with data revisions that take us to 2022. At that point, it will become obvious to people that we have a major problem. Money velocity will freeze up and banks will start failing.

That’s a lot to consider so let’s unpack this a bit.

Consider history. In October 1929, the stock market crashed. Many people on Wall Street suffered but Main Street was largely unaffected. The Hoover Administration got busy with some efforts to loosen credit but without success as credit markets slowly dried up. Throughout 1931, public sentiment toggled between pessimism and denial. Many people thought it was a temporary blip that would go away.

No one called it the Great Depression. That came much later.

By the election of 1932, enough people were concerned about the economic situation but the campaigns did not really focus entirely on that. The big issue was Prohibition. Hoover did not have a strong opinion but Franklin Delano Roosevelt spoke out loudly for repeal. His fiscal policy pushed frugality and balanced budgets, and he decried Hoover as a big spender.

FDR won of course. But before the inauguration, the economic environment became dramatically worse. A banking crisis developed, and FDR used emergency powers to impose a bank holiday and repeal the gold standard. As part of this, he imposed a ban on private gold ownership. It was enforced with fines and jail terms.

Central planning then ensued with massive fiscal stimulus, crazed agricultural policies that required digging up crops to create artificial shortages, and price and wage controls.

All of this unfolded over the course of four years, the first three of which were not at the time thought to be much of a crisis generally speaking. Today it is obvious that 1929 marked the beginning but that was not apparent at the time.

It is not discernible in our time that we are already in recession but that is due to some brittle statistical measures. If you extend the inflation numbers to include housing and interest, plus extra fees and shrinkflation, minus hedonic adjustments, and then adjust the output numbers by the result, you end up in a recession now.

Do you remember the two successive quarters of declining GDP in 2022? At the time, it was said that this was not a recession, even though every definition of recession was two declining quarters of GDP. It was said at the time that the data was not enough to declare it because labor markets were strong.

Trouble was that this too was an illusion. Most of the job gains were in fact in part-time jobs and multiple job holders, and those gains went to foreign-born workers and not natives. Overall, jobs held by native-born workers that are full-time are down relative to four years ago. No one in the mainstream press admitted this.

The jobs report that came out last week was the first glimpse of truth because it was brazenly awful, underperforming every prediction. It also chronicled major job losses in manufacturing and professional services. Those are hard-core recession signs that are likely going to worsen.

All this data will start to be revised next year as the conventional wisdom will change. It will be widely admitted that the economy is weaker than we previously supposed. This will happen regardless of who wins. For one winner, it will serve as an attack and for another winner, it will serve as pretext for extreme intervention like the promised price controls on rents and groceries.

Meanwhile, we will be revisiting the inflation problem. The Fed has already added $1.1 trillion to the money stock over the last 12 months plus lowered interest rates. The effect of this easing has not affected mortgage rates because investors are expecting higher rates in the future. The Fed can control overnight lending but the shape of the yield curve is determined on the bond market.

If major changes are proposed in terms of spending cuts, the bond market will freak out and the United States could repeat the experience of the UK just a few years ago. New prime minister Liz Truss was quickly hounded out of office on grounds that her spending cuts had spooked the bond markets.

U.S. creditworthiness is already on a hair trigger as the debt pileup has reached astronomical levels. The entire purpose of this wild spending has been to balloon the GDP as much as possible to prevent a recession from being declared already. The debt-to-GDP level is now higher than it was in the Second World War, and getting worse by the day.

(Data: Federal Reserve Economic Data (FRED), St. Louis Fed; Chart: Jeffrey A. Tucker)

The easy solution is dramatic spending cuts but that won’t happen if the bond market starts panicking with quality downgrades. There are only two private institutions that grade U.S. bonds and both are subject to being muscled by political concerns. Such an event could easily overwhelm a new administration. The political people will go into overdrive and demand that the Fed accommodate the bond market, fueling more inflation.

I truly wish that none of this would happen but the truth is that economic forces are always and everywhere more powerful than political ones. There are structural problems alive in U.S. economic life today that are not easily solved by policies of any sort.

But in U.S. political culture, whatever takes place under one president’s watch is blamed on the officeholder regardless. That the circumstances have been created by the previous administration or have nothing to do with existing policy has no relevance in the political culture. That alone makes it nearly impossible for a sitting president to plead with the public for patience.

In 1981, Reagan did make a plea for patience, and lost a great deal of Congressional support in the midterm elections of 1982. He was fortunate that the economic recovery came in time for the 1984 election that granted him a second term. But that was a very close call, and that was also under conditions that were not as structurally dire as conditions today.

As a result, the new administration will encounter pressure to achieve the impossible: immediately improve American living standards without imposing any pain at all. Such a demand is impossible to grant. As a result, whatever happens in this election will likely be reversed in the midterms of 2026, meaning that we cannot count on any kind of policy consistency for many years to come.

Maybe I’m wrong. I hope so. But from what I’m looking at, I don’t see how a frank acknowledgement of current conditions can be put off for another year.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

It’s not a good day for the establishment. Just hours after Kamala Harris – and the Democrats – staggering loss which ushered in Trump as president for the third time and gave Republicans a sweep of Congress, Germany’s three-party ruling coalition which had been on the verge of collapse for months, imploded on Wednesday evening after Chancellor Olaf Scholz announced he will fire Finance Minister Christian Lindner over persistent rifts on spending and economic reforms, a move that paves the way for a snap election at the end of March.

The firing ejects Lindner’s fiscally conservative Free Democratic Party  (FDP) from the troubled coalition, forcing Scholz to call for a confidence vote that he said would take place on January 15. If Scholz loses that vote, which is virtually certain, a snap election is set to take place by March.

The collapse of Germany’s government came just hours after Donald Trump’s clear win in the U.S. election, a result that stunned German political leaders, who depend on American military might for their country’s defense and fear Trump’s tariff policies will hobble German industry.

“Dear fellow citizens, I would have liked to have spared you this difficult decision, especially in times like these, when uncertainty is growing,” said Scholz – viewed as the weakest German chancellor in decades – in a statement at the chancellery.

But the rifts inside the coalition proved too great to overcome. Caught in the middle of an impossible battle, Lindner and his conservative FDP insisted that the German government stick to strict spending rules and cut taxes, even as his left-wing coalition partners wanted to maintain social spending and boost German industry through economic stimulus.

“All too often, Minister Lindner has blocked laws in an inappropriate manner,” said Scholz in a statement. “Too often he has engaged in petty party-political tactics. Too often he has broken my trust.”

Scholz said he had offered Lindner a deal to create an emergency fund to aid Ukraine that would exist outside Germany’s regular budget, but Lindner refused to participate in such fiscal gimmicks that saw the UK recently redefine the nature of “debt.”

“Olaf Scholz has long failed to recognize the need for a new economic awakening in our country,” said Lindner. “He has long played down the economic concerns of our citizens.”

As Politico reports, the FDP is the smallest party in the coalition and is now polling at only four percent — below the threshold needed to make it into the German parliament — meaning its leaders have been mulling a coalition break in order to save their political futures.

Crisis talks in the coalition of Scholz’s Social Democratic Party, the Greens and Lindner’s Free Democratic Party had come to a head after the FDP issued a paper with demands for liberal economic reforms that were difficult for the other two parties to accept.

Lindner’s recent policy paper, leaked to the media last week, called for tax cuts and a scaling back of climate policies in order to stimulate economic growth — both positions that put the party at odds with his coalition partners.

Central to the coalition disagreements was the adoption of the 2025 budget by parliament in which a gap of at least €2.4 billion, and potentially far more, needs to be filled, as well as an agreement on measures to revamp the country’s ailing economy.

The government crisis comes at the worst possible time: Trump’s victory, which anticipates imposing significant tariffs on German exports, is expected to put heavy pressure on Europe’s largest economy. An analysis from the German Economic Institute (IW) estimates that a new trade war could cost Germany €180 billion over Trump’s four years in office.

Many in Germany had hoped that the victory of Donald Trump in the U.S. election earlier in the day would force the coalition to hold together over fears that the incoming president would give Europe’s biggest economy a hard ride, targeting its all-important car industry in a trade war.

Ultimately, however, not even the looming threat of Trump proved enough for the fractious parties to put aside their differences.

Sensing that the economy is about to go from bad to much worse, last Tuesday – amid mounting concern about the imminent collapse of the EU’s largest manufacturing economy – Germany’s giant trade union IG Metall launched strikes in the nation’s metal and electrical industries in an attempt to win higher wages. According to the tabloid Bild, employees began walking off the job during the night shift, including at Volkswagen’s plant in the city of Osnabruck, where workers worry the plant may be closed.

Elsewhere, around 200 employees of the battery manufacturer Clarios went on strike in Hanover, Lower Saxony, carrying torches and union flags, the outlet wrote.

Meanwhile, in Hildesheim, Lower Saxony, around 400 employees, including those at Jensen GmbH, KSM Castings Group, Robert Bosch, Waggonbau Graaff and ZF CV Systems Hannover, have reportedly halted operations.

Protests are also expected at BMW and Audi plants in Bavaria. Work is to be stopped nationwide during the course of the day, the tabloid wrote.

”The fact that production lines are now at a standstill and offices are empty is the responsibility of the employers,” IG Metall’s negotiator and district manager Thorsten Groger stated, as quoted by Deutsche Welle.

IG Metall is demanding a 7% pay raise compared to the 3.6% raise over a period of 27 months offered by employers’ associations, due to soaring inflation. The companies call such demands unrealistic.

The mass strikes come as Volkswagen announced on Monday it would close “at least” three of its ten plants in Germany, lay off tens of thousands of staff and downsize remaining plants in the country. The measures are part of a cost-cutting drive, the conglomerate said earlier. Oliver Blume, chief executive of the VW Group, has cited a “difficult economic environment” and “failing competitiveness of the German economy” as factors behind the decision.

The German Association of the Automotive Industry warned last year that the country was “dramatically losing its international competitiveness” due to soaring energy costs.

A recent survey by the VDA auto industry association suggested that the reshuffling of the German car industry could lead to 186,000 job losses by 2035, roughly a quarter of which have already occurred.

At a recent pre-election speaking and podcast event, comedian and Libertarian political commentator Dave Smith expressed his view that it is very realistic that the next President Donald Trump could successfully negotiate an end to the Ukraine war. 

Smith’s view is optimistic, as he articulated that he believes Trump’s expressed desire to end wars in Ukraine and Gaza is genuine. But Smith also laid out that much depends on who Trump puts around him in top national security positions. Below is the hard-hitting segment featuring the prominent commentator addressing the question: will Trump be able to end the war in Ukraine?

PBD: Will Trump be able to end the war in Ukraine?

Dave Smith: Yes, If he listens to Tucker Carlson, Bobby Kennedy, and Vivek Ramaswamy, but not if he picks Mike Pompeo, Liz Cheney’s pick for Defense Secretary, or John Bolton, Hillary Clinton’s pick for National Security Advisor pic.twitter.com/1f5kQZQEW4

— Liam McCollum (@MLiamMcCollum) November 6, 2024

Below are Dave Smith’s words from the segment on Trump and Ukraine below [emphasis ZH]…

“Why the hell are we even expanding our military alliance to Ukraine? And listen, Donald Trump always says that the war ‘never would have happened if I was president, and I would negotiate an end to this.’

And I gotta say I think he’s right about that. I don’t think the war would have happened if he was president – I think he will negotiate an end to it.

I don’t think he’s right that Hamas wouldn’t have attacked Israel if he was president – that seems kind of ridiculous to me. But he’s right: the Ukraine war could be over tomorrow if American wanted to negotiated a peace to it.

Vladimir Putin has been trying to the entire time… 

Well the question becomes who does Donald Trump put around him? If Donald Trump puts Mike Pompeo, aka Liz Cheney’s pick for Defense Secretary… if he puts John Bolton, aka Hillary Clinton’s pick for national security adviser – then maybe not, maybe it doesn’t happen.

But if he listens to Tucker Carlson, and ‘Bobby’ Kennedy, and Vivek Ramaswamy, and all the smart people around him – then yes, he could negotiate an end to that war.”

* * *

Indeed, the question ultimately becomes: will Trump really keep the ‘swamp’ out of his administration this time around? We hope so.

Via SchiffGold.com,

On Friday Peter capped off the week by discussing the latest round of troubling data. With the nonfarm payroll report coming in far below expectations, Peter elaborates on the predicament the Fed is in. With mounting political pressure and an election in mere days, how will the Fed possibly manage both inflation and a stagnating labor market? Peter’s answer? They can’t.

During the last several months, the media and political class have insisted the economy is healthy, even if it is cooling. But disappointing economic metrics and multiple downward revisions to important data reinforce the American consumer’s intuition. The economy is not doing well:

“Voters are not necessarily fooled. That’s why so many want change – they don’t want to stay the course. They’re not buying what the media is selling about how great the Biden-Harris economy is. In fact, all the data coming out this week confirms that this is a weak economy. We’re probably in a recession. It’s stagflation, or worse—recession and inflation at the same time.”

The Fed’s gambit to cut rates and hope for the best is backfiring. The cuts have actually triggered long-term rates to rise, and the recent nonfarm payroll report is only going to make things worse:

“Rising government debt is causing bond investors to lose confidence in the Treasury’s ability to repay without creating inflation. What’s happening in the bond market is exactly what I predicted. … Today’s results offer more proof. They were expecting 125,000 jobs, but we ended up with just 12,000—well below the lowest estimate of 57,000. Plus, the prior two months were revised down.”

The Fed is stuck between inflation and a stagnating economy. The nation’s eyes are on the election, and it’s very unlikely Jerome Powell will be able to resist political pressure to start printing more money:

“The Fed’s not going to do anything about it—they can’t. In fact, they’re going to fuel the fire. They’re going to cut rates, going back to quantitative easing, because the recession is going to keep getting worse. The economy will weaken as inflation gets stronger. So what can they do? They can’t fight both; they have to pick. And all the political pressure, whether from Harris or Trump, will push them toward stimulating the economy.”

Turning to the latest campaign headlines, Peter notes that the betting market have seemingly backed off of their Trump optimism. In reality, Peter says, this fluctuation is probably the result of traders closing their positions, not a sudden loss of confidence in Trump:

“It reached about $55 a share on Tuesday and then closed barely over $30, at $30.56. DJT stock was plunging as traders took profits on DJT, covering their bets on Donald Trump and unwinding them. That’s why we saw this big move today, with Harris shooting up and Trump collapsing. It’s not that the polls really changed or that Trump is much less likely to win today than yesterday; it’s simply that those who made those bets now have an incentive to cover because they exited their trade.”

In other news, Michael Saylor’s company, MicroStrategy, is planning on purchasing over $40 billion in Bitcoin. Peter shows his literary side, comparing Saylor to the myopic Captain Ahab:

“He really is Captain Ahab, and Bitcoin is his Moby Dick. But he’s going to go down, and everyone on the ship is going down with him. Even if I were bullish on Bitcoin—I know there are people who watch this podcast and say, ‘Hey, I agree with everything Peter Schiff says, except for Bitcoin.’ So, if you really like Bitcoin, here’s what you need to do: Sell your Bitcoin now and buy it back when MicroStrategy goes bankrupt.”

Peter wraps up what may be his last podcast before the election with a sober dose of reality. Donald Trump is undoubtedly the best hope America has to fix our political dysfunction, but we shouldn’t pretend his track record is something to be proud of: 

“Everybody knows I support Trump. I’ve encouraged my supporters to vote for him. But I am not going to say that his first term was an economic miracle. Now, I know people like to oversell, hype it up to get votes, but that destroys all your credibility. If we’re ever going to solve the problems that need solving, we can’t pretend that Trump’s first term was great. All the problems got worse under Trump. They would have gotten worse under Hillary too, but they got worse under Trump. Government spending increased—where’s the miracle? Trade deficits hit record highs under Trump even before COVID. … They slashed interest rates to zero, and we had massive quantitative easing. That’s the illusion that was created.”

Make sure you catch up on other news from last week with JD and Joel’s analysis on the SchiffGold Gold Wrap Podcast.

This graphic, via Visual Capitalist’s Marcus Lu, visualizes the results of an Ipsos poll that asked adults whether they thought aliens would visit Earth.

The survey consisted of 24,471 adults across 36 countries, conducted between October and November, 2022.

Where E.T.’s Existence Would be Most Accepted

India, Saudi Arabia, and the UAE had the highest share of respondents who believe an alien visit would be likely.

It’s hard to ascertain any one reason these three countries believe in aliens so strongly. It may be due to rich mythologies where the acceptance of various gods, djinn, and other magical beings translates into acceptance of alien life.

There might also be a religious element at play. Ongoing discussions about what the Quran states about other forms of life, except for humans, have generated interest on the internet.

It could also be an effect of mass media: the Star Wars movies, for example, were very popular in India.

However, the same influence for some countries clearly doesn’t work for others. The U.S., home to Hollywood—which seems to release at least one movie about aliens a year—sits firmly middle of the pack.

And then there’s Japan, where only 8% of those surveyed believed a visit was likely.

This is somewhat surprising, given the country’s strong technological advancements and fascination with futuristic themes in popular culture.

So… Do Aliens Exist?

NASA has said that so far, no credible evidence exists for extraterrestrial life. And despite multiple “strange light sightings,” over the years, the Department of Defense’s most recent report states there’s no “verifiable evidence” that all the “unidentified anomalous phenomena” (a new term for UFOs) actually represents alien life.

However, as a case study for probability, the odds of humans being the only advanced civilization in the whole universe is one in ten billion trillion. Or really, really, small.

So, purely mathematically, the chances of alien life existing are likely.

Now whether they’d visit—is another question entirely.

If aliens did visit, they’d probably bump into one of the many satellites hovering over the planet. Check out Operational and Planned Low Earth Orbit Internet Satellite Projects by creator MadeVisual to see which companies own what constellations.