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Perfect Storms – Colliding

Posted on Thursday, May 26, 2022
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by AMAC, Robert B. Charles
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Storm

A “perfect storm” is the unexpected intersection of a bad things, creating a really bad thing. What happens when a “perfect storm” meets a “perfect storm?”  In math, they might cancel, but in reality – you get a really, really bad thing. While we may avoid it, one is headed our way.

“Storm One.” Imagine the first intersection of bad things, largely created by bad policies. We face – by the numbers, – a Biden-driven “perfect storm” in our economy, accelerating inflation caused by shutting down chunks of the US energy sector, reversing energy independence, and inexcusable federal overspending.

We also have record debt at $30 trillion. Not all that debt was Biden’s doing – but he and congressional Democrats added trillions of dollars over the past year that we do not have. Tax revenues do not get close. 

Now, watch what happens next. Wages – artificially high as people took federal benefits and left the labor pool – will push up. Why? Unions know workers are paying more, so demand more.

Not surprisingly, that wage-inflation reinforces price-inflation. Why? Because employers must make more to pay more, so they charge more to cover wages. What do you think that does? You get the point.

Now, add another factor to “Storm One.” The Federal Reserve, thinking inflation is from wild growth which it is not, is raising interest rates on borrowing – yours, mine, corporate, and federal. That includes higher interest on that $30 trillion debt – paid by who? You and me.

But that is not all, as these rates rise, our economy will slow. We will enjoy high inflation, combined with big job cuts as companies struggle to grow with these rates, so cut costs. 

As they do that, what happens? Unemployment rises. That means consumer spending – by people who now have less to spend – also begins to fall, so we get more layoffs. This is called a “vicious cycle” – and whether two successive quarters or any other definition, also a “recession.”

When you add upward spiraling inflation and interest rates to downward spiraling employment, spending and confidence, you get “stagflation” or Jimmy Carter 2.0. That is “Storm One.”

“Storm Two.” This one is blowing from the East but big. Because of Putin’s Ukraine war, which was likely deterrable, but Biden missed the signals and window, did not believe Putin, encouraged a “minor incursion,” the world faces a major hit in grain and corn production. Ukraine is rightly known as Europe’s “breadbasket” – and is being destroyed.

Zelensky just indicated a 25 to 30 percent drop in grain supply, creating an imminent food crisis – in 10 weeks – for much of the world. The price of everything from bread to cereals will rise.

So, on top of high inflation, energy cost, interest rates, and unemployment, plus falling consumer confidence, we will now see shortage-driven food price spikes. These will hit other parts of the world harder, but we will be affected. That food crisis is “Storm Two.”

What is the good news? Well, there is some. First, on food, we produce our own, and will continue doing so, even if world demand forces up prices. The US could feed 10 billion people, we just do not always plant. We are a 21 trillion-dollar economy, historically self-sufficient.

Other good news? Inflation causes are reversible. We can cut excess federal spending, reduce taxes – which under John F Kennedy, Ronald Reagan, and Donald Trump, elevated overall wealth, raising the net federal revenues.

To lower inflation, create hiring, restore energy independence, and boost consumer confidence, we need only re-start the US fossil fuel sector. Not surprisingly, no other nation has shut theirs down, and we should not.

The day we regain energy independence, much of the world will respect us more, falling into line again. And we will see cheap gas and heating oil again, along with jobs and export revenue.

So, there are answers. Another is to help allies by letting free markets rip, individual citizens prosper, food and energy be produced, and federal revenues rise – as under Kennedy, Reagan, and Trump. With that, we will see stronger defense and more resources for domestic needs.

We face two “perfect storms.” We will survive if we hold on and think smart. A big political voice must be heard – ours, the American people. We have weathered storms, but wisdom is knowing how to avoid or mitigate “perfect storms,” in this case, “stagflation” and a food crisis. Let’s look for clearer air, better leadership, and from November onward calmer seas.

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Stephen Russell
Stephen Russell
2 years ago

Civil War/Rev War 2 seeds

PaulE
PaulE
2 years ago

RBC,

Everything you covered was the direct result of allowing ideological Marxists, who also happen to be completely corrupt and incompetent, as well as economically and scientifically illiterate to control all the main levers of power in our federal government. In what sort of alternate reality would one expect any sort of positive outcomes to occur under those circumstances. Our current state, as a country, is completely consistent with what one would normally expect such political leaders to deliver to its people. We’ve seen these set of circumstances play out over and over again in other countries with very predictable and consistent results. We are no different in that respect. We, as a country, allowed a deeply flawed (nicest way I can say it without getting censored here) President and Congress to assume power and they are replicating the exact same set of policies and outcomes that cost other countries their economies and eventual freedoms.

The remedy you outline, with better policies and real leaders in place, is sound. However, as you yourself note, it requires a President of the caliber you outlined and a Congress operating in support of such a leader to bring about a restoration of sanity, a sound economy and strong foreign policies that encourage our allies and strike fear and doubt in our enemies. All of which is what most Americans would refer to as good governance of the country.

That may or may not begin this November, depending on how the votes are counted and who the leadership is of a GOP controlled Congress. However, the real opportunity to restore the country won’t begin until we have the sort of President you mention in place in 2025 to set a completely different agenda from the one this administration has us on.

Giordano_Bruno
Giordano_Bruno
2 years ago

A huge sector of citizens in our American republic no longer has anything that resembles a moral compass . . . a population that believes in no objective truth and therefore embraces anything that stirs their emotions and most base instincts, and the low caliber of our leaders reflects that fact!

Zoe Frost
Zoe Frost
2 years ago

Energy dependency, inadequate energy production to fuel the grid, multi-$TRILLION bogus bills (full of pork, easily plfered, increasing already historic debt), supply chain nightmare, fuel prices gone wild, “stagflation” and a (growing) food crisis…all due to DELIBERATE ACTIONS of the most corrupt Commie Demoncrap (and RINO) government traitors in histoy…aiding and abetting the evil, insane Commie/Globalist elitists so they can have their filthy, evil boots on our necks…the hell with how many are destoyed or dead (that’s their plan, Stan).

BigD
BigD
2 years ago

There’s a third storm on the horizon, WW3. If our Strategic Oil Reserves are depleted our country may not be able to respond quickly enough to defer an attack by our enemies. Our current Commander and Chief doesn’t appear to be capable of protecting our country, i.e. Afghanistan.

Jerry
Jerry
2 years ago

One thing Mr. Charles didn’t consider is the God factor. Suppose God decides to withhold the rain or send too much rain and destroy most of our crops. That could very well happen.

Willy
Willy
2 years ago

If you believe the 2020 election was on the up and up, the majority of the country want this. I’m in the minority that doesn’t and I hope we can get this country back on track by 2022/2024 or shortly thereafter. Old senile Joe is only the CEO of US Corp, he isn’t really the President of the true USA. Here’s to the sleeping Republic we have, wake up, don’t WOKE UP next time you vote!

Mario Capparuccini
Mario Capparuccini
2 years ago

Storm 3. China invades Taiwan and 90% of the semi conductors manufactured in the world falls into the hands of the CCP. Do we trust Biden to deter the CCP? We know the answer.

Jeb
Jeb
2 years ago

Loved the logic of your article. The problem, logic does not exist in joeblow’s WH. I am not convinced joeblow wouldn’t give away all the food produced in the US. I am not convinced that he will not allow brown outs and blackouts all summer instead of just reopening our energy production. They do the opposite of logic, either because they want to or because they are just that stupid. I take consultation in knowing that his supporters and voters get to suffer equally.

HocasPocas
HocasPocas
2 years ago

What about all the US farm land that they are allowing china to buy up? They aren’t just buying farm land either. People better wake up before it’s too late

Rich
Rich
2 years ago

Wow! I so much want to believe the “good” news. Unfortunately, you need a leader to pull this stuff off. We don’t have one! If you still think we are the biggest baddest nation on the planet, you better look around. China isn’t just up and coming, they are there. Biden is doing everything in his handlers power to make America weak. Wake up people!

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