What's going on in the American Economy?

You had better start paying attention if you aren't already..

Here's the real deal.

1) Covid Era effectively doubled the money supply i.e. cut the value of the dollar in half. Most of that money went to people who could have survived without it and a majority of that went to people who didn't need it but wouldn't say no to it. i.e. the ultra-wealthy, big corporations, and business' that were able to afford to structure themselves for huge tax breaks and massive amounts of stimulus.

2) Put that on top of the Trump era tax cuts for the wealthy+ and you have a lot of financially savvy people holding a lot of cash.

3) The smartest of them sold their equities at the first sign of a crash and then waited to buy back twice as much at half the price.

4) That left huge amounts of money on the table for the wealthy+ and they soon figured out that cash was heading for a huge reckoning - i.e. inflation would hit hard - so they started buying real estate of all kinds, gold, equities, crypto, businesses, used cars, and using their cash to fund loans, angel investments, and other money makers that work well for those who are not in a distressed position - meaning those who don't need to worry about rent or groceries next month or next week.

Are you seeing the picture yet? Because there is more.

5) Wages never keep pace with rapid inflation - so suddenly hiring people to work for $20-$30 an hour was a bargain. In terms of buying power - these employees were half price. Their hours bought less groceries, paid less rent, paid less mortgage or car payment etc.

Politicians howled "Look at all these great jobs!" and at the same time downplayed inflation by not including things like food, fuel, rent, or other necessities.

6) Employees realized they could take shitty jobs and earn more than their 'honest' employers at their regular jobs were willing to pay. In fact, they could make more by driving Uber, renting their cars out for TURO, or turning their rental properties (or vans) into AirBNBs. Employees left the security of shitty jobs to make more money as insecure gig workers.

7) Those employers had to hire new employees who wanted more money but weren't as good at the jobs - and instead of paying more wages - they hired less qualified people and raised prices to offset the drop in productivity and small increase in wages they were forced to implement by higher minimum wage jobs or by more demanding (and less qualified) candidates.

I hope you are seeing the cycle I'm describing - it is the opposite of a win-win-win. It's a lose- lose-win. The only ones who win in this Frankenstein economy are those at the very top of the food chain who thanks to having the resources, education, and influence of wealth before all of this began were able to double, triple, or quadruple their share of the American pie.

The losers are workers, small business, consumers, savers, spenders, sellers, buyers - everyone except for those at the top. The real estate brokers have done well, those providing service to the ultra wealthy have done well, those who managed to get investment in their startups have done well or at least middling. Trade workers are doing well since there are no young tradesmen coming in to replace the skill they have - but those coming in are generally no substitute for those retiring or dying.

Everyone (but the 1%) loses. Credit is easy right now because that money is quickly becoming worth less (worthless). Borrowing per borrower is at an all time high. Most of it won't get paid back.

There is a huge drop coming - and if you aren't thinking about how you are going to weather it - you better start doing so.

The story above only paints a tiny picture. Here’s a portion of it from CNN as well.