Are we Heading to a Recession, Depression or Collapse?

recession, depression or collapse
When he predict "a mild recession" you should prepare for a depression.

Technically, we had a recession last year after two quarters of negative growth, but the government and media didn’t admit it. Now, they are warning us about the possibility of a “mild recession.”

If they are predicting a “mild recession,” you should prepare for a full-blown depression. And if the mainstream media ever starts talking about a depression, brace yourself because that means a financial collapse is around the corner.

Compounding the threat of a financial collapse is a societal collapse where the devaluation of our money is just one of many problems. The country-wide decay of moral values, the corruption of the Rule of Law by our elites, the adoption of a socialist agenda, the use of government agencies to persecute the politically unpopular and protect those in power, and the ridiculous idea that green energy is going to save us are pushing this country ever closer into a collapse.

I used to think an election might change things, but it’s getting too late. Our best bet may be to rebuild after the collapse, throwing out many of the policies and ideas that were adopted since Reagan left office.

What’s Wrong with People?

I don’t know if the majority of the population is too stoned to care, too stupid to realize what is being done to them, or too distracted to notice. Maybe legalized marijuana, the massive amounts of fentanyl and other drugs making their way into the country, the availability of 24-7 online pornography, the mind-numbing addiction of social media, the failure of our public schools, and the corruption of our political figures is so pervasive that no one notices the rate at which this country and all it once stood for is falling apart.

I notice, and I am concerned the worst is yet to come.

More Bank Collapses Coming

I predict we have seen only the beginning of the bank failures. The first ones were the small earthquakes that precede the volcano. Now we’re in that period where the pressure builds until, one day, it just explodes, blowing the top off the mountain. It could happen in the next two weeks or the next two months. The difficulty is no one knows how big the explosion will be and how far the damage will spread.

Thanks to the rising interest rates, the vast majority of banks are technically insolvent. Their investments have dropped in value, meaning they have less money than they owe their depositors. The smart money is pulling out of small and medium banks and moving cash elsewhere. This puts the banks in a bind because they have to sell assets to raise funds.

The smart money is buying gold and silver, if they can find it. Physical supplies of precious metals are growing tight, and the paper markets are struggling to keep the price down. Expect Gold and Silver to break even further upwards the next time we see bank runs or more banks being taken over by the FDIC.

Recession is Inevitable

The Fed is walking a tightrope where too high interest rates will cause banks to collapse and too low a rate (the equivalent of free money) is what got us into trouble in the first place. They want a recession, because a recession could lead to deflation, which means interest rates will drop without the dangerous side effects that more quantitative easing will cause. But the same financial pressures that will cause a recession could cause the banks to collapse, followed by the stock market.

Will the Fed time this right? Can they manage to balance the equation that cools things off and quiets inflation without sending the economy into a tailspin? Doubtful. They seem to react like a kid playing whack-a-mole, always a beat too late to smack down the problem.

The question then becomes, will the recession lead us into a depression? It’s not only possible, I think it’s likely. Once things slide downhill, there’s not much we can do but hang on and hope. I don’t think the consumers, who are responsible for more than two-thirds of the U.S. GDP, have the resources to spend their way out of a recession. As a recession lingers, the situation steadily gets worse as more businesses fail and more jobs disappear, until we find the country in a depression. That could last for years.

Tipping into a Collapse

Once we are in a recession, non-financial forces could force us into a collapse. While something external, like a nuclear attack by Russia or North Korea, could certainly be the tipping point, I think it’s more likely to be caused by anger and frustration; infighting between domestic factions might push us over the edge.

Besides the anger of those who have lost their job and their house in a recession, there are plenty of things to be angry about: election rigging, illegal actions by the FBI or ATF, a miscarriage of justice when it comes to Hunter Biden, rising crime with no punishment, corrupt government officials, political prosecutions, an open border, tax dollars flow down green energy holes or black holes in the Ukraine, and blackouts caused by stupid EPA regulations penalizing power generation. The other side has its own litany of complaints: too many cops, too many people killed by cops, people who refuse to use their preferred pronouns, men who are not allowed to participate in women’s sports, abortion restrictions, 27 states with constitutional carry, and so forth.

At some point, these two sides are going to collide and someone besides Kyle Rittenhouse is going to use their gun at a protest. Just like the original “Shot Heard Around the World” started the Revolution, a shooting at a protest could erupt into a raging battle. If that situation spreads, we could be caught in a civil war between extreme factions. Depending on how the government reacts and public perceptions, that could push the country into a collapse or even a revolution.

Bad Government

Many of the problems we experience today, economic and social, are the result of bad government and bad governance. Unfortunately, I don’t see that changing. I expect recession leading to depression because of government overspending, a lack of bipartisanship, congressional representatives who are out for themselves instead of the good of the country, and a senile president. I worry about a collapse because we are no longer united. Sure, we could experience an economic collapse, also because of bad governance, but I think a social collapse caused by the new Divided States of America is more likely.

All we can do is prepare. Prepare for chaos in the economic markets and chaos in the streets. Prepare to pick your sides, or to try to stay on the sidelines. Be ready to do without and to survive based only on what is in your house and within your control.

We’re on a slippery slope; prepare for it to get worse before it gets better.