I hate eggs. I never buy them, even when living a normal life, unless I'm doing some baking, which I do like doing at times. But I like to laugh, and I make memes. Eggs have jumped an insane amount in price, 60% or more, and lots of people are making jokes about it. This is my entry into the expensive egg meme fest.
And just to prove I'm Old School at food memes, here's a meme with my video still of me making Oreo pancakes, way back in 1990. Tips... use Double Stuff Oreos, break into big chunks, add to batter and cook. No syrup needed.
I have a new blog called Adaptive Reuse SoCal, about finding new uses for old, abandoned, and unused buildings, as well as the economy, and commercial real estate in general.
Too much inventory? Slow down in demand? How will the recession affect the bike industry (including BMX)? Rob here give you his thoughts.
I'm way outside the actual bike industry, totally out of the loop on traditional industry insider news. But I'm an amateur futurist, among other things, who's been blogging about a "the next Great Recession" since 2017 or early 2018. I just geek out on economic and future trends. Covid should have been the start of a LONG major recession, but The Fed (Federal Reserve), created $5 to $6 TRILLION dollars in 2020, and threw it at the economy. Bailouts, "Quantitative Easing", super low interest rates, stimmy checks, PUA, PPP, and all sorts of other programs tossed loads of money at Wall Street, big banks ,businesses, city, state, and county governments, and most of us individuals. Yep, even I got some. We were all hood rich for about a year, when this current recession should have been happening. All that money is why we have the current high inflation. Big influxes of new money devalue a currency, and in 12 to 18 months, prices rise to adjust to the lower value of the currency. Hey, the party was fun... while it lasted. That's the nature of parties.
But now The Fed (and other central banks around the world) is stuck. They've been raising interest rates to fight the 40 year high inflation. But that has caused a major drops in the inflated prices of stocks, crypto, and the downturn of the real estate market in many areas. If they back off and create more new money, inflation takes off and goes even higher. So they're driving us into a major recession, intentionally, to fight the inflation they caused by bailing us all out of the pandemic business shutdown crash. So things are all out of whack, in nearly every business category, in nearly every investment category, in ost of the world. Uh... bummer.
The bike industry is small, pidly compared to the really big industries, like food, oil, chemicals, telecommunications, cars, and of course, high tech. But it's still a decent sized industry, and employs (and sponsors) a lot of people. It looks like we're in for a slowdown. From my vantage point, this reminds me of heading into the early 1990's, which became a loooong recession/stagnant period. BMX "died" in 1989. Sponsors dropped nearly every freestyle team, except Haro and GT, as I recall.
I know nothing of this youTube channel above, but Rob in the video makes a lot of sense, and does it in under 5 minutes. If you ride, work in the industry, or are sponsored by anyone in the BMX, MTB, or other parts of the bike/action sports world, watch this video. Then do some research with the industry people you deal with. See how things are in your part of the industry, and if you need to make some changes in what you do.
I just found another video on this subject, recorded on Black Friday, November 25, 2022:
It's December 21, 2022. Congress is trying to pass the $1.7 trillion Omnibus bill before leaving for their holiday vacation. Above, David goes into a few of the things in the bill, how it will cause more inflation, and thoughts about it. Obviously, he doesn't really read the whole thing.
$1,700,000,000,000
That's the number.
How much is $1.7 trillion? Here's one way to try and put it in perspective, that I just figured out. For $17.4 billion, the federal government could give every single one of the 580,000 homeless people in the U.S., $2,500 a month, to pay for housing, for a whole year. $2,500 a month should be enough to rent some place to live, for one person, in pretty much any part of the country, even here in Los Angeles area. That $17.4 billion would be 1.02% of the Omnibus bill, housing every single homeless person for a year, in a room or apartment they pick, and leaving almost 99% of the money for other purposes.
$1.7 trillion is the same as giving $8,100 to every one of the 209 million adults in the U.S.
I know... booooooooring!
How' bout this? The $1.7 trillion in the Omnibus bill could by a new, 2022, Dodge Challenger SRT Hellcat, for every single one of the 19 million men, women, and children in the entire state of New York.
19 million all American mucle cars in one state. Just a way to put this amount of money into perspective. In 2018, 66,717 Dodge Challengers were sold, the peak year of sales for that model.
To be clear, I'm not saying the Omnibus Bill should or shouldn't be passed. I'm sure there's a lot in there that needs to be spent, and I'm also sure there's a whole bunch of "pork barrel" spending that doesn't really need to be spent. My point in this post is just to try and put the huge amount, of $1.7 trillion U.S. dollars, into a frame of reference, so we get some idea just how much money that is. Yes, it will help cause more inflation down the road, 12 to 18 months, on average, after the chunks of money are spent. It won't increase inflation in the next few months, though. It takes a while for large blocks of new money to work into the everyday economy, causing inflation.
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I have a new blog called Adaptive Reuse SoCal, about finding new uses for old, unused, and abandoned buildings, as well as the economy, and commerical real estate in general. Check it out!
Inflation is NOT prices going up, it's the value of the currency (the dollar, for us) going down. Warren Buffet and Charlie Munger, of Berkshire Hathaway, are the two best investors, over decades, in the U.S., and the world. "The best hedge against inflation it your own earning power." - Warren Buffet.
Why a amateur rocket launch in a blog post about this year's economy? It's a good visual representation of the way inflation took off, and raised prices on almost everything in the past several months. Many people are looking at gas, home, and other prices, thinking, "Whoa, what just happened?
In my opinion, we are now 31 months into what I call The Phoenix Great Depression, a 5 to 7 year + economic mess that will ultimately feel like a great depression to most Americans, and may meet the traditional definition of one. It started with the Repo Market Crisis in late September of 2019, and got everyone's attention when Covid-19 hit U.S. shores in February and March of 2020, leading to mass business shutdowns.
We are now heading into the second recessionary wave of this long crisis. What does that mean? This year, that means three main things.
1) Prices will keep going up, in general. Gas prices will go down some after a while, and real estate prices should be falling most places nationwide, by late 2022. The official inflation rate, currently 7.9% is a joke, real inflation for most things people buy is probably closer to 12% to 20%. Gasoline prices are up around 50% here in the L.A. area, over $6 in many places, and that's a lot more than 7.9% per year. I think the official interest rate may go a bit higher, but then will come down this year. But inflation will remain high, 5%-7% most likely.
2) Interest rates will keep going up for most, or all, of 2022. I wrote an economic outlook report for my business owning friends, and sent it out on September 10th, 2021. In it, I predicted interest rates would rise 1% to 2% by late 2022. The 10 year T-bill rate, a good benchmark for interest rates, was 1.35% then. The 10 year T-bill rate just hit 2.38% yesterday, meeting the 1% minimum rise I predicted six months ago. It's reasonable to expect interest rates to rise another 1% to 1.5% by the end of 2022. This will dramatically slow down the real estate market in 2022, and should lead to falling prices in most areas by late this year.
3) The stock market indices will continue a bumpy downward trajectory for the next few months. Think of a ski slope with moguls, they will bounce up at times, but the overall trend will continue down. Look at a DIJA chart for 2008, that's the kind of trajectory I see as most likely for stocks this year4-7 months of bouncy downtrend, and maybe a big drop afterwards. Up and down, but a slow downward trend from now (late March) to maybe July-October 2022. The four main stock indices should drop below these levels this year, 2022: Down Jones Industrial Average- below 27,000, Nasdaq- below 10,000, S&P 500- below 3,500. Once stocks bottom out, below these numbers, they should bounce back 10% - 20%.
Where do I get these numbers? In stocks and commodities, there's an old rule that every long term bull market makes a retracement of about 50% of the rise, after reaching the peak. So if a bull market rises about 1,000 points, it will drop back about 500 points, get unstable for a while, and then begin a new trend. I read about this rule in a commodities course by Ken Roberts in 1998. The markets are so manipulated and warped at this point, I think the retracement will be more like 35% to 45% of the total rise from the 2009 low, to the peaks early this year.
These are my personal opinions, and, as always please do your own research, due diligence, and consult appropriate professionals before making business and investment decisions.
Oh, by the way... When I was writing this post last night at a McDonald's, the type pad for my laptop was turned off remotely, by someone. This has happened 2 or 3 times now, rendering my laptop useless. As of right now, I can't get into the software to re-enable the type pad. That's how intense the censorship of alternative thoughts about the economy is these days.
In addition, I just noticed the page view counters on my blog have been turned off, AGAIN. So, there's this thing in the U.S. called a Constitution, and the First Amendment is all about Free Speech. This is how intense the attacks on free speech our in the U.S. A. in 2022.
