(Schiff Gold)—We keep hearing about a “soft landing.” According to government officials, central bankers, and mainstream financial media pundits, the US economy has dodged a recession.
So why are recession warning signs still flashing?
Most major financial institutions and high-profile economists have abandoned or significantly downgraded their recession projections. Those that still still forecast an economic downturn predict it will be short and shallow.
For instance, during the last FOMC meeting, the Federal Reserve upped its economic forecast, characterizing economic activity as “expanding at a solid pace.” It increased its GDP projection for 2023 to 2.1%, more than double its 1% projection in June. Fed economists do expect growth to slow to 1.5% next year, but any talk of a recession is completely out of the discussion.
But one major financial institution still sees a recession in America’s future — Deutsche Bank.
The German bank was the first major financial institution to project a recession in the US, and it’s sticking to its guns.
Deutsche Bank isn’t just making a calculated guess. It has solid data to back up its projection. The bank’s head of global economics and thematic research Jim Reid and a team of economists recently analyzed 34 US economic downturns dating back to 1854 and identified four macroeconomic “triggers” common to past recessions.
Bad news — all four are flashing red.
In its analysis, the Deutsche Bank team calculated the percentage of times these four events led to a recession. They call this the “hit ratio.” Based on their analysis, they determined that no single trigger can predict a recession. Nevertheless, all four of the triggers most commonly associated with US recessions are in play now.
Reid cautioned that it’s impossible to accurately predict every recession using macro triggers.
But it’s fair to say that the most significant ones [triggers] have been breached this cycle and that the US tends to be more sensitive to these historically.”
The Four Triggers
Following are the four triggers identified by the Deutsche Bank team and their hit rates.
An Inflation Spike (77%) — There’s no question that this trigger is in play. Price inflation soared to a four-decade high in the summer of 2022. While it has cooled in recent months, the CPI began creeping up again in July and continued to rise in August.
Reid said the US economy “seems to have the most sensitivity to inflationary spikes.” Since 1854, a 3% rise in price inflation over a 24-month period caused a recession within three years 77% of the time.
Note that there can be a significant lag in time between the initial inflation shock and the recession.
And while price inflation might be down, it isn’t out. During a recent podcast, Peter Schiff said, “It’s obvious to anybody who opens their eyes that inflation is not topped out and coming down. It’s bottom out and going up. And the people who are blind to this, who are asleep, they are in for a rude awakening.”
An Inverted Yield Curve (74%) —Typically, longer-term bonds offer higher yields than short-term bonds. A 10-year Treasury generally features a lower yield than a 30-year. This is because investors typically factor in more risk on a longer-term loan. When this flips and short-term bonds start yielding more than long-term bonds, it’s called a yield curve inversion.
The US Treasury yield curve has been inverted since July 2022.
Yield curve inversions have preceded a recession 74% of the time since 1854. If you consider a more modern period since 1953, the hit rate increases to 79.9%.
A Rapid Rise in Interest Rates (69%) — To fight price inflation, the Federal Reserve has hiked rates by more than 5% in just 18 months.
Since 1854, a 2.5% increase in short-term interest rates over a 24-month period led to a recession 69% of the time. As Reid put it, interest rate hikes haven’t ended well for the economy. He said, “The US seems to have the most sensitivity to interest rates. The US cycle has historically been more boom and bust than others in the G7.”
That’s likely because the US economy runs on borrowing and spending. It can’t function for very long in a high interest rate environment. Schiff summed it up in another podcast.
The economy is built on a foundation of cheap money. It’s not just the economy; it’s every facet of it. The government, the deficits, the government budget is built on cheap money. And it’s not just the federal government that’s been gorging on this cheap money. A lot of the state governments, municipalities — they’ve all issued a tremendous amount of debt over the last 15 years.”
The last time rates were at this level was in 2006. We know how that ended. But there’s a big difference between then and now. There is even more debt in the economy. Consider that in 2006, the national debt pushed above $10 trillion for the first time. Today, it is more than three times that level.
Oil Price Shock (45%) — The price of Brent crude has spiked by about 33% since June. This has thrown cold water on the “disinflation” narrative.
When oil prices have spiked 25% over a 12-month period, the US economy has gone into a recession 45.9% of the time.
Conclusion
As you can see, all four of these triggers are in play today. This is yet another reason to question the mainstream’s sanguine view of the economy.
As Schiff explained, most people in the mainstream don’t seem to grasp the gravity of the situation. They don’t realize that we are at the beginning of the end of this whole phony economy. He said Fed chair Jerome Powell could put off the implosion in the short run by doing something drastic to change the narrative. That would entail at least hinting at interest rate cuts.
Otherwise, this is going to happen. Whether it’s tomorrow, the next day, or the next week is hard to tell. But what seems apparent to me is that we’re about to go over a cliff. I just don’t know how much more distance there is between where we are now and the edge of that cliff. But we’re going there.”
Bypass Big Tech Censors
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.