Editor’s Commentary: Is recession coming? Are we already in one? What do inflation, rate hikes, job markets stumbling, global currencies teetering, supply chains collapsing, retail sales plummeting, food shortages, energy crises, and other economic indicators tell us?
I am not an economist but I talk to some pretty smart financial minds. I have to quote one in particular even though I hate using anonymous sources; her bosses don’t know she’s a “right-winger” and that knowledge could affect her career prospects. She texted me this morning, “A lot of economists are fearful that ringing the alarm bell will create a self-fulfilling prophecy, but tell your readers whenever we say ‘2024’ regarding crashes and collapses we’re really thinking ‘2023’ but hoping to stave off the carnage a bit longer.”
It was an interesting quote that I had to reread a couple of times, not because it’s too complex but to grasp the undertones. “Crashes and collapses,” she said. “Stave off carnage,” she said. Sounds ominous. But as I said, I’m not an economist so I’m not sure what to make of it. I asked if she thought I should encourage people to buy precious metals in preparation. She texted, “Supplies first. Then gold and maybe silver.”
Again, ominous. We’ll see how it all plays out but I’m much less bullish about recovery than I was before the midterm elections. It seems like we’re in for some very troubling financial times ahead in this nation and around the globe. When they say 2024 for recession or any other bad economic conditions, assume it’s already here while hoping it never comes at all. Here’s Peter Svab from our premium news partners at The Epoch Times with a complete breakdown of what one economist has been predicting…
Recession Coming in 2024: Economic Forecaster
“We see this year that the Fed pushes too hard too fast.”
American industry will slow down next year, then fall into a recession the year after, according to ITR Economics, an economic forecaster.
“We’re still calling for more of a slowing growth cycle in 2023, but the original soft landing that we were calling around the end of 2023 now looks like it’s turning into a hard landing in 2024,” Patrick Luce, an economist with ITR, told The Epoch Times.
A key indicator that made ITR change the forecast was the inversion of treasury rates. In July, the 10-year treasury yield sunk below the 2-year one and the inversion has been growing since. Such an inversion signals that investors are wary of the economic situation in the next few years and it historically tends to happen 12 to 18 months before a recession.
Luce blamed the bleak outlook on the Federal Reserve’s aggressive raising of interest rates this year, from virtually zero in March to more than 4 percent now.
“We see this year that the Fed pushes too hard too fast,” he said.
Fed Chair Jerome Powell has been saying for months that rates need to stay higher for longer in order to tame inflation. Inflation escalated from less than 2 percent in early 2021 to more than 9 percent in June. It has since moderated to 7.1 percent in November.
The increase has been attributed to several factors, primarily the gigantic government spending during the COVID-19 pandemic, as well as supply chain disruptions caused by the lockdowns instituted in response to it.
The combination of the two factors “bottlenecked the system,” Luce said.
Other issues cited by some experts as affecting price inflation have been the restrictive domestic energy policy of the Biden administration and the war in Ukraine. Powell has stressed that the Fed has little power over the supply side of the economy, but that he can try to close the production-consumption gap by taming demand.
The problem is, by the time the Fed is satisfied that inflation has been quelled, it may have already tightened the monetary policy too much.
“These impacts, they don’t happen overnight,” Luce said. “They take time to manifest themselves in the broader, macroeconomic sense.”
Effects Lagging Behind
In its analysis, ITR likens the economy to a train. The cars in the front see the impacts of what’s to come first, while the rear cars are responding with a lag to trends already well underway in the economy.
“The financial sector leads the economy. Housing market, specifically single-unit housing, leads the economy,” Luce said.
Then come indicators such as new orders and industrial production. Further down is wholesale trade and then retail. At the rear of the train are consumer prices, which is exactly the indicator the Fed is trying to affect, Luce pointed out. In the housing sector, the upcoming recession is already evident, he noted.
Higher interest rates immediately throttle lending which then quickly hits the housing sector, which is sensitive to mortgage rate movements. Housing permit issuance was down about 11 percent year-over-year in October, leading ITR to consider the sector already in recession.
“That contraction is already underway,” Luce said. “It is our expectation for that to continue throughout next year and even into the first quarter of 2024.”
Yet he doesn’t expect the sector to get pummeled as in the Great Recession of 2008.
“Inventories are much lower today then they were back in 2005–2006 as they were leading up into the Great Recession,” he said.
Meanwhile, homeowner vacancy rates are low, homeowner occupancy rates are high, and people seem to still have enough income to pay their mortgages.
“The consumer’s ability to service debt right now and household ability to service debt right now is very strong,” Luce said.
What’s weighing housing down are very high prices. ITR is expecting the Fed to get rates up to about 5 percent and then stop the hikes around March–May next year.
“As that federal funds rate peaks and if they start to bring it back down, that will also give easing to that affordability situation within the housing market,” Luce said.
He noted the housing market particularly depends on locality, meaning some areas will likely see major crashes while others perhaps a mere slow-down.
Recession in Tech
Tech is another sector that will see the recession arrive early, ITR predicts. The industry was “stimulated over trend” during the pandemic and is therefore “more susceptible to the pullback in kind of that post-COVID era,” Luce said.
The rest of the economy is likely to sink into a recession in early 2024, albeit a relatively shallow one, ITR expects. From a GDP perspective, the recession may resemble the “flat and bouncy” one of 2000–2001, Luce said.
From industrial production perspective, it would be close to the recession of the late 1960s or early 1990s. “Definitely more mild than what we saw during the Great Recession,” he said.
The recession wouldn’t cause deflation, he explained, but rather “a temporary reprieve” in inflation.
For the rest of the decade, ITR expects inflation to remain elevated. For one thing, Americans are getting older on average, which means a shrinking labor pool and upward pressure on wages. In addition, during the pandemic, many people who were working despite retirement age have called it quits and don’t seem to be coming back.
“When I look at the labor force participation rate, the majority of demographics are back on trend, but folks over the age of 65 especially haven’t gotten back to that participation rate from the COVID era,” Luce said.
Moreover, the pandemic and lockdown woes have prompted an “onshoring trend” of companies reducing dependency on foreign supplies and bringing production to the United States. That also boosts domestic labor demand.
A shift toward higher inventory levels to bridge over potential supply disruptions is also inflationary as it kills some capital productivity.
“Those trends are real and we’re feeling them,” Luce said.
If the Fed insists on its mandate to keep inflation around 2 percent, it may run into “structural” factors “providing more inflationary pressures above that 2 percent level,” he said.
The ITR forecast assumes the job market will remain “strong enough to support ongoing real income growth” and that food prices will “moderate or come down,” Luce said.
Another caveat is that ITR bases its forecasts on market forces—it doesn’t try to guess what the government may do, for example, in response to a recession.
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.
Do those pundits actually believe they appear brilliant in saying that about a recession in 2024? Yes DUH, we are already there ! What has to happen before those morons wake up to what recession means? By 2024 we will be in a REAL DEPRESSION now that Biden’s handlers are very close to destroying America with Biden being the intended fall-guy when the SHTF civil war commences.
Everyone is trying desperately to cover their own asses by making stupid statements to try and appear relevant, but relevant to what. America is edging closer to the edge of the precipice and will run right off that cliff like lemmings if we don’t stop them.
The Republic already is in recession, thanks to criminal Biden, Democrats and RINOs. 2023 will bring on the greatest Depression in history. It will be bad, very bad! Criminal Biden and his retro-regressive have absolutely no clue about economics. Biden is quite well clueless about most things and is not qualified to be a US President. The criminal stinks, is a bum!
We are already in a recession – multiple quarters of contraction, decreased manufacturing output, job losses (yeah, those “1 million jobs added” in 2022? Make believe!!) and massive inflation.
This will continue in 2023 as the Fed and other world banks continue to INTENTIONALLY destroy the collective economies of all the producing nations.
Which will result in a global GREAT DEPRESSION in 2024.