(Mises)—Those who have been predicting a recession in the United States and an associated stock market crash seem to be having a hard time. At least, it appears so. US gross domestic product grew by 2.1 percent in Q2 2023, after growing 2.0 percent in Q1; the unemployment rate was rather low at 3.8 percent in August 2023; and the S&P 500 was at 4,460 points, around 10 percent below the index record of 4,818 points from January 2022. Yet, there are many variables that yield a point to the prophets of doom.
For instance, high inflation has reduced the real incomes of people and businesses, lowering their demand for goods and services. The increase in credit costs, which began in early 2022 with the Federal Reserve interest rate hike, should (at least) slow down consumption and investment—and lead to more loan defaults. In addition, the US yield curve is severely inverted, signaling an imminent recession.
Not to be forgotten is the downward pressure on asset prices—real estate, in particular—caused by the rise in yields. This puts pressure on banks and makes them more cautious about taking on additional credit risks. The supply of borrowable funds to consumers and businesses is drying up and becoming more expensive compared to the cheap and plentiful credit supply in the last decade. When bank credit growth slows down, the economy’s money stock growth slows down as well.
The latest data for the US shows that bank lending growth has declined considerably—declining 0.5 percent year over year in August, down from 10.1 percent year over year in August 2022. This, in turn, impacts the money stock M2, which fell by 3.7 percent year over year in July. (It should be noted that, in addition to lower bank lending, other factors were also at work—such as interest rate–induced shifts from bank deposits included in M2 to those not included in M2, which contributed to the reduction in the US commercial bank money stock.)
While all this is undoubtedly the case, the “time factor” must also be considered in this context.
Put simply, it takes time for higher credit and capital costs to impact the broader economy. In fact, the economic and financial effect of increased borrowing costs will materialize gradually over time, in small increments, so to speak. Borrowers typically have a debt maturity profile. This means that not all of their total debt will be due at the same time, with maturities spread out over the years. So, only a part of a firm’s loan portfolio will have to be refinanced at higher interest rates in 2023.
Over time, however, credit costs rise as a growing portion of the outstanding debt must be refinanced at higher interest rates. In the course of this development, the trouble begins—and things start to get messy. Higher credit costs reduce firms’ profits, while increased interest rates curb the demand for their goods and services. These are the typical conditions under which the economy slows down or even contracts.
Of course, in such a scenario, the government may increase its deficit and try to fend off recession by boosting overall demand. This is, however, a risky undertaking when government debt is already very high and borrowing costs are elevated. Investors could all too easily question the effectiveness of an increased deficit spending program and become concerned about the government’s creditworthiness—with potentially disastrous consequences.
Even though it appears to have been premature for the doomsayers to predict a recession and a stock market crash, it may have become clear that “all is not going well.” Perhaps most important in this context is the issue of valuation levels. Clearly, the rise in interest rates in the last eighteen months or so has already significantly impacted many asset markets—just think of the real estate sector. However, the asset price revaluation phase may not have reached its final stage.
For example, US stock prices show a rather pronounced disconnect from the bond market. This suggests that stock prices are either headed for a downward correction—granted that bond prices remain at current levels or continue to fall—or that bond prices will correct upward to support higher stock prices, or a combination of both will happen with slightly lower stock prices accompanied by slightly higher bond prices.
Undoubtedly, the key questions are: Will interest rates remain at elevated levels, or will they continue to rise? On the other hand, will interest rates return to the downward trend they had been on since the early 1980s until around 2022? Answering these questions amounts to making a truly “big call.” Undoubtedly, quite a few considerations must be made that allow both higher and lower interest rates to be predicted going forward.
Either way, the answer to these questions will most likely be compatible with making a case for holding physical gold and silver. This is because higher interest rates are likely to result in a rather large-scale “credit event,” while further declining yields would signal the (expected) return to inflationary monetary policy—an attempt to boost asset prices, devalue the currency, and overcome the recession, whatever it takes.
One thing is certain, though. The storm that hasn’t reared its ugly head yet will come in the form of recession, high unemployment, and—if central banks lower interest rates again and keep increasing the money supply—chronic high goods price inflation.
About the Author
Dr. Thorsten Polleit is Chief Economist of Degussa and Honorary Professor at the University of Bayreuth. He also acts as an investment advisor.
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Safeguarding Your American Dream: Discover the Power of America First Healthcare
In today’s economy, healthcare costs remain one of the biggest threats to financial stability and family security. Americans work hard to build a better life, yet rising medical expenses can quickly erode savings, force tough trade-offs, and even push families toward debt or bankruptcy. Medical bills continue to rank as the leading cause of personal bankruptcy in the United States, with millions facing underinsurance or unexpected out-of-pocket burdens that no one plans for. Many turn to government-run marketplace plans under the Affordable Care Act, hoping for relief, only to discover that what appears affordable on paper often delivers higher long-term costs, limited real protection, and coverage that may not align with personal values or family needs.
America First Healthcare stands out as a private insurance agency dedicated to helping conservatives and families secure better coverage and better rates through customized, values-aligned options. By conducting free insurance reviews, the agency uncovers hidden gaps in existing policies and connects clients with private alternatives that emphasize personal responsibility, small-government principles, and genuine affordability—often delivering up to 20% savings while providing stronger protection for the American Dream.
The allure of marketplace plans is easy to understand: open enrollment periods, premium tax credits for many households, and the promise of “comprehensive” benefits mandated by law. Yet recent data reveals a different reality, especially after the expiration of enhanced premium subsidies at the end of 2025. Enrollment for 2026 dropped by more than one million people compared to the prior year, with many shifting to lower-tier bronze plans to keep monthly premiums manageable.
These plans feature significantly higher deductibles—averaging around $7,500 nationally—and greater cost-sharing requirements. Families who once paid modest amounts after subsidies now face average premium increases of $65 or more per month, even as they accept plans that leave them responsible for thousands in upfront costs before meaningful coverage kicks in.
High deductibles create a dangerous barrier to care. Studies show that people in such plans are less likely to seek timely treatment for chronic conditions, attend preventive screenings, or fill necessary prescriptions. A seemingly minor illness or injury can balloon into major expenses when patients delay care until problems worsen. For a family of four, a single hospitalization, cancer diagnosis, or unexpected surgery can easily exceed the deductible, triggering coinsurance and out-of-pocket maximums that still leave substantial bills. One recent analysis noted that some proposed changes could push family deductibles toward $31,000 in future years, further exposing households to financial risk.
Beyond the numbers, marketplace plans often carry structural limitations. Coverage for certain critical services may include waiting periods or narrower networks that restrict access to preferred doctors and specialists. Preventive care is required to be covered without cost-sharing, but everything else—lab work, imaging, specialist visits, or ongoing treatment—typically waits until the deductible is met. This reactive model contrasts sharply with the proactive, holistic approach many families prefer, especially those focused on wellness, early intervention, and maintaining health to enjoy life rather than merely reacting to illness.
Values alignment represents another growing concern. Government-influenced plans operate within a framework shaped by federal mandates and political priorities that may not reflect conservative principles of limited government, personal freedom, and ethical stewardship. Families who want to direct their healthcare dollars toward providers and benefits that honor traditional values sometimes find marketplace options feel misaligned, forcing a compromise between affordability and conviction.
Private alternatives, by contrast, offer year-round flexibility without the restrictions of open enrollment windows. Independent agents can shop across a wider range of carriers to design plans tailored to specific family needs—whether that means lower deductibles for frequent medical users, broader provider networks, or add-ons that support wellness and preventive services from day one. Clients frequently report more stable premiums that do not automatically escalate each year, along with genuine cost savings once the full picture of deductibles, copays, and coverage depth is considered.
Take the experience of real families who made the switch. Amanda C. shared that her new plan felt “way better” than what she had through the marketplace. Johnny Y. noted his previous coverage kept increasing annually until he found a more stable private option. Sofia S. expressed delight with her plan and began recommending it to others. These stories echo a common theme: when families move beyond one-size-fits-all government marketplaces, they often discover customized protection that better safeguards both health and finances.
Founder Jordan Sarmiento’s own journey underscores the stakes. In 2021, a six-day hospitalization generated a $95,000 bill. Under a well-structured private “Conservative Care Coverage” plan, his out-of-pocket responsibility would have been just $500. That stark difference illustrates how thoughtful planning and private options can prevent a medical event from becoming a financial catastrophe.
Practical steps exist for anyone questioning their current coverage. Start with a no-obligation review of your existing policy to identify gaps—high deductibles, limited critical-care benefits, or escalating premiums. Compare total projected costs (premiums plus potential out-of-pocket expenses) rather than monthly premiums alone. Consider family health history, anticipated needs, and lifestyle priorities. Private agencies can present side-by-side options that include stronger wellness incentives, broader access, and plans built on shared values of self-reliance and freedom.
In an era when healthcare inflation continues to outpace general cost-of-living increases, relying solely on marketplace solutions carries growing risk. Families who proactively explore private alternatives frequently achieve meaningful savings while gaining peace of mind that their coverage truly works when needed most.
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Ultimately, protecting your family’s future requires looking beyond the marketing of “affordable” government options. By understanding the long-term costs hidden in high deductibles, shifting coverage tiers, and values mismatches, Americans can make empowered choices. Private, values-driven insurance offers a smarter path—one that rewards diligence, supports wellness, and delivers real security. For those ready to move beyond the limitations of traditional marketplace plans, a simple review can reveal options designed to serve families, not bureaucracies. The American Dream thrives when individuals and families retain control over their healthcare decisions, and thoughtful private coverage plays a vital role in making that possible.