Federal Reserve Chairman Jerome Powell and his open market committee left the only interest rate they control unchanged on November 1st. Everything is okey dokey, soft landing in process.

After the announcement and brief remarks by Mr. Powell the Q & A began with a room full of Fed following financial journalists, er leakers. Beyond the usual fluff questions, Jonnelle Marte from Bloomberg concluded her question with, “Also, do you think that those higher yields could affect banking stress?”

The eurozone economy is more than weak. It is in deep contraction, and the data is staggering.

The United States is borrowing its way to disguise recession.

The headline economic figures for the United States look robust. However, details show concerning weaknesses.

Real GDP growth surged to 4.9% in the third quarter, above the consensus estimate of 4.5%. However, some analysts, including Bloomberg, expected up to 5% growth based on the nowcast estimates.

Sovereign debt is eating the world. Lining up a financial crash that could make 2008 look like a picnic.

How did we get here?

In short, governments and central banks deluded themselves into thinking that unlimited deficit spending financed by unlimited money printing won’t do what they’ve done for literally millennia -- plunge the economy into stagflation.

They are, of course, wrong. And we’re seeing the catastrophe unfold before our eyes.

The impending decline of the dollar is apparently imposing a real Halloween scare on the American foreign policy establishment. An August 22, 2023, article on the Council on Foreign Relations website entitled “The Future of Dollar Hegemony” explained that 

Faced with growing American frustration over more than $100 billion spent on a failed proxy war in Ukraine, President Biden’s handlers have hit on a gimmick to convince us that this foreign aid is actually an investment in our own economy! In his recent television address, Biden explained that as we transfer more weapons to Ukraine we then will build new weapons at home to replace them. That, explained Biden, means more American jobs and a stronger American economy.

It’s important to remember these pre-crisis days, where the Fed sounds like they’re doing a great job to steer the economy, and where economic stimulus isn’t even on their agenda. This is not an endorsement of the current state of the economy, but rather a reference point to look back upon when things get worse in the future.

From the onset of the current Israeli-Hamas conflict, the statements from the Joe Biden administration and Congress were crystal clear: America is the indispensable nation, and we’re rich and powerful enough to be able to afford two wars to guarantee the safety of the world. Even with the displeasure over an unstoppable growth in debt and a declining economy, the message to both the domestic and international audiences is DC will get involved wherever it need be.

Dorothy and her companions in the movie The Wizard of Oz feared lions and tigers and bears as they journeyed through the woods to visit the wizard. But real people living today might fear frighteningly large numbers more than large wild animals.