Have We Truly Dodged A Recession This Year? | Adam Taggart

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I'm Wealthion founder Adam Taggart, here with a brief explainer video for you on the topic of stealth liquidity.

This topic is important because it helps explain why 2023 is unfolding, to the confusion of many analysts, to be the "Year Of The Recession That Wasn’t"

Heading into this year from the unrelenting beating for stocks and bonds that was 2022, the vast majority of economic forecasters predicted a recession was near-certain to arrive in the first quarter or two.

The Fed had turned off the monetary stimulus spigots and was now pursuing interest rate hikes and Quantitative Tightening with an aggression rarely seen before in history.

The fast rising cost of capital, plus elevated input costs and higher wages from raging inflation, were squeezing corporate profits. Layoffs surged. Corporate bankruptcies started spiking to levels not seen since 2010.

And then the banking system started stumbling – seeing more US bank failures as measured by market cap than in the Global Financial Crisis – forcing banks to tighten lending standards.

And on top of that, the US government faced a debt ceiling showdown, which required the US Treasury to drain its general account to keep government operations funded until a deal was struck – which would then suck over a $trillion in capital out of the economy as new Treasury bonds got sold to refill the TGA’s coffers.

And on top of that, the Feds higher interest rates caused a surge in interest expense on the federal debt, now passing over $1 trillion for the fiscal year.

All of these factors made a compelling, practically overwhelming case for reduced systemic liquidity in 2023. For well over a decade, the markets and the economy had become dependent on the Federal Reserve’s trillions of dollars worth of QE & rock-bottom interest rates. And then during the pandemic, a series of new fiscal stimulus packages and forbearance programs added to the addiction. Without those, the thinking went, the economy would contract in 2023, companies would lay off workers in larger numbers, and the financial and housing markets would correct materially.

But something funny happened on the road to this widely-expected recession. The recession forgot to show up.

Why? In this video, we think we might just have the answer.

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There’s no doubt that it's a very challenging time right now for the average investor. Above and beyond the recent economic impacts of COVID, the new era of record low interest rates, runaway US debt and US deficits, and trillions of dollars in monetary and fiscal stimulus stimulus has changed the rules of investing by dangerously distorting the Dow index, the S&P 500, and nearly all other asset prices. Can prices keep rising, or is there a painful reckoning ahead?

Let us help you prepare your portfolio just in case the future brings one or more of the following: inflation, deflation, a bull market, a bear market, a market correction, a stock market crash, a real estate bubble, a real estate crash, an economic boom, a recession, a depression, or another global financial crisis.

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