June 6, 2022

Hurricane season is officially underway, beginning June 1, extending to November 30. Expect the usual stories about hurricanes becoming more frequent and severe due to global warming, despite contrary evidence.

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What about a new type of hurricane? Not rain and wind, but an economic hurricane of stagflation, a toxic combination of high inflation and stagnant economic growth. This hurricane is so miserable that a term was coined to measure the misery, aptly named the misery index, the sum of the inflation and unemployment rates.

The misery index is currently in double digits, near 12, and if economic malaise continues, expect this number to creep closer to 20, territory last seen during the Jimmy Carter presidency, the last time both the misery index and malaise were commonly discussed.

True hurricanes are forecast by meteorologists, although amateurs such as Al Gore, Greta Thunberg, and Prince Charles, often opine on upcoming climate change catastrophes. Economic hurricane predictions are best left to those with a far deeper understanding of business and the economy than Al or Greta have of the weather or climate.

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One such expert is Jamie Dimon, CEO of JP Morgan Chase, the largest U.S. bank. At a recent financial conference, he warned, “You know, I said there’s storm clouds but I’m going to change it … it’s a hurricane.”

He went on with his economic hurricane forecast, “Right now, it’s kind of sunny, things are doing fine, everyone thinks the Fed can handle this. That hurricane is right out there, down the road, coming our way.”

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Another business titan, Elon Musk, echoed Dimon’s hurricane forecast. Just as animals are able to sense an incoming storm or tsunami, Musk has a similar premonition about an upcoming economic hurricane. Musk has a “super bad feeling” about the economy. He emailed Tesla executives to “pause all hiring worldwide,” and instead plan on cutting 10 percent of the Tesla workforce.

A third economic mogul weighed in, although not with a weather analogy. Goldman Sachs’s President John Waldron observed:

This is among – if not the most – complex, dynamic environments I’ve ever seen in my career. The confluence of the number of shocks to the system to me is unprecedented. We expect there’s going to be tougher economic times ahead.

It’s clear that America is heading toward an economic hurricane. Do others recognize this, aside from the three commenting above? Does the media notice, or are they too busy reporting on COVID cases as if it’s still 2020?

Average Americans certainly recognize the coming economic storm. Anyone who drives a gasoline powered vehicle knows the pain of filling up the tank. Gas prices hit another record high of $4.71 a gallon with seven states topping $5.00 a gallon. Biden’s response is that gas and food prices are “not likely” to come down anytime soon because there is a lot “going on right now.” There’s always a lot going on. He was elected to manage it.