June 20, 2022

President Donald Trump, while meeting with a group of military leaders in the White House in 2017, cryptically warned of “the calm before the storm.” When asked by reporters what he meant he simply replied, “You’ll find out.”

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There has been much speculation as to what “storm” Trump was referring to, ranging from overturning a fraudulent election to devolution. While his comments from five years ago remain inscrutable, today a real storm is on the horizon, plain to any American consumer. This storm is economic, perhaps a hurricane, as JPMorgan Chase CEO Jamie Dimon described it, the likes of which may be terrifying and life-changing to those caught in the maelstrom.

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Before I am accused of hyperbole, several financial gurus have likened current economic conditions to a storm, as I chronicled in a recent article. An SMU professor agrees, “We’re seeing these massive dark clouds on the horizon.” A coming storm is an apt description.

Was the Trump presidency, with $2 gas, low unemployment and inflation, peace and prosperity, the calm before the current economic storm? Did Trump know what lay ahead, teasing out a prediction? Regardless of what President Trump was alluding to, an economic storm is definitely coming, not just on the horizon but already taking its toll on hard-working Americans.

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Inflation is at 8.6 percent, the official government number for the CPI. This is based on a basket of goods and depending on what is measured and how it is weighted, may misrepresent the inflation rate facing consumers on a daily basis. For example, the Truflation Dashboard reports inflation at 13.2 percent, with food costs up 26.5 percent.

The producer price index rose 10.8 percent in May, foretelling higher consumer prices soon reaching store shelves. Small business optimism fell to a new 48 year low. Pessimistic business owners will not be hiring new employees or expanding their businesses. Many may close up shop instead.

Anyone visiting a gas station sees the price over $5.00 a gallon, more than twice what it was a few years ago. As most goods and services require transportation costs, meaning fuel, expect to see this price increase passed along to consumers through higher prices.

The stock market is down bigly from the Trump days and is now officially in a bear market, meaning markets are down 20 percent or more from their most recent all-time high. Despite the unemployment rate hovering at 3.6 percent, this represents only those actively seeking employment, not those who have given up looking for work.

The labor force participation rate, a better measure of who is working and who is not, dropped to 62.3 percent, the lowest level since the mid-1970s, excluding the months during the COVID shutdowns. What are President Biden and his economic wizards doing to alleviate this?

Inflation is too much money chasing too few goods, a remnant of irresponsible government policy and leadership going back decades. This was exacerbated by copious COVID relief money, paying Americans to stay home and not work or produce. As COVID is waning, the Biden administration, rather than taking its foot off the stimulus accelerator, is continuing to create money and spend like a drunken sailor.