by Michael Snyder, The Economic Collapse Blog:
Do things seem “slow” to you this summer? If so, you are definitely not alone. In recent weeks, my wife and I have heard from so many people that are saying that activity at their businesses or organizations has been really slow lately. In other words, less money has been coming in than usual. This has caused a lot of confusion, because when these people turn on their televisions they are told that the U.S. economy is doing just fine. Of course that is not actually true, but these media reports are still causing a tremendous amount of confusion. A lot of people out there are just very frustrated because things are so slow for their businesses or organizations right now while the overall economy is supposedly buzzing along at a really good pace.
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So what is really going on?
Well, it is absolutely imperative to understand what the Federal Reserve has been doing.
After pumping an unprecedented amount of money into the system during the pandemic, in recent months Fed officials have actually been making efforts to reduce the size of the money supply because they have been so scared of inflation.
As a result, M2 has been declining at the fastest pace in modern history.
When the money supply contracts, there is going to be less economic activity.
So this is one of the biggest reasons why things have been so “slow” for businesses and organizations all over America this summer.
And if the money supply continues to shrink, a recession will be inevitable. At this point, the Conference Board’s index of leading economic indicators has already fallen for 15 months in a row…
An index designed to track turns in U.S. business cycles fell for the 15th straight month in June, dragged down by a weakening consumer outlook and increased unemployment claims, marking the longest streak of decreases since the lead-up to the 2007-2009 recession.
The Conference Board on Thursday said its Leading Economic Index, a measure that anticipates future economic activity, declined by 0.7% in June to 106.1 following a revised decrease of 0.6% in May. The decline was slightly greater than the median expectation among economists in a Reuters poll for a 0.6% decrease.
The last time we saw a streak like this, we experienced the worst economic downturn since the Great Depression of the 1930s.
And many would argue that we have already entered a new economic downturn. Employers have been conducting mass layoffs all over the country, and the number of job openings in the United States just fell to the lowest level in more than two years.
Another sign that the economy has now fallen into hard times is the fact that sales of cardboard boxes are absolutely plummeting. The following comes from an excellent article by Michael Maharrey…
And here’s another off-the-beaten-path metric that is screaming recession — a big plunge in the sale of cardboard boxes.
Earlier this month, Packaging Corp. of America reported that cardboard box sales fell 9.8% in the second quarter. That ranks as one of the biggest slumps on record when you combine it with the 12.7% drop in Q1. According to a report by FreightWaves Research, the combined six-month decline ranks as the biggest plunge since early 2009.
Now, you might wonder, ‘What do cardboard box sales have to do with the economy?’
Stop and think about it. Stuff gets shipped in boxes. Everything from raw materials to final products arriving at your door is packaged in boxes. If there is less stuff produced and sold, an economy will need fewer boxes. So, cardboard box sales serve as a pretty good indicator of real economic activity — production, buying, and selling.
He is right.
These numbers are absolutely screaming that a recession is dead ahead.
And it isn’t just the U.S. economy that is struggling.
According to Zero Hedge, the latest numbers show that manufacturing activity is now in contraction mode all over the planet…
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