Credit card debt is rising at rates comparable to the 2006-2007 financial crisis, with essential spending increasingly financed through credit cards, signaling potential economic stress.
Credit card delinquencies are increasing rapidly, prompting credit card companies to offer more deals to higher credit score borrowers to balance potential risks.
FED Chair Jerome Powell expressed concern about the 4.3% unemployment rate, which is 50% higher than in 2022 but still near 2017 levels, potentially leading to a rate cut in September if it reaches 4.5% or 5%.
The FED’s 5.25-5.5% interest rate range since March 2022 has had limited impact on real asset prices like housing, as consumers anticipate future rate decreases.
Consumer spending in the US is heavily reliant on debt, creating economic tension as wages increase by 5% year-over-year on average while inflation continues to rise.
Non-essential spending on cheaper alternatives to expensive items is driving up inflation, as consumers adapt to economic pressures.
The FED has limited control over key inflation drivers such as supply chain disruptions, commodity cycles, geopolitical events, and climate issues.
Monetary policy primarily influences the money supply and has a lagged effect on the economy, limiting the FED’s ability to quickly address economic challenges.
Intellectuals in the 1950s, like Adlai Stevenson, were often revered for their airs of intellectualism rather than substantial knowledge, highlighting a disconnect between perception and reality in intellectual circles.
Despite being viewed as a “country bumpkin” by intellectuals, President Harry Truman was actually a voracious reader of heavyweight literature in original Latin, demonstrating the danger of superficial judgments.
In the 1930s, leading American intellectuals erroneously advocated for the Soviet centrally planned economy while condemning the US system, ignoring the massive famine in Ukraine despite its rich farmland.
Journalists like Walter Duranty and Malcolm Muggeridge faced ostracism for reporting the truth about Ukraine’s famine, illustrating the groupthink and resistance to facts prevalent among intellectuals.
Intellectuals often mistake narrow expertise for broad wisdom, believing their specialized knowledge qualifies them to guide society, despite frequently demonstrating ignorance on complex issues outside their field.
The 2020 US presidential election is a fear-based election with 100-year high voter participation rates, potentially leading to enormous expectation collapse and resistance movements regardless of outcome.
Losing candidate’s supporters may form movements similar to the French Resistance against Nazis or nullification movements, potentially leading to defiance of federal authority.
The current situation is reminiscent of the 1850s, when a third party emerged and secession and civil war ensued.
The fourth turning, a generation-long era of societal reorganization, is characterized by polarization, civil war, and regime change, with the current one beginning with the 2008 financial crisis.
This era necessitates massive social spending programs, government growth, and centralized control to ensure regime survival.
The fourth turning brings cultural changes towards convention, authority, community, and equality, with a new focus on the future.
The K-shaped recovery has rewarded asset owners at the expense of middle class aspirants, potentially sparking class wars, generational wars, or ideological civil wars.
The 1930s, 1850s, and American Revolution serve as historical parallels to the current fourth turning, with each involving a catalyst, civic regeneration, climax, and resolution phase.
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