In a recent video, real estate expert Michael Bordenaro provided an in-depth analysis of the latest Beige Book released by the Federal Reserve for July 2024. The findings of this report are alarming, indicating a slow economic collapse unfolding before our eyes.
Quarterly Insights from the FED
Bordenaro explains that the Beige Book, released every quarter, offers insight into the economy from the FED’s perspective based on surveys from businesses and individuals. Despite its somewhat conservative tone, the Beige Book highlights significant economic issues, revealing a recessionary trend.
Mixed Economic Activity Across Districts
The Beige Book reports that seven FED districts experienced some level of increased economic activity, while five reported flat or declining activity. This mixed performance indicates that the economy is robust in certain areas while struggling in others, painting a picture of economic disparity.
Worsening Economic Conditions
The July Beige Book shows that the number of districts reporting economic decline has increased compared to the previous quarter. This trend suggests that economic conditions are deteriorating in more regions, signaling a broader economic slowdown. The report notes that wages continue to grow at a moderate pace, but prices have also risen modestly. Bordenaro points out that this dynamic does not benefit consumers, as rising costs negate wage increases, leaving people financially strained.
Flat Household Spending
Household spending remains flat, indicating that consumers are only spending on necessities. This cautious spending behavior is a clear sign of economic distress, as people prioritize essential purchases over discretionary spending. The auto industry, already struggling, faced further setbacks due to recent cyber attacks. These attacks disrupted sales and compounded the industry’s challenges, contributing to the overall economic decline.
Real Estate Stagnation
Both residential and commercial real estate markets are flat, with no significant activity reported. This stagnation reflects broader economic uncertainties and the reluctance of consumers and businesses to invest in property. Retailers are increasingly discounting items to attract price-sensitive consumers. This trend underscores the financial struggles of many Americans, who are opting for cheaper alternatives and shopping around for the best deals.
Personal Anecdotes of Economic Strain
Bordenaro shares personal stories from subscribers, illustrating the real-life impact of the economic downturn. For example, one viewer reported that a local café increased the price of a grilled cheese sandwich from $5 to $7, leading to a noticeable decline in customers.
Layoffs and Reduced Work Hours
The economic slowdown has led to significant layoffs and reduced work hours in various industries. Bordenaro highlights the situation at Mercury Marine in Wisconsin, where employees face short-term layoffs, reduced work hours, and increased financial uncertainty.
Government Intervention in Manufacturing
In contrast, the Stellantis assembly plant in Illinois received substantial federal funding to produce electric vehicles. This move, while creating jobs, underscores the government’s selective support for industries aligning with its policy goals.
“It Will Get Much Worse”
People in the comments shared their thoughts and advice: “The wisest thing that should be on everyone’s mind currently should be to invest in different streams of income that doesn’t depend on the govt. Especially with the current economic crisis around the world. This is still a good time to invest in gold, silver, and digital currencies (BTC,ETH…)”
Another commenter said: “40 pack of water went from $2.18 to $5.48 at walmart. Freon has doubled. Car insurance up 70%. Electric up 50%. You didn’t have to be a genius to know printing trillions would be a problem. It will get much worse.”
Health Insurance Challenges
Subscribers also reported issues with health insurance. One viewer’s preferred healthcare provider may no longer be covered due to disputes over reimbursement rates. This change forces individuals to find new doctors mid-plan, adding to their financial and logistical burdens.
Preparing for Economic Downturn
What are your thoughts? How can individuals and businesses prepare for a prolonged economic downturn? What measures can be taken to address the economic disparities between different regions? How should policymakers balance the need for economic growth with the protection of consumer interests?
See the full video on Michael Bordenaro’s YouTube channel for more details here.
