The U.S. Economy Continues To Move In The Wrong Direction

by Michael Snyder

Despite so much evidence to the contrary, the Biden administration continues to insist that the U.S. economy is on the right track.  But is that really true?  Thanks to the Federal Reserve, interest rates are now much higher and the money supply has been contracting at the fastest pace since the Great Depression.  As a result, large companies have been conducting mass layoffs, the housing bubble is imploding, and economic activity is rapidly slowing down all over the nation.  But if you ask Joe Biden and his minions, what we are witnessing is all part of the plan.  In fact, they continue to speak of “Bidenomics” as if it is a good thing…

Monday’s announcement is part of Biden’s greater push for his economic plan dubbed ‘Bidenomics,’ which ‘is rooted in the simple idea that we need to grow the economy from the middle out and the bottom up – not the top down,’ Dunn and Donilon wrote.

The president’s economic proposal includes plans to hike taxes on the uber-wealthy and corporations in order to subsidize social, climate and health programs.

Give me a break.

I’m not buying what they are selling, and most other Americans aren’t either.  According to one recent survey, well over half of all Americans disapprove of how Biden has been handling the economy…

More than half – 54% – of Americans disapprove of how Biden is handing his job, while just 35% of respondents approved of his stewardship of the economy, according to a Reuters/Ipsos poll conducted earlier this month.

Those figures are a bad sign for Biden and his fellow Democrats.

Of course Biden is not responsible for the stunning reversal in money supply growth that we have been witnessing.

The money supply has been steadily shrinking since late last year, and during the month of April it actually contracted at the fastest pace that we have seen since the Great Depression…

During April 2023, the downturn accelerated even more as YOY growth in the money supply was at –12.0 percent. That’s down from March’s rate of –9.75 percent, and was far below April’s 2022’s rate of 6.6 percent. With negative growth now falling near or below –10 percent for the second month in a row, money-supply contraction is the largest we’ve seen since the Great Depression. Prior to March and April of this year, at no other point for at least sixty years has the money supply fallen by more than 6 percent (YoY) in any month.

It is important to understand that the economy does not immediately respond to a change in the money supply.

There is a lag. In other words, it takes time for the effects to filter through the entire system.

But we are already starting to see some very troubling signs.  As I have been documenting in recent weeks, large companies have been conducting mass layoffs all over the country.  Just a few days ago, Ford added their name to the list…

Ford Motor Co. is planning to lay off a minimum of “several hundred” salaried employees, starting as soon as next week, the Detroit Free Press has learned.

The action will be limited to white-collar workers in North America, perhaps just the U.S.

And we are starting to see initial claims for jobless benefits move higher.