The Atlanta Federal Reserve recently revised the G.D.P. expectation for the first quarter of 2025 into the negative. A large part of the economy is being supported by an increasingly smaller and smaller part of the population. Those with some real wealth continue to spend no matter what the cost. Those who would like to be presumed as wealthy continue to borrow in order to spend. A very large part of the population has officially tapped out. Their borrowing capacity is maxed out. Their earnings have stagnated against the cost of goods and they purchase only that which is absolutely necessary.
Stocks are said to be "priced to perfection". The only way to go from here is down. Housing has "jumped the shark" in many markets and inventory is building. The only way to go from here is down. Some people who thought themselves to be bullet proof where their jobs were concerned are having a come to Jesus moment. A lot of paper wealth is about to go up in flames. People with gold, cash, silver or easily convertible securities are going to be well positioned to buy some bargains.
It will be interesting to see if the Federal Reserve jumps into the fray again with Q.E., money printing, Z.I.R.P., etc. If it does, inflation roars. If it does not, a crash in several areas of the economy as true price discovery takes place.
