Job growth numbers on Friday failed to impress. Economists had predicted job growth in the area of 720,000, but according to the Department of Labor’s estimates, jobs growth for August was only a third of that: 235,000.
Commentators on CNBC called it “terrible news” and the word “stagflation” has started to appear more and more in the media and investor narratives.
For example, Desmond Lachman writes in The Hill:
Today, with inflation rising to levels last seen 30 years ago and with unemployment remaining stubbornly high amid the COVID-19 pandemic despite massive policy stimulus, we may again be entering a prolonged period of stagflation…”
A Barron’s headline reads: “A Weak Jobs Report Puts Fed in a Bind as It Stares at Stagflation.” The Street has advised investors to “embrace stagflation” and BofA warned of “the potential for stagflation.”
And there are good reasons to fear that stagflation may be on the horizon.
Consumer confidence fell to its lowest levels since 2011 in July. The Atlanta Fed has reduced its Q3 forecast from 6 percent to 3.7 percent over the past month. Bank lending has turned negative in year-over-year measures in recent months—both in real estate loans and commercial loans.
It’s now abundantly clear there is no “v-shaped recovery” as so long promised by advocates of covid lockdowns. Total non-farm employment remains 5.3 million jobs below February 2020’s peak. Although the headline unemployment rate fell in August to 5.2 percent (down from 5.4 percent in July) this is likely being pushed down by a depressed level of labor force participation —which remains well down from 2019 in the 25-54 age bracket.
Bigtime Stimulus with Disappointing Results
All these numbers should be much better given that the economy is still in the midst of receiving enormous amounts of monetary and fiscal stimulus. Federal spending is at multi-generational highs, largely because the federal government can continue to borrow at rock-bottom interest rates. This is only possible because the Federal Reserve continues to add to its $8.3 trillion portfolio composed largely of government debt and mortgage assets.
Over the past 18 months, the Fed has added $4.2 trillion to its assets, which means the Fed has also flooded the economy with a similar amount of money.
As the New York Times summed it up on Friday:
The Fed has been buying $120 billion in government-backed bonds each month to keep longer-term interest rates low and many types of borrowing cheap, bolstering lending and spending to help the economy heal.
Given these levels of stimulus, we should be talking about an overheating, booming economy given those levels of stimulus. Yet, as Daniel Lacalle has pointed out, these continually ratcheting up levels of stimulus produce increasingly meagre results.
High Inflation Presents a Political Problem for the Fed
This all leaves the Fed in a very unpleasant position. As the Fed is fond is reminding everyone, it has a “dual mandate” to both maximize employment and achieve “price stability.”
Yet, thanks to structural weakness in the economy, pursuing the goal of maximum employment has required an unusually immense amount of money creation which has fed into tremendous amounts of asset price inflation—namely stock prices and housing prices. Now even consumer prices are beginning to build, as Powell admitted in his Jackson Hole speech.
So, if continued stimulus is necessary to keep job growth going—which appears to be the case—what’s the Fed going to do to keep prices from spiraling out of control?
Ultimately, this is a political problem, not one of technocratic management. Right now, there is heavy political pressure on the Fed to keep the money spigot open and the government spending flowing. There’s also plenty of pressure to keep the financial sector well lubricated. The Fed has been happy to oblige.
But the political situation can change significantly if price inflation comes to be seen by the public as a real problem. There’s some evidence it may already be moving in that direction. As CNBC reported on Tuesday, the “Conference Board reports that consumers now see inflation running at 6.8 percent 12 months from now.” And, of course, rents and prices for housing are already crippling many households financially.
So, the Fed could end up facing pressure from the public—and thus from a growing number of elected officials—to cut price inflation well before anything resembling a robust economy is actually achieved. If the Fed then cuts back on asset purchases and allows interest rates to rise, the federal government would have to pay far more interest on the debt, leading to very unpleasant budget cuts. Moreover, as interest rates rose, a decline in lending would lead to a declining money supply and a bust would ensue. Zombie companies would begin to go bankrupt and unemployment would rise.
The Fed’s apparent plan to somehow get full employment and then deal with inflation sounds nice, but reality could easily derail the plan.
Headed for the 1970s?
Some commentators are already suggesting that we’re heading in that direction. Niall Ferguson fears “inflation could be repeating the trajectory of the late 1960s, which laid the foundation for sustained high prices the following decade.”
And Ken Rogoff suggests “the parallels between the 2020s and the 1970s just keep growing.” He then asks
Has a sustained period of high inflation just become much more likely? Until recently, I would have said the odds were clearly against it. Now, I am not so sure, especially looking ahead a few years.
How could this be avoided? The US would need big-time economic growth and big productivity gains to grow its way out of this. But that’s unlikely because productivity has already been crippled by American governments’ lockdowns and covid stimulus policies in 2020. Logistics and supply chains are in disarray. The workforce is still down 5.3 million workers from its peak 18 months ago.
Unless something changes soon, this all points toward a scenario of stagflation.
Plandemic, Voter Fraud, Afghanistan: All Parts of The Great Reset
If you still consider “conspiracy theorist” to be a pejorative, you’re not paying enough attention.
What do Covid-19, 2020 (and beyond) election fraud, and our disastrous abandoning of American citizens in Afghanistan have to do with one another? They’re all parts of the globalist plan to usher in a new era of Neo-Marxism in a depopulated world. This is The Great Reset unfolding before our eyes, and the only way we can stop it (other than through constant prayer) is to stand together and spread the truth.
Covid-19’s attachment to The Great Reset is obvious, though we continue to post about it daily. Voter fraud is a bit less obvious but nonetheless easy to recognize when we understand that people like Joe Biden, Justin Trudeau, and Emmanuel Macron are pushing to “Build Back Better” under the precepts of Neo-Marxism.
The Afghanistan betrayal in August, 2021, is harder to associate with The Great Reset, but it’s definitely just as attached. We can see this is the unwillingness of the Biden regime to extend the deadline to withdraw despite American lives put clearly in harm’s way. We can see it in the needlessly abandoned military equipment that was conspicuously left intact; disabling a Black Hawk takes minutes but they were given to the Taliban in pristine working condition. Then, there’s the pallets of hundred dollar bills left for them. If you think all of this was just irresponsible governance, you probably think Barack Obama is out of politics, too.
Weakening America’s standing in the world and empowering the Chinese Communist Party and others to engage fully with our enemies in a globalist cabal are beneficial to the architects of The Great Reset, and both happened in one fell swoop in August.
These truths need to be spread. As a conservative network of news outlets, we are swimming upstream against the forces of mainstream media. We are getting canceled across the board by Big Tech. We will continue to spread the truth to millions, but we desperately need help to spread the truth to a wider range of people. This is where you come in.
The best way you can help us grow and continue to bring proper news and opinions to the people is by donating. We appreciate everything, whether a dollar or $10,000. Anything brings us closer to a point of stability when we can hire writers, editors, and support staff to make the America First message louder. Our Giving Fuel page makes it easy to donate one-time or monthly. Alternatively, you can donate through PayPal or Bitcoin as well. Bitcoin: 3A1ELVhGgrwrypwTJhPwnaTVGmuqyQrMB8
Our network is currently comprised of nine sites:
- NOQ Report
- Conservative Playlist
- Truth. Based. Media.
- Freedom First Network
- Based Underground
- Uncanceled News
- American Conservative Movement
- Conservative Playbook
- Our Gold Guy
We are also building partnerships with great conservative sites like The Liberty Daily and The Epoch Times to advance the message as loudly as possible, and we’re always looking for others with which to partner.
Also, we could use contributions of content. If you write or want to start writing and you share our patriotic, conservative, America First ideology, contact us. The contact form on this and all pages on the site goes directly to me.
Some of our content is spread across multiple sites. Other pieces of content are unique. We write most of what we post but we also draw from those willing to allow us to share their quality articles, videos, and podcasts. We collect the best content from fellow conservative sites that give us permission to republish them. We’re not ego-driven; I’d much rather post a properly attributed story written by experts like Dr. Joseph Mercola or Natural News than rewrite it like so many outlets like to do. We’re not here to take credit. We’re here to spread the truth.
While donations are the best way to help, you can also support us by buying through our sponsors:
- MyPillow: Use promo code “NOQ” to get up to 66% off AND you’ll be helping a patriotic, America First company.
- Freedom Phone: Use promo code “MAGA” and get $50 off AND you’ll be helping a patriotic, America First company.
- OurGoldGuy: Tell them we sent you in your request to buy gold and it will help us… AND (wait for it) you’ll be helping a patriotic, America First company.
We know we could make a lot more money if we sold out like so many “conservative” publications out there. You won’t find Google ads on our site for a reason. Yes, they’re lucrative, but I don’t like getting paid by minions of Satan (I don’t like Google very much if you couldn’t tell).
Time is short. As the world spirals towards The Great Reset, the need for truthful journalism has never been greater. But in these times, we need as many conservative media voices as possible. Please help keep NOQ Report and the other sites in the network going. Our promise is this: We will never sell out America. If that means we’re going to struggle for a while or even indefinitely, so be it. Integrity first. Truth first. America first.
Thank you and God Bless,