Amid numerous warnings of an unfolding recession coming from multiple investors and market experts alike, some predictions are bleaker than others, including those from Bloomberg’s commodities expert Mike McGlone, who forecasts one of the worst economic resets in this generation’s lifetime.
Specifically, McGlone said that the economic landscape, particularly in the United States, was at the beginning of one of the greatest economic resets of our lifetimes,” as he told finance reporter David Lin in an interview for his The David Lin Report show streamed on June 21.
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As the market guru explained:
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“[There is] a deflationary trajectory that shows no signs of stopping until we have some signs of liquidity pumping from the Fed. And typically, when they start pumping liquidity, it still takes probably a year for bottoms in most risk assets, so [this] is just the beginning of one of the greatest economic resets of our lifetimes.”
Furthermore, McGlone pointed out at the New York Fed’s estimate for recessions from the yield curve, which was currently at 70%, “the highest it’s been since 1982,” but that “investors are kind of double-dog daring the Fed and the bottom line is that’s kind of the cat and mouse game.”
According to him, “it’s illogical to expect just a mild recession after the greatest amount of rate hikes ever on the back of what caused those rate hikes, the biggest pump in liquidity that’s dumping,” which is why he fully expects “a reciprocal recession like we had in ‘08-’09, like we had in 2000 to 2002, and maybe in the 80s.”
“People are way underestimating how severe it will be just based on the lessons and the cycles of history. And the bottom line is, booms and busts always come on the back of liquidity that dumps, and we’ve just never had, ever, extremes near the last pump and liquidity that’s dumping.”
With this in mind, McGlone concluded that the current financial situation demonstrated “a setup for one of the biggest corrections in our lifetime,” which is “very similar to 1929-1930” in the fact that “everything’s tilting lower.”
Stacking recession alerts
Meanwhile, among other people warning about the failing economy is Robert Kiyosaki, the author of the best-selling personal finance book ‘Rich Dad Poor Dad,’ who recently said that the US was “sitting on the edge of a great depression” after Germany slipped into a recession.
At the same time, the Conference Board’s leading economic indicators, based on their chart patterns and behavior over the last 30 years, have suggested that the global economy is, indeed, moving toward further decline this year, as Finbold reported on June 8.
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