Alright, people, gather around because it looks like we’re in for a bit of an economic roller coaster, and not the fun kind. Remember Lawrence Summers? You know, the Democrat economist who sounded the alarm bells back in 2021, warning Joe Biden that his spending spree might just lead us down a path we really don’t want to go? Well, guess what? He’s back at it again, and this time he’s not just ringing the bell; he’s smashing it with a sledgehammer.
Summers, who’s no stranger to the corridors of power, having served as the Treasury Secretary once upon a time, has a knack for making predictions that unfortunately seem to come true. And his latest prophecy? It’s the kind of stuff that makes you want to check your savings account and maybe even hide your wallet. According to Summers, the economy is still on thin ice, inflation is running rampant, and, oh boy, get this – the markets could crash. Yep…crash, as in, “See you later, financial stability, it was nice knowing you.”
Now, let’s break this down a bit. The man’s not just pulling these dire warnings out of a hat. After all, he’s got the credentials to back up his claims. When the latest inflation report hit the streets, showing a 3.5% increase over the last 12 months – the highest year-over-year increase since last September – Summers wasn’t exactly shocked. In fact, he pretty much said, “Told you so.” Summers argues that high inflation shouldn’t come as a surprise to anyone with a pulse.
But here’s where it gets even more interesting. Summers suggests that the real rate of inflation could be even higher than what’s being reported. If you take out the “transitory stuff” and exclude housing, we’re looking at a super core inflation rate that’s running above a 6% clip. Yikes. That’s not just a small leak; that’s a gaping hole in the boat.
.@lhsummers, former US Treasury Secretary and Wall Street Week contributor, says he's not surprised inflation rose again in March, but he says an interest rate cut in June by the Federal Reserve would be dangerous https://t.co/VVbO71W83N pic.twitter.com/enjnKsEm5Z
— Bloomberg TV (@BloombergTV) April 10, 2024
And just when you thought it couldn’t get any worse, Summers throws another curveball by suggesting that interest rates might climb even higher. For the average Joe and Jane, that means kissing those dreams of buying a home or a new car goodbye unless they’ve got a money tree growing in the backyard.
So, what’s the takeaway from all this doom and gloom? Well, for starters, maybe it’s time for the folks at the helm to start paying attention to the warning signs and steer this ship away from the iceberg. Because if Summers is right, and history suggests he might be, we could be in for a bumpy ride. And let me tell you, people, in the game of economic predictions, I wouldn’t bet against Lawrence Summers.