Forum

Have you noticed many products are suspiciously missing on the grocery store shelves? Why is that? The simple answer is the US is no longer in charge of its product production or supply chains.

We the People are no longer in charge. We’ve been sold to the lowest bidder!

Paradoxically, the U.S. economy has shown signs of surprising strength. Unemployment remains near historic lows, job growth is steady, and consumer spending remains relatively healthy. On paper, the situation appears resilient, but a complex web of economic pressures lurks beneath the surface, potentially reshaping the near future.

People often view strong employment as a sign of a healthy economy, but the root causes of deeper instability remain unaddressed. The labor market has been one of the brightest spots in the U.S. economy. Despite aggressive interest rate hikes by the Federal Reserve, unemployment has stayed low, and businesses in many sectors continue to hire. This strong job market gives consumers the income and confidence they need to spend.

However, this robust employment may actually be masking deeper vulnerabilities. Consumer demand, fueled by stagnant wages and leftover stimulus-era savings, is clashing with a supply system under significant strain. That tension where demand outpaces supply is a key ingredient for inflation.

It appears the US is the host and foreign manufacturers and whole nations have become the parasite, sucking the blood from our veins!

The U.S. relies heavily on imported goods, from electronics and clothing to machinery and components. But recently, the global supply chain has become increasingly volatile. Tariffs imposed on major trading partners, such as China, have raised the cost of imported goods. Simultaneously, global disruptions, including COVID-era shutdowns, war-related supply shocks, and natural disasters, have slowed foreign production. Thus fewer goods make it to U.S. shelves, but demand remains high, prices inevitably rise. These supply bottlenecks have contributed to cost-push inflation, the kind that is especially difficult to manage through interest rate adjustments alone.

But it doesn’t stop there! An oversupply of dollars has triggered a demand-pull inflationary period in the economy.   To avoid economic collapse during the pandemic, the U.S. government and Federal Reserve injected trillions of dollars into the economy. Stimulus checks, emergency business loans, and enhanced unemployment benefits added a tidal wave of liquidity.

At the time, the strategy worked, and the U.S. avoided a depression, but over time, this massive increase in the money supply contributed to demand-pull inflation: too much money chasing too few goods. With foreign production slowed and domestic manufacturing still recovering, the result was predictable: the prices surged.

The Federal Reserve is on the ropes and getting bruised. The Federal Reserve began aggressively increasing interest rates to cool consumer spending and bring inflation under control. While higher interest rates can slow the economy, they also make borrowing more expensive, thus affecting mortgages, credit cards, auto loans, and business investment.

The risk? If the Fed raises rates too high, too fast, it could trigger a recession, a broad economic slowdown characterized by falling GDP, rising unemployment, and reduced consumer and business activity.

The Bigger Picture: Inflation, Recession, or Both?

All signs point to a delicate and dangerous balance:

• Employment is strong, but consumer prices remain elevated.
• The U.S. dollar is plentiful, but goods are scarce.
• Trade barriers and global instability are limiting supply.
• Monetary tightening threatens to cool demand, but perhaps too sharply.

If supply chains do not stabilize, and if global production continues to lag, even the most sophisticated monetary policy may not be able to engineer a “soft landing.” 

The US is starting to feel the hidden cost of a hot job market, and like the frog in warming water, it doesn’t realize what lies ahead.  

A strong job market is generally a good thing, but higher disposable income fuels demand for goods and services. When those goods are heavily reliant on foreign supply chains slowed by tariffs, restrictions, and production delays, the US ends up with too many dollars and not enough goods, which erodes purchasing power and drives inflation even higher.

A slow correction is on the horizon, but it is a sunrise, not a sundown!

While America’s job market remains a source of strength, it may not be enough to counteract the economic aftershocks from:

• Overprinted dollars
• Foreign tariffs and reduced imports
• Ongoing supply shortages
• Aggressive interest rate polices

This mix creates a volatile brew of inflationary pressure, with recession looming as a possible consequence.

In effect, the US have primed the economy not for a sudden crash, but for a slow, structural correction. This correction will require policymakers, businesses, and households to adapt without the safety nets they previously relied on.

The more profound problem is the US foreign dependency, which is nothing more than a parasitic relationship with foreign manufacturers. These nations impose high tariffs on American goods while blocking U.S. products from entering their markets. In the meantime, the U.S. remains overly dependent on them to fill its imbalance, characterized by skyrocketing costs, unpredictable delivery times, and an oversupply of spendable dollars, holds the U.S. economy hostage.

Final Word: Cut the umbilical cord to foreign manufacturers and restore economic health to the host! The U.S. must rebuild its manufacturing base, take control of production, and reclaim its economic independence or become a dead frog in boiling water.