Follow on:

I’m Wealthion founder Adam Taggart, here with a brief explainer video for you on the topic of stealth liquidity.

This topic is important because it helps explain why 2023 is unfolding, to the confusion of many analysts, to be the “Year Of The Recession That Wasn’t”

Heading into this year from the unrelenting beating for stocks and bonds that was 2022, the vast majority of economic forecasters predicted a recession was near-certain to arrive in the first quarter or two.

The Fed had turned off the monetary stimulus spigots and was now pursuing interest rate hikes and Quantitative Tightening with an aggression rarely seen before in history.

The fast rising cost of capital, plus elevated input costs and higher wages from raging inflation, were squeezing corporate profits. Layoffs surged. Corporate bankruptcies started spiking to levels not seen since 2010.

And then the banking system started stumbling – seeing more US bank failures as measured by market cap than in the Global Financial Crisis – forcing banks to tighten lending standards.

And on top of that, the US government faced a debt ceiling showdown, which required the US Treasury to drain its general account to keep government operations funded until a deal was struck – which would then suck over a $trillion in capital out of the economy as new Treasury bonds got sold to refill the TGA’s coffers.

And on top of that, the Feds higher interest rates caused a surge in interest expense on the federal debt, now passing over $1 trillion for the fiscal year.

All of these factors made a compelling, practically overwhelming case for reduced systemic liquidity in 2023. For well over a decade, the markets and the economy had become dependent on the Federal Reserve’s trillions of dollars worth of QE & rock-bottom interest rates. And then during the pandemic, a series of new fiscal stimulus packages and forbearance programs added to the addiction. Without those, the thinking went, the economy would contract in 2023, companies would lay off workers in larger numbers, and the financial and housing markets would correct materially.

But something funny happened on the road to this widely-expected recession. The recession forgot to show up.

Why? In this video, we think we might just have the answer.


Transcript Available Shortly…

The information, opinions, and insights expressed by our guests do not necessarily reflect the views of Wealthion. They are intended to provide a diverse perspective on the economy, investing, and other relevant topics to enrich your understanding of these complex fields.

While we value and appreciate the insights shared by our esteemed guests, they are to be viewed as personal opinions and not as official investment advice or recommendations from Wealthion. These opinions should not replace your own due diligence or the advice of a professional financial advisor.

We strongly encourage all of our audience members to seek out the guidance of a financial advisor who can provide advice based on your individual circumstances and financial goals. Wealthion has a distinguished network of advisors who are available to guide you on your financial journey. However, should you choose to seek guidance elsewhere, we respect and support your decision to do so.

The world of finance and investment is intricate and diverse. It’s our mission at Wealthion to provide you with a variety of insights and perspectives to help you navigate it more effectively. We thank you for your understanding and your trust.

Put these insights into action.

This is why we created Wealthion. To bring you the insights of some of the world’s experienced wealth advisors and then connect you with like-minded, independent financial professionals who will create and manage an investment plan custom-tailored to you. We only recommend products or services that we believe will add value to our audience.  Some links on our website are affiliate links. This means that if you click on them and use the affiliate’s services, we may receive a payment from the vendor at no additional cost to you. 

Schedule a free portfolio evaluation now.