We were seeing these issues before CO-VID - when the employment rate is over-heating and the inflation rate is ticking up, the Fed takes on their dual mandate a

We were seeing these issues before CO-VID - when the employment rate is over-heating and the inflation rate is ticking up, the Fed takes on their dual mandate and starts raising rates. The Fed began raising their rate in 2016 topping out in mid 2019. This recession was predicated based on the yield curve of that 2019 top. This latest recession was interesting because the Fed and Congress did such a good job in handling it that coming out of it the job market was still booming, unlike most others that allow the inflation rate to cool down with many losing their jobs. When new money is created, it can be spent on consumption goods, creating inflation, or it can be spent on investment goods, causing a change in the velocity of money. Smart money will make a guess as to which one will soon be more scarce in the near future, money or assets. When the money supply is increasing at a rate greater than the rate of nominal incomes, assets will tend to increase. When the reverse is true, currencies tend to increase, so you will sell your assets while they are still worth something. In our current post-gold standard environment when the Fed lowers interest rates below the natural rate of a stable velocity, this causes the velocity to drop, and therefore it's a great time to speculate on assets. It's well understood therefore that when new money is created it does not initially create any inflation, but as this article argues, that inflation arrives with a time delay. When the Fed raises the interest rate above the natural rate of a stable velocity, the money supply will now rise slower than nominal income and that makes the crash an inevitability. This cycle the Fed dot plot is planning for this to happen around the end of the year 2022, and then it takes about 6 months after the yield curve inversion for the actual crash to occur.