“NO RECESSION HERE!!” – Introducing Buy Now, Pay Later for UberEats

The government shills and permabulls are insisting there’s no recession anywhere in sight.

Aggressively stupid, wholly disconnected with reality, and totally uninterested in anything other than “My Side vs. Your Side” mindless partisanship.

Meanwhile, there’s a company called Zip that is offering the option for people to “buy now, pay later” with Uber Eats orders:

It’s real. You can go to the website above at the link and see for yourself.

I made the argument the other week that the rise of these “buy now, pay later” (BNPL) companies is a telltale sign of severe economic distress among average Americans.

Online purchases for things like airline tickets, shoes, computer desks, etc. increasingly offer a financing option for people who can’t afford to pay it all up front.

Not only is this indicative of a badly strained consumer, these BNPL plans are very dangerous. They can add up very quickly–$25 here, $9 here, $30 there, $17 another time. Pretty soon you’re locked in to an extra $100 a month or more. People really need to watch out when it comes to BNPL.

Basic necessities in America like food, energy and gas have never been more expensive:

You’re not getting the full story from the official CPI inflation numbers, even as bad as they are. The official figures are biased against basic necessities, under the logic that Americans are going to buy them no matter what. CPI figures are predominantly weighted towards discretionary items. That’s why they don’t tell you even close to the full story.

Essentials are more expensive than ever. Inflation has made the average American significantly poorer. Forget discretionary spending, people can barely even afford the essentials.

It shouldn’t be too long now before Americans start zeroing out their savings accounts to pay for basic necessities. In fact, it may have already happened, as credit card debt in the US is at a record high:

I don’t think this is Americans recklessly spending. I think this is out of necessity to afford basic goods.

On August 5, CNBC reported that credit cards and personal loans were surging, but made sure to quickly point out that #EXPERTS are not concerned because unemployment is still low:

It’s possible that inflation gets so bad, and outpaces income so much, that it doesn’t even matter if people have jobs–they can’t afford anything no matter what.

But high inflation will lead to job cuts. Inevitably. Because there are many companies who sell non-essential products and services that will be neglected by cash-strapped consumers. These companies will lose money, and eventually have to lay off their employees.

Imagine if, every month, I spend money on only three things: food, energy, and going out to dinner at nice restaurants.

Two of those items are essentials: food and energy.

Going out to eat at a nice restaurant is not essential.

If the price of food and energy goes up 20% in a month and my income remains the same, I’ve got to tighten my belt in order to afford those basic necessities. And there’s only one area for me to cut spending: dining out.

When inflation hits and sends the price of basic necessities skyrocketing, superfluous spending grinds to a halt. All the things that we like and enjoy, but don’t need will end up on the chopping block.

And that translates into massive losses for the companies that sell non-essential goods. Those massive losses turn into layoffs, since labor is the single largest expense businesses face.

Okay, so what happens when Americans run out of money entirely?

The process goes like this:

  1. Monthly spending rises above monthly income due to inflation
  2. People have to dip into their savings to pay for basic necessities
  3. Savings eventually run out so people open new credit cards to pay for basic necessities
  4. Eventually expenses rise so much that people can no longer even afford their basic necessities–and their CC debt

What happens at step 4?

The whole economy collapses is what happens.

I hope it doesn’t get to that point. I hope inflation comes down before that happens. But I’m not sure it will.

The reason inflation is falling right now is because the US government is emptying its strategic petroleum reserves to artificially depress crude oil prices. But eventually the SPR will run out, the supply of oil will go back down, sending oil prices up–and the price of everything else along with it.

Eventually, not only will the SPR run out, but the government will also have to replenish it by purchasing oil (instead of selling it) this will increase the demand for oil at a time of decreased supply, making oil prices skyrocket even more.

And since oil prices affect just about everything, we will see inflation return in a major way.

The only thing that will bring these prices down is a massive recession–in other words, a massive decrease in demand.

We’re heading for disaster no matter what the media shills and government officials tell you.

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