Are you prepared for a recession?

Ah, macroeconomics. If you spend a lot of time on macro twitter—or bitcoin twitter, or stocks twitter, or really any economic twitter filter bubble—you might be tempted to believe you have your thumb on the pulse of what’s going to happen with the economy. I know I fall for this. ”Ah yes, the housing market is going to collapse next month, I’ve seen at least 10 twitter threads confirming this with extensive data-driven evidence.”

That to say, I have no clue what’s going to happen in the next 24 months. But it sure as hell feels like I do, and if that spidey sense means anything, we’re definitely headed for a long period of high inflation, stagnant economic growth, and system-wide de-leveraging the likes of which we’ve never seen in our (us young under 35s) lives. Just the possibility of this I’ve started to see affect the way people around me think, and I’ll admit, it has me already thinking ahead about diversifying my income and generally preparing for a rainy day.

As much as I’ve started to see people start to prepare for hibernation, I’ve just as much seen the blissfully ignorant continue to lever up their lives, presumably on the basis that… nothing bad or unforeseen could ever happen? How could you believe that right now? Or that if something did happen, their debt would somehow be backstopped? And if not, that default would be backstopped? And if not… Oh, I guess this makes sense.

Are you prepared for a recession? Are you prepared for the job market to be brutal and to lose your job and be unemployed for a lengthy amount of time? Most of the people in my age bracket have never experienced a truly rough economic environment, only barely remembering, if anything, flashes of nervousness in the wake of the 2008 financial crisis. Seeing people live as if there’s no warning signals flashing right now… it just makes me a bit sad, because we know how this ends.

If you’re not prepared for a recession, now might be the time to start getting ready. Maybe it’s already too late, I don’t know. Either way, most people don’t seem ready. And they need to be. The rolling hills of DFW suburbia, filled to the brim with houses bought with mortgages that people can not afford. And two cars in the driveway bought on lengthy loans that would blow up in your face if even the mildest of financial hardship struck. Entire lives contingent on paychecks from companies whose business models depend on certain assumptions about how The Money will continue to work.

Don’t be fearful, but do be prudent.