Opinion
By Michael C. Randle
Whoa, have you noticed how many restaurants are closing? It is happening everywhere. Sure sign. Batten down the hatches.
One year ago, two weeks after ‘Liberation Day,’ April 2, 2025, I wrote, “Well, with this kind of economic policy (tariffs), you will see slowdown signs within a year. The first thing that will occur is discretionary spending will slow.”
“The second sign will be restaurants closing.” I first made that claim at a dog park about April 9, 2025 to several folks. I wrote it and published it the next week.
Poor Nick Pihakis, who I have known for over 40 years here in Birmingham. His restaurant empire is burning down. Knowing Nick, he will survive. He has been around long enough to have been in this spot before.
The burden of debt
When there is big debt and a slowdown, one who is owed and who invested wants the piper to be paid. If the money is not there because of a slow period, and it goes uncollected for months, if not a year, the ones who funded it will simply settle for whatever they can get.
The originator of the loan realizes that their debt will never be paid, so they go to court.
Once the law suits fly, the business is usually done. But really, the entity was done long before the suits started flying, but that is not always the case. That is the micro-version.
The macro-version is this nation is digging deeper in debt than ever before. These multi-billion data centers are being funded in shady ways; and they are not proven yet; even though the massive leap in workforce production has been proven as a result of A.I. And when the U.S. goes to war, it ain’t cheap. The U.S. does not use shoulder-fired rockets off of a motorcycle or even a donkey like some do in the Mideast. No, some of our bombs, a single one, cost millions. Then again, maybe we should, but that is simply a knee-jerk comment.
No, the defense department has a billion-dollar-budget and they spend it every year.
And that budget just got bigger. And now, as a result of all the shooting, that stockpile is depleted; so, more money must be piled on to mo’ money. Mo’ money means mo’ debt.
We just had an electric vehicle bubble. Add a data center bubble, if it occurs, and that is a double bubble. The economy will slow with the strain of debt unpaid.
It is not going to be a Great Recession, but it will be a recession, unless bond markets start dissolving, or worse, turn to vapor under the strain of unpaid debt of nations.
Then again, my chin is up regarding bonds. If you shut down China or the U.S. because of debt, then the world shuts down. I mean, what nation is going to shut down another?
It would be world financial suicide if those two nations defaulted.
Add Japan, South Korea and much of Europe defaulting (sans Scandinavia, which has its act together even with zero population growth) and then look for cannibalism, the Second-Coming and possibly wolves and lambs sleeping together. It just won’t happen.
The Second-Coming? Possibly, and when that happens mo’ money won’t mean a thing.
I recently wrote and published in the media properties I own, “We are on the precipice of either an economy that may grow beyond measures or collapse to a degree.” I don’t think there will be an in-between, or a soft landing.
These bets will either pay off or they won’t. So far, they haven’t. So, prepare.
It’s not politics; economic policy is math. And the math simply did not work with these tariffs and other things, like this war.
It is bad policy and it has nothing to do with what you believe in personally, such as red vs blue or conservative vs liberal or gay vs straight. Data via math only has one answer and that is the data itself.
Most level-headed folks, such as moderates, are neither. Why? They know math.
