Finance advisor Eddie Hobbs has predicted that Ireland will go into a ‘fireball’ recession by the Autumn. The former TV presenter, who was the face of RTE’s ‘Rip off Republic’, has warned that working people will be hit the hardest come Autumn.
Hobbs’ warning about a recession comes as one of the world’s wealthiest business leaders and potential Twitter owner, Elon Musk, also expressed concern about the economy. Meanwhile, the British Office for National Statistics (ONS) published new figures that reignited fears the UK is heading for a recession.
In an interview with The Irish Mirror, Hobbs said that Ireland will enter an economic downturn within a matter of months as he predicted imminent job losses and business closures. He said that there is a “complete suspension of reality” in Irish public life at present, and accused Irish political leaders of failing to be honest with themselves or the Irish public on the prospects for the economy.
“We will likely be in recession by early Autumn, but definitely by Winter. All the signs are there. Right now, we are in a vortex, on the way to recession”, Hobbs said.
“We’re looking at the economy contracting, job losses, business closures. It’s a f**king firestorm,” he added.
Hobbs said that people are unsuspecting of the impending financial crisis, which is “in the guise of the runaway cost of living”.
“The next financial crisis is upon us, except this time, it’s in the guise of the runaway cost of living. The price will be paid by the working people getting poorer,” he said. The economist said:
“We may as well start talking about it. At the moment, there is a complete suspension of reality going on. We’ll have to change all our budgetary positions – they’re redundant. Throw the political manifestos down the toilet”.
Hobbs, a critic of Covid vaccine passes and mandates, also said that Covid-19 lockdowns have contributed to soaring inflation.
“It cost us €40billion to do lockdown. We completely overdid the money-printing. It’s going to end in inflation,” he warned.
“We’re looking at rationing electricity next winter. We will experience unaffordable prices. The shock of energy rationing and food rationing is going to cause a change of mindset,” he added.
“We enter the epoch with a vast housing crisis, a dysfunctional health system, and a civil service where risk-taking is punished and doing nothing gets you promoted. Politically, we’re facing such challenges, we will need a national unity Government.
“We’re in a state of war. It’s incumbent on the opposition and current government to get together and form an arrangement where they are supportive of each other. We can’t afford politicking. It’s time for unity, not division”, he added.
On the role played by political leaders and the idea of ‘the rich getting richer’, he said:
“Politicians know it is political decisions that have caused this. The world is set up to enrich the rich. Billionaires have become squillionaires in the last 15 years. They’re making obscene amounts of money and power in the last decade. They’re on a different planet to the rest of us.”
Hobbs believes that despite the financial hardship Ireland endured in the aftermath of the Celtic Tiger, the situation we are facing is worse than it has ever been before.
He told the publication that the wealth gap hasn’t been as wide “since the Victorian period”:
“We’re rather close to when Dickens wrote Hard Times. Those most in danger are service workers and tradespeople on average wages with no safety net. The likes of the plumber or the electrician, on low wages in the private sector – 93% have no pension.
“The woman behind the counter in the local SuperValu who was there all through lockdown. They’re on close to minimum wage or just above it. That’s who I think of,” he added.
Hobbs also said that Europe is in a period of “stagflation” – with the cost of living rising faster than the economy is growing.
“Stagflation is when the inflation rate is running well above the economic growth rate. What that basically means is costs are rising faster than the economy is growing.
“Workers have no chance of recovering the losses they’re experiencing against inflation. They just can’t. People automatically go backwards. You’re in reverse gear,” he said.
While he predicted that a recession will follow, he insisted that house prices won’t crash as they did in the last recession of 2008.
“The Central Bank has its foot on the throat of the credit under-writing in Ireland. Prices will flatten by 10% to 15% maybe, but that’s more to do with ‘demand destruction’ which is when they’ve squeezed it and there’s no-one left who can afford those prices.
“Then you’re at the apex and there’s only one way of going, which is down”.
The financial guru also said ‘price gouging’ was an element at play, describing price increases as a “bonanza” for some businesses.
“Gouging is going on, prices are rising. It’s a bonanza for some businesses. ‘Put up the prices until they scream!’
“There are genuine price pressures in the background, but they’re adding them on – and adding a bit more. They’re hiding gouging behind the inflation increase.
“It’s human behaviour. The people gouged by the gougers – if they had a chance to gouge, they’d gouge themselves”, he said.
MUSK: US ECONOMY “PROBABLY” ALREADY IN RECESSION
Similarly, Tesla titan Elon Musk has predicted a recession lasting 18 months to hit the US soon, prompting speculation that he is set to lay off 10% of his Tesla workforce.
Musk recently said that the US economy was “probably” already in a recession – as he cautioned US companies to keep a tight eye on costs and cash flows – as inflation in the United States hit its highest annual rate in over 40 years.
Musk reportedly said he had “a super bad feeling” about the economy in an internal email earlier this month.
“These things pass and then there will be boom times again,” Musk told the All-In Summit in Miami Beach last month, Bloomberg reported.
UK ECONOMY
Many UK experts have joined Hobbs and Musk in predicting a recession in 2022. Fears that the UK is heading for a recession were reignited this month after the Office for National Statistics (ONS) published its latest figures.
The ONS revealed that the UK economy shrank by 0.3% in April, as the nation grapples with rising living costs and an unprecedented increase in the cost of fuel.
The statistics, released on 3 June, also showed that the UK’s GDP has fallen for the second consecutive month, falling 0.1% in March, and not growing at all in February. The ONS said that experts had been anticipating a 0.1% GDP rise in April and expressed shock when the figures revealed a 0.3% drop.
British consumer confidence has fallen to levels north seen in economic downturns since at least the 1970s, even before the full impact of the fastest inflation in a decade is felt.
Commentators say that Government intervention to slash energy bills will only help to an extent – and until then, British households face the ‘biggest fall’ in living standards since the 1950s, according to a report in Bloomberg.