Despite recent positive economic indicators, investor and macroeconomics expert George Gammon has issued a sobering warning about a potential hard landing for the U.S. economy. In an interview with Michelle Makori of Kitco News, Gammon expressed concerns over the actions of banks and the broader financial landscape, indicating underlying issues that could lead to economic turmoil.

While GDP growth and inflation rates appear favorable, Gammon pointed out that banks are displaying an unexpected aversion to lending, opting instead to invest in long-term treasuries. According to Gammon, this behavior reflects the perceived risk in the real economy, as banks anticipate storm clouds on the horizon.

One of the key indicators cited by Gammon is the inverted yield curve, a reliable recession signal that has remained inverted for over two years. This, Gammon argues, reflects significant concerns within the banking sector about future economic stability. Moreover, he draws attention to the substantial unrealized losses facing banks, comparable to levels witnessed during the Great Depression.

Gammon further emphasizes that the banking system's systemic risk has increased since the global financial crisis due to a more complex web of financial engineering and interconnectedness among global banks. In light of these factors, he argues that the Federal Reserve's ability to engineer a soft landing is challenging, citing historical data that support this claim.

Highlighting alarming trends in the M1 and M2 money supplies since 2022, Gammon reveals a significant decline that mirrors the great depression of the 1930s. These findings only deepen his concerns about the potential severity of the economic downturn that lies ahead.

In conclusion, Gammon urges caution and advises paying close attention to the actions of banks and the bond market rather than solely relying on optimistic GDP and inflation figures. He emphasizes that, despite the efforts of the Federal Reserve, the probability of a hard economic landing remains high.

As the U.S. economy continues to show signs of growth, Gammon's warning serves as a reminder to keep a watchful eye on the banking sector and the bond market as crucial indicators of future economic conditions. As experts and policymakers navigate these challenging waters, the focus remains on mitigating the risks and safeguarding the economy from a potential hard landing.