Early Signs of Economic Stress And A Warning From History)
Peter Reagan

One of the advantages of watching the economy for decades isn’t clairvoyance.

It’s pattern recognition.

If you’ve ever cooked pancakes long enough, you know when one is about to burn – not because you can see the future, but because you’ve seen the signs before. The bubbles change. The smell shifts. The timing feels familiar.

The economy works the same way.

And lately, a few of those early bubbles are forming.

Job growth is cooling

According to Reuters, White House officials recently acknowledged that job growth has slowed compared to earlier post-pandemic gains. Separate reporting noted hiring running roughly 53,000 jobs below pre-pandemic trends.

That doesn’t mean a recession is imminent. Economic data rarely moves in straight lines.

But cooling job growth matters – especially because employment is often the last domino to fall in a slowdown, not the first.

Meanwhile, layoffs have quietly picked up. The Hill recently reported that announced job cuts hit their highest January level in 17 years. 

Now, that’s not the kind of statistic that typically accompanies an economy firing on all cylinders. Unless perhaps AI replaced those 108,435 Americans who lost their jobs? I mean, it would still be unfortunate for them, of course. Did AI eat over 100,000 jobs last month?

The AI productivity boom that wasn’t

AI is coming for my job! That’s exactly the kind of news that sets many people to panicking. Considering the sorts of things we hear from AI evangelists like Elon Musk and Sam Altman, that anxiety isn't misplaced. 

But we aren't there, not yet. We’re seeing reports that AI isn’t quite the revolution that we were sold. Even though we were promised a productivity revolution with AI that would make us all richer, the reality of AI is a bit more bleak. Autumn Spredemann reports that a number of AI companies are slipping into a quieter, more troubling category: Startups that are functional but no longer viable.

Put bluntly, more and more AI startups are finding themselves in the position of not having a way to ever become profitable as a business. Ever. And that’s because they can’t deliver on their promises. Maybe AI can't do all the things they told us it could?

And that's a real problem. A huge of the optimism driving financial markets over the past year has rested on the idea that artificial intelligence would unlock a massive productivity surge. More output. Higher margins. Stronger growth.

Yet productivity gains reported by businesses that have adopted AI are uneven at best. That leaves AI startups struggling to convert hype into sustainable business models (burning through hundreds of millions of dollars in the process). When expectations run ahead of results, markets tend to correct the imbalance eventually.

We’ve seen this movie before – whether it was the dot-com enthusiasm of the late 1990s or the housing euphoria of the mid-2000s.

Exciting narratives can carry momentum for a long time.

Until they don’t.

The real mistake people make

When early slowdown signals appear, most people draw the wrong lesson.

They panic.

They assume that if a downturn is possible, drastic action is required immediately. Emotions take over. Decisions get rushed. Long-term plans get abandoned.

But here’s what decades of watching economic cycles have taught me:

The real risk isn’t volatility.

It’s assuming stability.

Every major asset class has surprised investors at some point. Housing. Technology. Energy. Even government policy shifts can change the rules overnight.

The lesson of history isn’t “sell everything.”

It’s this: Build resilience before you need it.

What has historically held its ground?

When economic storms gather, assets tied purely to confidence in financial institutions can move quickly – sometimes violently.

Physical precious metals are different.

They aren’t dependent on corporate earnings projections. They aren’t tied to quarterly growth expectations. They don’t rely on a promise to pay.

Gold and silver have maintained purchasing power across wars, recessions, inflationary periods, and policy mistakes precisely because their demand extends beyond financial markets. They are tangible assets with industrial, cultural, and monetary uses that have endured for centuries.

That doesn’t mean they never fluctuate in price.

But history shows they tend to behave differently when stress enters the system.

And sometimes, behaving differently is exactly what resilience requires.

Preparation is rational – panic is not

We may not be heading into a major downturn. The economy has proven more resilient than many expected before. But resilience isn’t the same as invulnerability. 

If you’re thinking about how to diversify your savings in a way that doesn’t depend entirely on financial-system performance, it may be worth learning how physical precious metals fit into a broader strategy. You can get started by requesting our free 2026 Gold IRA Information Packet.

When the pancake starts bubbling, you don’t throw away breakfast. You just turn down the heat – before your scorch them.

 

Peter Reagan is a seasoned financial market strategist at Birch Gold Group with over 15 years of experience in the precious metals industry. He has been featured in several leading publications, including Newsmax and Zerohedge. At Birch Gold Group, Peter leverages his deep market insights to help educate customers on how they can diversify their savings into gold and other precious metals. His commitment to education has made him a trusted thought leader in the field. In addition to the Birch Gold website, you can follow Peter on LinkedIn.

www.birchgold.com