 Hello and welcome to another episode of the Minor Issues Podcast. I'm Mark Thornton at the Mises Institute. We've talked about the inverted yield curve and the fact that it's an indicator of a looming recession. The inverted yield curve is simply when short-term interest rates rise above long-term interest rates, and this is a sign of risk and uncertainty in the short run of the economy of people being desperate for capital, and this is thought to bring about recession. But it doesn't predict recession perfectly. In recent times, the yield curve has inverted, interest in the topic online peaked in the spring of 2022, and the yield curve inverts during the summer of 2022. Since then, we've had a big stock market pullback and we've had a bear market rally, all sorts of issues that have come up in terms of the economy, some of which we addressed last week. But clearly, this does not work mechanically in that a slight yield curve inversion does not necessarily mean that the economy is going to have a GDP-type recession. It simply doesn't work mechanically. So we've had these pullbacks, we've had rallies, but no recession. An interest in the topic online has begun to wane after the initial peak in the spring of 2022. And there's much less talk of it in the financial media, except in fact to dismiss the inverted yield curve as a harbinger of bad things to come in the economy. Basically, they're saying we can now look past the inverted yield curve and that it doesn't really mean that the economy is facing severe struggles. However, while interest is waning in the inverted yield curve, it's actually become an episode of a substantial inversion. So instead of just barely inverted and then correcting, this is a case currently where the yield curve inverted, it's inverted significantly by a couple of percentage points, and it's remained inverted for an extended period of time. And when we look back at the history of the inverted yield curve during the current monetary system, the only time where we saw the yield curve inverted significantly over a long period of time, actually several different episodes of substantial yield curve inversion, the only clear case of that was the stagflation between 1970 and 1982 and the current episode. And then after that, we have to go all the way back into the 1920s to see that same phenomenon, although admittedly we were on a different monetary system. So the minor issue here today is not that the yield curve works or doesn't work or whether it tells us something significant or not, but looking at the facts, substantial yield curve inversions have led to significantly economically bad periods of time. So I think the inverted yield curve is still alive and well, and it still has something to tell us.