After The Fed's cocaine bear interest rate pivot last week, central bankers all over the world are turning to rate cuts like lemmings off a cliff. In fact, Bank of America's Michael Hartnett now predicts 152 rate cuts in the coming year. This is a problem given inflation's continuing across the major economies, with the Economist pegging final 2023 numbers at 4.1% for the US, 5.5% for the Euro area, and 6.8% for Britain. Even Japan is at 3.2%, which is way above their target after literally decades of structural deflation.
Powell won't cut until unemployment goes up, and even then I'm not so sure. Everybody is PREDICTING that he'll cut, but I'll believe it when I see it. The Phillips Curve says that if unemployment goes up then inflation must come down, but it was debunked back in the 70s and 80s. If unemployment goes up but the government needs to keep expanding the money supply to cover it's reckless spending and debt service payments, then inflation isn't going to come down. So we'll have inflation AND unemployment - which is "stagflation." If Powell cuts rates, inflation will rage even higher and we'll STILL have high unemployment. We're screwed either way, and the only thing that can save us is massive cuts to Federal Spending coupled with economic liberalization (deregulation) to encourage growth. Unfortunately, NOBODY in Washington wants to do any of that, so we'll probably just get a nice juicy World War Three and millions of us will die. Have a nice day!
We're almost there, here is an interresting point that a friend(71 year old 45 yrs a jet pilot here in Quebec) said to me recently:"if people don't see the danger". That pretty much sums it up, I've been talking about Gold/siver since April(of 2021) and 98% of people STILL don't believe me, to quote James Carville from 1992:"It's the economy stupid". When the crash happens, it will be too late for most but they will finally say:"Guy was right all along"!!! Keep sending us your insights and well would want to wish you a Happy New Year but this time I'll only say:"be prepared"!!! Thank you or Merci! Guy
Powell won't cut until unemployment goes up, and even then I'm not so sure. Everybody is PREDICTING that he'll cut, but I'll believe it when I see it. The Phillips Curve says that if unemployment goes up then inflation must come down, but it was debunked back in the 70s and 80s. If unemployment goes up but the government needs to keep expanding the money supply to cover it's reckless spending and debt service payments, then inflation isn't going to come down. So we'll have inflation AND unemployment - which is "stagflation." If Powell cuts rates, inflation will rage even higher and we'll STILL have high unemployment. We're screwed either way, and the only thing that can save us is massive cuts to Federal Spending coupled with economic liberalization (deregulation) to encourage growth. Unfortunately, NOBODY in Washington wants to do any of that, so we'll probably just get a nice juicy World War Three and millions of us will die. Have a nice day!
Scary stuff. Having been through the 70s and 80s the economic future is bleak.
We're almost there, here is an interresting point that a friend(71 year old 45 yrs a jet pilot here in Quebec) said to me recently:"if people don't see the danger". That pretty much sums it up, I've been talking about Gold/siver since April(of 2021) and 98% of people STILL don't believe me, to quote James Carville from 1992:"It's the economy stupid". When the crash happens, it will be too late for most but they will finally say:"Guy was right all along"!!! Keep sending us your insights and well would want to wish you a Happy New Year but this time I'll only say:"be prepared"!!! Thank you or Merci! Guy
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Excellent and insightful review also very timely and I believe accurate thank you
Ouch.
alas, I fear you are correct, stagflation is coming soon to a screen near you
What is Crack up boom
Well done, as per usual.