Here Are The Statistics I Picked Up Today
- 9% increase in the German Producer Price Index (PPI). Increasing PPI is the first stage of getting a consumer inflation figure a few months later. Expect a colossal consumer inflation figure in Germany in a few months. This figure was only surpassed in the hyper-inflation of 1923 and just after the end of World War Two. Duplicate this figure right across Europe.
- The EU Central Bank has therefore no choice but to increase interest rates in Europe in a massive way. This will usher in a severe recession in Europe.
- US stocks experienced their largest outflow of funds last week since the panic of 2018. The market is turning over. Panic is beginning to emerge. Gold was the only area to see an inflow.
- The US bond market is now expecting 10 interest rate hikes in the rest of 2022! This will destroy the easy money Covid stimulus inspired equity and housing boom of the last few years.
- There were over 1,000 interest rate cuts by all central banks in the years after the Global Financial Crisis. This has now reversed, and we have seen 75 interest rate hikes just this year. The 40-year-old bond bull market, where interest rates kept dropping and dropping, is now in reverse, probably for the next decade.
- Social media stocks in the USA: Netflix, Disney etc. are already down 58%. They soared on easy money, and they have much further to go.
- Between the Global Financial Crisis and now, the worlds central banks have injected over $23 billion in quantitative easing, this funny money was their preferred means to suppress interest rates. It made the insiders, the elites rich on cheaper and cheaper borrowings to play equity and housing markets. This is now in reverse. $3 trillion is going to drain from the global economy this year.
- The IMF is expecting global earnings per share to collapse from 21% to -3% this year.
- US inflation just came in at over 8% in March. Many think it is peaking. However, in the US the PPI is now running at 10% and still rising. So, inflation has not yet peaked in the USA. Meanwhile the Feds interest rates are still stuck at 2.93%. They have SOOOO fare to go to catch up. But never will. The market is predicting they can’t go above 4.5% or they will destroy the economy.
- Much of the world’s food supply has now been disrupted. For example, cooking oil prices have tripled in many countries and wheat has jumped 50%. Global food prices jumped 12% just in March. Fertilizer prices have doubled or tripled in the last 12 months. Agricultural exports from the world’s biggest exporters, Russia and the Ukraine, are knee-capped. Humanity is only 10 meals away from riots. The riots have started in Peru and Sri Lanka. They will spread.
What does this mean?
It tells us that global interest rates are about to explode. Economies will tank. Houses will crash. Equities will crash. Bond markets will reverse for the first time in 40 years. Food riots will become common. Unemployment will jump significantly. It’s not going to be pretty.
Most think the Federal Reserve has the job of preserving employment and inflation. This is a lie. Time and time again we have seen their main aim is to look after the stock and bond markets. These guys are money men, and they want to make profits for themselves and their insider mates. This is how it will unfold:
- The Fed will hike a lot this year in order to give itself some ammunition for the coming recession so they can cut into that recession.
- The market will throw a tantrum, crashing by up to 30-50%.
- After that the Fed will reverse so they can rescue their market buddies
- Money printing (QE) will once again will become normal, and the markets and economy will recover on this new financial sugar hit.
- The US dollar will begin a terminal decline as the world wakes up to the permanent nature of these sugar hits by the global reserve currency.
- Commodities, gold and other physical assets will be the go-to save haven for investors
- A protracted stagflationary depression will gradually emerge with high inflation combined with increasing poverty. It’s going to be very messy for all governments. Citizens will get very narky.