Federal Reserve Chairman Jerome Powell recently announced that the Fed is abandoning “inflation targeting” where the Fed aims to maintain a price inflation rate of up to two percent. Instead, the Fed will allow inflation to remain above two percent to balance out periods of lower inflation. Powell’s announcement is not a radical shift in policy. It is an acknowledgment that the Fed is unlikely to reverse course and stop increasing the money supply anytime soon.
Following the 2008 market meltdown, the Fed embarked on an unprecedented money-creation binge. The result was historically low interest rates and an explosion of debt. Today total household debt and business debt are each over 16 trillion dollars. Of course, the biggest debtor is the federal government.
The explosion of debt puts pressure on the Fed to keep increasing the money supply in order to maintain low interest rates. An increase in rates to anything close to what they would be in a free market could make it impossible for consumers, businesses, and (especially) the federal government to manage their debt. This would create a major economic crisis.
Wholesale American beef prices jumped 6% to a record high of $330.82 per 100 pounds, a 62% increase from the lows in February, according to Bloomberg, citing new USDA data.
The surge in beef prices comes at a time when the nation’s food supply chain network has been severely damaged by meatpacking plants going offline due to virus-related shutdowns and worker shortage. Bloomberg highlights the latest plant closures in [this map.]
Soaring food inflation came one day after President Trump said he would be issuing an executive order to address meat shortages.
Jim Rogers has been sounding the bear alarm for a while, and now that the market finally seems to be cooperating, the Rogers Holdings chairman is turning up the volume.
“I expect in the next couple of years we’re going to have the worst bear market in my lifetime,” he told Bloomberg in the wake of the worst first-quarter loss in the Dow’s history.
Why so glum? Rogers explained that it’s a combination of the coronavirus pandemic’s impact on the economy, high-debt levels and lowly interest rates that will inflict damage when they start rising.But for investors looking to keep some cash in play in the bruised stock market, Rogers, who co-founded the legendary Quantum Fund along with George Soros almost 50 years ago, talked about the “tried and true” approach to navigating such brutal stretches.
Soros Threatens World Economies as Globalism Crumbles
As the UK warns of a “very likely” terrorist attack at German markets, seasonal celebrations across Europe face further threat from bland identikit stalls, rip-off prices & a struggle to address the Christian roots of Christmas.
Ah, Christmas in Europe! Rosy-cheeked children waiting for Santa Claus and his team of reindeer to overwhelm them with gifts. A feast of mince pies, turkey and mulled wine.
Today the only place to really experience this idyll is in your dreams. Because Christmas celebrations in Europe have become a violent, bleak, homogenized, commercial disappointment.
Authored by Andrew Moran via LibertyNation.com,
When any one of the plethora of bubbles burst – pick your poison – and the next financial crisis impacts Wall Street and Main Street, how will the central banks and federal governments react? They have fired all their unconventional rounds of bullets, from subzero interest rates to vast money-printing. One other proposal could conceivably be giving your deposits a haircut, much like what occurred in Cyprus following the recession. This dyspeptic vision is not hyperbole nor is it paranoia – the tariffs have raised the price of tinfoil! It is unfolding right now as our globalist overlords are executing, or at least entertaining, fiscal and monetary measures to confiscate your wealth – directly or indirectly.
Plugging Holes In Swiss Cheese
Switzerland is one of the few European nations to record a federal budget surplus. The budget for the fiscal year 2020 will record a $615 million surplus, despite imposing pension and tax reforms that slashed revenues and raised spending. The Swiss government is handcuffed by a so-called debt brake, a balanced-budget amendment that mandates the budget to be in balance throughout the business cycle. This policy has decreased the debt-to-gross domestic product ratio to nearly 25%.
There was a lot of Fed-talk on Friday and the big theme was inflation.
For quite a while, Peter has been asking an important question: what is the Federal Reserve going to do when the inflation level gets above 2%? Well, it looks like its setting the stage.
In fact, the real rate of inflation has been above 2% all along. The way the government scores inflation keeps the number artificially low.
Inflation in Venezuela could top 1 million percent by year’s end as the country’s historic crisis deepens, the International Monetary Fund said on Monday.
Venezuela’s economic turmoil compares to Germany’s after the first world war and Zimbabwe’s at the beginning of the last decade, said Alejandro Werner, head of the IMF’s western hemisphere department.
“The collapse in economic activity, hyperinflation, and increasing deterioration … will lead to intensifying spillover effects on neighboring countries,” Werner wrote in a blogpost.
Venezuela, a once wealthy oil-producing nation, is in the grips of a five-year crisis that has left many of its people struggling to find food and medicine, while driving masses across the border for relief into neighboring Colombia and Brazil.
Socialist Democrat Ocasio-Cortez Called Out in Fact Check
U.S. consumer prices rose considerably more than expected in January, fueling fears that inflation is about to turn dangerously higher.
The Consumer Price Index rose 0.5 percent last month against projections of a 0.3 percent increase. Excluding volatile food and energy prices, the index was up 0.3 percent against estimates of 0.2 percent.
The Labor Department indicated that price pressures were “broad-based,” with rises in gasoline, shelter, apparel, medical care and food.
In the shadow of the stock market’s meteoric rise this year, the U.S. dollar has fallen faster and harder than most analysts expected.
The dollar took a beating in 2017, falling nearly 10%, its worst annual performance since 2003. Rather than reversing that trend as the U.S. economy grows and the Federal Reserve raises the country’s interest rates, it has continued with the greenback the weakest it’s been in more than three years compared to a contingent of world currencies used to track its value.
Venezuelan President Nicolas Maduro announced a 40 percent increase to the minimum wage as of January, a move that will foment what many economists already consider hyperinflation in the oil-rich but crisis-stricken nation.
In his televised year-end address, leftist Maduro said the new wage level would protect workers against what he calls Washington’s “economic war” to sabotage socialism.
“Good news!” said the former bus driver and union leader, speaking next to a Venezuelan flag in a midday address.