The facts are there for all to see. Across the globe, the rich are getting richer as the plantation workers of Slavelandia get poorer. And to make a bad situation worse, the era of Dragflation, where economies go down and inflation rises, has just begun.

In the United States, once the Land of Opportunity, today the Census Bureau’s annual report on income, poverty, and health insurance coverage showed that inflation-adjusted household income fell 2.3 percent last year from 2021. With the cost of living increasing, the median income in 2022 was $74,580 compared with $76,330 in 2021.

Yes, the median income is $74,580. To put that in perspective, the average price of a new car is $48,334, according to Kelley Blue Book. And with the median home sales price at $416,100, a median income plantation worker can’t afford to buy one.

And what is a median household? According to the Census Bureau, “This includes the income of the householder and all other individuals 15 years old and over in the household, whether they are related to the householder or not.”

Buy a house? A family of three, four, or more barely has enough to live on after the government steals their money in the name of taxes and spends what little they have left on essentials.

Last week, The Wall Street Journal reported that “Stubbornly high prices would likely keep home-buying affordability near its worst level in decades.” 

According to a LendingClub report, 61 percent of American adults are living paycheck to paycheck. 

TD Bank’s annual consumer spending index reports that inflation has changed the spending habits of four out of five consumers. 

Illustrating the severity of higher inflation, a CNBC Your Money Financial Confidence Survey found that some 70 percent of Americans say they are stressed out about finances, mostly because of rising inflation, rising interest rates, and lower savings… while only 45 percent of adults said they have an emergency fund. 

And yesterday, the New York Federal Reserve Survey of Consumer Expectations for August found that 60 percent of American consumers are concerned that because of higher interest rates and tighter bank lending standards, the ability to get loans, credit cards, and mortgages is harder now than it was a year ago… which was the highest level of worry since June 2013.

It’s Global

The Trend is Your Friend! Follow the facts.

Despite the equity market news, which constantly promotes better times ahead so stock prices keep rising, the economic reports on facts and data signal trouble ahead.

Over in China, the world’s second largest economy, factory activity in August slumped for the fifth month in a row, with its Purchasing Managers Index (PMI) coming in at 49.7 and it non-manufacturing PMI hitting 51.0 last month compared to 55.5 in July and 53.2 in June. Any number below 50 is considered contraction. 

Signaling the global slowdown, China’s exports fell for the fourth month in a row.

And in Germany, Europe’s largest economy and the fourth largest in the world, day after day the economic news has gone from bad to worse. 

With its economy shrinking and stagnating since the start of the year, its Bundesbank reported that “Economic output is likely to more or less stagnate again in the third quarter of 2023.”

Germany’s Ifo Institute reports that business confidence fell to a 10-month low while the government said that German industry production fell 0.8 percent month-on-month… while new orders for German industry slumped nearly 11 percent in July, racking up its worst performance since April 2020 when the world closed down to fight the COVID War.

Gloom and Doom

For Europe, according to S&P Global, business activity is contracting faster than expected, with the EU’s PMI slumping to 46.7 in August. S&P Global said that “For the first time in 2023 so far, output fell in both the services and manufacturing sectors. The service sector ended a seven-month run of growth with the steepest contraction since February 2021. Goods production meanwhile dropped for the fifth month running and at another rapid rate.”

Feeling the pressure of higher interest rates and slumping productivity, HCOB Eurozone CPI construction hit its lowest level of the year, falling from 43.5 in July to 43.4 in August. Getting hit the hardest, housing construction fell to its lowest level since April 2020 when the world locked down to fight the COVID War. 

Admitting to the damage ahead, the European Commission said that because of persistent inflation, they lowered the forecast for EU growth to just 0.8 percent this year and 1.4 percent for 2024. In May they predicted 1 percent growth this year and 1.7 percent for next year. 

TREND FORECAST: As we greatly detail, among the economic pressures bringing down economies and spending is inflation. What is barely being reported is that a bad situation will be made much worse as oil prices keep rising while the economies keep declining… a key factor of Dragflation: Declining economic growth and rising inflation. 

As we go to press, Brent Crude is trading at $92.24 … up $20 since June. Thus, the higher oil prices rise, the deeper economies will fall… a situation that will worsen as winter sets in across the Northern Hemisphere. And should the Ukraine War continue to escalate, oil prices will continue to rise. 

And, this comes as no surprise to Trends Journal subscribers, since we had forecast at the beginning of the year that Brent Crude would hit near the $100 per barrel mark.  See: 

• “ECONOMIC UPDATE – MARKET OVERVIEW” (21 Feb 2023) 
• “ECONOMIC UPDATE – MARKET OVERVIEW” (28 Feb 2023) 
• “SPOTLIGHT ON GAS AND OIL” (14 Mar 2023) 
• “ECONOMIC UPDATE – MARKET OVERVIEW” (21 Mar 2023) 

Also, we maintain our forecast that U.S. equities will sink in September and October. 

LAST WEEK: TECH MAJORS’ STUMBLE WEIGHS ON STOCK PRICES

Share prices of tech heavyweights Apple and Nvidia lost ground last week, pulling all three major stock markets down with them.

Apple fell 6 percent after Chinese government officials were forbidden to continue using iPhones. Nvidia was off 6.1 percent. 

Together, the two have been responsible for about 30 percent of the Standard & Poor’s 500 index’s gains so far this year.

The tech sector overall shrank by 2.3 percent because investors began to question the future strength of the rally in tech shares, according to The Wall Street Journal.

“You’re finally starting to see a more intelligent look at artificial intelligence,” Dan Genter, CEO of Genter Capital Management, said to the WSJ.

The Dow Jones Industrial Average, which includes Apple but not Nvidia, gave up 0.8 percent last week. 

NASDAQ, heavy on tech stocks, dropped 2.6 percent and the S&P retreated by 1.6 percent.

The 10-year treasury note’s yield was up for the week, reaching 4.257 percent compared to 4.173 percent a week earlier. Yields rise as securities’ prices fall.

Comex gold’s continuous contract price lost 1.1 percent on the week, reaching $1,942.60 at 5 p.m. U.S. EDT on 8 September.

Brent crude oil broke up through the $90 benchmark last week, rising 2.3 percent to $90.65 at 5 p.m. U.S. EDT on 8 September. West Texas Intermediate, which sets U.S. oil prices, was up 2.2 percent to $87.51.

Over the week, Bitcoin ticked down less than 0.1 percent to $25,785.40 at 5 p.m. U.S. EDT on 8 September.

Abroad, markets largely shared the negative trend that colored U.S. equities.

The London FTSE 100 managed a 0.2-percent gain. The all-Europe Stoxx 600 edged down 0.9 percent.

Japan’s Nikkei 225 shed 0.6 percent. The South Korean KOSPI index lost 0.7 percent on continued skepticism about export markets.

In China, the Hang Seng was down 2.1 percent, the CSI Composite gave back 1.9 percent, and the SSE Composite was off 0.9 percent.

YESTERDAY: STOCKS SEE MODEST GAINS AS ALL EYES REMAIN ON FED

The Dow Jones Industrial Average was up 87.13, or 0.25 percent, to 34,663.72 and the benchmark S&P 500 was up 29.97, or 0.67 percent, to 4,487.46. The tech-heavy Nasdaq was also up 156.37, or 1.14 percent, to 13,917.89.

Stocks gained some ground as investors continued to look for signals from the Fed. 

The CME FedWatch tool said 93 percent of stock traders believe the Fed will leave rates between 5.25 and 5.50 percent after the policy meeting later this month. These traders see a 41 percent chance for another increase after the following meeting in November. FactSet said the CPI data from August is expected to show a 3.6 percent increase in inflation year over year.

TREND FORECAST: As we note in this week’s ECONOMIC UPDATE, rising oil prices will push up inflation and we do not forecast that inflation rates will come anywhere close to the 2 percent range… a range that the Fed made up in 2012 during the Great Recession. 

Elsewhere, London’s FTSE was up 18.68, or 0.25 percent, to 7,496.87 and the STOXX 600 was up 1.55, or 0.34 percent, to 456.21. In Asia, Japan’s Nikkei was down 139.08, or 0.43 percent, to 32,467.76 and South Korea’s Kospi was up 9.20, or 0.36 percent, to 2,556.88. Hong Kong’s Hang Seng was down 105.62, or 0.58 percent, to 18,096.45. China’s Shanghai Composite was up 26.06, or 0.84 percent, to 3,142.78 and the Shenzhen Component was also up 100.50, or 0.98 percent, to 10,382.38.

OIL: Brent crude was down 7 cents, or 0.08 percent, to $90.58 per barrel while West Texas Intermediate was down 18 cents, or 0.21 percent, to $87.33. 

The boost came largely from Saudi Arabia and Russia deciding to cut their output due to slowing demand. Reuters noted that the two will take 1.3 million barrels off the market until the end of the year.

TREND FORECAST: Despite economies in decline and expectations for lower demand, the less supply coming from OPEC+ will keep oil prices high. And as we had forecast in the beginning of the year, Brent Crude will approach the $100 per barrel market.

We have identified the COVID-19 lockdowns and runaway inflation as two major catalysts impacting the oil market. The great revival has not happened and higher oil prices over the past month will push up inflation levels in the U.S. and Europe

GOLD: The precious metal was up $3.40, or 0.18 percent, to $1,922.10 an ounce. 

Gold benefited from a dip in the U.S. dollar, which means the yellow metal becomes more appealing for investors dealing in foreign currency. The 10-year Treasury note increased, which kept gold prices from a further increase.  

“Gold has started the week on a positive note on some dollar weakness, but prices will likely face some pressure in the near-term with the market expecting one more rate hike this year,” Edward Moya, senior market analyst at OANDA, told Reuters. “I don’t think we’ll be getting the green light for investors to become aggressive and getting back into the precious metal very soon.”

TREND FORECAST: It’s all about interest rates. The higher the interest rates go, the stronger the dollar gets. When interest rates go down, it will be the beginning of the end of the dollar. Our forecast is that gold prices will spike above $2,200 an ounce. The only reason that gold is down is because of the dollar. 

BITCOIN: The world’s most popular cryptocurrency was trading down $764.80, or 2.96 percent, to $25,066.90 by 4:15 p.m. ET yesterday. Bitcoin continues to struggle and dipped below the $25,000 mark earlier in the day.

TRENDPOST: Despite the volatility, Ali Martinez, a crypto market expert, told Finbold that “a whopping 717,331 new BTC addresses” were created on Saturday, which is the biggest jump in users since 2017.

Finbold wrote, “The recent surge in new Bitcoin addresses hints at a growing influx of new investors eager to seize the opportunity presented by the latest price dip, strategically accumulating BTC holdings. This influx likely suggests that interest in Bitcoin remains strong as individuals seek to capitalize on its long-term potential despite short-term market underperformance.

TODAY: DOW DOWN AS INVESTORS WAIT FOR INFLATION DATA

The Dow Jones Industrial Average was down 17.73, or 0.05 percent, to close the day at 34,645.99. The S&P 500 also fell 25.56, or 0.57 percent, to 4,461.90. The tech-heavy Nasdaq was down 144.28, or 1.04 percent to 13,773.61.

Oracle was the major drag on the Nasdaq after falling 13.5 percent on disappointing results.

Stocks were buoyed by reports of optimism that the Federal Reserve could orchestrate a “soft landing in its fight to tame inflation.” A panel from the American Bankers Association forecasts inflation to slow to 2.2 percent by 2024. The Fed’s target is 2 percent.

TRENDPOST: The Trends Journal has said, based on data, that there will be no soft landing.

The average American is hurting. 

The New York Federal Reserve said today that the average American household has—on average—$10,170 in credit card debt. These consumers absorbed $43 billion more in credit card debt during this period. Overall, debt per household grew by about 8 percent from 2022, WalletHub reported.

Gerald Celente has long said that the COVID War resulted in the Bigs getting Bigger, while the people of Slavelandia suffer. Indeed, credit card interest rates jumped to over 20 percent this year, up from 16 percent last year.

Elsewhere, London’s FTSE was up 30.66, or 0.41 percent, to 7,527.53 and the benchmark STOXX600 was down 0.81, or 0.18 percent, to 455.40. In Asia, Japan’s Nikkei was up 308.61, or 0.95 percent, to 32,776.37 and South Korea’s Kospi was down 20.30, or 0.79 percent, to 2,536.58. Hong Kong’s Hang Seng was down 70.56, or 0.39 percent, to 18,025.89. China’s Shanghai Composite was down 5.72, or 0.18 percent, to 3,137.06 and the Shenzhen Component was down 8.38, or 0.081 percent, to $10,373.99.

OIL: Brent crude futures were up $1.42, or 1.6 percent, to $92.06 per barrel while U.S. West Texas Intermediate rose $1.55, or 1.8 percent, to $88.84.

Oil approached a 10-month high due to supply tightening while anticipating demand forecasts from the International Energy Agency due on Wednesday, the same day the U.S. is expected to release its CPI data, Reuters noted. 

“Crude prices are rallying after the OPEC monthly report showed the oil market is going to be a lot tighter than initially thought,” Edward Moya, senior market analyst at data and analytics firm OANDA, said in a note to investors.

But again, we had forecast that oil prices would rise earlier this year: 

• “ECONOMIC UPDATE – MARKET OVERVIEW” (21 Feb 2023)
• “ECONOMIC UPDATE – MARKET OVERVIEW” (28 Feb 2023)
• “SPOTLIGHT ON GAS AND OIL” (14 Mar 2023)
• “ECONOMIC UPDATE – MARKET OVERVIEW” (21 Mar 2023)

GOLD:  The precious metal fell $9.40, or 0.49 percent, to $1,912.40 based on a strong U.S. dollar—which drains international demand. 

“People are getting out of the market and waiting to see how the data comes out, and maybe buy gold at a lower price because there’s still (some) safety buying in gold,” Bob Haberkorn, senior market strategist at RJO Futures, told Reuters.

TREND FORECAST: As we had long forecast, the stronger the dollar gets the lower gold prices fall. And the higher interest rates rise in the U.S. the deeper gold prices will fall. 

Conversely, when the U.S. Federal Reserve lowers interest rates—which we forecast they will do in 2024 in the run-up in the race for the White House—the dollar will decline and gold prices will rise to around $2,200 per ounce.

TRENDPOST: Michael Lee, founder of Michael Lee Strategy, told Kitco that gold will likely hit $5,000 an ounce in the next three years because the macro data determining prices “looks manipulated or flawed by design.”

“Every single time a [jobs] report came out [in 2023], it was later revised lower,” Lee told Kitco. “That has happened every month this year. That is a 12 sigma deviation event—meaning, you’re more likely to get struck by lightning five times on the way to work than this happening. You have to ask yourself, is this government bureaucracy, is this a flawed model, or is the Bureau of Labor Statistics cooking the books to favor the Biden administration?”

He continued, “One has to wonder how gold has not broken out materially above $2,000 given the amount of buying that these BRICS nations are doing at the moment. With silver, you’re finally seeing some JPMorgan traders go to jail for what they did 15 years ago in containing the price of silver,” he said. “Is there something like that going on in the gold markets to artificially deflate the price? When all these stars line up, and the price of something should be much higher, your mind just goes to these conspiracy theories because so many have become true over the last few years.”

BITCOIN: The world’s most popular cryptocurrency was up $947.40, or 3.77 percent, to $26,099.50 today after getting pounded in trading yesterday—where it fell below the $25,000 mark. Despite its struggles, bitcoin is still performing the S&P 500, year over year, and is up 16.50 percent. The S&P benchmark is up 8.54 percent year over year.

TRENDPOST: The bitcoin increase was credited to the unwinding of bearish derivative bets on the market—known as a short squeeze, CoinDesk reported. The report noted that there were otherwise no bullish catalysts to push the price higher.