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It’s all in the numbers.
Life on Earth is getting more miserable by the day.
A Gallup poll released today shows that thanks to the dictators who locked down the world to fight the COVID War, the “World is Unhappier, More Stressed Out Than Ever.” Their findings show that:
“Emotionally, the second year of the pandemic was an even tougher year for the world than the first one” according to the latest annual global update on the negative and positive experiences that people are having each day.
“As 2021 served up a steady diet of uncertainty, the world became a slightly sadder, more worried and more stressed-out place than it was the year before—which helped push Gallup’s Negative Experience Index to yet another new high of 33 in 2021.”
A Gallup survey of adults in 122 countries found that four in 10 adults said they experienced a lot of worry (42 percent) or stress (41 percent), and slightly more than three in 10 experienced a lot of physical pain (31 percent). More than one in four experienced sadness (28 percent), and slightly fewer experienced anger (23 percent).
Duh!
Of course, this comes as no surprise. The political science, not medical science, used to justify the massive lockdowns and mandates imposed on citizens and businesses since the COVID War was launched by the Chinese on their Lunar New Year, “The Year of the Rat,” in 2020, was unprecedented in world history.
And as we have long detailed, with politicians across the globe following the Chinese lead, they have destroyed the lives and livelihoods of billions… while doing next to nothing to kill the virus. And as the Gallup survey confirms, by robbing people of their freedom and their future, the COVID War has put billions of people over the mental edge.
Among the businesses that survived the lockdowns, many are a shadow of what they were in 2019. Remember how those who looked up to the politicians and “health officials” who locked them up and closed them down gleefully repeated their stupidity that “It’ll come back,” in their belief that the devastation caused by the COVID War did not exist and would not persist?
And as we have greatly detailed, the economies and equity markets that were artificially propped up with cheap money and record low interest rates will turn as unhappy and stressed out as is Gallup’s survey of society.
While inflation worries are now a central concern to the central banks, as we have long noted, they were either too stupid or they were lying about the scope and depth of inflation. Among the numerous examples of their incompetence, back in May of 2021, we quoted former Fed Head and now U.S. Treasury Secretary Janet Yellen spouting that inflation above 2 percent will be small and temporary as supply chains and the economy in general recover.
“I don’t think there’s going to be an inflationary problem, but if there is, the Fed can be counted on to address it,” U.S. Treasury Secretary Janet Yellen said in a 5 May statement quoted by the WSJ.
Again, as we noted in great detail, central Banksters across the globe spewed out the bullshit for some two years that inflation was “temporary” and then “transitory.
Among the leaders selling the lie or stupidity of no inflation was the former head of the International Mafia Monetary Fund and now head of the European Central Banksters, Christine Lagarde.
Two weeks ago she noted how off-trend the Banksters are by declaring that “All international institutions have made the same mistake” of underestimating inflation’s speed and power.
In fact, back in January Lagarde dismissed rising inflation rates and rejected calls for the ECB to raise its base interest rate from -0.50 percent, where it had remained since 2014. (See “ECB: More Monetary Methadone,” 27 Apr 2021 and “ECB Pledges to Keep Rates Lower Longer,” 27 Jul 2021, among other articles.)
Still spewing out bullshit, today Lagarde played down the risk of inflation hitting Europe, stating that “… we are still expecting positive growth rates due to the domestic buffers against the loss of growth momentum.”
TREND FORECAST: As we have noted, the ECB’s raising interest rates from -.50 percent to -.25 percent this month is symbolic, not substantive.
Moving rates from negative to positive territory will jolt Europe’s economy slightly this fall, but businesses and consumers will have to adjust after eight years of living in a different financial world.
With Europe’s inflation at 8.1 percent now quadruple the ECB’s target, and the central bank’s interest rate creeping up by .25 basis points, the hikes will have no meaningful impact on inflation.
And, to make a very bad situation worse, as we have extensively detailed in the Trends Journals, the sanctions NATO and U.S. leaders have imposed on Russia are making a very bad inflation situation much worse as food and fuel prices skyrocket.
As the Bank for International Settlement noted Sunday, “Gradually raising policy rates at a pace that falls short of inflation increases means falling real interest rates. This is hard to reconcile with the need to keep inflation risks in check. Given the extent of the inflationary pressure unleashed over the past year, real policy rates will need to increase significantly in order to moderate demand.”
Taking into account what the BIS is stating, considering the tiny amount of rate hikes that will be imposed by the ECB, inflation will move higher while the economies fall lower: Dragflation.
Up and Down
However, as the Trends Journal forecast for nearly two years, inflation is a hot trend that will keep rising, and despite the Fed claiming they have the “tools” to deal with it, the only tool they have is to raise interest rates much higher. As we repeatedly note, the higher interest rates rise, the deeper equities and the economy will fall.
And the fall is under way. On the inflation downside are the decline of key commodity prices.
Among them copper, or as we have referred to the metal as “Dr. Copper” because it is said to have a Ph.D. in economics because the price at which it is selling accurately signals changes in global economic trends.
From heavy industry to hi-tech, copper is an essential manufacturing component. Therefore, the higher the demand, the higher the price for not only copper but other commodities needed to build expanding economies.
Thus, when copper prices drop sharply, it is a signal that economies will dive down as well. Selling at its lowest level since early February 2021, copper prices have fallen some 25 percent from its March peak. In addition to copper, a number of other industrial metals such as zinc, lead, aluminum, tin, nickel are down 10 to 20 percent from their highs.
Beyond rising interest rates that are bringing down base metals, China’s zero COVID policy lockdowns which have lessened demand for the products are also responsible for the commodity price drops.
TREND FORECAST: While many commodity prices are down from their recent highs, they are still far above their previous lows. Therefore, we maintain our forecast for Dragflation: Negative economic growth and rising inflation.
In fact, the Bank of International Settlements said in its annual report that it released this week that the global economy may well face negative growth and higher inflation… which the media still inaccurately terms stagflation. Again, economies that decline are not “stagnant.”
What the world is facing now is unprecedented in world history. Again, never before has the globe been shut down as psychopathic, pathological lying politicians did to fight the COVID War.
And never before have interest rates been in negative and zero range and never before had governments poured in countless trillions to artificially prop up economies that they killed with their lockdown and draconian mandates.
LAST WEEK: MARKETS BOUNCE BACK AFTER THREE WEEKS OF LOSSES
Buoyed by new optimism regarding the U.S. Federal Reserve’s plan for interest rates, among other things, U.S. equity markets reversed three consecutive weeks of losses.
The Dow Jones Industrial Average soared 800 points on Friday and gained 5.4 percent for the week.
The NASDAQ added 7.5 percent and saw a record 3.3 billion shares change hands during Friday’s closing auction.
The Standard & Poor’s 500 grew by 6.4 percent, bouncing out of the bear market that it fell into last week. On Friday, it rose 3.1 percent, its biggest one-day spurt in two years.
All 11 of the S&P’s sectors rose, with gains especially strong in consumer discretionary stocks, financials, materials, and technology.
However, the S&P remains about 18 percent lower than it began the year.
Stock prices had slipped recently on fears that the Fed would lift interest rates so high so fast that the economy would stumble into a recession.
Last week, bargain hunters went shopping and some speculators went long on the belief that recent worse-than-expected news on inflation might persuade the Fed to raise rates in smaller increments, The Wall Street Journal said.
“It’s clear that economic activity is cooling, which should cool down inflation,” Luc Phillips, investment chief at SYZ Private Banking, told the WSJ. “That is rather positive.”
TREND FORECAST: To say economic activity is cooling and it will bring down inflation is “rather positive,” we see as “rather stupid.”
Unlike past interest rate hikes that were accelerated to cool inflation, unlike back then, this time, global economies were driven into recession by the COVID War lockdowns and were artificially boosted with cheap money and record low interest rates. Therefore, when what had juiced them up dries up, we forecast an economic calamity the likes of which were never seen in modern history.
Need more proof? This month, the University of Michigan’s index of consumer sentiment plunged to its lowest level ever. The gloomy outlook may prompt consumers to spend less, which also would tend to slow inflation.
The survey’s purchasing managers index covering manufacturing and services dropped to a five-month low in June, further underlining economic weakness that could cause prices to throttle back.
The 10-year treasury note’s yield closed the week at 3.136 percent, slipping from 3.238 the week before. Yields fall as securities’ prices rise, indicating more investors want to buy them.
Down and Up
Gold slid gently through the week to close down a fraction at $1,826.
Bitcoin eked out a minor gain for the week, closing up 2.2 percent at $21,000.
Benchmark Brent crude oil closed at $108.87, sliding on growing indications of a global economic slowdown. West Texas Intermediate, the standard for U.S. oil prices, finished the week at $106.61.
Overseas, Europe’s Stoxx 600 index rose 2.2 percent last week, leaping on Friday in tandem with U.S. markets.
The Japanese Nikkei 225 gained 1.4 percent for the five-day trading span. South Korea’s KOSPI gave up 3.3 percent on a glum outlook for its export-centered economy.
The Hang Seng index in Hong Kong added 3.5 percent, China’s SSE Composite edged up 1.1 percent, and the mainland’s CSI Composite took on another 1.6 percent.
YESTERDAY: ALL QUIET IN THE WESTERN MARKET
One stock investor described Monday’s trading day in the U.S. as “very sleepy.”
The Dow Jones Industrial average shed 62.42 points, or 0.3 percent, to end the day at 31438.26 and the S&P 500 was also down 11.63 points to 3900.11. The Nasdaq Composite Index fell 83.07 points, or 0.7 percent, to 11524.55.
As though this signaled a major trend, and ignoring the broad consumer retail market sector which accounts for some 70 percent of America’s GDP, the mainstream media pumped up the news that one of the bright spots in the market, given supply chain issues and high inflation was Nike, the sneaker company. The Oregon-based company posted better-than-expected revenue for the quarter despite these challenges, and said it did not notice customers altering buying habits due to inflation.
Indeed, you can’t talk about the stock market too long before considering inflation and the Federal Reserve’s interest rate hikes. But stock brokers think they see a light at the end of the tunnel and have expressed “optimism” that the worst days are behind us.
In fact, so certain are they that Happy Days will be here again, analysts at UBS said investors are more confident that the Fed will start cutting rates in mid-2023, according to The Wall Street Journal.
Fewer traders also believe the Fed will raise interest rates by another 2 percentage points by the end of the year, the paper said. Last week, 74 percent of those polled thought the country would have to take its medicine with another 2 percent hike, but that number is now 52 percent.
Russia defaulted on its foreign debt after missing the payment of $100 million to bondholders, but that did nothing to hit global equities or Russia’s ruble which is still at a seven year high.
And, totally absent from the mainstream warmongering Western media is that Russia could have easily paid the $100 million if the U.S. didn’t seize—or more appropriately steal—more than $300 billion of Russian central bank assets.
The default was not seen as a risk for a “ripple effect” in the markets, and Moscow blamed the West for erecting barriers so it could not make the payments and was thus pegged with the “default’ label, according to the paper. The report pointed out that Russia has the money to make the payments but sanctions have cut the country off from the banking system.
Russia has been pulling in about as much money on energy exports as before the war, which has prompted leaders at the G7 meeting in Germany to call for price caps on Russian crude.
“The goal here is to starve Russia, starve Putin of his main source of cash and force down the price of Russian oil to help blunt the impact of Putin’s war at the pump,” a senior U.S. administration official told CNN.
Elsewhere, the Stoxx Europe 600 rose 0.6 percent and the FTSE, the U.K. benchmark, gained 0.7 percent.
GOLD: Spot gold shed 0.22 percent on Monday to about $1,822.30 per ounce due to continued pressure from an elevated dollar. U.S. gold futures fell 0.36 percent to $1,823.70. As the Trends Journal pointed out, gold loses its appeal when the dollar is strong and central banks hike up interest rates. Investors see gold as an attractive long-term investment due to the risk of recession by the end of 2022 due to the Federal Reserve’s interest rate increases.
BITCOIN: The world’s largest cryptocurrency traded between $20,550 and $20,650 on Monday. Overall crypto market capitalization is roughly $877 billion. The peak was when the crypto market hit $2.9 trillion in November.
Goldman Sachs on Monday cut Coinbase’s rating to “sell” from “neutral,” according to CoinDesk.com. The bank said Coinbase would need higher crypto prices and volatility to drive an increase in revenue in the short term. The report said the bank forecasts “breakeven to negative adjusted EBITDA over the next several years.”
TODAY: DOW FALLS 491 POINTS AFTER NEW REPORT ON CONSUMER OUTLOOK
As it has been for the past few months, it was another roller coaster day on Wall Street with the Dow and S&P 500 both erasing early gains. Ten of the 11 major sectors in the S&P which fell 2.01 percent, ended the day in negative territory and the index is on track for its biggest first-half percentage drop since 1970.
Dow Jones Industrial Average fell 491.23 points, or 1.56 percent, to 30,946.99 while the tech-heavy Nasdaq Composite slumped nearly 3 percent to 11,181.54.
Traders were trying to determine if stock prices, that are up 8 percent in the last four sessions, would stick. But a new report on consumers’ outlook splashed cold water on hopes the trend would continue.
The main driver for losses was the report from the Conference Board that showed consumers’ short-term outlook fell to 98.7 in June, which is down 4.5 points from its May reading of 103.2.
The report is the latest sign that inflationary pressures have been impacting the American consumer. The University of Michigan said last week that consumer sentiment reached 50 in June, which is the lowest reading in 70 years.
TREND FORECAST: With some 70 percent of America’s GDP consumer based, the reality of an inflation weary, wage declining Main Street is hitting Wall Street. As goes the American consumer so goes the stock market. And, as interest rates move higher and as food and fuel prices keep rising, the deeper Main Street falls, the further The Street will fall.
TREND FORECAST: The Trends Journal has long warned subscribers that the central bank Banksters were either too stupid to see inflation rising, or are totally in the game of rigging the markets, and were fully aware that the higher interest rates reach, the harder the market will fall.
As we continue to note, while the average person feels the economic pain as inflation rises and it costs them more to buy less, the true levels of economic devastation will not be realized by the general population until Wall Street crashes. Therefore, the Bankster Bandits and The Wall Street White Shoe Boys will do all they can behind the scenes to delay the market crash. In fact, the Feds may even ease up on rising interest rates if the economy and equites move into crash landing mode.
Europe’s Stoxx 600 was up 0.2 percent, to 416.19, and Britain’s FTSE 100 was up 65.09 points to 7323.41. South Korea’s Kospi was also up 20.17, or 0.84 percent to 2422.09. Japan’s Nikkei jumped 178.20 points, or 0.66 percent to end at 27049.47. I
The Stoxx 600 is down 17 percent after touching its all-time high in January.
The European market responded to reports that China will continue to ease some of its COVID-19 restrictions. China announced that it will cut the quarantine period for international travelers.
The National Health Commission announced that international travelers will only need to quarantine at a centralized facility for seven days upon arrival in mainland China. CNBC pointed out that the previous rule was that travelers had to quarantine for up to 21 days.
City officials in Shanghai also announced that they were able to limit COVID-19 transmission in the city and the war was over. There were still some rules in place in the city of nearly 25 million as China continues to pursue its “Zero COVID” strategy.
Stocks in China also responded positively to the news and were higher today, with the Shanghai Composite was up 0.89 percent to close at 3409.21. The Shenzhen Component increased by 157.12 points, or 1.23 percent to about 12982.69. Hong Kong’s Hang Seng gained 189.45 points, or 0.85 percent, to close at 22418.59.
GOLD/SILVER: Gold was down 3.30, or 0.1808 percent to 1821.50 per ounce at 2:30 p.m. ET on today as U.S. Treasury yields rose from 3.193 percent on Monday to 3.201 percent.
As the Trends Journal has long pointed out, gold prices are vulnerable to higher Treasury yields and interest rates. The Conference Board Consumer Confidence Index reached its lowest level since February 2021, which means the Fed could act bolder to rein in inflation.
“Consumers’ grimmer outlook was driven by increasing concerns about inflation, in particular rising gas and food prices. Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as growing risk of recession by year end,” Lynn Franco, senior director of Economic Indicators at the Conference Board, said in a statement obtained by the Trends Journal.
Mike Mullaney, director of global markets research at Boston Partners, told The Wall Street Journal that these inflation expectations means the Fed “will be “much more aggressive in squashing inflation.”
The U.S. dollar came down slightly over the last few sessions, but its strength compared to other currencies has also made gold a less appealing option for foreign investors.
TREND FORECAST: We maintain our forecast that for gold to maintain strength, prices must stay in the high $1,900 per ounce range and when they solidify above $2,200 per ounce, gold will spike to new highs. On the downside, should gold fall below $1,800, its bottom will be in the $1,730 range.
OIL: Oil was up 1.9 percent on Tuesday to 111.63 per barrel. Brent crude was also up 2.20 percent to 117.59 per barrel and West Texas Intermediate was trading 1.77 percent higher at 111.54 as of 2:33 p.m. ET.
Bank of America analysts wrote in a recent note to investors that inflationary “pressures from food to energy to services, coupled with fast paced interest rate hikes, suggest oil demand will struggle to fully recover to pre-pandemic levels until next year.”
Energy prices have been soaring for much of the world even prior to the 24 February invasion of Ukraine. Countries that took part in the G7 meeting in Germany announced Tuesday that they have reached a preliminary agreement to put a price cap on oil flowing from Russia.
Olaf Scholz, the German chancellor, admitted to reporters that the effort is ambitious “and there is still a lot of work to be done.”
Americans are dealing with record prices at the gas pump and many have turned to reducing the amount of gas they purchase. President Joe Biden has floated the idea of a three-month holiday from a federal gas tax that would save Americans about 18 cents per gallon at the pump. Economists pointed out that the sum would not make much of a difference in Americans’ lives. If the holiday is approved by Congress, Americans can save up to $88 over a 12-week period.
TREND FORECAST: The picture is clear. The higher oil prices rise, the faster inflation will rise and the greater the pressure on central banks to raise interest rates. And the higher interest rates rise, the deeper equity markets and economies will fall.
BITCOIN: Bitcoin edged downward today and hovered between $20,550 and $20,689. The crypto was trading at $20,689.90 at 1 p.m. ET. After volatile trading over the past few weeks, bitcoin remained relatively stable over the weekend.
The Trends Journal has pointed out that the world’s most popular crypto has lost more than half its value since November when it was trading at $68,982 per coin.
Gary Gensler, the chairman of the U.S. Securities and Exchange Commission, said in an interview with CNBC Monday that bitcoin is the only cryptocurrency that he considers a commodity. His comments seemed to be directed at other popular coins like Ethereum. Ethereum is trading at $1,175.44 a coin.
James Seyffart, an ETF analyst at Bloomberg Intelligence, took to Twitter after Gensler’s comments and said they are “definitely positive” for the coin, in his opinion. But he said it remains to be seen if it moves the needle vis-â-vis Grayscale’s application to convert its Bitcoin Trust into a spot-based ETF, The Coin Telegraph reported.
Michael Sonnenshein, Grayscale’s CEO, said Monday in a letter to investors that he remains encouraged by the SEC’s actions over the past eight months, “which have signaled an increased recognition of and comfort with the maturity of the underlying bitcoin market.”
Gensler’s SEC, in October, approved the first ETFs to take positions in bitcoin futures. (It’s worth mentioning that Gensler taught a class on bitcoin at the Massachusetts Institute of Technology.)
Cryptos have generally been lagging due to the macro environment and concerns about future moves by central banks to raise interest rates.
We have pointed out that these rates set by the Fed can impact cryptos because of an increased competition for capital. Speculative investments, like cryptos, tend to lose. These rising rates are seen as altering the risk-reward calculation for major investors and hedge funds.
TREND FORECAST: We had long forecast, the downward breakout point is when prices fall below $25,000 per coin. They are now below that breakout point, thus bitcoin could fall back to $10,000 per coin or lower.
On the upside, we maintain our forecast that bitcoin will find strength to hit new highs when it breaks above $55,500 per coin.
We have long noted that cryptos would be hurt when governments act to regulate these trades. Gensler said in the interview that “many of this crypto financial assets have the key attributes of a security. Some of them are under the Securities and Exchange Commission (jurisdiction).”
The Trends Journal has long pointed out that if an asset is considered by the SEC to be a security, those involved in the transactions must comply with the rules.