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It’s here, it’s alive but still not “official” until the “official Bankster bandits” who officially dismissed spiking inflation as “temporary” and then “transitory” make it “official.”
The Recession that we had forecast is sweeping the globe. In the first quarter of this year, America’s Gross Domestic Product contracted by -1.6 percent. In the world of “what we say counts,” The Street’s criteria for characterizing a recession as “official,” is two quarters of negative GDP growth.
Therefore, according to their definition, get ready for second quarter declines… and more to follow.
Beyond the declining GDP numbers that will be adding up over the coming months, currently, the recession numbers are seen in the rapid slide of raw-material prices, from corn, to copper, from cotton to crude oil… prices are plummeting. In fact, the slump of major industrial metals that are traded in London has racked up its worst quarter since the Panic of ’08… the domain name the Trends Journal secured in November of 2007!
It is not rocket science to understand and analyze the trend lines that have led the world to the onset of socioeconomic disaster.
Tracking trends is the understanding of where we are and how we got here to see where we are going.
And while the “where we are” begins with the murderous scum Woodrow Wilson, who dragged America into WW I, another one of his deadly deeds was creating the Federal Reserve Bank—the group of gangster Banksters to take control of the United States economy.
For even those too stupid to see the facts and over bloated by swallowing the mainstream crap, no clearer evidence is needed than witnessing the fact that the former Fed Head is now the head of the U.S. Treasury.
Yes, Janet Yellen, who, as we have greatly detailed in the Trends Journal, continually said that inflation was temporary and dismissed those of us who published the hard facts and evidence that inflation was spiking and here to stay… until the Banksters rapidly raised interest rates, as they now are. (See “CENTRAL BANKS STILL FUMBLING POLICY,” 21 Jun 2022 and “YELLEN HALF-ADMITS SHE GOT INFLATION WRONG,” 7 Jun 2022)
While for the major media it is ancient history, since the Panic of ’08, governments, along with their Banksters buddies have been artificially pumping up economies with record amounts of bond buying schemes and record low interest rates.
And despite the soaring inflation, they kept them low, and even as they are now raising them, compared to inflation numbers, for the major economies such as the EU, U.S. and Japan, they are still deep in negative territory when accounting for inflation.
Yet, even at their low rates, The Street can’t stay on its high without massive doses of cheap monetary methadone pumped in by Bankster money junkies.
And neither can the general economies.
As we detail in the Trends Journal, the “experts” and “economists” quoted by the mainstream media are now blaming much of the declining economic growth on the “pandemic.”
It has nothing to do with the coronavirus. It was a political science “pandemic.” For over two years—and still trending in China where the COVID War was launched on Lunar New Year 2020, The Year of the Rat—moronic, made-up, draconian lockdowns that lacked a scintilla of scientific data have destroyed the lives and livelihoods of billions across the planet.
And now, with the cheap money drying up as interest rates rise, so are the economies. And the socioeconomic blight on humanity caused by politicians to fight the COVID War has spread further as the United States and its allies have joined the Ukraine War to defeat their centuries old enemy, Russia.
TREND FORECAST: While many commodities spiked when the Ukraine War ramped up in March have decelerated, the longer the war rages the higher many commodities such as oil, which is sharply down today (see below) will rise.
But there are upsides and downs. JPMorgan Chase forecast that “global oil prices could reach a ‘stratospheric’ $380 a barrel if U.S. and European penalties prompt Russia to inflict retaliatory crude-output cuts….”
On the downside, Citigroup predicts that if the recession hits, which we say it has, crude oil could plunge to $65 a barrel by the end of the year.
While we do not forecast oil prices to hit the $300 range, should the Ukraine War continue and the sanctions imposed on Russia continue, despite the decline in demand, supply will remain tight and oil prices will stay at or above their current range.
And should tensions between the U.S. and their Israeli allies against Iran escalate into a military conflict, crude prices will spike above $150 per barrel.
Insult to Injury
As we have clearly illustrated and supported with facts, not one of the political, media or Bankster “officials” have blamed the COVID War’s made-up lockdown mandates for destroying the global economy. And neither of them blame the actions of governments and central banks that have created the inflation cycle by pumping trillions of dollars into economies and keeping interest rates low despite rising inflation, to artificially pump up 2020 crashing economies.
Adding arrogance to stupidity—as though the economic crisis began on 24 February when Russia invaded Ukraine—Andrew Bailey, the governor of the Bank of England, said today that “the global economic outlook has deteriorated materially,” and warned that the worst may still be coming.
Why? Not because of anything the governments and Banksters did to destroy economic growth while pumping up inflation… it’s all Russia’s fault.
“These higher prices, weaker growth and tighter financing conditions will make it harder for households and businesses to repay or refinance debt,” and that “Given this, we expect households and businesses to become more stretched over coming months. They will also be more vulnerable to further shocks.”
And the shockwaves are spreading across the planet. In Argentina, inflation has spiked 60 percent while its sovereign bonds have plunged toward 20 cents on the dollar.
In Turkey, the land of forever low interest rates and rising inflation, its annual inflation spiked nearly 80 percent and its lira is down 28 percent against the dollar.
Added to the declining currency club, and realizing that the lower the currency sinks the more it cost to buy products and services, today the euro slumped to a 20 year low against the dollar.
Not only is the euro down, so too is the human spirit. Fearing an “inevitable” recession, a Reuters poll released yesterday showed investor morale in the euro zone hit its lowest level since the height of the COVID War in May 2020. The Sentix’s index for the euro zone fell to -26.4 from -15.8 in June.
Sentix Managing Director Manfred Huebner said in a statement that “In every respect, the dynamics are reminiscent of the crisis year 2008, and what was then the collapse of the financial system is now the danger of the collapse of the European energy supply,” he said noting that “The energy crisis … is leading to considerable economic distortions.”
TRENDPOST: You reap what you sow. Mr. Huebner did not note that Europe and the United States created this “energy crisis” by imposing strict sanctions on Russia, the primary supplier of gas and oil to the Eurozone.
As noted by the World Economic Forum, “Europe is heavily dependent on Russia for its oil and gas. In 2021, two-fifths of the gas Europeans burned came from Russia. And over a quarter of the EU’s imported crude oil comes from Russia.”
From Bad to Worse
From top to bottom, the Eurozone is going down. Yesterday it was reported that Europe’s largest economy, Germany, which had reported trade surpluses for several decades, posted a foreign trade deficit of 1 billion euros ($1.03 billion). The last time the country reported a monthly trade deficit was 1991, according to Bloomberg.
Its Chancellor Olaf Scholz who, as we noted is a strong weapons supplier to Ukraine in their fight against Russia and has supported the sanction which cut off much gas and oil once supplied by Russia said yesterday that because of the Ukraine War “the crisis won’t pass in a few months” because it “has changed everything, and supply chains are still disrupted by the pandemic.”
TRENDPOST: Once again, as we say, “bullshit has its own sound.” The “crisis won’t pass” because, rather than minding their own business and letting Russia and Ukraine decide their differences, NATO and the U.S. have been actively involved in ramping up the war by sending billions in money and military armaments to Ukraine that have made a bad situation much worse.
And, adding insult to financial injury, the sanctions imposed on Russia have done nothing to stop their advance into Ukraine while the sanctions instead hit the economies across the globe and the people’s pocketbooks, thus ramping up the recession trend.
Secondly, as we noted above, the political clowns, media whores and the mindless continue to spew out the crap that economies and supply chains were, and are, “disrupted by the pandemic.”
NO, THEY WERE “DISRUPTED” BY THE POLITICIANS AND THEIR “HEALTH OFFICIAL” POWER FREAKS WHO IMPOSED MADE-UP, UNSCIENTIFIC, DRACONIAN LOCKDOWN MANDATES THAT DESTROYED THE LIVES AND LIVELIHOODS OF BILLIONS ACROSS THE GLOBE… WHILE FORCING “OPERATION WARP SPEED” JABS ON SOCIETY AND PUNISHING THOSE WHO REFUSE.
LAST WEEK: STILL SLIDING
U.S. stocks ticked up on Friday, the first trading day of the year’s third quarter, after ending the worst first half of a year since 1970.
Still, equity markets closed down for the week, their 11th losing week out of the last 13, The Wall Street Journal noted.
The Dow Jones Industrial Average shed 1.6 percent over the five days, the tech-heavy NASDAQ sank 4.6 percent, and the Standard & Poor’s 500 index ended the week down 2.2 percent.
Markets were weighed down by news that consumer spending slowed in May, and U.S. factory output declined in June, the WSJ noted. See “Consumer Spending Slowed Again in June” in this issue.
The Institute of Supply Management’s June survey of factory activity sank from 56.1 in May to 53 percent last month, its slowest pace in two years, which we report in “June Factory Activity Slowest in Two Years” in this issue.
Also, the U.S. commerce department revised its estimate of first-quarter consumer spending down to a 1.8-percent gain from its earlier 3.1-percent projection. (See “First-Quarter Consumer Spending Much Weaker Than Thought” in this issue.)
Markets also are shrouded in concerns about rising interest rates and the prospects of a global recession.
At their meeting in Portugal last week, U.S., British, and European central bankers signaled that their priority is to tame inflation even if it means slowing economic growth.
“If the inflation fever begins to break a little bit, it would give the [U.S. Federal Reserve] more breathing room,” Jurrien Timmer, an investment director at Fidelity Investments, told the WSJ.
“That could be enough to calm the economy down without causing much collateral damage,” he said.
Also last week, yields on government securities continued sliding from their mid-June highs.
On Friday, a shortened trading day ahead of the 4 July holiday, the 10-year treasury note’s yield slipped from 2.973 percent to 2.901 percent as traders wondered if the Fed might ease its pace of interest-rate increases amid a slowing economy.
In contrast, the premiums investors demand to hold corporate bonds instead of safer U.S. securities rose to their highest level since the summer of 2020 when the COVID lockdowns were tanking the economy.
U.S. markets were closed on 4 July.
Gold ended the week at $1,811.20, down 0.7 percent.
Bitcoin was down 7.2 percent on the week, ending Friday at $19,247 and continuing to slip further during the weekend.
Brent crude edged up $2.60 a barrel Friday, ending at $111.63. West Texas Intermediate oil’s price lost a dollar last week, ending at $108.43.
Abroad, Europe’s Stoxx 600 index was down 1.5 percent for the week, with the Nikkei 225 ending 2 percent lower and South Korea’s KOSPI off 1.8 percent.
The Hang Seng index in Hong Kong rose 2.1 percent. China’s SSE Composite shrank by 0.4 percent, while the CSI Composite eked out a 0.8-percent gain.
YESTERDAY: THIN TRADING ON THE FOURTH OF JULY HOLIDAY
U.S. markets were closed on Monday in observance of the Fourth of July holiday but European markets saw gains on the back of energy stocks and oil prices.
The FTSE 100 increased by 1.0 percent to 7241 due to increases in Harbour Energy, BP, and Shell. Investors in the European market have been watching moves by central banks in their fight against surging inflation.
The European STOXX 600 is down about 16 percent in 2022.
TREND FORECAST: The European Central Bank is expected to raise interest rates in July for the first time in a decade, but as we note, they will still be in negative territory. And the lower interest rates stay, the further the euro will decline. And, the longer the Ukraine War rages and the tighter the sanctions NATO and the U.S. continue to impose on Russia, the deeper the drag on the EU and global economies.
President Joe Biden is reportedly planning to end tariffs on some Chinese imports to ease inflationary pressures, but it will do next to nothing to reverse the recessionary trend and little to bring down inflation.
Japan’s Nikkei 225 increased by 0.84 percent to 26,153, the Shanghai Composite was up 0.53 percent to 3,405.43, and the Shenzhen Component rose 1.29 percent to 13,026.25.
Traders said they believe the market has already been through its worst moments and the challenges of the first half of the year will not be repeated at the same level for the second half.
GOLD: Spot gold struggled on Monday to break past $1,807.19 per ounce and U.S. gold futures fell 0.5 percent to $1,809.50.
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.
The dollar continued to trade near two-decade highs and the 10-year Treasury yield fell to its lowest level since June. Gold has fallen for the last three months but has traded above $1,800 an ounce due to fears that much of the global economy is headed into a recession.
BITCOIN: The world’s largest cryptocurrency traded between $20,400 and $19,854.30 on Monday.
We have reported extensively on bitcoin’s dramatic price swings in the past few months due to several factors ranging from interest rate hikes from the Federal Reserve and an overall decline in the value of tech stocks.
Bitcoin investors are trying to determine if the recent jump in prices was due to pent-up excitement rather than a fundamental change in the situation in the marketplace. Bitcoin lost about 70 percent in value since its November high.
TODAY: ANOTHER BUMPY MARKET AS OIL PRICES RAISE RECESSION CONCERNS
As it has been for the past few months, it was another roller coaster day on Wall Street with the Dow ending down 129.44, or 0.42 percent to close the day at 30967.82.
The Dow was down by 500 points but regained some of its early losses as the trading day rolled on. The S&P 500 also rebounded during the day after being down 2 percent. The benchmark index finished the day up 6.06, or 0.16 percent to 3831.39.
The S&P 500 down, more than 20 percent this year, is in bear territory, and the Dow is also down about 16 percent and, overall, stocks have had their worst start in 50 years. The tech-heavy NASDAQ, after opening sharply lower, climbed 1.75 percent to 11322.24. For the second quarter, the NASDAQ is down some 22 percent, racking up its worst quarterly performance since the Panic of ’08.
The big news was Brent crude dropping nearly 10 percent to $102.57 a barrel. West Texas Intermediate was trading down 8.79, or 8.0789 percent at 99.68 per barrel by 4 p.m. ET. It was the first time West Texas Intermediate fell below $100 since May.
The word on The Street is the low oil prices is evidence of a slowing economy.
The surging U.S. dollar measured against other currencies has also dampened oil demand because purchasing crude with foreign currencies has become more expensive.
Chevron, ExxonMobil, Phillips 66, were all down for the day.
TRENDPOST: Americans are feeling the pain at the pump with the national average of a gallon of gas at $4.80, according to AAA. The price has come down since its high on 14 June when it was $5.02 per gallon.
The price of gas has become a sensitive issue for the Biden administration, and the president has taken to social media to make an appeal to gas stations to bring down prices. (The tweet caught the attention of billionaire Jeff Bezos who commented, “It’s either straight ahead misdirection or a deep misunderstanding of basic market dynamics.”)
The U.S. Oil and Gas Association, an oil industry group, also took a swipe at Biden’s tweet, posting, “Working on it Mr. President. In the meantime — have a Happy 4th and please make sure the WH intern who posted this tweet registers for Econ 101 for the fall semester.”
The American consumer drives 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 down 2.11 percent, to 400.68, and Britain’s FTSE 100 was also down 207.18 points to 7025.47. South Korea’s Kospi was up 41.44, or 1.80 percent to 2341.78. Japan’s Nikkei was up 269.66 points, or 1.03 percent to end at 26423.47
The Stoxx 600 is down 17 percent after touching its all-time high in January.
Stocks in China also responded positively to the news and were higher today, with the Shanghai Composite down 0.041 percent to close at 3404.03. The Shenzhen Component increased by 53.14 points, or 0.41 percent to about 12973.11. Hong Kong’s Hang Seng gained 22.72 points, or 0.10 percent, to close at 21853.07.
Gas prices in Europe continue to rise and compounding the problem was the strike in Norway by oil workers. Ray Dalio’s Bridgewater is pessimistic about European stocks and it was revealed that the hedge fund took a $6.7 billion short position on some of the continent’s largest companies.
The Euro Stoxx 50, which is the benchmark for the continent’s biggest companies, is down 18 percent this year.
Bloomberg, citing a person familiar with the matter, reported that Bridgewater posted a 32 percent return for its flagship hedge fund through the first six months of the year.
GOLD/SILVER: Gold was down 34.80, or 1.9206 percent to 1766.50 per ounce at 4 p.m. ET on today as 10 Year U.S. Treasury yields were down 0.077 percent to 2.827.
As the Trends Journal has long pointed out, gold prices are vulnerable to higher Treasury yields, U.S. dollar, and interest rates. The dollar hit its highest level in about 20 years. Gold prices hit their lowest point in more than six months because investors see more attractive alternatives to gold due to the surging dollar and higher interest rates.
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.
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 was down about $114, or 0.56 percent and was trading at $20,098.20 at 3 p.m. ET.
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.
The volatility of the coin has led to top crypto exchanges announcing layoffs. Coindesk reported on Tuesday that Bullish.com is reportedly cutting about 10 percent of its staff.
Core Scientific, a top crypto mining company in North America, also began “strategically selling” its bitcoins, according to Axios. The report said the company sold 7,202 bitcoins at an average price of about $23,000.
We are working to strengthen our balance sheet and enhance liquidity to meet this challenging environment,” Mike Levitt, the CEO, said in a statement.
Cryptos have generally been lagging due to the macro environment and concerns about future moves by central banks to raise interest rates.
Over the past week, yields are falling but the dollar keeps rising. This dynamic proves that investors are rushing to safety, with heightened fears of recession
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. Bitcoin took a hit on news that the U.S. dollar hit 106.59 while yields continue to fall.
The Coin Telegraph pointed out that the Crypto Fear & Greed Index reached 19/100 today, which is the highest reading since the Terra LUNA collapse in May. The reading still represents “extreme fear” for investors.
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.
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.