GERALD CELENTE: Economic Trouble Ahead
The Conference Board reported that its “Consumer Confidence Index®” deteriorated for the third consecutive month in April
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From housing to healthcare, from junk food to soda, across the spectrum inflation is eating away at consumers’ disposable income, and they are feeling the pinch.
Today, The Conference Board reported that its “Consumer Confidence Index®” deteriorated for the third consecutive month in April, retreating to 97.0 … from a downwardly revised 103.1 in March.
Even at the top, as we have forecast, and again report in this issue of The Trends Journal, luxury brands are taking an economic hit. The economic fish is rotting from the head down.
And, at the bottom of the economic scale, for the plantation workers of Slavelandia, they are becoming too poor to even swallow a Big Mac.
McDonald’s CEO Chris Kempczinski said today that “It is clear that broad-based consumer pressures persist around the world,” and they “continue to be even more discriminating with every dollar that they spend as they face elevated prices in their day-to-day spending.”
Again, how did this all happen?
The COVID War laid the foundation for inflation when the central Banksters fiscal stimulus scam brought interest rates to zero to juice up the sagging economy, and the government used its monetary stimulus game to inject trillions of dollars backed by nothing and printed on nothing into the pockets of businesses and consumers.
With March inflation up 3.5 percent for the year—down from the 40-year high when it hit 9.1 percent in 2022—it is still eating away at consumers whose wages are falling behind the real inflation rate, which according to Shadow Stats, is twice what the government is reporting.
Executives at 3M, the maker of Scotch tape and Post-it Notes that also reported Tuesday, told analysts it’s seeing “continued softness in consumer discretionary spend.” While 3M earnings and revenue topped expectations in the first quarter, management said it anticipates consumer spending this year to be “muted.”
Newell Brands CEO Chris Peterson on April 26 joined the chorus of executives pointing to inflation as the main force bedeviling their businesses. Though the owner of Coleman and Rubbermaid products exceeded analyst forecasts for the first three months of the year, the company issued soft guidance for current-quarter earnings and said revenue is likely to decline.
“The categories we compete in remain under pressure with consumers continuing to carefully manage their discretionary spend as the cumulative impact of inflation on food, energy and housing cost has outpaced wage growth,” Peterson said.
Seeing how the high prices keep hitting consumers and corporations, Starbucks Corp. Chief Executive Laxman Narasimhan said today that “Let me be clear from the beginning, our performance this quarter was disappointing and did not meet our expectations.”
It is disappointing, the CEO said, because of “A deteriorating economic outlook.”
Yes, the economic outlook is dimming, because the U.S. Fed kept interest rates high, which has made a bad situation worse.
High-interest rates will bring down the economy and have only a marginal effect in bringing down inflation. Yes, some commodity prices will decrease, but true consumer staples such as housing, insurance, food, tuition, etc. will mostly keep rising.
Indeed, today the S&P CoreLogic Case-Shiller reported that in the United States the price of a home in the 20 major U.S. metropolitan markets hit a new record, increasing 7.3 percent in the 12 months ending in February.
On a national level, home prices were up 0.4 percent in February and up 6.4 percent over the past year.
TREND FORECAST: The Dow was down 570 points today over fears that the U.S. Fed will not lower interest rates fast enough. Should economic data continue to worsen, we forecast they will lower rates in the run-up to the presidential elections to keep the current White House in power.
Indeed, the former Fed Head, Janet Yellen, is the U.S. Treasury Secretary, which clearly illustrates that the Banksters are the money junkies running the show.
Again interest rates in the U.S. and other nations will go lower as economies weaken.
At its last meeting, the Bank of Canada kept interest rates high because of what they called a strong Canadian economy… which, like most of the world, was artificially propped up with fiscal and monetary stimulus.
Now, as a result of their high-interest rates, today, Statistics Canada reported Tuesday that the nation’s gross domestic product rose only 0.2 percent in February, and their data suggests that the GDP in March will be unchanged.
And with its utilities and manufacturing sector contracting 2.6 percent and 0.4 percent respectively, get ready for the nation to sink into Dragflation: declining economic growth and rising inflation.
We note Canada’s economy and the hard numbers since they reflect what is going on in most of the Western world.
Therefore, interest rates will go down across the spectrum to again artificially drive up sagging economies. However, the lower interest rates fall, once again, the higher inflation will rise.