WEEKLY ECONOMIC UPDATE – MARKET OVERVIEW
The following article is a sample article from this week's Trends Journal magazine.
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In the gambler’s world, reality does not count.
Week after week, from the International Monetary Fund, World Bank, Organization for Economic Cooperation and Development, etc., we report on their ongoing economic downgrades across the globe… yet equity markets have not crashed and many keep rising.
As we report in this and previous Trends Journals, demonstrations are raging across Europe as people take to the streets in protest of lack of basic living standards, skyrocketing inflation, government corruption, immigration waves, crime, violence… and to stop sending weapons and money to keep fighting the Ukraine War.
Indeed, as economies go down and living standards slide across the continent, the European Commission plans to send €18 billion to Ukraine next year.
Earlier this week, EU Commission President Ursula von der Leyen wrote on Twitter that the commission is disbursing a further €2.5 billion for Ukraine.
“We are planning €18 billion for 2023, with funding disbursed regularly for urgent repairs and fast recovery leading to a successful reconstruction,” she posted. She concluded that “We will keep on supporting Ukraine for as long as it takes.”
“We” means the plantation workers of Slavelandia.
And as the U.K. watched its inflation rate hit 11.1 percent and sink into deep economic duress, last week, its new Prime Minister took a trip to Kyiv and pledged a $60 million arms package for Ukraine while also vowing to double down on its effort to train Ukraine’s armed forces.
In Germany, the economic powerhouse of the EU, inflation is at an all-time high of 10.4 percent since its unification. Yet, on the dire news, European markets closed at a three-month high today.
Over in China, the world’s second largest economy, with its zero-COVID policy wide-ranging lockdown and draconian mandates, its property market meltdown keeps heating up, retail spending keeps cooling down and the travel, tourism, and restaurant businesses are in steep decline.
And while Hong Kong’s Hang Seng index fell 1.31 percent today, China’s Shanghai was up… as they were across Europe, as we noted.
Thus, hard economic data has little or next to nothing to do with the gambling casinos called “equity markets.”
Need more proof?
How about the FTX Bankman-Friedman scheme (or is it FTX “Bankster”—Friedman?) that is being reported as the largest currency fraud in history? (See: “Putting an End to Voldymyr Zelensky’s Follies” in this Trends Journal.
Money Game
Yes, Wall Street has zero to do with Main Street. As Monday’s front page headline in The Wall Street Journal read, “Inflation Reins In Holiday Spending.”
But the next day, their top-of-the-page headline in its Business & Finance section noted how “Investors Pour Into U.S. Stocks”… pumping in more than $86 billion this year according to Morningstar Direct.
Again, they are not “investors,” but rather “gamblers.”
Discounting yesterday’s headline of how consumers are cutting back holiday spending, WSJ now says that the so-called investor’s credit “resilient consumer spending for helping American stocks retain their luster amid a darkening global economy.”
They go on to note that despite the S&P 500 heading for its worst year since the Panic of ’08, “the buy on the dip mentality that drove U.S. stocks to repeated records in recent years lives on.”
Quoting Jim Masturzo, the investment officer with Research Affiliates, it is made clear that it’s all about the gambler’s game… hardship and reality are not an equity market concern. Besides investing in U.S. markets, Masturzo sees double-digit annual returns in Europe: “You want to buy when there is blood in the streets. That makes now a good time for Europe.”
TREND FORECAST: There you have it… “blood on the streets makes it a good time for Europe.”
Again, virtually absent from the reporting and forecasts by “The Club” is that the robust 5.9 percent global economic growth in 2021 was artificially created by the countless trillions governments poured into economies—as many still are—and record low interest rates by the central banks.
Now, after decades of soft inflation and record-low interest rates, the higher interest rates rise, the deeper economies will fall. And the higher rates rise, the more it will cost governments (especially heavily indebted emerging markets), businesses and consumers that borrowed in the U.S. currency to pay their bills.
Therefore, as we are now seeing with the dollar retreating from its two-decade high and shedding over 4 percent this quarter, there is a growing likelihood that the Federal Reserve may only raise interest rates 50 basis points when they meet in mid-December.
However, with the U.S. midterm elections over and a sharp economic downturn not affecting the ruling party, as the Fed has done before, they may well raise interest rates higher to fight inflation, and then, following the political playbook, lower them before the 2024 Presidential Election.
Again, we are unable to precisely forecast the interest rates since the game is rigged by the Bankster and political crime syndicates who savor “blood on the streets.”