INFLATION – RECESSION – RISING RATES RATHER THAN LOWER RATES – Investment Watch

by Martin Armstrong

COMMENT: Marty, I need to thanks a lot for the WEC. Maybe you’ll take into account doing one that’s streamed in the midst of this craziness. I’ve listened to many analysts. However you might be head and shoulders above everybody. Solely you referred to as for declining financial development, rising inflation, and rising rates of interest despite a recession. I perceive it’s Socrates that places this all collectively. However we actually want you now.

Please, Please, Please!

WL

ANSWER: I’ll take into account it. My days are full and I can not even start to elucidate all the things that’s coming in from sources around the globe. The “Stickly” core inflation, which doesn’t embody meals or power, made its low completely on its 31.4-year decline from the very best yearly closing in 1979 to the underside in 2010. That is actually necessary to grasp as a result of whereas meals and power are rising sooner, they filter over into the core inflation and are driving that greater at a sooner tempo. We’re taking a look at all the things rising, a lot as was the case throughout the Nineteen Eighties. Even ticket costs are rising in sports activities.

I perceive that folks THINK that Paul Volcker conquered inflation by pushing rates of interest to insane ranges. Let’s get one thing straight — the high-interest charges did NOT cease the inflation. Volcker drove the worth of the greenback greater and that produced DEFLATION, driving the British pound to $1.03 by 1985.

Elevating charges does NOT cease inflation; it’s going to solely enhance it once we are coping with a SHORTAGE reasonably than an extreme demand increase. The identical end result will unfold with the rising greenback BECAUSE of the rising charges and that produces deflation, however now we have the stupidity of these pulling the strings within the Biden Administration and Europe for local weather change. They’re in energy now and need to destroy as a lot of the power system as they’ll as a result of they concern the election cycle will swing in opposition to them so they need to destroy no matter they’ll proper now.

Meals shortages will get MUCH worse into 2023, and we’ll see energy failures this summer season in several components of the US and Europe. There are individuals within the Biden Administration who merely need to destroy as a lot as potential within the power sector in hopes that the Republicans can do nothing in the event that they take again management.