Mohamed El-Erian, a Blooomberg Opinion contributor, cracks me up in his efforts to avoid speaking directly. Generally, El-Erian knows the situation, he was one of the first to identify the issue with inflation in March 2021. However, he continues avoiding any mention that the U.S. economy is already in a negative position for growth.
Consider this…. In this interview El-Erian says he believes the Fed will flip-flop and lower rates in reaction to what is happening in the economy. Keep in mind, the only reason for the Fed to reverse rates so quickly is if the economy is already in a demand side contraction and the latest .75% increase in rate is being done into a negative GDP environment.
Of course, the reality is exactly that. The U.S. economy is already contracting, mostly because of inflation chewing up the supply side, and the Fed is factually raising interest rates into an economy already in a demand side recession. But everyone must pretend that’s not the case, so here’s El-Erian saying Jerome Powell is going to end up reversing himself, flip-flopping, which doesn’t make sense if you don’t first establish that the economy is right now shrinking as he speaks. WATCH:
It’s cultural. He will never speak directly.
It’s avoiding the Regime’s Kill List.
If that’s the case for him, then he should scramble to find what’s left of his integrity and resign from all positions that influence this country’s economy.
Ed. to add: Everyone in positions akin to his need to either step up and say what’s going on, alongside all possible solutions, or they need to refuse to play a fiddle while the ship sinks and simply walk the F- away. I’m tired of mealy mouth paycheck seekers.
Wow, I used to have some respect for this guy and I’ll bet I wasn’t the only one. In the end he too will go down with this ship, he won’t be missed. None of the liars will.
No. Incorrect.
Raising interest rates will not cure this type of inflation. This is not simple Chamber-of-Commerce/Bush exploitation of the middle class. That kind of scam envisions manipulating the economy, then collapsing it and making tons of money as they run the decade’s long cycles. This time, the planners (Schwab, Soros, etc.) in charge of our government have an economic collapse, but there is no repeat since at the end of this cycle there would be no middle class, and the economic collapse will be followed by a collapse of FREEDOM (the ultimate goal). A global tyranny is what is envisioned and destroying your economic reserve ensures (they think) you will go begging for a loaf of bread and when given (by them) you will be promising your perfect obedience; that if they say give me you child, you will say “of course, I breed for your pleasure”; that they will feed you worms and you will thank Great Leader for the worms. They don’t anticipate a John Adams or a George Washington coming along and say we will fight instead. They plan to keep the malcontents divided and/or scared, with pandemic propaganda and all sorts of psyops. All the while they steal every meaningful election to ensure you would not cast off the yoke. But men they are and like men will die and have their plans come to naught. Too many people, We the People, will not descend to such a servile state. They will not win at the end. If they cause pain, too many will be seeking Justice, and the elite will be no more. The ultimate betrayal of the parasites they are, to kill its host, will not occur. They will be flushed down the toilet bowl of history, like the scum they are. We the People are noticing all their moves. Not good.
American Taqyia
Speaking the truth is not on the agenda.
Ask his good buddy Obama.
It’s hard to be a talking head with a mind.
Actually, Armstrong economics through his AI “Socrates” saw this coming in 2019
All the real science is warning that there is a reasonable chance that we are headed into a much colder period ahead. This will have an impact on food prices and our computer models have been warning that the next wave of the Economic Confidence Modelshould be an inflationary wave. Even a new study from nature.com said: “The recent prolonged solar minimum and subsequent weak solar cycle 24 have led to suggestions that the grand solar maximum may be at an end.”
The next 8.6-year wave beginning in January should produce a collapse in confidence in governments which will result in a shift from Public to Private assets, but then on top of this, we see a shortage in agricultural markets adding to the inflationary wave coming. Then add the Monetary Crisis and Sovereign Debt Crisis cycles and we end up with some very interesting impacts during the next wave.
https://www.armstrongeconomics.com/future-forecasts/ecm/the-next-8-6-year-wave-will-be-inflationary/
I wonder if this models are used by climatologist 😉
I can tell you this, Socrates has never been wrong. Armstrong created this AI back in the 70’s and Socrates writes reports every day for each 1000 global stocks, commodities, currencies, indices, etc…
It truly is the most fascinating system in the world. The private blogs Armstrong also has is dead on. I found and have followed Armstrong economics back in 2011. As a trader myself, I question everything so I was one of those who at first, thought it was another scam. But I’m here to say, it is definitely NOT a scam.
Socrates has never failed. The hardest part was understanding the “Arrays”, it’s like the Matrix from that movie.
The ECM is also spot on, that too, is fascinating. That called for a peak in the markets on January 18, 2020 to the day. That was posted 8.6 years earlier.
What Armstrong discovered years ago is truly amazing.
Yes, Socrates also sees war, political, weather, etc, cycles too.
Armstrong might be the most interesting person that nobody’s every heard of (in a general sense). I just wish I heard about him earlier. As you previously mentioned, his “Socrates” program/software is about the closest thing to a crystal ball that I’m aware of. The guy was thrown in jail because he refused to sell Socrates to the CIA if I’m not mistaken (there’s a lot more to it than that but the movie “The Forecaster” is about Armstrong’s life).
I would encourage anyone to look into Martin Armstrong. This guy went through the ringer because he refused to become part of “The Club” and I believe he promotes himself as an anti-Klaus Schwab.
Fwiw, I’ve seen the same thing re the climate. Sunspot activity is indicating a likely cooling period.
You have 30 pct for house
You have 30 pct for tax
You have 5 pct for savings
65 pct is, as they say, inelastic.
Education 10 pct
75 pct is locked.
10 pct is food, fuel
15 pct is travel and entertainment, discretionary spend
When food fuel goes to 20 pct because inflation: 15 pct discretionary goes to 5 pct. or a reduction of 66%
Not really complicated reductive math, but it is true.
I am sure hedge fund folks understand this, but really, the math is easy.
The discretionary segment is so leveraged, they just don’t know it. Who is it?
Airlines
Hotels
Apparel
Fancy restaurant
Think middle class luxury
Add in:
Auto
Leisure (boats)
Anything that’s not food, energy and a roof over your head.
Again, the Federal Reserve is trapped!
the biggest borrower is our Government and the Fed cannot control that. They have no tools to control our useless politicians who have absolutely no real world experience when it comes to global economics.
They are hoping still, to this day, that people stay focused on shiny objects as far away from them.
My wife made a great point… “Great Depression, Great Recession and now, the Great Reset.”
Given the first two were yuge, but NOT “great” and in fact were horrible, does not bode well for the third.
I think everyone expects them to pivot. So for that, I do not think they will since the inflation is coming from the supply/supply push side of things and not demand pull. Why does no one nail down this fact that raising interest rates here won’t do anything because these tools aren’t going to help when the inflation is coming from energy/interior led initiatives?
Rebuilding the carburetor on a car, that actually needs new points,..
If it ain’t broke, fixing it won’t change anything.
Its government policies that need reversing, which ain’t going to happen, and since the damage is done wouldn’t change the trajectory at this point.
No kidding, bad energy policies impact ALL prices.
Nothing that would really work will be done during the Biden Administration. That is because fixing things is not part of the agenda of the Biden Administration.
The left rejected the idea of prosperity a generation or two ago in the 1970s, that allowed them to stop trying to Peddle the ridiculous notion that socialism would bring prosperity.
For it, they substituted the idea that Prosperity is bad. And that is what they are trying to accomplish -destroy prosperity.
You might ask, what do they have to to gain?
Ask that of our foreign enemies. We are not facing separate problems of Russia, China, Iran, and the American left we are facing one enemy that includes them all. In some important cases, our people work for their people.
“The left rejected the idea of prosperity a generation or two ago.”
Yes, this had been sold to the public.
Now that we understand what a behavioral nudge is and how it works, it is much easier spot it in action, particularly if you know people who are particularly susceptible.
Maybe 5 years ago I was part of a conversation with a (very susceptible) South American immigrant and a German immigrant, both legal immigrants, both then in their 70’s. They both agreed that it was just going to be time to live with less (which was ironic because both of them never worked a day in their lives and were sitting in a kitchen in one of the wealthiest blue suburbs in the Northeast). My thought was “I have never heard anything more out of sync with the American ethos” although out of politeness I didn’t say it out loud.
It was a weird moment that really stood out.
For the younger Gen Z generation, they have been totally sold on owning as little as possible. They have never lived in circumstances that allowed them to draw the direct connection between the ability to maintain liberty and stand up to tyranny and middle class ownership of land and the means of production.
I think that illusion is on the cusp of being shattered. Not sure how many are going to manage to learn the lesson and end up living.
Btw: Another interesting “nudge” that made its way through the same set of susceptible people about 5 years ago – a sudden urge to sell their silver flatware, whether inherited or from their own wedding registry. You really have to wonder about that one.
As the Left has become dominant in society, in the zeitgeist, the post-modernism of leftism has dominant.
Telling the truth is no longer valued. Saying what makes people feel good, or pleases powerful people is what matters. Feelings matter more than facts.
This is partly a manifestation of women’s greater role in leadership of the culture. Women expect to see the emotional wisdom to protect the feelings of others, even if that requires dissembling (lying).
The great issues of the day are now built on lies, and quaint old-fashioned people assume that the facts exist somewhere, or that those who differ are nobly motivated. No, they lie to succeed in society.
Millions pretended to see some evidence of Trump’s Russian collusion.
Millions pretended to see some evidence that Trump’s impeachment was justified. Impeachment # 1 or Impeachment # 2, take your pick.
And millions pretend to see some evidence that Biden was fairly elected in 2020.
You can dismiss this all as partisan dishonesty, but many (millions?) of RINOs join in. Ivanka Trump has recently jumped on the bandwagon that the election was largely fair. She no doubt lives her life in a small circle of loyal friends, many of them Democrats, while many other fairweather friends long ago deserted her. So Ivanka strives now to adopt the position that will please her friends and keep her friends.
Understandable, but not laudable.
Mysogynists will out themselves. Stop with the woman hate. There are just as many men who act the same way.
It’s not hate to notice that government control exploded all other the Western world when women were allowed to vote. In general, women value safety over everything else, a role that governments eagerly filled
There is a reason that societies historically did not allow women to vote, a perfect illustration of Chesterton’s Fence.
I’m not sure women would be on board to build the Military Industrial Complex. That sounds like a macho man thing. See what I did there?
They might not build the MIC, but they sure use it. Do you have any idea how many female heads of state went to war in the 20th century?
I’m just pointing out that stereotyping women as having poor risk analysis is as valid as stereotyping men as being behind the vast majority of scams involving greed. Both have some truth and both kind of highlight that the main factor in our problems is the Democrat party (and RINOs) and people with no morals.
Methinks statistics show that married women think and vote differently than single women. The former are majority GOP.
Liberals have learned to love the lie. Lies confer achievement without sacrifice and make reality conform to the warped prism of self-interest, instead of the other way around. So now they’re hopelessly addicted to lying, even when it makes things more difficult for them. And some of the libs are coming to learn what has always been obvious: you can learn to love the lie, but the lie never loves you back.
Not to be repetitive, but the term ‘liberal’ is confusing methinks. The modern so-called liberals are religious extremists. Read about the Inquisition, or Sharia Islam etc, and the very same human characteristics dominate.
Conservative women are awesome. They are standing up for a free America, and they look great while doing so. They exhibit great strength and radiate beauty from within. We see so many of them stepping up to fight for our country, our rights and our values.
Just heard that suburban whites still support Joey; because of the bubble.
I really do wonder why you would post this except to maybe cause division within our ranks? You will not be able to repeal the right of women to vote any time soon. And you must know that many of the regulars on this site are women. I think you might be better off supporting the idea that better women should rise to the top- women like Mayra Flores, Kari Lake, Candace Owens, Boebert and Greene. Women are very helpful in organizing campaigns and effective at knocking on front doors. If leftism hopes to promote weak women in their cause, we need to promote strong women in ours.
In addition, historically speaking, we have yet to see a female Mao, Stalin or Hitler or even a Jim Jones. Hillary surely tried, but right now our greatest problem is Biden (and we are still dealing with the after effect of the “feelings” of Obama, Clinton and Bush). So I hope you will reconsider your comment.
Trump’s guy said the stock market is only half way in losses. Another 7K loss in the Dow. We will all start from zero. Utopia. I just bought a generator for rolling brownouts after America was energy independent 16 months ago. I am investing in prepper food because my gubmint can’t do anything. I have arms and ammo. Protect family and friends. It is getting nasty. Everything that threatens the family is a target.
Remember this here: when it hits the fan, cannibals will never go hungry. Just sayin!
The vacz’d ones will prove toxic. 🤫
El Elian is really smart and almost always correct. He doesn’t trust the Fed to do the right thing in the face of political pressure from the Democrats, especially during the 2024 campaign season.
I believe El-Erian is generally credited as being one of the first analysts who named our 2003-04 financial panic a “Black Swan” event. I would contend we’re on the precipice of experiencing the next one as we speak.
I don’t think this qualifies as a Black Swan. What is happening now, both cause and effect, is well understood within conventional economics. It is just that nobody ever thought any government would ever do something that stupid.
The fed has a perfect record. To late, to little, to much. Abject failure as designed. Destroying the economy and then ushering in digital world currency.
He just assuring his wall street buddies and the DC parasites Jerry will eventually resume the shipments of free money to them. (no matter the cost to the working and under classes.)
The shipments of free money are only a means to an end. Stagflation, starvation, and fiat currency collapse, followed by total control of every economic transaction through a digital currency is the end game. Powell just basically said the quiet part out loud yesterday.
There will be no flip flop, because the end game is that the .001 percent will end up owning all the hard assets – all the land, all the houses, all the factories – and the remaining (much smaller) population will be wage slaves. I think the winter of death predicted by Biden is the one coming now, as the immune systems of the jabbed full give out, the food shortages hit, and we experience heating oil and electricity shortages extreme cold (weather engineered) like Texas ?trial run).
The collapse is intentional.
The way to fight back is to refuse to play: Go all or almost all cash now, buy the stocks with the real assets at the generational low (when all Trump era gains are gone you can figure we are most of the way there), and buy land that can grow things, especially food.
Be someone who can stand up, precisely because you own your own destiny.
Be a country boy who can survive. “They can’t starve us out . . .”
Yesterday, after years of financial repression, we as seniors, who have been punished for the crime of saving and not doing as were being pushed to do, entering a stock market casino, finally signed on to a 3 month CD using our “ill begotten gains”, derived from saving and cutting our cloth to our circumstances . It has been a hard slog, and our seed corn has been diminished because those in charge of the monetary policy have been whooping it up with their friends in the Free Drink Saloon that is the market.
We were offered a more substantial rate if we tied our money up for three years. Two days ago, financial ” experts” and banks were forecasting the same rate we were offered yesterday for 3 years will be announced at the December meeting, so we will play it so that we are able to take advantage of that rate then IF it happens. We are in uncharted waters. We aren’t gamblers. Safety of our money (if that is even a thing anymore) is our prime concern .
What is clear is that no one…NO ONE…has any clue what he or she is doing. There are plenty of “cooks in the kitchen” (such as El Erian) telling Chef Powell how to bake his little meringue. But the recipe for sound money has been shredded and burned long ago.
We will have a better idea which direction we should go by December…I hope. In the meantime, those who haven’t a clue are in charge. Are they Voelkers or Yellens…either way, we will continue to cut our cloth because it’s just the sensible course to take. As my husband has said, I wouldn’t trust any of them to walk our dog.
Sound monetary policy, I’ve always had it, I buy nothing with credit, instead I save till I have enough to buy with cash, nothing affects this policy. Put your cash money into assets that are not inflationary, I like land and real estate, there is a known quantity of it, you can’t mine it or make more of it, it keeps on paying a dividend, even in hard times. And if push comes to shove you can grow you own food, raise your own cattle, and raise your family on it without a note to pay. And land will always go up in value, why do you ask, because being limited quantity and the population always increasing, someone will pay the price to buy it!!!!
Good advice for younger folk perhaps…not so much I regret to say for people of our age with limited resources and lessening physical abilities.
The one thing we have done for years is get ourselves into a position where we have no debt.
Home…no mortgage but still owe confiscatory property taxes (but locked long ago, thanks to our state’s over 65 freezing of such). Credit card (one)…paid off each month for the few things we use it for. Automobile (5 years old)…owned and kept in immaculate running order and condition. Wants…none. All these things we have done.
All we are looking for is an honest return on capital, no great amassing of wealth. That used to be doable, and was considered an easy thing to accomplish when the laws of sound money were observed and prudence was the order of the day.
Regretfully those times are long past. It’s criminal what corrupt governments and financial “know it alls” have brought this country down to. It is what it is though, and we proceed accordingly.
And Janet Yellen has just said we will not have a recession….what a tool she is….does she know already the Fed is going to flip flop on rates like a dead mackerel?
The thing to remember is the global coordination of “Build Back Better”. This global monetary whipsaw action has been planned/implemented as a tool to round up “populists” by collapsing their asset values “houses and retirement plans”, making them dependent on government.
First there was talk of MMT and how it would solve everyone’s problems…
The experts are not that stupid. They positioned the dominoes and now watch them fall. Money printing will put more control into the hands of the banks. They will force the implementation of social control through digital passbooks.
You are starting to hear stories that the GOP will clean up in the midterms and the Fed will start cutting rates shortly after. I expect FJB will head the GOP off at the pass and the Fed will start lowering rates sooner. The upcoming stock market rally will be FJB’s, not the GOPs’.
This woman is whack-o. If the government can never run out of money, why do they make us pay income taxes?
Because you are a slave to the endless debt they create.
Before something can be consumed it must be produced.
Taxes are to prevent the productive from consuming what they produced so that those that produce nothing can consume.
So no, they don’t need the currency, but they do need the real goods and service your currency would have provided you.
That’s about the most contorted explanation I’ve ever heard. You must be an economist.
It is our labor that produces “real goods and services” that is taxed.
You will note spaul’s view of the world has no place for investment.
https://www.marketwatch.com/story/based-on-history-the-next-bull-market-is-just-months-away-and-could-take-the-s-p-500-to-6000-says-bofa-11655475414
“Some knowledgeable people, apparently including the Pope, are beginning to suspect that there may be more going on in the world than just the war in the Ukraine. They say that World War 3 has already started and things will get worse from now on. This can be difficult to determine while we are participating in the unfolding events and do not have the benefit of the historical perspective. It is doubtful that people back in 1939 realized that they were looking at the start of a major worldwide conflict, although some may have suspected it.
The current global situation is in many ways like a giant jigsaw puzzle where the general public only sees a tiny part of the complete picture. Most don’t even realize that there may be more pieces and don’t even ask these simple questions: Why is all this happening and why is it happening now?
Things are more complicated than most people realize. What they see is the evil wizard Vladimir Saruman Putin invading innocent Ukraine with his orc army – for absolutely no reason. This is a simplistic view, to say the least because nothing happens without a reason. Let’s put things in perspective and see what is really going on – and why the world is going crazy before our eyes. Let’s see what World War 3 is all about.”
https://thesaker.is/world-war-3-for-dummies/
This article by Sundance is a perfect example of one of the many reasons I come daily to this website. There is practically no reasonable advice being given by anyone about where the economy is headed on any news show. And here Sundance is able to unscramble the word salad to give us a peek.
Sometimes yahoo finance news gives a story thats correct, BUT you should read the comments many like minded patriots leave. I go there for the comments section because there are some smart analysis regardless of the articles truth.
The way to stop inflation in its tracks would be to pass and follow a balanced federal budget, and stop expanding the money supply through irresponsible fiscal policy.
There would be no need to raise interest rates to lower the availability of money, because the money supply would not be expanding artificially.
in 1980 a 1% increase in interest rates meant $200B in increased federal debt service. Now, a 1% increase in interest rates means a $2T increase in debt service.
We are screwed until/unless we make the politicians pass balanced budgets or be turned out of office.
This is the most important issue of our time.
Here is a link to the June 17th New York Fed’s Blog on their DSGE Model Forecast for the US economy:
https://libertystreeteconomics.newyorkfed.org/2022/06/the-new-york-fed-dsge-model-forecast-june-2022/
…The model’s outlook is considerably more pessimistic than it was in March. It projects inflation to remain elevated in 2022 at 3.8 percent, up a full percentage point relative to March, and to decline only gradually toward 2 percent thereafter (2.5 and 2.1 percent in 2023 and 2024, respectively). This disinflation path is accompanied by a not-so-soft landing: the model predicts modestly negative GDP growth in both 2022 (-0.6 percent versus 0.9 percent in March) and 2023 (-0.5 percent versus 1.2 percent). According to the model, the probability of a soft landing—defined as four-quarter GDP growth staying positive over the next ten quarters—is only about 10 percent. Conversely, the chances of a hard landing—defined to include at least one quarter in the next ten in which four-quarter GDP growth dips below -1 percent, as occurred during the 1990 recession—are about 80 percent…
https://libertystreeteconomics.newyorkfed.org/2022/05/do-businesses-in-the-region-expect-high-inflation-to-persist/
From May 17th:
…Our May Empire State Manufacturing Survey and Business Leaders Survey included questions posed to regional businesses about their inflation expectations. When queried about their expectations over the next year, businesses generally expect inflation—as measured by the change in the CPI—to remain on the high side. As the chart below shows, the typical manufacturer expects prices to rise by 6.5 percent in the year ahead and the typical service firm expects inflation to be 6.1 percent over the next twelve months. These short-term expectations are only modestly lower than the actual inflation rate over the past year. However, when asked about inflation expectations over the medium-to-long term (three to five years ahead), businesses in both surveys expect price increases to moderate to 4 percent in 2025 and 3 percent in 2027. Interestingly, inflation expectations among businesses in the region line up quite well with the inflation expectations of households obtained by our nationwide Survey of Consumer Expectations…
Honestly this is no worse than pretending these rate hikes are just suddenly needed. We should have been here 12+ years ago.
Quantitative Easing was one of the worst policies in our lifetime- 0% rates and unlimited spending to artificially keep it there so governments and corporations could borrow money cheaply. what could go wrong?
Muslim econ 101 deny, deny, deny.
I know borrowing rate calculations have a bit more added into the mix before they are settled to become the actual borrowing but also consider the following:
NOT a single penny of current FEDERAL spending is in any of the legislated budgets nor covered by taxes.
The new denomination for FEDERAL Spending = $XX TRILLION DOLLARS
For each TRILLION Dollars actually SPENT from the congressional authorized pile (i.e. Legislated into a spending ACT or BILL) even at this rate = 0.75% x 1 TRILLION = $7.5 BILLION of uncovered new interest on the FEDERAL Debt.
The US Government cannot even service the interest on existing debt.
The FED Flip Flop is needed to provide fake top cover for more FEDERAL outlays from the Congressional Authorized Pile of Spending ACTS.
Perhaps you should look deeper into El Erian as there is far more.
Actually TWO things will happen. The more likely is a “bipartisan” Congress passes an “emergency relief” spending bill. The two combined will make inflation worse and accelerate us into a major recession.
If the Fed reverses, it’ll be driven by the stock market losses. Democrats boasted in 2007 before the election that “every 1,000 point drop in the Dow is 10 more seats.”
We are well past screwed at this point.
The Republicans will vote for everything the Democrats want. Schumer and McConnell are likely already in negotiations.
So, in order for El Erian to be right about a Fed 360° reversal on interest rates (and I have no doubt that he is right given the corruption!).
A: Does Biden have to do a reversal on oil and gas production first?
B: How can the Fed start cutting the interest rate without a substantial drop in the price of oil and gas?
C: Would the US have to end the Ukraine-Russia Conflict and end the Russian Sanctions first especially the oil and fertilizer sanctions?
D: Is the purpose of a Fed interest rate reversal to reverse the stock market crash and help Democrats in November 2022?
In other words what will be the end result of this if El Erain is right?
The FED and Treasury have painted themself into an economic trapped since the crash of 2007-08 and Clinton’s signing of the Frank-Dodd act with artificially low interest rates and quantitative easing . Then the spending of the covid relief bills and Biden’s big spending agendas are springing that trap. They are out of moves, economic disaster it the only answer, just how deep and how long is the only question. Even digital currencies won’t save them or be extension us..