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Stagflationary Global Debt Crisis Looms – And Things Will Get Much Worse: Nouriel RoubiniJun 30, 2022 - 12:22:47 PDT
There is ample reason to fear big economies such as the US face recession and financial turmoil.
On average, European Union countries had a gross government debt of roughly 88 percent of GDP in 2021.
ECB Will Buy Italian, Greek Bonds Using Proceeds From German, French Bonds To Avoid CrashJun 30, 2022 - 11:21:42 PDT
Not that long ago we joked that the ECB's cunning "market fragmentation" plan - which became critical after Italian bonds crashed when markets realized that QT is not, in fact, QE and without the ECB backstopping worthless European paper said paper would trade down to its "fair value" - would consist of fighting inflation on even days with higher rates and no QE, and then fighting bond market fragmentation and soaring Italian yields on odd days with NIRP and QE.
In a rare press conference after the Madrid NATO Summit today, President Biden was asked how long Americans should expect to pay high gas prices over the Ukraine conflict. Biden's response was flippant: "for as long as it takes." He also blamed high food prices on "Russia, Russia, Russia." Are Americans buying it?
Jun 30, 2022 - 09:30:25 PDT
In just one quarter, precious metals derivatives had soared from $79.28 billion to $491.87 billion. That’s a 520 percent increase in a span of three months. (See Figure 18 at this link. The last ten years of the graph is shown above.)
Jun 30, 2022 - 09:23:20 PDT
Gold is over $1800 an ounce. It was $310 or so in 2003 with the US dollar index in the same place. Moves in the dollar don't really set the price of gold. Rather, gold is a function of faith in central banks.
A day after Fed Chair Powell crowed once again how the US economy was strong enough to cope with his hawkish rate-hike cycle (and President Biden told the world this morning that the US economy is the strongest in the world), the Atlanta Fed just stole the jam out of everyone's donut by confirming the recession has started.
President Joe Biden signed the Keep Kids Fed Act into law over the weekend, extending the U.S. Department of Agriculture’s school nutritional waivers to September 30.
Jun 30, 2022 - 09:06:54 PDT
This builds on a 2020 initiative that issued $500 checks to 150 families for 18 months.
Jun 30, 2022 - 09:02:01 PDT
Other states have taken similar actions for inflation relief. Earlier this month, Maine began sending $850 checks to state residents who filed an income tax return in the state last year and reported an income of less than $100,000. In April, Kansas Gov. Laura Kelly announced the state would issue $250 rebate checks for qualifying residents.
Jun 30, 2022 - 08:40:04 PDT
Deutsche Bank, the first major bank to predict a U.S. recession in the current inflationary era, now sees a chance that price gains won't come off nearly as much as forecasters or Federal Reserve policy makers think they will.
I wonder if it is all the Covid monetary and fiscal stimulus that is finally getting homeowners to put their houses on the market, perhaps fearing the end of the housing price run-up with Fed-induced rate hikes?
High inflation acts as a drag on purchasing power as consumers save less.
Jun 30, 2022 - 08:24:39 PDT
The US economy is slowing as inflation ravages consumers. US Regular Gasoline prices, for example, are up 104% under President Biden which helps to slow the economy. US personal consumption expenditures fell to +0.2% MoM in May as “inflation” or real personal consumption expenditures PRICES rose +6.3% YoY as The Fed’s balance sheet (aka, Master Blaster!) remains.
Powell Says Fed Must Accept Higher Recession Risk to Combat Inflation: WSJJun 30, 2022 - 08:19:39 PDT
Fed Chairman Jerome Powell has said interest rates would continue to rise until the central bank sees clear proof that inflation is slowing. But he conceded that elevated rates could lead to a recession
Gold Defends $1,800 and Rebounds Swiftly on Fed’s Preferred Inflation GaugeJun 30, 2022 - 06:24:07 PDT
Gold witnessed a dramatic turnaround during the early European session and rallied over $20 from the vicinity of the $1,800 mark or the lowest level since May 16. The momentum pushed spot prices to a fresh daily high, around the $1,825 region, though lacked follow-through buying.
Bitcoin price remained under pressure in June as a number of factors including rising rates and a liquidity crisis in the crypto industry weighed on the world's biggest cryptocurrency.
The Federal Reserve’s policies of increasing interest rates and quantitative tightening—reducing its $8.9 trillion balance sheet—will increase the volume and cost of federal government borrowing, slamming the federal budget and exposing the consequences of decades of deficit spending.
The headline-maker from this morning's macro melange is The Fed's favorite inflation indicator - Core PCE Deflator - printed lower than expected at +4.7% YoY (vs +4.9% expected and +4.9% prior). The headline May PCE printed +6.3%, equal to the April data
Euro-Area Confidence Dips on Consumer Gloom and Recession Fear: BloombergJun 30, 2022 - 06:06:03 PDT
Confidence in the euro-area economy slipped as households become more pessimistic amid fears a Russian energy cutoff will spark a recession.