Why We Are Entering A Global Recession

Inflation caused by massive banana republic monetary easing led to inflation, as it always does. Then, last year, major central bankers were shocked to find that inflation was skyrocketing. Quel surprise!
So they turned tail and started righting monetary policy by raising interest rates and actually reducing the money supply!
The chart shows Global Monetary Policy by combing the interest rate and money supply decline into one line on the chart. It’s the red line.
The blue line shows the Purchasing Manager’s Index, a measurement of economic activity, mainly manufacturing and wholesaling.
The relation ship is clear. A tight monetary policy leads to a weak economy.
The counter argument is that China’s reopening plus leftover money from insane government transfer payments will soften the blow. I think the government largesse is certainly delaying the recession but is not eliminating the recession. It will just start about 6 months later than normal.
The Chinese reopening won’t affect the major developed countries but it will affect countries like Australia who supply China.
Right now, the world is in a fight to the finish between the strong forces of China reopening and developed world tightening. In this battle, both will win!
The developed world will go into recession but Chinese strength will partially offset some of the effect.
I'm going to be going into detail on this new theme in the coming days and show you how to make money from it.
The best thing you can do is become a premium member!
Comments ()