Inflation Spike Due To China?
The beginning of the new year brought with it the hope that the long, painful period of high inflation was finally coming to an end, but that possibility seems very remote at this time. The U.S. economy is not healthy.
In light of higher than anticipated inflation readings worldwide, Ben Emons of the Connecticut-based NewEdge Wealth issued a warning that "there are symptoms of a second chapter in the pandemic price increase." Along with an unexpected spike in the consumer price gauges in Australia, Japan, and Italy, the Spanish inflation rate unexpectedly increased after five months of declining price growth.
Inflation has reportedly become more coordinated globally and is influenced by many of the same factors, including housing, energy, and transportation, according to Fed research quoted by Emons and presented in January. According to the study, if inflation rises sharply in a number of wealthy countries, it is likely to happen in the United States as well.
China's decision to relax its stringent zero-COVID-19 policy and reopen its economy, the second-largest in the world, is one of the key factors causing the recovery in price inflation. By doing this, Beijing's reputation as a manufacturing powerhouse has been restored and supply chain tensions have been reduced. Yet because China is the world's biggest user of the majority of commodities, it has also threatened to raise prices globally for fuel, industrial metals, and food this year.
While inflation in the U.S. has retreated from a peak of 9.1% notched in June, there are still signs of underlying price pressures in the economy. Gas prices are up 26 cents from one month ago. Core inflation, which excludes more volatile measurements of food and energy, remains stubbornly high. And on Friday morning, the Labor Department reported that the economy added an astonishing 517,000 jobs in January.
Jerome Powell - Federal Reserve Chairman
All of that occurs despite the Federal Reserve's most vigorous drive to raise interest rates since the 1980s. Since it was almost zero in March 2022, policymakers have increased the federal funds rate eight times in a row, to a range of 4.5% to 4.75%. Jerome Powell, the chairman of the Federal Reserve, praised the gradual but steady drop in inflation on Wednesday but cautioned reporters that the labor market is still "very tight" and "out of balance." - Fox Business
For quite some time, I have prophesied that the establishment will enter a phase of monetary tightening and will keep raising interest rates and reducing their balance sheets until the markets collapse and the system becomes unstable.
The data indicates that components of a financial black hole have already been generated, and that forecast has thus far proven to be accurate.
The US is currently experiencing a recession, according to statistics that the St. Louis Fed has quietly released. This revelation was made public just before the new year, obviously to avoid receiving more press coverage. The announcement also comes just after the Philadelphia Fed reduced its expectations for labor growth in the second quarter, removing a staggering 1 million jobs from their initial projections.
The inference is that the Fed might have purposefully overstated the gain in employment. Why? Because the central bank wants to keep tightening and needs positive results to support rate increases. Why is the elite so adamant on deflation now, more than ten years after QE and loose money, is the question we need to ask ourselves.
After the 2008 credit catastrophe, the Fed has generated countless trillions of dollars. In the name of the coherent economic reaction, they created nearly $8 trillion in just 2020 and 2021, all as a result of pandemic lockdowns that never should have occurred. The volume of dollars in circulation worldwide is staggering, and inflation shows no signs of abating any time soon.
