Financial topics

[John]

** 13-Jul-2021 World View: CPI

> CONSUMER PRICE INDEX – JUNE 2021

> The Consumer Price Index for All Urban Consumers (CPI-U) increased
> 0.9 percent in June on a seasonally adjusted basis after rising
> 0.6 percent in May, the U.S. Bureau of Labor Statistics reported
> today. This was the largest 1-month change since June 2008 when
> the index rose 1.0 percent. Over the last 12 months, the all items
> index increased 5.4 percent before seasonal adjustment; this was
> the largest 12-month increase since a 5.4-percent increase for the
> period ending August 2008.

> https://www.bls.gov/news.release/cpi.nr0.htm

Still following the 2008 pattern.

[vincecate]

Still following the 2008 pattern.

So what is next? The Fed takes the punch-bowl away and the market crashes?

[John]

** 13-Jul-2021 World View: Market crash

> Still following the 2008 pattern.

> So what is next? The Fed takes the punch-bowl away and the market
> crashes?

The Fed says that inflation is "transitory," which is the same thing
that I'm saying, so I would expect the Fed to continue on the same
path as before.

This question of when the Fed will "take the punch-bowl away" is
discussed endlessly on tv, with the debate being between 2022 and
2023. Either way, it's not going to happen this year.

However, as we've discussed many, many, many times in this thread and
this forum, there's going to be a market crash. What will trigger it
is to be seen.

By the way, I don't understand what's going on with tech in China, but
the CCP actions against Didi and other high tech companies could cause
some kind of chain reaction. All of a sudden, in the last week,
there's a lot of "stuff" going on in the world (Cuba, South Africa,
Ethiopia, Lebanon, Jordan, etc.), and we won't know whether it's
important until it's over.

[vincecate]

All of a sudden, in the last week,
there's a lot of "stuff" going on in the world (Cuba, South Africa,
Ethiopia, Lebanon, Jordan, etc.), and we won't know whether it's
important until it's over.

I think the common theme is poor countries where food prices are going up faster than salaries.

From:
https://www.financialsense.com/contribu ... civil-wars

"For every 10 percent increase in global food prices there is a 100 percent increase in anti-government protests, according to a recent report from the International Monetary Fund. "

https://www.imf.org/external/pubs/ft/wp/2011/wp1162.pdf

Abstract
We examine the effects that variations in the international food prices have on democracy and intra-state conflict using panel data for over 120 countries during the period 1970-2007. Our main finding is that in Low Income Countries increases in the international food prices lead to a significant deterioration of democratic institutions and a significant increase in the incidence of anti-government demonstrations, riots, and civil conflict. In the High Income Countries variations in the international food prices have no significant effects on democratic institutions and measures of intra-state conflict. Our empirical results point to a significant externality of variations in international food prices on Low Income Countries' social and political stability.

[John]

** 13-Jul-2021 World View: Food prices

> All of a sudden, in the last week, there's a lot of "stuff" going
> on in the world (Cuba, South Africa, Ethiopia, Lebanon, Jordan,
> etc.), and we won't know whether it's important until it's
> over.

> I think the common theme is poor countries where food prices are
> going up faster than salaries.

> From:
> https://www.financialsense.com/contribu ... civil-wars

> "For every 10 percent increase in global food prices there is a
> 100 percent increase in anti-government protests, according to a
> recent report from the International Monetary Fund. "

> https://www.imf.org/external/pubs/ft/wp/2011/wp1162.pdf

> Abstract

> We examine the effects that variations in the international food
> prices have on democracy and intra-state conflict using panel data
> for over 120 countries during the period 1970-2007. Our main
> finding is that in Low Income Countries increases in the
> international food prices lead to a significant deterioration of
> democratic institutions and a significant increase in the
> incidence of anti-government demonstrations, riots, and civil
> conflict. In the High Income Countries variations in the
> international food prices have no significant effects on
> democratic institutions and measures of intra-state conflict. Our
> empirical results point to a significant externality of variations
> in international food prices on Low Income Countries' social and
> political stability.

I agree with this, but I would describe it differently. As we pass
througn a generational Crisis era, the amount of food in the world per
capita is going down, with the result that more and more local
populations on the margin have insufficient food. An FAO report
issued yesterday says that world hunger and malnutrition increased
dramatically last year, continuing a trend that began before the
pandemic. The shortage of food leads naturally to higher food prices.

Your quote from the IMF focuses on prices first. That is, it says
that food prices go up, therefore some populations cannot afford the
higher prices, therefore there are anti-government protests. This is
absolutely true, but I would start from the core reason of
insufficient quantities of food leading to higher prices.

A corollary point is that agencies like the IMF are wrong when they
blame countries like the US for not providing enough aid, with the
implication that if the US spends more on foreign aid, then the
anti-government protests can be prevented. This is nonsense. First,
there's not enough money in the world to buy enough food, when there's
not enough food to be bought. And second, the anti-government
protests are organic, and are increasingly common in a generational
Crisis era.

[vincecate]

I agree with this, but I would describe it differently. As we pass
througn a generational Crisis era, the amount of food in the world per
capita is going down, with the result that more and more local
populations on the margin have insufficient food. An FAO report
issued yesterday says that world hunger and malnutrition increased
dramatically last year, continuing a trend that began before the
pandemic. The shortage of food leads naturally to higher food prices.

What do you think the core of this generational crisis is or will be? Or is it too early to say?

I think the generational crisis of the current era will be hyperinflation of the USD and other fiat money.

[John]

** 13-Jul-2021 World View: Spiraling clash

> What do you think the core of this generational crisis is or will
> be? Or is it too early to say?

It's too early to say, but as I've said many times, I expect the most
likely scenario to be an unexpected military clash in the South China
Sea or the Taiwan Strait or Kashmir or Central Asia or elsewhere that
spirals into a regional war that brings in intervention from China,
leading to a larger war and a world war.

That's why I referenced protests going on in Cuba, South Africa,
Ethiopia, Lebanon, Jordan, etc. These are small protests, and they'll
all probably remain local, but it's still possible that one of them
will spiral into something larger.

I also mentioned the CCP's actions against Didi and other tech
companies, which may trigger a chain reaction in a different way.

[aeden]

https://finance.yahoo.com/quote/LBS=F?p ... c=fin-srch

https://www.commerce.gov/data-and-repor ... /dashboard and lei discussions as before in
supply chain and dislocations.
Disinflation traction after august sweeps and no we did not really recover in 2008 kiddy's.

John is correct on regional maps and flair ups as my rabbit hole in the Balkans and what Ankara does and not says.
The BRI heats maps should be pinging maps also in proxy considerations also.
We trade above the margin and moving averages.

You damn fools are selling the rope they are going to use on you.

[vincecate]

Many people think there is another two years before the Fed changes policy. If you look at the graph in the link below you can see that whenever inflation is above 3% and going up fast it suddenly goes down and there is a recession. This is the Fed taking away the punch bowl. It can not wait 2 years.

https://howfiatdies.blogspot.com/2021/0 ... -bowl.html

[aeden]

https://www.zerohedge.com/geopolitical/ ... ial-unrest
As we seen before they can turn a bread basket in a coffin sooner than you do think or will act.

The only ones who are not burned loot murdered are armed neighborhoods as feeds drift in under the radar.
Wake up you damned fools. Room temperatures are not going to make it.
Filtering in are they will be possibly hit on the highway before they can get to the distributions point very soon.

thread: blackcrack