By Michael Pento – Re-Blogged From http://www.Gold-Eagle.com
By Michael Pento – Re-Blogged From Pento Portfolio Strategies
China appears to have more to lose from a trade war with the US simply because the math behind surpluses and deficits renders the Bubble Blowers in Beijing at a big disadvantage. When you get right down to the nuclear option in a trade war, Trump could impose tariffs on all of the $505 billion worth of Chinese exported goods, while Premier Xi can only impose a duty on $129 billion worth of US exported goods–judging by the announcement on July 10thh of additional tariffs on $200 billion more of China’s exports to the US we are well underway towards that end. However, this doesn’t mean China completely runs out of ammunition to fight the battle once it hits that limit.
The Federal Reserve (FED) has raised interest rates 7 times during its latest tightening cycle, after almost 10 years of its previous rate suppression binge.
What tended to have happened in previous interest rate tightenings is that shorter term interest rates have risen somewhat faster than long rates, and at some point, short rates catch up to and pass long rates. This rare situation is referred to as an ‘Inverted Yield Curve.’
By Michael Pento – Re-Blogged From Pento Portfolio Strategy
My research shows that this is one of the most hawkish Fed rate-hiking regimes ever. It has raised rates seven times during this current cycle and is on pace to raise the Fed Funds Rate(FFR) four times this year and three times in 2019.
But what makes its monetary policy extraordinarily restrictive is that for the first time in history the Fed is also selling $40 billion per month of Mortgage Backed Securities (MBS) and Treasuries starting in Q3 and $600 billion per year come October. Because the Fed is destroying money at a record pace while the rest of the world’s major central banks are still engaged in money printing (QE) and zero interest rate policies (ZIRP), Jerome Powell’s trenchant and unilateral tightening policy is now causing chaos in emerging markets.
By John Rubino – Re-Blogged From Dollar Collapse
Here’s a new indicator for you: It seems that the difference between the price of oil here and abroad is a measure of tightness in the market, with a rising spread indicating higher prices in the future, with all the inflationary pressures that that implies. From today’s Wall Street Journal:
[Not included in the 4% number are the 6 million or so Americans who have dropped out of the labor force since the last Recession, as alluded to near the end of the article. – Bob]
By Thomson/Reuters – Re-Blogged From Newsmax
U.S. job growth increased less than expected in April and the unemployment rate dropped to near a 17-1/2-year low of 3.9 percent as some jobless Americans left the labor force.
The Labor Department’s closely watched employment report on Friday also showed wages barely rising last month, which could ease concerns that inflation pressures were rapidly building up, likely keeping the Federal Reserve on a gradual path of monetary policy tightening. Continue reading
By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com
The timing of any credit crisis is set by the rate at which the credit cycle progresses. People don’t think in terms of the credit cycle, wrongly believing it is a business cycle. The distinction is important, because a business cycle by its name suggests it emanates from business. In other words, the cycle of growth and recessions is due to instability in the private sector and this is generally believed by state planners and central bankers.