Saturday, October 26, 2024

The YIELD Curve has UN-inverted, many other countries are pushing away from the USA / USA (see the BRICS alliance), now what?

Well, it has been a few months since I have written, and I'm not sure the world economic situation has gotten better. I can say that it has CHANGED, though not totally for the better.

What Signposts Can We See?

Inflation has moderated, but standards of living continue to be hurt because in general, pay rises, except apparently at the lowest income cohorts, have NOT risen to match the inflation of prices seen. (and the way they measure inflation is actually considered bogus my many because of the many manipulative calculations used like "substitution", hedonics" and things like using "Owners Equivalent Rent" as opposed to real measures of rent or home prices.)



World Stresses:
But the world has other stresses now too.....the stress of war is growing stronger, as well as the stresses created by the sanctions and weaponization of the world reserve currency because of war. (which was a problem for decades actually with other countries the USA did not like.....but the world reserve currency is a bit like "air", very important....and something that most thing should NOT be trifled with)

The yield curve has UN-inverted, after being inverted for a VERY LONG TIME.....and I have been told that recessions are signaled by the inversion of the yield curve, but only start after the yield curve UN-inverts!


 Where are the Anti-WAR people?

War is all around.....and no one seems to be pushing for peace?!? Some conspiracy types suggest that if the global economy trips up again, a war is the sort of thing that can not just create a distraction, but the sort of event that "resets" or "recalibrates" global power. (your beliefs may be different.....) I just ask you to dig down deep if you are supportive of the escalation of the world conflicts.....how has it worked out so far? Have any of the USA wars over the past two decades resolved ANYTHING? (they certainly killed a lot of people and created millions of refuges fleeing their homeland)


Canary In The Coal Mine?

Gold.....perhaps the canary in the coal mine? Well, that's what a lot of people are thinking.....central banks are buying it now. The BRICS alliance is talking about using as a reserve asset for their settlement currency (up to 40% backed by gold?)



What Happens Next? 

Now what.....I guess if you believe in Game Theory, no one wants any sort of disorderly transition....but we can SEE there are stresses and unhappiness with the status quo....so what are these stresses?

Here are my thoughts.....the USA is trying to "run the world"....and when things don't go our way, we use our weight to make it so.....we do so militarily, and we do so with out money. (Which happens to be the world reserve currency)

Well, you can see what others might not be so happy with that.....in fact, the USA is able to PRINT GREEN PIECES OF PAPER without limit, and so trade those for goods and services that other people of the world actually toil to create. (you can see how our debt that skyrocketed as of late, with little ramification)



What do you and I do?
I have no clue.....I don't things will get better until we become productive....but how things will devolved, I don't know, except to say I thing our standard of living will continue to slowly drop.....but for what reason, inflation or deflation, I'm not sure.

Cash flow is king.....real assets will be good at times....productive activities will be very valuable at times too. (but be ready for heavy taxation.....I fear we are looking at a "redistribution" future where our population will demand a "Robin Hood" redistributive government.....be be prepared. (at least mentally)


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