Financial, Economic and Social Mood Update (November 1, 2022)
The entire world is now in the midst of an unprecedented societal collapse in which all asset classes are moving in the same direction except for cash, which currently loses its purchasing power due to inflation. By the time things hit bottom, human society will have to be rebuilt from the ground up in the most marked way since the Great Flood documented in the Old Testament.
The overall stock market had lost 41 percent of its record nominal value as of October 13, 2022 since values peaked from November 2021 to January 2022 depending upon the particular index or financial asset class, thus equaling the net loss in the stock market during the crash from January 2000 to October 2002 (33 months). The most recent prior stock market crash took place from October 2007 to March 2009 (17 months) when the asset market lost 63 percent of its value. This time around, the eventual cumulative loss will be much more severe. What we are witnessing in real time right now is a bear market rally – a deceptive “fool’s rally.”
How lackluster has the performance of precious metals been? Let’s look at gold, which is the major precious metal = it has lost 0.42 percent in the past week, 1.03 percent in the past one month, 8.05 percent in past 3 months, and a whopping 39.0 percent in the past 28 months. What does this show? The stock market, the currency market, the crypto market and the precious metals markets are all very strongly correlated to move in the same direction over the same period of time. In a deflationary collapse, only CASH will be king.
Nicholas Gerli of Reventure Consulting (this channel is on YouTube) is forecasting an interest rate “pivot” by the US Federal Reserve Bank as soon as January or February of 2023. This “pivot” to lower interest rates will be driven (as it always is) by the overall market, which is heading into an absolutely gargantuan deflationary collapse. Deflation will be driven by a collapse in consumer demand, a collapse in asset prices, a collapse in the prices of goods & services, a collapse in the overall level of full time employment (i.e. very, very many people will be laid off from their jobs and thus become unemployed), commercial bank failures, the demise of many more small businesses as well as the demise of many household business names (the bankruptcy of many large corporations). An astounding 40 percent of the US population have received at least some help from charitable food banks within the last 12 months – this fact tells us that we are already in a Great economic Depression (this from the YouTube channel of “Jeremiah Babe” in Palm Desert, California who obtains much of his news from the Hedge).
More proof of the worldwide deflationary “freight train” headed our way is the fact that rates for shipping goods both via rail & truck have become very depressed, that demand has fallen (i.e. much less business for the rail companies & for the trucking companies) and that excess unsold inventory has piled up in brick & mortar retail outlets such as Walmart & Target.
A deflationary collapse is a difficult concept for many people to understand. It will help to see the definition thereof, and to read about historical examples thereof: https://en.wikipedia.org/wiki/Deflation.
