Another busy week in the markets and on the geopolitical front. The Federal Reserve finally raised the Federal Funds Rate by 25 basis points, placing the range between 25-50 basis points. Rates still remain extremely low and monetary policy is still accommodative. Despite the Federal Reserve mentioning how they are prepared to take a tougher stance on inflation, which is at 8 percent, a look at their balance sheet points in the opposite direction. Their balance sheet hit a new all-time high this week, increasing by $44B to now stand at $8.954T! This is a 10x increase of their balance sheet since the GFC of 2008-09. These actions are inflation by definition.
On the geopolitical front, the Russia-Ukraine conflict continues to take center stage. Yet circling the periphery are perhaps other alliances taking shape. Whether that is the Saudi’s announcing that they are considering taking Chinese Yuan for their oil as opposed to US Dollars, or India working with Russia to establish their own two-way payment system, or Russia asking China for military assistance – one thing is certain, this is a message to Washington, DC. The message is clear – these nations are taking a stand and saying they can operate outside of US influence. This is much easier said then done, but a journey of 10,000 steps begins with a single step. Washington still has many arrows in her quiver, but escalation is not the answer. Let us pray that cooler heads prevail. Stemming from inflationary pressures and the ongoing conflict, global food prices continue to be of major concern. The longer the conflict continues and the longer inflationary pressures remain, the more likely it is that there will be a serious breakdown in the global food supply-chain that will lead to mass starvation. This is just beginning and can will likely take 2-3 years to play out in its entirety. Should that be the case, this will give rise to massive global uprisings and further instability. Stay diversified, stay vigilant, and stay with The Kapital News. #Inflation #FoodPrices #Gold #Silver #Recession #Oil #USA #Russia #Ukraine #China #Liberty #Protests #Revolution #Peace