Tag: inflation

Ep. 622 – Empty Stomachs Bring Revolutions

The Kapital News
The Kapital News
Ep. 622 - Empty Stomachs Bring Revolutions
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The FAO Food Price Index report for February 2022 was recently released and it has hit a new all-time high. The previous high was back in February of 2011 – which was also the beginning of the Arab Spring. Coincidentally, oil prices are back to 2011 levels as well. The cause of increase in world food prices is multi-faceted. There is of course the major fiscal and monetary policies that were implemented over the past two years and continue to this day – their very actions are inflationary by definition. Global supply chain disruptions persist adding chokepoints and contributing to upward price pressures. Growing conditions and crop production is also of concern – the FAO cites issues with corn production in Argentina and Brazil. Corn is not just used for human consumption, but also for livestock and ethanol – thus contributing to further downstream price increases. Lastly, the uncertainties that exist due to the Russia-Ukraine conflict. These two nations account for 25 percent of global wheat production and 20 percent of global corn production. Ukraine exports the bulk of their exports to Asian and Middle Eastern nations – as such, the stage is set for a redux of the Arab Spring – as bread is a main staple of the diet in the region. The conflict is also leading to some countries beginning to hoard their food production and limit or halt entirely the export of foodstuffs – Hungary just halted all grain exports. Other countries may very well follow suit and others, such as China, may go on a buying binge to obtain and store as much as possible in fear of continued rising prices – which if happens, such buying will continue to put upward price pressure on agricultural commodities. Further, in retaliation to economic and financial sanctions that have been placed on Russia, President Putin is retaliating by telling Russian fertilizer firms to stop exporting their products. This will have huge ramifications as Russia and Belarus, an ally of Russia, are two of the world’s top producers and exporters of fertilizers. In addition to this, natural gas prices have been rising, which is an input good and thus a cost to manufacturing fertilizers. It is easy to connect the dots and realize that higher food prices are likely the norm for the foreseeable future.

US gasoline prices are now averaging over $4 per gallon, a level not seen since 2008. The price increase is also the largest increase over a 10-day period, where the prior 10-day record high occurred following Hurricane Katrina in 2005. Transportation costs have already been on the move higher through the pandemic and rising fuel prices will only exacerbate the concerns. Stay diversified, stay vigilant, and stay with The Kapital News. #Inflation #FoodPrices #Revolution #USA #Russia #Ukraine #Gold #Silver #Wheat #Corn #Oil #Commodities #Protests #Liberty #Peace #Stagflation

Ep. 621 – Weekly Wrap Up

The Kapital News
The Kapital News
Ep. 621 - Weekly Wrap Up
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Global markets continue to be rattled by the ongoing conflict between Russia and Ukraine. However, this is the easy scapegoat for what truly ails the markets – easy money. Governments and central banks injected trillions of dollars into the world economy. Their excuse then, and justification for such actions was the pandemic. Now as the pandemic is seemingly coming to an end, they have a boogeyman to blame for supply chain disruptions, higher prices, etc – Russia. It is almost too coincidental, don’t you think? Several major global stock markets have given back all of their pandemic gains. It only takes a few short months, sometimes even weeks, to erase a year or years of gains. This is a direct result of markets having been juiced by cheap money. It wasn’t real. It was a bubble. As such, it can collapse easily and that is what is unfolding now. However, governments, central bankers, and other policymakers are not going to take responsibility for their actions. Thus, they will look for any and all excuses possible. Now, it’s the pandemic and Russia. What will be next?

As is highlighted in today’s podcast, global trade is discussed and how countries the world over will likely engage in hoarding their goods that are typically exported. This past week, Hungary announced that they are stopping the exports of grain products. Russia and Ukraine account for nearly 25 percent of the world’s wheat production and 20 percent of global corn production. Also this week, President Putin of Russia, reached out to fertilizer companies, basically instructing them to slow or stop the export of fertilizers. Russia and Belarus, an ally of Russia, are two of the largest fertilizer producers in the world. If they were to stop exporting, global food prices, which are already at or near all-time highs, will get even higher. Revolutions are fought on empty stomachs. We witnessed the Arab Spring only a decade ago. Rising global food prices were a major factor in that movement. Now with even more debt, higher food prices, a pandemic, and energy prices at levels also not seen for several years, sets the stage for a lot to go wrong in short order. Such protests, riots, strikes, revolutions, should they occur, will only exacerbate the current situation. Further disruptions to supply chains, less production of goods, fewer exports due to restrictions and/or lack of production – all of which translates into higher prices for the basic necessities. Stay diversified, stay vigilant, and stay with The Kapital News. #Commodities #Gold #Silver #Recession #Peace #FoodPrices #Revolution #Protests #Russia #Ukraine #USA #Liberty #Stagflation #Inflation

Ep. 619 – End the Pandemic, Start the War

The Kapital News
The Kapital News
Ep. 619 - End the Pandemic, Start the War
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Out of the frying pan and into the fire. Just when you thought two weeks to end the spread was bad because it turned into two years – now we find ourselves on the doorstep of war. And not war with a small country that we typically after, but one with nukes. Yes, I mean Russia. Today, Russia decided to invade Ukraine and they did so on all fronts. The Russian stock market crashed over 30 percent, the Ruble hit an all-time low against the US dollar, and western nations set into place further sanctions against Russia. The blame game can wait. What we need to know is if this has staying power and if it’s a distraction. A distraction from the pandemic and all the draconian measures that followed. A distraction from a weakening economy being destroyed by inflation. A distraction from financial markets that appear to be ready to buckle under the weight from a decades long artificial intervention. There are many questions to ask, but the most important one may simply be to ask, why? Is this really the best we can do as the human race? Be prepared for the ensuing economic fallout and the political instability that will follow. Stay diversified, stay vigilant, and stay with The Kapital News. #War #Peace #Russia #Ukraine #Gold #Silver #Economy #FoodPrices #Recession #Protests #Revolution

Ep. 618 – The Fed’s Trapped, Here’s Why

The Kapital News
The Kapital News
Ep. 618 - The Fed's Trapped, Here's Why
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Tame inflation or keep the markets up – what to do, what to do? This is the position the Federal Reserve, along with some other major central banks, are contending with. It’s been an open secret for years that the Fed is beholden to the credit and stock market. However, the Fed now finds the economy in an inflationary environment. One way to combat inflation would be to raise interest rates significantly to match or exceed the current rate of inflation, which is at 7.5 percent. Doing so, however, will surely bring down the credit markets and with it the stock market. Yet, not contending with inflation, will only make the inflation that much worse and will last that much longer. Inflation is a regressive and hidden tax that impacts the most economically vulnerable among us the worst. This also ties into massive wealth inequality that is one for the record books. So coupled together with persistent and high inflation along with massive wealth inequality sets the stage for massive political instability, protests, and revolutions, which will be experienced the world over. This is not just a problem for the USA, but for the world. Stay diversified, stay vigilant, and stay with The Kapital News. #Inflation #Stagflation #Recession #Depression #Protests #Revolution #FoodPrices #InterestRates #Liberty #Freedom #Oil #Gold #Silver

Ep. 617 – Inflation Nation

The Kapital News
The Kapital News
Ep. 617 - Inflation Nation
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I step aside for a few months and all hell breaks loose – exactly how I told you it would. Inflation has proven not to be transitory and the solutions that exist to combat inflation are not popular and will bring the entire economy to a screeching halt. Those trillions upon trillions of dollars in fiscal and monetary stimulus came with a price tag – and everyone is now paying that price – inflation! Stay diversified, stay vigilant, and stay with The Kapital News. #Inflation #Stagflation #Recession #Depression #FoodPrices #Oil #Gold #Silver #Liberty #Freedom #Protests #Revolution

Ep. 616 – Stagflation: Not So Transitory

The Kapital News
The Kapital News
Ep. 616 - Stagflation: Not So Transitory
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With initial jobless claims edging higher week-over-week to come in at 351,000 for the week ending 18 September, to major corporations such as FedEx, Costco, and Nike, informing the markets that higher prices are coming and are here to stay, the writing is one the wall – stagflation is here and it is not leaving any time soon. In the same vein, even members of the Federal Reserve and the White House are doing a 180 and no longer referring to inflation as transitory, but rather something that will be a little more persistent. Stagflation is a one-two knockout with higher unemployment, stagnant to negative growth, and higher prices – consumer and producer. This environment has not been seen in the United States since the 1970s and 1980s, especially to this degree. In the goods and services that are needed, we will see persistent and sustained price increases. The remainder of this decade is going to be volatile, violent, and unforgiving. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Stagflation #Inflation #Gold #Silver #Commodities #Oil #Natural Gas #Liberty #USA #Housing #FoodPrices #Freedom

Ep. 612 – Housing Unaffordability + Jobless Claims

The Kapital News
The Kapital News
Ep. 612 - Housing Unaffordability + Jobless Claims
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#Inflation #Stagflation #Housing #FoodPrices #Revolutions #Riots #Protests #Freedom #Liberty #Debt #Bubbles #Jobs #Gold #Silver #Commodities #Oil #USA

Ep. 610 – More Signs of Stagflation

The Kapital News
The Kapital News
Ep. 610 - More Signs of Stagflation
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#Stagflation #FoodPrices #Commodities #Inflation #Gold #Silver #Debt #Fraud #HousePrices #Jobs