IMF’s Map of Stagflation: This Is Keeping the Central Banks Awake at Night

IMF’s Map of Stagflation: This Is Keeping the Central Banks Awake at Night

Show Video

historically gold is the last asset standard that's what you need to have in your portfolio to protect the wealth that you've accumulated to position you to take advantage of this big crisis because this next piece is not going to be just a recession i promise you but there's only one way to fight recession which is deflation and that's with inflation and they got nothing to lose because they're at the end the imf just came out with their 2022 financial global financial stability report and guess what we found out coming up [Music] i'm lynette zhang chief market analyst here at itm trading a full-service physical gold and silver dealer specializing in custom strategies because everybody's a little different but you know the imf's really gave us a map of stagflation now i'm going to refer back to this a number of times but i'd like you to remember i lived through it if you're if you're my age or older or even a little younger you're going to remember this but we also were dealing with stagflation in the 70s and quite honestly there are more parallels so let's move forward here's their map okay wow look at this global growth projections go down now i want to point something out because the world in 2022 is expected to shrink globally to 3.6 in growth but then it's going to stay level why do you think that would stay level when you have the u.s the euro area and the middle east and central asia all declining really markedly even into 2023 not a big shocker oh well maybe it's because they anticipate that in latin america in sub-saharan africa and in latin america the caribbean that it'll either stay the same in 2023 or get a little bit better is that so they could show the world stabilizing in growth in the next year in 2023 i don't think this is really gonna look i don't think this is gonna turn out the way this map shows i think it's gonna be much much worse but what they say is global economic prospects have worsened significantly since our last world economic outlook forecast in january yeah well it doesn't take rocket science to see that but let me show you what keep the central bankers up at night because they're totally up in many countries there is a rising risk that inflation expectations become de-anchored prompting a more aggressive tightening response from central banks so what they're really saying here is that the expectations indicates a loss of control because it's a loss of confidence if they don't think that the federal reserve or any central bank if the if the public does not think that they can control this inflation then that is a massive loss of confidence this is a con game it requires confidence so this totally keeps the fed and other central banks up at night additionally it increases in food and fuel prices could significantly increase the risk of social unrest and so what they're really saying in here is when people are hungry and hopeless they make choices they would not otherwise make they lose the confidence and then this increases the potential for ultimate loss of control which is a complete regime change now mind you the powers that be have a regime change in mind for us socially economically and financially but they want to stay in control of the shift and so they want to stay in power on the other side of the shift this could very well be the opportunity to make some positive changes for the people because i don't really want the people that got us into this mess to begin with to remain in control and empower you think it's going to be different on the other side yeah i don't think so but we are on the precipice if if it's already started actually of a global food and security issue and i've been telling you for so many years that food is the single biggest issue for people as we go through these transitions food water energy security barter ability wealth preservation community and shelter get it done if you haven't moved forward on these issues in a very powerful way then i'm sorry but you are behind the eight ball so we need to just move forward powerfully and get it done because the sharp increases in commodity prices echo those of the 70s because we changed we had a regime shift change from a quasi-gold standard anyway to a pure debt based standard where we handed over complete control to these central bankers so between the government and the central bank there's no purchasing power left and we're going into a hyper inflationary spiral because they have to burn off all the debt that they've created and here you go i mean i've been saying for a while that i think that this is the start of it time will tell but i'm i'm pretty sure i'm right i mean i hope i'm wrong but i i i don't think so i don't think so and frankly i ordered more food from azure farms this morning but we're also seeing a spillover so this is what they've been talking about quite a bit because it's not just contained in the areas that they like to take out of the of the inflation numbers food and energy so it is spilling over into goods and services as well and we're looking at slowing growth and rising prices that's stagflation the 1970s reset the system from a savings based system into a debt based system and i have to tell you we need to be back on this savings based system and the government is not going to do that for you you have to become your own central banker and do it for yourself this is your protection this has been proven to protect you from inflation and the ravages of it for thousands of years over and over and over again and you'll see what i mean a little bit further along because we know the system is resetting again it had to it died in 2008 it's just been on life support and all that life support means that all of the systems inside the body of the global economy have shut down they are addicted to this free money and now they have to take it away and so what we see are global conditions tightening in other words interest rates are going up the central banks are not buying as much of the government's bonds and debt and as well as going into the open market to buy corporate debt like we saw them do not that long ago etc and there's something that's really interesting in here okay anything above this line anything above this line is considered tightening anything below that line is considered easing right so making monetary policy easier right now interest rates at zero and the ability to borrow as much as you want for most corporations have certainly enabled the stock market the real estate all of the increases that we've seen in this inflation because between 2008 and 2022 there has been a massive amount of liquidity new money pushed into the market and also lots more debt and i want you to keep this in mind because the tightening also threatens liquidity which we're going to talk more about in just a minute but the other thing that i wanted to really point out to you is that it's in the the united states and in the eu are kind of tightening i mean they haven't really done it yet but just talking about it over and over again has actually created some level as you can see of tightening it'll be interesting to see what they actually do and not not what they actually do because we know they're going to raise rates and here in the us they're going to raise them 5 by 50 basis points because that's shock at all except everybody they've been telling about us for so long that markets uh traders have gotten into position have you gotten into position because the markets the traders in the markets have totally gotten to position but what i really wanted to point out is that the level of easy money is the same as it was here in the us back in 2007 before the system broke from so much easy money it's like you know i should have had a picture with with water and let it spill over because you pour all this free money you pour it you pour it you pour it at some point it's going to spill over shocker look we printed all this money and we haven't had inflation oh garbage they had inflation in the stock market and they had inflation in the bond market and they had inflation in the real estate market and it's really all about those big bets derivative bets that are placed on top of those that's really what makes this so extraordinarily dangerous and in some places they've reached extremely tight levels in eastern europe yeah i don't think we've seen the last of this and also you can see that in china who is pledging to keep supporting the economy i mean china's this yellow line and can you see how that's gone back into easing because i mean it's just a mess over there they've shut down their economy again and boy shocker that that influence is spreading globally i'm making supply-side uh supply systems even tighter in not just commodities but also in goods and it's killing their economy too but you know sometimes when i see this stuff honestly you never really know i mean we make assumptions that they want this to keep going but just think about the fact that they know that this is the end because they're looking at all of the data and they see it maybe just maybe a lot of these crises that we say unfolding and if you were alive in the 60s and 70s like i was it was crisis to crisis to crisis to crisis there were lots and lots of crisis around so you're paying attention here you're paying attention there you're paying attention there while what they're really doing is shifting the ground underneath your feet the financial system the money system and you don't know it because you're already off balance on everything else i can tell you i can promise you in july of 1971 i had a 20 bill in my pocket in september of 1971 i had a 20 bill in my pocket maybe it was even a brand new bill i did not know nobody not most nobody central banks knew government knew but the general public no idea that anything had changed and we were you know keep calm you know nixon told us if you buy american products you're not going to have to deal with inflation it was garbage it was absolute garbage and it's garbage now these patterns repeat and i can't sit here and tell you definitively that all these crisis crisis to crisis to crisis to crisis that we are lurching from crisis to crisis with i can't tell you that this is not part of the intent to keep everybody off balance so they can make the shift and remain in power you don't want them to remain in power i'm telling you right now do not want them to but china and asia excluding china are easing where latin america europe the middle east and africa excluding russia and ukraine are tightening yeah but you see this tightening is deflationary but they have to do it because it's a con game it requires confidence and they have to do it for their credibility they have to but the reality is is there's only one way to fight inflation and that's with deflation and there's only one way to fight deflation and that's with inflation they're between a rock and a hard place i don't care what they decide it's all gonna be a problem and i thought this was so interesting that i caught and and this is from deutsche bank recession warning there are good reasons to expect inflation will continue to surprise to the upside much as we hear it's going to moderate in the second half of this year no we regard it therefore as highly likely that the fed will have to step on the brakes even more firmly in other words raise rates more and a deeper recession will be needed to bring inflation to heal but they can't do it they won't do it i'm going to put my neck on the line here and i'm going to tell you they're going to have to try so i'm not saying they won't raise rates but they will change that as the economy as the global economy as the u.s economy completely craters and it will crater if they do 50 50 50 50. because there's so much debt that's coming due and must be either paid off or rolled over or defaulted upon remember all the zombie corporations that we've talked about over the years that's just gotten worse so it's funny because somebody was kind of making fun and of it the other day and said well the zombie apocalypse you know it's not these walking dead that are going to come and eat your brains it's the walking dead corporation that will take down the whole system because it will trigger a level of derivative default most likely that they will not be able to cover up it's those that create this mess that that can determine whether or not there's a default i mean it really is it really is it is is a very sad joke but on the top of this or on the side rather i should say of the recession warning what do we have i mean that was just lucky happenstance frankly home price appreciation accelerates once again in 20 counting 20 u.s cities

nationally prices surged 19.8 percent the third biggest increase in data going back 35 years okie dokie then so you got home prices going up 20 and you've got inflation yeah it's only at eight and a half percent do you believe that have you been to the grocery store have you been to the gas pump do you really think that these are temporary because frankly i don't i don't and how in the world can people afford to live and when people are hungry and hopeless they make choices they would not otherwise make so i thought that this was also really important to show you and there are a few things and there are some things in here i didn't even mark off but i definitely want to talk to you about so they say the yield curve has flattened significantly since the beginning of the year reflecting concerns about the economic outlook and frankly we had an inversion the fact that they managed to manipulate that inversion away does not because they do it every time does not not negate the fact that we had a yield curve inversion and frankly the five year is still inverted above the ten year uh is it inverted against the 30 year i'll have to look it might be because it typically is so we have a yield curve inversion and every single time there is a year curve inversion there is a recession here you go can you see it right now this is the fed funds rate and this graph goes back to 1962 and you can see what it looks like until we hit 1986 1987. when they have clearly gotten control but look at the ramp room they talk so much about paul volcker first of all and you can see intraday the yields were actually 21.5 percent intraday can you see fedshare pal boom raising rates to 21 not gonna happen because we're at the end of the system that was the beginning of the system this is the end of the system but look at how kind of choppy and thick these interest rates were and now it's all nice and smooth isn't that interesting because what the fed has been fighting is deflation over all these years and there's only one way to fight deflation and make no mistake about it a stock market going down a real estate market going down that is all deflationary there's only one way to fight it and that's with inflation so look at they've dropped their interest rates on average five and a half five and three-quarters percent to stimulate that borrowing and spending to keep those assets inflated and the cheaper it is to borrow why do you think what do you think the one of the real reasons why we've seen this massive increase in house prices because they're basically giving the debt away for free well what happens if that changes now i want you to think about this because wall street after 2008 that was a set up for wall street to come in and make a big mark in the real estate market which is exactly what they did buying up a tremendous amount of real estate and then what do they do they convert that or fine turn it into a financial product that's financialization and then sell it back to you you're the one in your pensions and your iras and your 401ks etc you are the one that is going to eat it in the shorts if you own these products that's why if you can't take it out or do anything else with it or even if you can and you choose not to that's your choice i'm not telling you you got to do what you're comfortable with regardless of what i say but you need to have a diversified portfolio to protect this we have historic formulas that give us a good darn gauge on what on how much gold you're likely to need to protect that wealth so we've got it all in formulas you call us you talk to us we'll tell you how much you need that's easy peasy but they've been fighting deflation and now they're out of tools why are they out of tools because we've been anchored at zero since 2008 over here and the attempt to raise rates is really about having the ability to lower it again to inspire higher inflation so you tell me what they can do they're trying to raise rates just so they can lower them again but we're going from crisis to crisis to crisis so really doesn't matter but if you have variable rate debt you better get it paid off as quickly as you can because that is that puts you in massive jeopardy this is really significant this is a really significant graph and what i'm trying to show you here i mean this is the imf showing you this is the federal reserve showing you can you see it because frankly we're at the end when we're at the end now a challenging normalization process yeah think what in the world is normal about anything that's been going on since 2008 nothing except that they remain in control and they transfer your wealth but they're doing it a lot faster stop them how do you stop them this is how you stop them you take it out of the system in something that has full utility always demand you don't want gold just because it's gold you want gold because it protects you from inflation it protects you from political unrest it protects your wealth and your purchasing power that's why simple a repricing of risk is possible well look at the markets you think that's a repricing of risk because as long as you had free money and they could pump up those stock markets for example earnings were irrelevant i mean it wasn't really all that long ago the the do you ever hear about unicorns anymore by the way no but you heard about them all the time when they didn't have earnings they weren't going to have earnings as far as the eye could see and they were worth billions and billions of dollars well with interest rates rising that changes that equation it really is just that simple and much as they want you to believe that all of this money printing sorry edgar we have to fix this all of this money printing did not have any impact on inflation oh those were all contained garbage garbage garbage and now that they're being forced to take that free money punch ball away there's an awful lot of thirsty traders out there i hope you're not one of them they say that all that did all the qe did was a 50 60 basis point compression in interest rates yields garbage it's much higher than that all the meddling much much higher but not for you or me it's for the corporations because they're far more important than we are and at this point there are no good options they keep the free money well punch bowl rolling then that will just exacerbate the the inflation that we're dealing with they take the punch bowl away that creates a deflationary environment because stock markets are being volatile and going down and and real estate markets well those are still going up but you got to have a place to live you don't have to own a stock but you got to have a place to live you got to have that shelter food water energy security barter ability wealth preservation community and shelter get it done get it done you're not going to know the day before and even if you didn't know the day before you would not have time to get everything in place i can't even begin to tell you how thankful and grateful i am that the universe put me in the space to understand what was happening i started prepping well i started with the gold and the silver because if you don't preserve your wealth first it's kind of hard to do anything else but i bought this property and started an urban farm i'm not a gardener i'm not a farmer i am an urban farmer now but i certainly wasn't when i started this because i 100 knew food becomes the single biggest issue for people we don't know how long this is going to last but what we do know is it's here it's here so short term dollar funding tensions and market liquidity market liquidity is your ability to buy and sell easily without dislocating prices that's market liquidity so the more money flowing into an area the more liquid that asset or that instrument is so with all that free money made the markets really really liquid but now that is starting to change international dollar funding conditions have also shown some strains because how many times have we talked about the corporations that have issued debt in terms of dollars they don't own dollars but when they have to make an interest payment or a bond payment they have to pay in dollars so this is really just in theory you're going to see this whole thing fall apart i promise you you will but when the fed raises interest rates or even when interest rates on government debt goes higher well then that's supposed to have an impact on gold because after all gold doesn't pay you an uh interest payment well i'll tell you what a trillion times zero is zero and i've shown you ad nausea probably how low the purchasing power is has gone there's no purchasing power left the only thing keeping the dollar viable is your confidence and that confidence is going away too the bid ask spreads of high quality government bonds are the widest since the coven 19 crisis high quality because they can print the money that they need to pay you oh that makes it high quality all right well look i got a bridge in brooklyn you interested i could sell you that bridge in brooklyn don't buy it absolutely don't buy it because the reality is the liquidity is drying up and here's how it impacts you this is the sovereign bank you kind of remember we were talking about this back in what 2013-14 with the sovereign debt crisis with greece and and europe i mean it was was all over the place and there and it created a doom loop between governments which are sovereigns and banks so here the imf gave gave us this beautiful little flow chart on how that is but without going into that in too much detail this is really what you need to see and then the note is a sudden tightening so central banks raising rates substantially a sudden tightening of global financial conditions is one type of shock that may trigger an adverse sovereign bank feedback loop this is called a doom loop but they didn't want to say that in here but that's what it's called because with the government debt you have to have confidence in your government or you topple the government you topple that power they don't want that they don't want that they want to remain in power but when government bonds aren't uh you know easily purchased around the world well and governments need money to continue to run the government and the army they raise taxes and they reduce services we actually saw that quite a bit in chicago several years ago when they were having their own government debt crisis so higher taxes fewer services and job losses because this transmits to the corporations all right we've got a very tight labor market of course they want a two-tier labor market kind of like china i did a report on this i don't know several several several months ago with the lay down um economy where and we're seeing it here too in this very tight labor market where people are reassessing what the value of their time and work is so right now we have a tight labor market but we go into a massive recession you're going to see job losses and then that translates into the banks bail in anyone you better not have too much cash sitting in the bank that you can't afford to lose so that too needs to be protected even if you have to like i have to keep a certain level of cash because i'm running a business and i have salaries to pay and all that kind of stuff right but i offset if that all goes away if they mail that in and yes you'll say fdic insurance there's not enough enough money in there to pay if too many big banks or too many banks go out at once we saw that in 2008 they were one bank failure away from it being obvious so if that does it's not a big deal to me because i'll just convert some of my gold into whatever cash i need to keep my business running so that's security that's savings that's protection so you really need to think about it because they've been testing this they know how this works and what are you gonna do you're gonna go bang on the doors give me my money it's not your money you loan it to the bet i just got 15 cents in interest on my business checking account 15 flippin cents you know why i got 15 cents because my guys i got 15 cents because i've loaned them that money that i've deposited in there yeah so here's the kicker rising liquidity and funding risks i'm going to read you this whole thing there are some signs that the sharp rise in market volatility severe disruptions in commodity markets the lme and the perception of rising counterparty risk may be starting to weigh on dealer bank's balance sheet capacity and appetite for intermediation meaning they're not sure they're going to get the money back so they don't want to lend it out remember we saw the same thing in 2008 with that inter bank funding boom dropped like a stone without with implications for liquidity and funding conditions as well as broader market funding they are scared to death that the banks won't do the job that they need them to do which is provide liquidity buying and selling these assets so that they create a market but that's been changing for a while i've done videos on that as well [Music] by the way just want to point this out let's see where is it blah blah blah blah blah maybe starting to wait okay rising okay so right here the perception of rising counterparty risk let's see what financial here's a test you've heard me say it a bunch of times what financial asset is the only asset according to the bank for international settlements that runs zero counterparty risk i'll give you a hint you hold it you own it outright it runs no counterparty risk you gotta hold it because if you don't you don't own it tensions in short-term dollar funding markets have been limited so far but strains are beginning to emerge reportedly reflecting both precautionary motives to bolster liquidity positions so in other words starting to hold back some money if they run into trouble but you know who funds those money that liquidity the short-term liquidity money markets do you own any money markets or do you perceive that you own the money that's in those money markets no no no uh let's see reportedly reflecting both precautionary motives to bolster liquidity positions as well as growing concerns about credit risk no counterparty risk spreads in short-term dollar funding markets have widened in other words the cost to borrow has gone up this is a problem can you see this next crisis brewing are you ready for it are you ready for it because this is going to get you ready for it as well as food water energy security community and shelter get it done get it done if i sound urgent it's because i feel urgent and i hope you feel urgent too and shocker gold is now the second most liquid asset on earth guess what gold is about to be the first most liquid asset on earth look it has the second highest trading volume of any asset class and there is a rush to safety this is proven thousands of years it has the most functionality because it is used across the entire spectrum of the goal global economy every single area financial art food technology medical on and on and on every single sector you tell me what else can say that what other financial asset and it runs no counterparty risk historically gold is the last asset standing that's what you need to have in your portfolio to protect the wealth that you've accumulated and or to position you to take advantage of this big crisis because this next piece is not going to be just a recession i promise you and i i don't like to promise this but there's only one way to fight recession which is deflation and that's with inflation and they got nothing to lose because they're at the end if you aren't prepared for hyperinflation yet get prepared get prepared please do yourself a favor do your family a favor i don't care what anybody else thinks i'm showing you what's happening they're telling us what's happening it's just that most people don't listen because they're busy living their lives and i get it i mean i totally get it but i want to make sure that my family and it's a broader family it's not just my children and my siblings it's it's my itm family here it's my i don't really ever say this word but metal mama's family here i want to make sure that we all can survive this and even thrive through this that's the opportunity it's not all doom and gloom but if you don't get prepared but with all this doom and gloom i gotta have a little bit of fun and also there are some things that i'm dying to talk about that i don't get to talk about on air and i will on saturday june 11th at the grand waialea on maui that's a saturday so i hope you can join us the link is below right the link is below and uh it's a very very small intimate group i think we're almost done yeah we're almost done i think we just have a few spots left so make sure that you watch my interview with security expert bill blickensdurfer on the beyond gold and silver channel and that's out now and also on the itm podcast leave us a review on apple or spotify listen to us anywhere anytime on all major platforms we're here for you and if you haven't already or even if you have but you haven't finished it off you need to really click that calendar link below talk to our consultants to set up your own personal strategy and have some goals in mind and if you don't quite know how to do that we'll help you we have questions that we'll be able to ask you that will help you determine what are your priorities what are your goals and then we can put together a plan to help you support that but your goals have to come first so if you like this please give us a thumbs up make sure you leave a comment it helps us spread the word even more and this is a very important video share share share have a pizza party and share it or something because maybe you can entice people to watch it if you offer them some free food it's worth it so that you have some help in protecting those that you care about and until next we speak please be careful out there bye-bye [Music] you

2022-04-29 17:54

Show Video

Other news