Direct from BOOM Finance and Economics at the links below – Note – BOOM uses American English whereas AP uses British English.
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THIS WEEK’S EDITORIAL
US NUMBERS ARE GOOD — STOCKS SURGE UPWARDS AS PER BOOM FORECAST: On Friday, two data points of special interest in the US carried no CPI inflationary surprises. The Federal Reserve’s favourite inflation indicator, the Core PCE Annual Price Index annual change came in at 5.1%, below the consensus forecast of 5.2%. And Personal Spending in the US increased by just 0.6% month-on-month in September.
BOOM would have preferred them both to be lower. However, they did not increase significantly which indicates a cooling of CPI inflationary pressures. The US stock markets responded very positively, rising strongly during Friday’s trading session. The Dow Jones Index rose by 2.6%, the S & P 500 rose by 2.46% and the Nasdaq Index rose by 2.87%.
On 16th October, BOOM predicted that US stock and bond prices would start to rise. BOOM wrote “the prices of stocks and bonds should start to rise from here and the Federal Reserve can put further interest rate increases on hold or reduce the rate of rise.“ Since that date, the US Dow Jones stock market index has risen by 14.6%. It is heading towards its best month performance in 84 years. The S & P Index has risen by 11.4% The NASDAQ Index has risen by 10%.
All US Bond prices have started to rise over the last week as well. BOOM is not aware of any other commentator on Earth who predicted this. The bottom of the market was actually on Thursday 13th October. BOOM’s forecast was made on Sunday 16th.
CHINA MUST CHANGE DIRECTION: It appears that China’s experiment with mixing capitalism with communism is over. That is what the evidence shows. The effect of this on the economy will be seen in the fullness of time. However, this may not end well for the people of China if the result is an adverse effect on incentives and productivity.
Investors in China’s stock markets have seen very poor to non-existent returns since 2007 but especially so over the last 4 years, since 2018. Both the Shanghai and Hong Kong stock markets have performed badly in both those time frames. Private equity investment in its corporations is not being rewarded, thus investors have steadily turned to real estate in an attempt to accumulate wealth.
House prices surged in 2010, 2016, 2018, 2019 and, finally, in 2021. However, they have now fallen significantly over the last two years. China house prices dropped 6.0% YoY in July 2022, following a decrease of 7.2% YoY in the previous month. House price growth reached an all-time high of 25.0% in Feb 2010. Despite the recent falls, prices are still double what they were in 2010. But the recent falls are ominous.
In a sign of desperation, Chinese investors turned to the Crypto markets over the last 2 years but that has also disappointed them with total Crypto market capitalization falling from US$3Trillion to below US $1Trillion over the last 12 months. Investing in Crypto has been severely discouraged by the Chinese government. Thus, there is no way to turn. Wealth creation has been crushed. The financial economy is at a standstill.
Xi Jing Ping has also tightened his grip on the nation with the adoption of a “Zero Covid” policy which is strangling the real economy slowly but surely and making life miserable for citizens. Annual GDP growth in the real economy has fallen to 3.9% and is expected to fall further by years’ end. In early 2021, GDP growth rose to 18%. That was the last “hurrah”. It seems that the communist dream of making everyone equally miserable has since reared its ugly head.
Zero Covid policies have failed all over the world in many nations and China will also fail in this foolish quest. Why? Because it is impossible to stop a respiratory virus unless nasal anti-septic sprays are used as the prevention strategy. All other means such as face masks, lockdowns, hand washing, social distancing and so-called injectable “vaccines” have failed and will fail in China. In particular, injectable “vaccines” must always fail against respiratory infections as they have no effect on the mucosal immune system (mouth and nose) which is where any respiratory virus invades the body.
Thus, injectables using new mRNA technology are guaranteed to fail plus they will cause mass ill health as evidenced by the adverse events being experienced around the globe with the estimated damage totalling somewhere between 50 million to 350 million injured and 1 to 6 million killed in just the US, UK and Europe. Those numbers are probably 4 times worse for the entire planet. The devastation of health is the result and economic contraction is guaranteed if these injectables continue to be used.
BOOM’s advice to China is to abandon all Zero Covid policies immediately and to again encourage wealth creation for all of its citizens. It can limit excessive wealth through taxation but to discourage everyone is not good policy. It must abandon all connections to the World Economic Forum and its anti-human ambitions. The injectable “vaccines” that cannot work against respiratory viruses and are promoted by the World Economic Forum must be abandoned.
Klaus Schwab and his guru, Yuval Harari, must be denounced. This is the pathway forward to a healthy and wealthy China. Economic productivity will be restored. Unless there is a change in the management of the economy, it will start to implode into a debt deflation with further, severe asset price collapses baked into the cake. The loan books of the commercial banks will then begin to crumble leading to a banking crisis. And then, nobody in China will be happy with their economic circumstances. Massive social upheaval will follow as sure as night follows day.
In previous years, BOOM has been an admirer of China’s expert management of its money supply. But those days are over. It looks like poor policies and poor leadership have become universal phenomena in the 21st century. They are not only found in the advanced economies of the West. China must stop and reassess what it is doing.
CHINA STOCKS FALLING: Hong Kong’s financial markets are slowly but surely being destroyed. Its position as a global financial hub is over. The Hang Seng Stock market index has now fallen from 31,000 in early 2021 to below 15,000 last week. That is a 50% decline in market capitalization for the companies listed there. Investors are leaving.
Meanwhile, Shanghai’s stock index, the Shanghai Composite, has fallen from 3,700 to 2,900 over the last 11 months. This is a decline of almost 22 % — an horrendous result in such a short time frame. But it has fallen by 42% since its peak price of 5,000 in June 2015 and 50% from its peak price in November 2007.
RECORD SALES OF ENERGY FROM RUSSIA TO CHINA: Meanwhile, Russia is benefiting greatly from China’s demand for energy. Russia exported a record amount of liquefied natural gas (LNG) and steel-making coal to China in September.
Russia’s coking coal exports to its trading partner surged to 2.5 million tons in September from around 900,000 tons in the same month last year. Overall coal imports, including thermal and coking coal, jumped 20% to nearly 7 million tons year-on-year.
EXCESS DEATHS RISE AGAIN IN AUSTRALIA — 17.3% ABOVE EXPECTED AVERAGES: Excess Deaths from All Causes rose for another month in Australia. According to data from the Australian Bureau of Statistics, in 2022, there were 111,008 deaths that occurred by 31 July and were registered by 30 September, which is 16,375 (17.3%) more than the historical average. Australia seems to be on track to achieve about 30,000 excess deaths from all causes by years end.
In July there were 17,936 deaths, 2,503 (16.2%) above the historical average. Only 1,310 were attributed to Covid 19 — about 7% of the total. Thus, 93% of the deaths were not due to Covid 19.
In regard to Doctor Certified causes, Cancer was far and away the greatest killer with 4,265 deaths, Dementia, Respiratory Diseases and Heart Diseases all numbered around 1,500 each.
However, it is well known that Death Certificate causes are essentially just best guesses by the Doctor who is willing to sign a death certificate. Only 11,530 deaths appear to be accompanied by a Death Certificate in July. This means that 35% did not.
The fact is that we really don’t know why the excess deaths are happening unless large autopsy studies are conducted that specifically look for Spike Protein and evidence of viral Nucleocapsid. If large numbers of bodies contain Spike Protein without Nucleocapsid, then we can conclude that the new injectable “vaccines” are the cause of death.
In the UK, the excess deaths from all causes have risen by 19% above expected averages. Much higher levels of excess deaths are occurring in European nations.
If excess deaths keep rising month by month, then we could be faced with a severe effect on national economies. Death is an indicator of illness and excessive illness will inevitably lead to labour shortages and decreased productivity. Ireland has just recently reported a 600% increase in demand for emergency healthcare services at hospitals.
Healthcare systems may breakdown due to excessive illness within the ranks of healthcare workers. A tsunami of disease will be met with a failing healthcare system.
Politicians and their “expert” advisers have caused this dynamic but they are unwilling to admit this. Until they do, we can expect worse outcomes over time.
ARCHBISHOP VIGANO OPEN LETTER TO POPE: A fully comprehensive open letter has been published from Archbishop Vigano to the Pope on the church being complicit with the deception of WEF, de-population agenda of Great Reset and immorality of the vaccines developed using abortive foetal cell lines and experimental nature of the Vax rollout; contrary to the Nuremberg Code. Link: https://www.marcotosatti.com/2022/10/21/vigano-open-letter-to-the-holy-see/
In economics, things work until they don’t. Until next week. Make your own conclusions, do your own research. BOOM does not offer investment advice.
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BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY: LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans). https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how global banking systems really work.
AND Watch for 4 minutes, this Bank of England explanation: Money is essential to the workings of a modern economy, but its nature has varied substantially over time. This video describes what money is today.
Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models. EMAIL: gerry{at}boomfinanceandeconomics.com
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From here it looks like the Left Swinging very destructive NWO Pendulum of Evil is swinging fast and hard on your Island and England is suffering Reverse Diversity, slated to become itself a penury Colony of countries such as India. We have the same NWO Conspiracy progressing at Warp Speed here (USA) but conservatives hope to torpedo the Oligarch’s and their Useful Idiots on 8Nov2022. What do the Oligarchs propose? We lose Everything. They give us a CBDC and the Mark of the Beast, their chains, and promised happiness. Hopefully there will soon be a general slave revolt of Western Proletariats with the good sense to reject the Devil’s Deal ; for what would it profit a man to gain the whole world if it cost his Soul? The Elites sold theirs and that’s their problem; me and my household are Not For Sale to Satan.
Thanks rhs jr – my faithful supporter 🙂 Yes, you do seem to have a chance to stop the rot, or at least slow it down. Here in UK we are in for such a dose of austerity that the Brits will be spinning in their pubs and moaning like hell which will change nothing.
It’s going to be a boring winter for me as I really don’t want to engage with people expounding on negative issues over which we have no control. Anyway, when it’s cold and pissing down outside I stay in my cosy cottage and observe the world from my computer screens!
What is coming is unprecedented in human history. That is a bold statement, but one that is hard to deny. The reason I am saying this is because for the first time, a 4th turning will be world wide. In prior history, 4th turnings have been staggered from country to country depending upon their own political history. WW2 changed all that. At the end of WW2 most of the known world was laying in ruins from the war and the world wide depression that preceded it. This reset the clock on 4th turnings bringing them all in sync. With the exception of Russia, who’s 4th turning began at the end of the Soviet Union, every country involved in WW2 are now entering their 4th turning together. This ensures the world will be a much different place when we come out the other side…..
I am a great fan of 4th turnings Jdog and agree with all you say. I hadn’t thought of a reset at WW2 – but you are surely right – another nugget of wisdom – thanks mate – and bang on 80 years.
I am also a great fan of Charles Hugh Smith because his interest in systems coincides with my own. Remarkably he wrote this in 2011 – worth a read now we are actually at the year he predicted – uncanny:
https://www.businessinsider.com/beyond-the-false-dawn-global-crisis-2020-2022-2011-2?r=US&IR=T
His theory of our current energy requirement of 11,000 Watts/day/head needing to drop to 2,000 Watts/day/head is intruding to say the least. I hadn’t thought of energy consumption in this way and will do more research on the subject.
Hi Peter, this might be interesting to you:
https://unherd.com/2022/10/the-revenge-of-the-technocrats/?=frlh
I don’t really understand enough of British politics… but it seems contradictory to claim ‘Osbornist technocratic project’ and Tory globalist [Brexit] project (even more globalist than the EU) – and Labour is what exactly, non-globalist?
Sorry for delay ‘m’, just caught up. I will read this great article today and get back to you asap.
Hi again ‘m’. I’ve read the article and consider it a nothing burger. What it fails to recognise that the politicians of any Party don’t control anything. I should have thought that most people observing Lettuce Liz’s demise would have concluded beyond doubt that the markets control Britain and behind them the Banksters in the form of The City of London and the alphabet agencies like GCHQ, the Establishment like HM Treasury and the OBR
The House of Commons is a playhouse – the politicians are puppets on the stage supposedly entertaining the masses, keeping them distracted, and selling them BS. The fact is that Britain is F**ed beyond hope as indeed is the western way of life. I shall be writing a Part 2 article about this in the weeks to come. But for your consideration, check this out:
“The author analyzes his own annual energy use and leads us to the conclusion that our 10,000 watts a day lifestyles must be trimmed to around 2,000 watts a day to be sustainable with current technologies”.
https://www.businessinsider.com/beyond-the-false-dawn-global-crisis-2020-2022-2011-2?r=US&IR=T
AND:
I can do this by living on my boat (when I get another one!). I am not sure most everyone else will be happy with 2,000 watts/day. You can work out your own consumption for fun!
Central Banks gold buying review. NOT the USA central bank for sure.
Would anyone dare to call this the FEAR trade of the current time?
Their own country paper with ink on it vs the yellow dog.
https://www.bloomberg.com/news/articles/2022-11-01/central-bank-gold-demand-booms-driven-by-mystery-buying
Banksters are Evil, not stupid; they know quite well what they are doing to the currencies and gold, which will come through it all untarnished; I’ll be eating the poor man’s protein (rabbit) and investing in the poor man’s gold (silver).
So your saying, essentially, we all have a Snowballs chance in Hell of getting out of this without massive losses.
Bonds are currently making me bleed from the fundamental orifice.
Have a Stock tip However … Market Code, SNOW. – does like a SSD storage thingy does and makes money disappear while doing what every one else is doing, so has a SNOW Balls Chance in Hell of going anywhere but out the door or take over Territory. Defiantly a buy for a Capital loss tax deduction