The good news of “full employment in the USA” is bad news for interest rates!

“The rise in prices is not yet weakening, suggesting a continuation of the rise in the key rates of the major central banks. The hypothesis of a recession remains central on both sides of the Atlantic and darkens the atmosphere. Forty-five central banks have raised their key interest rates in recent weeks, with widespread effects globally”.

Yes, you read that right.

  1. inflation is not going down and that is what I was trying to show you yesterday with the graphs of producer price inflation which is a leading indicator of the rate of inflation.
  2. we are well on the way to a generalized and globalized recession due to the rise in interest rates.
  3. 45 central banks raise rates. And that too is what I’m trying to show you when I tell you that the dollar is rising against all currencies. Each time the FED raises its rates, the whole world is obliged to follow in order to safeguard the exchange parities. This will create a crisis in all emerging countries with fragile currencies.

Finally, as we say in the United States…

“Good news is bad news”

“In the United States, according to the monthly employment report published on October 7, the number of jobs created in September was greater than expected. The unemployment rate fell to 3.5% – a situation of almost full employment. And consumption is resisting.

This good news for the economy is actually very bad news for the markets because it means that the American economy is still very vigorous and therefore inflationary. We will therefore have to raise rates faster and higher than what the markets had anticipated for the moment.

Refer to my latest strategy file “Central banks are attacking you, how to turn their strategy in your favor” where I explain what the FED will do, at what pace and in what proportions. This is the key to the heritage of the coming months. If you understand what is going to happen then this will allow you not only to protect your wealth, but above all to transform this attack from central banks into opportunities. All the information to subscribe is here.

Charles SANNAT

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