Here is a look at real world inflation as M2 money supply grows at a rapid rate.
M2 Money Supply Growing At 6% Annual Rate
August 26 (King World News) – Peter Schiff: In Warsh’s first two months as Fed chair, M2 has grown about 0.9%, an annualized pace of nearly 6%. Properly defined, inflation is the expansion of the money supply; higher prices are the consequence. A 6% monetary inflation rate is hardly consistent with the Fed’s 2% CPI target.
Real World Inflation
Otavio Costa: There are two types of inflation:
What the government reports and what the real world is experiencing.
We all know which one to believe.
KING WORLD NEWS NOTE: Massive Chasm Between Commodities (REAL WORLD INFLATION – YELLOW) & Fake Government CPI Inflation (BLUE)
Just wait until the Fed points to the blue line — or a similar measure — to justify easing financial conditions, even as inflation continues to accelerate.
The debt trap is becoming impossible to ignore.
INFLATION: Iran War Continues To Cripple Shipping
Gerald Celente: Iran claims to have blacklisted 45 tankers that have violated its rules for passing through the Strait of Hormuz. The vessels could be seized, fined, and have their cargoes confiscated, Iranian authorities warned in a post on X.
The list includes oil supertankers, liquid products carriers, and ships carrying non-petroleum products. Some ships on the list are owned by Bahri, the Saudi national shipping line, and various carriers owned by the United Arab Emirates’ national oil company.
Vessels owned by Klaveness Ship Management, Stolt Tankers and the South Korean company Sinokor, and Stolt Tankers also were listed.
Any ships transferring cargo from the cited vessels are likely to receive similar punishments, the post added.
The warning was issued as Donald Trump declared the strait to be a U.S. territory, an announcement Iran said is “delusional.” Iran’s tightened grip on the waterway also coincides with the U.S. announcing it will launch additional “economic warfare” against the country.
To avoid risking punishment, ship owners should apply for permission to cross the strait and pay for security services, Iran’s post added…
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The U.S. already has blockaded Iranian shipping through the strait.
Ships seeking the removal of their names from the non-compliant vessels’ list must submit a request with relevant explanations to Iran’s maritime authorities, the post said.
TREND FORECAST:
Iran’s tough new measures give it additional leverage in negotiating an end to the war. The country has proven that endless bombings will not weaken its determination. New economic sanctions against Iran’s trading partners are unlikely to have an immediate effect.
The sanctions will increase international pressure on Donald Trump to find a settlement, without having to admit he’s lost the war. However, we see only a temporary end to the Iran War because, as we have greatly detailed, Israel will keep pressure on the United States to ramp it up.
SAUDIS PROPOSE POLITICAL INSURANCE PLAN FOR SHIPPING
With insurance companies in London, Saudi Arabian officials have discussed creating “war and political risk insurance” that would cover ships in the Persian Gulf region, the Financial Times reported.
Since the Iran War began, insurance companies have dramatically raised premiums on, or refused to cover, ships traveling the Persian Gulf and fuel production and shipping facilities in the region.
Insurers also have backed away from Saudi-related vessels traveling in or near the Red Sea as Yemen’s Iran-allied Houthi rebel faction has been shelling those ships. The Saudis’ Red Sea port of Yanbu has become critical to the country’s oil shipments after the Strait of Hormuz became a war zone.
In the Saudi proposal, ships and related assets could be covered at cheaper rates through a pool of money created among primary and secondary insurers. The Saudi Import-Export Bank would create a backup fund of several hundred million dollars to boost coverage for insured entities, people familiar with the matter told the FT.
Those funds could serve as “insurance for insurers,” offering partial reimbursement to commercial underwriters willing to insure ships and assets in question.
Earlier this year, Donald Trump persuaded insurance giants AIG and Chubb to create a facility that would provide up to $40 billion to cover shipping and petroleum-related facilities in the region. The facility was set up but has neither processed nor paid any claims, according to the FT.
“Cover is certainly still attainable in the region,” Maximilian Hess, founder of risk consulting firm Enmetena Advisory, said in an FT interview. “I don’t see this as a market in crisis.”
However, the proposed pool could help “ensure that insurance is still available at good commercial rates that don’t have too much of a meaningful impact on [project] economics and final investment decisions.”
TREND FORECAST:
This will do next to nothing as the Iran War escalates following the U.S. mid-term elections in November. Iran will remain in control of the Strait of Hormuz, not the United States as President Trump falsely claims. And the greater the war escalates, the more the Houthis will do to support Iran and stop shipping in the Red Sea.
SOUTH KOREA TESTS ARCTIC SHIPPING ROUTE
South Korean ship the PanStar Acro is sailing to Europe by way of the Arctic, testing whether that route opened by melting sea ice can be a viable alternative to the Suez Canal.
The canal is at the north end of the Red Sea, the southern entry point of which is under military assault by Iran-backed Houthi rebels. Houthis are bombarding ships they see as allied with the West against Iran.
The ship will sail north along Russia’s eastern Kamchatka Peninsula, then transit the Bering Sea and follow the Northern Sea Route, a 3,500-mile shipping lane that will lead it to the U.K., then on to the Netherlands and Poland.
Traversing the Arctic can cut as much as 4,500 miles and 10 days from the Suez Canal route, the Korea Institute for International Economic Policy calculated.
The PanStar’s cargo includes car parts and chemical products but is also carrying about 100 empty shipping containers.
The trip will last 40 to 45 days, according to South Korea’s Oceans Ministry.
South Korea hopes to make its southeastern port of Busan a global maritime hub by making the Arctic route common by 2030.
Environmental advocates have criticized the plan, warning it will speed Arctic ice melt, raise ocean levels, and exacerbate extreme weather events.
Major shipping lines including CGM, CMA, Hapag-Lloyd, and MSC have pledged to not use the route due to environmental risks. The Arctic lane typically is only practical when sea ice has melted enough to allow travel without icebreakers.
“The Northern Sea Route has become increasingly viable as the Arctic warms about four times faster than the global average, leading to a sharp decline in sea ice,” Paran Ocean Citizen Science Center, a Korean environmental group, said in a 2025 statement.
“But making the route commercially viable would require further warming, putting the policy at odds with efforts to combat climate change,” it noted.
TRENDPOST:
Because of shipping chaos caused by the Iran War, governments and shipping firms are plotting the financial practicality of alternative routes. The northern arc is increasingly viewed as a leading possibility. But this will do next to nothing to bring down shipping costs and the price of oil since it is much longer route than through the Strait of Hormuz, more costly and subject to dangerous weather.
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