Leaders are bracing for an economic downturn.
Leaders Brace For Economic Downturn
May 25 (King World News) – Gerald Celente: As we have been reporting, there is growing consensus among government and the corporate “Bigs” that economic growth will slow as prices continue to rise, pushing the world closer to a global recession that will reduce living standards around the world.
“Higher food and energy prices are having stagflationary effects, depressing output and spending and raising inflation all around the world,” U.S. treasury secretary Janet Yellen noted in Bonn, Germany, last week at a conference of G7 finance officials.
Soaring costs of energy and food will be a dominant concern among world leaders, she predicted.
“The U.S. is best positioned to meet this challenge, given the strength of our labor market and the economy,” she said.
However, the U.S., like the rest of the world, will not be undamaged.
The country will experience “some pain” as the U.S. Federal Reserve labors to rein back inflation, Fed chair Jerome Powell predicted earlier this month, as we reported in “Fed Head Warns of “Pain” in Fight Against Inflation.”
“It’s going to be hard to avoid some kind of recession,” Wells Fargo CEO Charles Scharf said on 17 May at the WSJ’s Future of Everything Festival.
Around the world, food shortages, sparked by crop failures, the Ukraine war, and Western sanctions against Russia are continuing to drive prices higher…
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Leaps in the price of bread have set off street protests, some fatal, in Iraq in March and Iran this month, highlighting our Top Trend of New World Disorder, which foresaw street protests, social unrest, and political chaos in response to poverty and war.
The U.K.’s annual inflation rate moved up to 9 percent in April, another 40-year high; the U.S.’s rate was 8.3 percent, also the highest in more than 40 years.
That already leaves consumers feeling like the economy is in a recession, although technically it is not yet, the WSJ said.
“Five dollars spent at the local café might get them a medium coffee instead of a large,” the WSJ pointed out. “Three hundred dollars might get someone a flight from San Francisco to Denver but not to Chicago.”
As prices rise, Americans are beginning to forego saving.
In December 2020, the U.S. savings rate rose to 13.7 percent of income, compared to the 8-percent average that prevailed pre-COVID.
However, in March, the rate fell to its lowest in nine years, the U.S. commerce department reported.
Ultimately, persistent inflation will cause consumers to cut spending, which likely would force companies to lay off workers, Diane Swonk, Grant Thornton’s chief economist, told the WSJ.
That would begin a period of stagflation, defined by slowing growth, stagnant consumer demand and rising unemployment, she said.
We have said repeatedly that the outlook is not for stagflation but Dragflation, our Top 2022 Trend marked by rising prices and declining economic output.
Dragflation will dominate as the world economy enters a recession in the next few months.
Also of importance…
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***To listen to the man who has become legendary for his predictions on QE and historic moves in currencies discuss the incredibly dangerous scenario the world faces as well as what to expect from major markets including gold CLICK HERE OR ON THE IMAGE BELOW.
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