skyreach

By SKYREACH, IG Client blog, 2 September 2022 We all need some kind of “news” about financial and investing data. But have you ever thought which sources of “news” are reliable and which are not? And have you tried to make logical sense of their contradicting statements, or do you just accept what is written? Whether you look at Bloomberg, CNBC, Newsweek, fortune, trade or professional magazines, etc... Often you come across conflicting or illogical conclusions. For example: The New York times august 12 2022, said: “stocks record best stretch of year, as inflation fears recede”. Same day Bloomberg suggested the market maybe out of the woods due to a bullish signal. Reuters august 5 2022, reported: S&P500 ends down as jobs data rekindles rate hike fears”. Seeking alpha august 22, reports : “the S&P500 registers small dip on gloomier economic outlook”. By Aug 31 markets fell due to hawkish fed rate statements. If by now you have stomach ulcers, I do not blame you! News create emotional reactions as they input emotional reactions in the first place. And their data reports are usually a general statement of a single factor or two only. Or you get a specific generalisation only. So how on earth can you evaluate bits of headline news or its contents which one day say rates hike is good then another day that it is bad? This is not based on any economic rationale but an emotional reaction to an immediate news story. The true economic and investing picture has metrics, indicators and probabilities and a longer time scale picture of the main direction of these metrics. Any short term picture can change like the flip of a switch. So none of this can be used as it is an immediate news reactions, and sometimes, hype. Human psychology affects us all, and hence how we then judge that information. Out goes any analytical thinking you had!!!! It happens regularly. You can even go to media archives see tons of past examples. Also, you maybe aware that all major financial companies ( as in all industries ) have and use market intelligence which is for their use only, and the PR department that feeds only the slanted news and data they want, to improve their image or to entice us for their products. The media facilitates this as a messenger. The media as a whole is good at sensationalising, hyping and slanted news at times as they like to push our buttons or get us to buy their news. So relying on “news” for your investing, or to base your economic ideas can be fraught with dangers. Find a service that provides insights, like IG, you are now using, and books on the subject. Note that any tom, **** or harry can be “great” investors in a running bull market. You may just randomly pick a stock and you are likely to have a winner. Usually the majority of the general public gets in on the last phase of the bull. The true smart big professionals have started getting out from that time (most do not). Use the technical theories, laws, empirical formula and facts of your chosen subject. Do not just rely on “news”. News are short term for seconds to hours. It could be right or wrong on any given occasion by chance, usually not by design. So, even as an investor, be a professional. The big players in the market take advantage of us general investors. And yes, it is difficult to navigate all this if only because: some professionals tell you xyz is going to go up, another recommends you do not: a professional economist tells you the economy is still bullish due to, say, the jobs report, another tells you we now heading for a crash. What do you believe? Heck, if you believed everything they tell you in the media you will end up a nervous wreck!!! One minute this, next the other way, get in on this, now get out of it!!! Hence evaluation of any information is of vital importance. And that depends on your skill of evaluating. See my past blog on this. Every new generation of professionals think they “know what it is all about”. They do not have enough experienced wisdom, historical know-how, nor have they horned their skill base. Some are arrogant and over confident., but most not, from my experience. This is why mistakes get repeated and they fall into pitfalls in investing (when it is most unexpected). And in recessions lot of companies ditch many of their experienced professionals for “cheaper” lower level professionals. Hence much experience and the valued insights are lost. And once it carries on like this for a few generations you have what i call the lost technology of expertise. Lot of industries lose their high quality products during recessions and some end with poorer quality products. Other company's might take advantage of this. As regards the fed their record of evaluating cannot be said to be good as they get the economy into trouble and there is an inability to handle it before things get so bad. Economic predictions are ever changing. Fundamentals get flouted. So in my view any central bank is not causative but reactive in actions because their “cause” actions follow their reactions. It is similar to us reacting to news then we we get “cause” to do something - right or wrong. A true professional would know his know-how well enough to be able to have some foresight in doing something right before it gets worse. Currently the fed tells us, rightly, we are going to have a recession. It is not because they have to tighten the rates, which will cause the recession, but because they know from experience that it always happens this way. So what was missed in the first place? This is never spelled out. What was the primary cause beforehand, to it? They know it is inevitable that a recession will follow. They cannot stop it. Some other central banks are in a denial. The odd thing is nobody realises that psychology affects them all too, in my view!!!!! What do you think? Read my recent blog on “financial conditions – red alert” for more on this.

PROPETY PRICES Go back 50-70 years the house prices were far more stable and if they rose then it was very slow, with a small rise. Houses were treated as places you live and not treated as a capital investment . Europe was even more stable for house prices. Property companies and estate agents are the vested interests who encouraged the change in attitudes and of course the greed factor follows. Even governments has got in on the act by charging various taxes. Then again governments cannot think outside the box and create income streams from other means / sources other then taxes. That is the bigger problem for all, otherwise taxes could be reduced or eliminated on houses. Renting investment is different. and expected.

The FED wanting to weaken the economy or loss of jobs is a weird way to go about it!!!!! The FED should just reign in EXCESSIVE MONEY SUPPLY THAT DRIVES THE EXCESSIVE MOVES IN THE SHARE MARKETS, COMMODITIES, HOUSE PRICES , DEBT-LEVELS , ETC... ALL ARE HYPER-INFLATED. Otherwise the market will play it out as the BIG BOYS KNOW WHAT IS GOING ON FROM THEIR INTERNAL ANALYSIS, WHICH IS OFTEN DIFFERENT FROM THAT GIVEN FOR PUBLIC CONSUMPTION. THEY HAVE ALL THE METRICS AND INDICATORS THAT WE DO NOT. The "sorting out of the economy" should be to CHECK THAT INDIVIDUAL businesses ARE OPERATING ON THEIR OWN BUSINESS CONDITION. INTEREST RATES ARE ONLY PART OF THE PICTURE THAT TAKES THE FOCUS BECAUSE OF THE HISTORIC DEBT BUILD UP AND EXCESSIVE PRICE RISES IN MANY THINGS. They know all this cannot be sustained and a recession will follow despite the FED claim they are in control and will put the economy down. It would happen if they did nothing!!! The FED, and other Western central banks have stopped giving forward guidance. WHY? Because they have no idea what consequences will follow. OR, if they know then they are not going to say why. Commodities price rise is a BIG PROBLEM and may remain for sometime. But they will blame it on the current war --- yet the price rises BEGAN A YEAR BEFORE THAT WAR CAME BY. THEY HAVE TO JUSTIFY WHY SOMETHING IS HAPPENING BUT JUST ASSIGN A RECENT CAUSE THAT IS NOT THE PRIMARY CAUSE OF THE PROBLEM. BIG SPECULATORS WITH BIG MONEY FLOWS GOVERN THE MOVEMENTS OF OIL, GAS, ETC... NOT THE NEWS (THAT IS A SHORT TERM EFFECT). Time to time they will try to make others invested in it wrong and lose, hence the volatilities. Yes, one has to know one's own psychology in investing. THE WHOLE KEY NOW IS THAT WE ARE IN THE BEAR MARKET THAT UNFOLDS SLOWLY, THEN LATER DROP MORE RAPIDLY. AT SOME POINT THE BULLS WILL SUFFER BIG. Huge bulls exist now that is based on margin debt investing by big players, like hedge funds. So, what do you believe to be true --- BULL OR BEAR? Elon Musk made a mistake of considering to buy Twitter in the first place. BUT THIS TYPE OF ACTION OCCUR WITH SOME OTHER COMPANIES AT THE PEAK OF A BULL MARKET AND EARLY STAGE BEAR MARKET. Governments have their arms twisted by influence of the fossil fuel companies so new clean energy takes a back seat. The current events show how wrong it was NOT to force fossil companies to change faster in the first place when they could financially (no problem).

Two things are determining inflation currently. 1. Excessive money supply pumped into the economy by the central banks via money printing (digitally nowadays), called QE that is not been significantly reduced yet!!!! They are only focusing on rate hikes!! 2. Major energy and other soft commodities prices rises. These two are killers of the economy. So inflation could continue to rise in places. Excess money is also used by bankers and financiers to speculative in push commodities prices in either directions. By empirically defined recession indicators, YES, we are in the throngs of a started bear market / recession (likely to be deeper later). Debt burdens will have to be reduced, many will do it when in big losses and not act before (as they HOPE it will not be the case). World debts by countries is usually in dollars hence increasing dollar value IS BAD for them ( and for central banks) and so the world recession fears now.

TO BE OR NOT TO BE by SKYREACH, IG client, 30 August 2022 The EU Commission has been in denial of inflation pressures despite the real world events taking place around them for some months. Now they may be forced to act by these events. The EU, like some other countries are ALREADY IN A RECESSION BY ALL DEFINITIONS. In the EU Commission's case it is,behind the scenes, more worried about the servicing of the huge debts of southern member states as that goes up with the rise in rates. So various metric tools are used to justify a delay in handling the rampant inflation rise. Now, this may be a wrong assessment, then they are still TOO SLOW ACTING ON RATES, OR EVEN IN REDUCING THE MONEY SUPPLY SUFFICIENTLY. TOO LITTLE TO LATE TO HANDLE WHAT IS IN FRONT OF THEM. As my previous several blog have stated, that it is the CONTROL OF THE MONEY SUPPLY THAT NEEDS TO BE ADDRESSED, NOT JUST THE INTEREST RATE. Not all economic metrics are going show “recession indicator” SINCE MANY LAG and each sector of the economy has its own dynamics until they too get pulled down. It IS WEIRD HOW ECONOMISTS AND CENTRAL BANKS, AS PROFESSIONALS, DO NOT UNDERSTAND THIS. Still, overall I believe central banks are aware of this and have all the metrics in front of them but the assessment is faulty. Hence the reason why they are slow to act, or it is s too little too late, or just ineffective in handling the situation. Time will show which of these plays out the most. See my recent blog, “FINANCIAL CONDITIONS RED ALERT”. Also governments (which includes the permanent mandarins) are impotent in handling the economic and financial side of activities. It is dismal. On the one hand they are reliant on financiers and central bank advise and actions, whilst they remain confused and glib in knowing the real state of business conditions (not macro-level), inability to handle malpractices, historic debt-levels they helped and allowed to continue, and what the abuse of over supply of money can do to the economy. Upping the positive sound bites ( false positive PR) will NEVER MAKE THE SITUATION GO AWAY, e.g. US government (mid-term politics) refuting any recession even though it is, by agreed upon definitions. The latter is just wishing things to go away instead of DOING SOMETHING about it correctly. All central banks failed to act fast in a timely fashion. Now FED chief Jerome Powell is being straight forward and honest of the recession that is in its beginning stages. ALL CENTRAL BANKS KNOW TOO WELL THE EFFECTS OF INCREASING THE RATES ON HISTORIC LEVELS OF DEBTS PILED UP BY INDIVIDUALS, COMPANIES, FEDERAL STATES, AND COUNTRIES. It WILL mean DEFAULTS and maybe some bank failures (as they took too high a risk that cannot be measured easily). FOR THESE REASONS I believe a deep recession will take hold down the line. The markets are in early stage bear market, I believe. The FED chief has admitted recession will be too now. And the solution is? It is NOT another QE. That would prolong the economic agony with an apparent ointment that will not handle the primary “disease”. That would be adding more petrol to the fire.

By Skyreach, I.G. Client, Blog, 26 August 2022 Here is my current take and innovative thinking on the economic world. I hope it sparks a new way of thinking, solving problems and lead to better theory models in economics, finance and the political arena. In a seemingly complex financial world many wonder which way the economy will turn as of July 2022. For years central banks, particularly the Fed, worried about deflation and so hugely expanded the money supply (called QE) and the excess money went into the markets. Excess money supply creates inflation and the hope is it cancels the deflation. Deflation comes about either by prices falling for goods and services (cheaper), or by excessive growth of debts that eventually have to be liquidated. On the other side most economists go on using the same old theories, linear extrapolations and certain assumptions that together provide a baffling array of options, and ever changing predictions that cannot match changing current realities. Consider the agreed upon fact that collectively, households and businesses spending, saving and investments are dictated by funds in the economy, yet what has fueled the excessive levels that exists in the first place, is not recognised. That of the alluring lowest interest rates levels along with the massive money printing over an excessively long period. Because of this historical levels of debts have funded lot of the spending and investments, not genuine real money earned-based expansion. The attempt was to grow ourselves out of the huge debts in the economy and government, with more debts!!! Logical or illogical thinking? It didn't work. It defeats the purpose of reducing government debts and all others. Look at the margin debts by financial companies alone, now, mind boggling levels!!!! And no company controls its run-away expectations. It is a recipe for disaster. Then many professionals and governments will wonder why the deep recession. Having kept the rates so extraordinarily low for so long only prolonged the inevitable and build a bigger implosion to take place when inevitably the rates do go up. Also too, during the pandemic further QE was added to the system needlessly as spending, investments and business activities were stifled at historic levels around the world. Hardly any business activity yet QE continued when there was no major industry liquidity problems!!! Government spending shoot through the roof to support the lame businesses and households by increasing their own debt levels. Huge government borrowings financed the scheme. Much of that was abused and it showed how poor governments can be at managing its use, and not be accountable for it. What needs to be controlled? The huge surplus of money (QE) needs to be curtailed to conquer inflation, as that is what caused the over-inflated spending in financial markets, and mega-debt build up. We have a bubble everything economy because of it, over inflated prices of everything, including housing, commodities, bonds, market valuations, various types of debts at record levels. No economy can sustain that forever, something bursts or implodes and deflation results later on. That has been proven by past experiences, repeatedly. Problems of inflation and deflation There is a confusion with what inflation and deflation are. Few can see that there is good inflation and there is bad inflation. Similarly for deflation. Inflation caused by over-expansion of money supply is the bad culprit. It means purchasing power loss and more costs. Whereas inflation caused by natural price rise of product costs is not. It was needed by business to run their business well. Deflation caused by huge debt-build up is the bad culprit. This means unprepared businesses get into difficulties and cost increases stifle their business. Less jobs and less spending money means less savings, spending and less for investments. However, deflation caused by productivity increase, product price falls, and more technology lead efficiency represents good deflation (that is what we had in the recent past). Cheaper goods saves people money. That translates to more savings, spending and investments. Savings only increase if interest rates are at correct levels. Hence there are positive and negative components of inflation and, deflation. Hence a simple aggregate summing of the negative with the positive does not cancel each other out or handle the situation. Of paramount importance is that each has to be recognised and handled accordingly. Any business needs people for their sales. That is the key, the base support. So if they are not allowed to flourish and prosper then that directly affects businesses. Governments have been “busy” enforcing “get them to spend, spend, spend philosophy” in the hope it will “cure” their reckless ever growing mega-huge debts that has been the culprit. They penalised their base support foundation that had not caused the problem. Central bankers either went along with it or advised the governments to follow this plan. Either way, neither realised they violated the foundation of the symbiotic relationship (explained below). The cycles of equities markets and that of the economy are different. Different in rhythms, lags and laws. They both share a common bullish and bearish periods, overall. The efficient market theory has a lot of problems standing up to the real world economic realities and results, and even with the share markets. Besides that, lot of the variables can be manipulated to juggle conditions at the micro-level but it is violating the known laws that show the faults of the theory. The theory also implies that no manipulation or unethical practices, will take place as all humans are acting rationally and consciously, with full and correct use of the known laws in the related subjects. Who is kidding who? Take a look at that theory, how the laws are violated and human psychology! A man wearing great cloths or a suit looks smart but it does not make him a “rational being”, by his looks. Some are not. Just because a man holds a grand position does not automatically make him a smart problem solver. Many are not. A man has a billion dollars does not mean automatically that he is rational, or a problem solver, only that he knows how to make money. He may know little else in life. Nothing else is proven. There are many other qualities overlooked, positive and negative. Hence quality of products, quality of service matter with any business. It makes them or breaks them, eventually, based on the quality of management running the business. In finance it would mean how much returns they can deliver to all their clients, and give the same advise to all, not just to their rich clients There seems to be an obsession in controlling more of the wage-increases which comes about as a result of the excessive money put into the system, or from the commodity price rises. Yet few can say, “lets control the over-inflated money supply” to handle the problem, which after all, began the problem in the first place. Handle what primarily caused it. Is that difficult to recognise, and do? But many may not easily like that as they have gotten use to excess money to elevate the market prices without the relative increase of GDP compared to the previous bull phase. This gives a false sense of feeling good as the association is that the counterpart, the economy is really doing good too. If that were true then the mess in the system would be clearing up. Different types of symptoms present are confused when the incorrect “disease” is identified for a remedy instead of the correct “disease” / remedy, which would work. Problem solving requires we define the problem clearly and tackle the primary cause, not juggle and manipulate variables due to secondary or tertiary causes for patch work solution and get temporary relief, then find “other major problems arise”. Financial conditions tighten when businesses, and separately, the markets, realise where they are at. If a business is expanding that is good, if a sector is in recession then they will have to adjust to it and handle it. They should be following their business condition, not the general economy's condition alone. This is all assuming that they are left to handle their own financial responsibilities and not given financial aid from government or the over played QE drama and excessive borrowings to fund big government programs, i.e. excessive money printing, or attempt to “prevent” deflation! To get the market, and businesses efficient again then, they have to manage their own finances, and business activities. Recession results due to debt liquidation to raise cash to pay off unsustainable loans. Any recession clears up quicker if industry is left on its own to sort itself out. It always clears out the “dead wood” for a more proper business environment which is stronger and leaner. Politicians do not seem to have realised this having been fed other assumptions as “advice”. History of the early 20th century us example shows that the only time when no government aid was given or present, the economy recovered relatively faster. At all other subsequent times aid was given (excessive money-printing schemes) and the recession lasted longer. And, governments do not have a proper system to keep a critical eye, overseeing, that businesses manage their fundamentals properly based on a workable-based empirical formula. Life is more about micro-economics then just that macro “stuff” alone. Easy money enticed the businesses at the micro-economic level to feast on cheap debts and so some may not now be able to cushion themselves from the financial pressures of a looming recession that will come, sooner or later. One cannot blame the government for industry's misjudgments or malpractices, and government cannot “fix” everything for them. Nor can advised governments continue to enforce people to spend, spend, spend by various clever grand schemes, especially once digital money is enforced, as money. Cutting the survival level of the financial world's support base (reducing savings and investments) does more harm than good. It penalises the good and rewards the actual wrong doers. A major irony and counter productive. Jim Richards, analyst, lawyer, investor, author and top level advisor to governments, CIA and the fed, has written about the dire outcomes from digital money as the us president has passed an executive order to authorise it. Japan's mega-debts and long term QE use has had relatively few major financial disasters due to the very high savings culture that has always existed and remains. It is also a major manufacturer of products sold world wide. That has sustained the system for so long, until it cracks. The world financial system is delicately linked and most follow the same monetary theory so end with similar major pit falls, though the dynamics can be different for different countries. China's businesses are finding similar problems. Only they seem to be “new” at realising that you cannot solve an economy by excessive money printing or excessive debt build-up. Hyper-inflation build into many parts of their economy but the worst being the property market. It economically awaits a disaster, no matter how it manipulates its variables and thinks it can do patch-work solutions like the west has tried, again and again, and again. There is no doubt that we can “improve statistical figures” by patch-work manipulations for a while but that defeats the whole focus and energy away from the true economic scene and lasting solutions. Then you wonder why booms and bursts happen so often!!!!! Following “conventional wisdom” constantly has not solved it but repeated the problems to occur repeatedly (periodically). Rarely can professionals isolate the solution by asking themselves the following: “what is it that we do wrong that leads to booms and bust, so often?” There would have to be something wrong as we keep on repeating the same problems, time after time, after time. One ex-fed chief is known to have said booms and bursts are no more well before the 2007 bearish period, all because we had QE!!!!!! And yet here we are once again, boom and burst. Ask most people about pressure and equilibrium in the mechanical world and they will understand the concepts. Yet, few seem to have realised similar principles (not the same) exists in the real living world. “pressure valves will blow, conditions crack and non-equilibrium conditions crack open other negative events”. Even fewer people realise that life forms and livingness runs on different laws yet may have parallels with the inorganic, non-living material (matter) of the physical universe. Matter has no consciousness but life-forms do have, at different degrees. Man stands at the top of that tree. We associate one (physical) with the other (non-physical) instead of differentiating between them. Hence the dynamics of human activities are likely to have different factors or basis on which they operate on, then are currently recognised. How we associate, or react to, or personally consider objects, ideas and people comes from our own conscious or unconscious efforts. Hence situations and world events can affect the business world. However, businesses can ride out these storms providing their business fundamentals are maintained and economic fundamentals are not violated but unfortunately many will not have been focused on that. The recession will find them out. Primarily life is based on symbiotic relationships, not the brute force of the physical universe which we are attempting to conquer. Brute force equivalent is the dog eat dog mentality that some humans use as their negative reactions. Examples Economists extrapolate linearly assuming it will carry on the same way as it did in the past, then wonder why they have to change their prediction all too often. Governments think that to improve “education” you handle bad run-down buildings and have good aesthetics. Yet they, like others, forget that quality of teaching is the real key. Third world countries have greatly educated people even though their surroundings are far far less pleasing and “run down”. We get a fast inflation rise. What caused it? Blame rising prices, blame wage-increases, blame xyz that is happening now, but you forget to blame the real culprit that started it earlier on! The excessive money printing in the system and the excessive encouragement of debt-build up with low rates, and then justify that businesses need “growth”. Law of money-supply violated. The symbiotic relationship is broken too. Should businesses not manage themselves? Do they not know what they need to do to run their business? They know, obvious as it is. So, how come fundamentals are flouted by many? Focus should have been on business fundamentals. You cannot make money if you do not sell enough and it does not matter what the rates are. Can executives run a business properly, or run it into the ground? Period. We all know rates go up and down, a fact of economic life. Yet how surprised are companies, governments and financial institutions (who should know even better) when rates go back up and consequences of servicing debt costs will go up. Would that come under unprepared / bad management? They carried on as if “nothing” is wrong or any over-abuse is taking place (e.g. Creative accounting) or excessive loans needs to be worried about. It is as if there is no consequences to consider, or any financial destruction that could follow. Until that is, it happens. Past long gone civilisations and empires had no survival longevity, long term. Why? Well they usually began with trade and fair exchange, and a good ideal purpose and flourished. But later on it ended up by looting, confiscation of wealth of people and other nations treasures or properties. And then followed the wars or civil unrests as a result. Even today confiscation of wealth is the main attraction and used all over the world. It cuts the base support they have and that is hardly ever realised. It also applies to governments too. This is the violation of the law of exchange. Trade is done by exchange, trust and good relationships. Break of any of these factors lead to various problems and injustices. It is bad enough having physical universe disruptions at times but man is worse at causing his own various disruptions. Just look at the problems we have in the political, economic and financial arena alone, right now. Mankind has created his own environment he has ended up with. And a francy of destructive practices pulls us back and many do not realise it is man-made. Nature definitely did not give us this. Conquering financial problems, the planet, the moon, and mars could be our next vast expansion over the very long term. There is plenty to conquer and expand into out there without fighting amongst ourselves as the human race and ruining our own planet in a francy of malpractices that are destructive for us all. Some people will not feel the effect of a poor economy or bad practices, as much as the majority, until it gets extreme. Rare is the person who initially sees the knock-on effects that will follow. Businesses can only thrive if they have products that are needed or wanted, have quality built in and good management. In Britain and the USA we have become far more reliant on servicing led industries instead of manufacturing. Asian countries like china got huge benefits when the western policies changed to let manufacturing be done in china. The lure of cheap production created a loss of control and dominance in manufacturing that once existed. It was not a trade war that did it but sacrifice of the ability to make things ourselves. Then government and businesses wonder why the trade imbalances occur constantly. This is where governments need to improve. Innovations and new products of the coming future will help tremendously but for now we need to look at managing the obsession with over printing of money (QE). And businesses need to manage their core business and not be obsessed with piling up debts that cannot be handled, nor used for growing the business as in share buybacks to increase share price artificially. And banks do not want to lose out with lots of bankruptcies so expect governments to bail them out via various legalised schemes. A major breakthrough that has been made sometime ago by harry dent, economist, investor, author, who established the way demographics plays a major role in economics. So businesses and governments can plan long term based on this key model for better results. The digitalisation of fiat money taking place soon in the USA and elsewhere will not change how the money-supply law works, nor can it be flouted. Money is money whatever form it takes. Money is a form of exchange. The pity is it is no longer backed by gold standard for stability, as it was in the past, many decades ago. Business expanding too fast create their own problems, and expanding too slow has worse or different effects. Having a good steady controllable expansion is where the real skill of management lies. So steady viable expansion and profits represents stability. Whilst too fast a growth represents over-loaded with heavy debts and expecting excessive growth by various manipulations. Very slow growth could also means not enough is invested for growth or just have poor sales. We are exponentially expanding our understanding of the workings of the physical universe and developing great many applications, tools and products to make life easier. Yet we keep forgetting that life and livingness, the humanities, have different operating laws for all the subjects that come under it. This area has hardly made any genuine progress in the last 100-years alone. And as profit orientated our business models are it makes no different how much is made if our civilisation is reduced in wars or by extinction and we cannot enjoy life for its sake. Then no one will be able to command anything, nor make profits. This seems to be the hardest lesson we, as the human race, find difficult to learn. Life is not about dominance and obsessive control that lead to disagreements but about building trust, relationships, and willing to live with the national population, and other nations. All past civilisations failed in that regards and eventually died. Let's hope we can all learn from the past mistakes and better manage things for a brighter future. Disruptions often come by and affect everyone yet we manage to get through them, e.g. The pandemic, natural disasters, a bank collapses and wars. These however, are not the primary causes of the more underlying economic problems that have been infesting and brewing for a longer period until it gives way and the system erupts with a bigger calamity, such as a deep recession. Then we blame other current causes which are secondary or tertiary to the primary cause. It is a problem of correct problem identification for the many symptoms that are present. The primary cause is the common thread for all other lower order cause and effects. Finally, how can any country be rich and prosperous if it continues to live beyond it means on debts that is at highest ever by citizens, government and companies? Normally rich would mean that most would be relatively prosperous, can afford anything needed and have cash savings, as the USA relatively was in the 1950s. Government would be balancing the books annually with rainy day deposits set aside. Majority of the companies would be in a viable state, with growing sales and cash flow. Bankers, government and financiers are all aware of the debt problem yet are unable to resolve this without passing most of the costs onto the current and future taxpayers, instead of targeting those who allowed it to happen, or to continue it, and let them take the consequences and the losses.

It is still a wonder to me that Central banks do NOT get it, and perhaps industry. Yes, wage increase pressures are present. That SHOULD BE EXPECTED. Yes, companies have reasons to increase their prices. That too IS EXPECTERD. WHY? PRIMARY FACT: Central Banks have FAILED TO CONTROL INFLATION. THERE IS NO GETTING AROUND IT WITH JUSTIFICATIONS. Taking up various "toxic debts" of banks and companies does not solve excess money printing (now called QE). This only transfer's somebody else's debts onto the government side with no exchange in return, and then getting general bond holders to pay part of it by charging negative interest rates. The culprits who CAUSED THE TOXIC DEBITS go scotch free and it encourages them to maintain such bad practices. It is ODD no central banker thinks of things like this that is SO important. So remind me, what are they professional in? Governments are supposed to take care of the general population's financial welfare, not private industries. Handle the excess money printing, you handle the inflation. Interest rates having to shoot up is a sign of past mishandlings, e.g., using ultra low interest rates ever so long incorrectly. It IS because of this that purchasing power of the currency is lost. It is BECAUSE OF THIS that individual wages and price increases need to take place, rightly, to keep up with the increase of the cost of living. Yet governments and central banks worry about wage increases and price increases as a menace. And they try to limit wage increase. Price increases occur but then their customers cut-back on spending as they cannot afford as much. This IS AN INVERSION in thinking by officials. It develops a vicious circle. The primary source of the problem is out of mind, yet it has been so well known for decades. SIMPLE BASICS ARE NEGLECTED, OR JUST MISUNDERSTOOD. THIS APPLIES TO ALL CENTRAL BANKS, who seem to be copying each other in actions. Mervyn King, ex-UK central bank chief seems to be the only one who has some understanding on the problems of central bankers. It is understandable the the BoE wishes not to head into recession or reduce significantly the GDP by attempting to control interest rate increase. But that is misguided in my opinion. WHY? Rates level manage the Macro-economics, loans, savings and mortgages level control. It is the individual company's operating condition that is neglected. Each company may be responsible for it but they (some) can act poorly, cut corners, use creative accounting, unethical practices, no cash flow, huge debts, not growing organically, non-profitable, taking too huge a risk, etc... IT IS THIS AT THE MICRO-ECONOMIC LEVEL THAT THE HEALTH OF BUSINESSES ARE NOT GUIDED. When a plane is in operation, takes off and fly's it is in good hands, with good control. When "things" go wrong and the plane is out of control we have bad control (for whatever the reason). Similarly the ECONOMY IS IN BAD CONTROL . Governments and bankers think Marco economics will "solve" everything -- it comes out in the way they operate. Letting companies borrow until they have the highest debts ever in history is just one sign of 'bad control'. No banker would over loan a household individual more than he / she can pay back. And oh, they are always made to be paid back. Individual companies can over burden themselves with huge debts yet continue as nothing is wrong, no alarms, no worries. That is, until some economic trigger brings it down and cause an expected domino-effect. But bankers are clever there are government subsides, tax-relief, and transfer toxic debts relief plans in existence, then "all should be well"!!!! REALLY? HISTORY TEACHES US DIFFERENTLY. WHAT IS WRONG? For one, you make the taxpayer pay for others loans, costs, expanses, etc... call it what you will. So industry does not pay its own way as a private industry. Industry then goes back to the same old bad practices. Then, later, they wonder why the average GDP now is not as good as prior to previous recession!!!!! HEY, HAVE YOU NOT REALISED THAT YOU CHOCKED OFF THE BASIC FOUNDATION THAT INVESTING IS BASED ON. ----- SAVERS AND INVESTORS. The thinking is something like this: No, we have to have these existing plans. WE GOT TO KEEP SAVERS SPENDING, SPENDING SPENDING ANY WHICH WAY WE CAN FORCE THEM. WHY, IT IS THE DEBTS WE BUILD-UP -- IT IS TOO MUCH AND HAVE TO PAY THEM OFF SOMEHOW - WE GOT TO MAKE THEM PAY....... AND GROW THE ECONOMY OUT OF THIS MESS. BESIDES BANKERS WANT THEIR LOANS PAID, AFTER THEY COLLECTED HUGE INTEREST PAYMENTS OVER A LONG PERIOD, AND SO ADVICE GOVERNMENT HOW TO "SOLVE IT". After all these years we are no better off. And all end up suffering. The western countries, at least, are living beyond their means. THIS IS THE DWINDLING SPIRAL. IT HAPPENS OVERS DECADES.

INVESTORS, ECONOMISTS & FINANCIALS -- BREAKING NEWS--2 In my previous report, last week, the main theme was about indecisions. Indecision is a killer, in getting things done or solved due to the uncertainties in it. Many reports and commentators are using it but not realising it as it has become so commonplace that it is just accepted as it is, perhaps unconsciously. It usually goes in this way: 'On the one hand it is 'xxx' BUT, on the other hand it is 'yyy' so 'bla, bla, bla'. No definite conclusion comes out of it even with technical data backing it up as it applies here and now, for the current condition. Examples The recession is thought to be here, technically, but the figures do not have the hallmark of a 'recession'! So has a recession began or not? Not definite. You should note that the early part of the recession is not usually recognised as the symptoms are mild and not all fundamentals align for it (do they ever?). It is once it has come and finished that hindsight tells us: 'Oh, it began on.....' The rates should be increased by X but that would impact on a few other sectors. So, should we or should we not have X increase? Debatable! No certainty on what is happening! It gets worse as in a large group where a consensus is required. If the technicals are clear then how come most cannot have come to a similar conclusion? They often pull in different directions yet all are evaluating the same data!! Oh, that has nothing to do with personality. The agreed upon definition of a recession is 20% of major market fall. From the market perspective (historical data). Two quarters of US GDP falls, based on economic basics. Basic 2-yr and 10-yr US treasuries show inversion, this metric indicates a recession ( a major well known indicator). IMF assessment says recession going forward. Congress agrees this too. Global GDP is on vulnerable recession grounds too. US Politicians want to change the definition of recession as mid-term elections coming up. The financial chief, US government, says there is no recession, at end of July 2022. So what have we here? Well, for one, there may be some confusion. Two, the weighing of the importance of certain data is differently evaluated by some. And thirdly, different groups have different vested interests bias. Mix the three and you have quite a stew of information going in different directions! Vested Interest Examples. Oil Industry has a major spill at sea or at ashore. They are charged what can be considered as a 'minor charge' for this, not the full cost of the clean up. Particular in the USA where there is a law (aided by vested interest groups) to limit the charges despite the cost being a lot more. So the financial burden is put onto the government and hence for tax payers to pay off Many good health break through improvements are made by research using nutrition, particularly in the USA, yet the findings are suppressed from a broad big media announcements. Big Pharmas are the opposing group as they want to have the “solution” based on a drug formula and use these findings to create their own costlier drug based one. If they can come up with an alternative (not as effective as the nutritionally based original) then they have a 20-year exclusive rights to sell it to health establishments – that means big fat profits, and a big monopoly. You may ask why do western countries have mostly a drug based therapies used only in hospitals? Vested Interest biases have had great influences over a long time. The gambling industry loves to take peoples money (you want a bet!). It puts a lot of people into financial trouble because gambling is addictive for many. But governments loves it currently as people are employed! You'd think they would come up with better constructive ways to get people into good types of employment. No moral concerns exhibited here. Not an optimum solution? That is why the word vested interest has got associated with dirty tricks and bad specialist interests. All industries have their own Vested interest, i.e. the purpose with they function or exist. But functioning purely for the exclusive benefit of a select group or few groups or acting against the opposition ( overtly or covertly ) in a harmful or destructive way can be detrimental, e.g. like the competition. Biases are part of the human psychology make up. So that can be negative, harmful or destructive depending on how the bias is used and how many it affects. So long as it does not cause damage to others, or other industries, or to the general population, or throw any financial burden onto others who are not responsible for it then they are playing the “game” with proper ethical basis. Life has a symbiotic relationship. Both need each other. Ruin of one can damage the other. Big industry slowly destroys the environment then we ALL SUFFER, EVEN THE CAUSERS. You do not have to look any further then the history of past civilisations. Their destruction had failed economics under currents and vested interest groups triggered political and warfare troubles. Our modern “civilised” world faces similar problems. During or after recessions we have political troubles, warfare, and negative moods or behaviour and that increases, along with violence and crime. Current example is the Russia--Ukraine war. After the Soviet Block collapse the Warsaw pact reduced in numbers and a general agreement with the western countries for NATO not to increase. Bur the EU being EU, wanting expansion by engulfing more countries, including ex-soviet countries, then it began to alarm the Russians. The Western countries like the UK and Europe were happen to take the trillions of Russian money and have these, often, ex-KGB, in government circles and the high society. Until that is, the last decade of differences and disagreements that triggered the current war. Hence any industry or government optimising it needs with those of society at large and working with society at different levels will only better the survival of all, and bring about the long term stability and flourishing of businesses. And resolving differences or disputes of any kind around the table would bring about lasting peace, trust and cooperation. Who would like that? And who wouldn't?

INDECISIONS Lets look at the following statement first: 'In the consideration of that consideration we consider what needs to be considered'. If you understood the word concept 'consideration' fully then you will see that the sentence structure is correct and meaningful. However, did I really say ANYTHING WITH CLARITY, SIGNIFICANCE, WITH A DESCIVE AND WITH SPECIFIC CONCLUSIONS AND ACTIONS? NO. Lets look at the next illustration: 'We believe that the climate is dire and that action may be needed urgently. But looking at the near term future it will be calmer and things should equalise. As to the markets we believe they are frothy, and behaving in an exuberant manner. As regards the rates, If we hike the rates too high the economy may suffer and keeping them fixed as now then high rising costs could be incurred to the detriment of some areas, etc...' Granted the above is a small sample statement but it has the hallmark of some 100-pages or more type report's line of reasoning. The words make sense. But you end up reading between the lines to get some conclusions where none are really stated clearly. Naughty you, reading between the lines. You must be desperate or want a decisive answer from it. NO CERTAINTIES! So, how much clarity and definite but decisive conclusions were made in that statement? Any actions to take immediately to handle factor xyz, or to correct a poor economic condition, or that it will? Also, are the reported statement above considering just a few tools to “solve” the issues, i.e. macro tools only to derive a “solution” ? What about micro-economic tools and business fundamentals? Do you just ignore them and let the 'wind' or 'god' take care of it all? Do we let the businesses go out of control from their empirical-prudent practices, replaced by bad unruly practices? A friend once said that he and colleges designed and made an aircraft starting with a concept on a back of an envelope!!! They designed it, proved a working model, then a real working experimental model until it worked well. This took subject know-how, and good technical skills, and the correct tools to create a workable craft. Well, I realised that it is no different in any other profession. Of course you have to translate that battle plan with relevant data / applications in the other professions. Businesses and investors need good workable models and precise tools to give indicators that will allow us to identify where it is going wrong. Then the solution IS CLEAR AND DECISIVE. But in every profession there is ONE PAREMOUNT FACTOR THAT COMES IN THE WAY ALSO. Human psychology. We have fixed ideas, we maybe acting on false ideas, we assume incorrectly, we use theories that result in destructive chaos yet continue to use it, we may not like to change our habits or behaviour, greed rules our emotions, etc, etc, etc... How can you conquer that? You may now see why I rant about central bankers, and bankers plus economists. It is NOT THEM PERSONALLY, but the the other facts no one is making them aware of and highlight significant points. Maybe, just maybe, we CAN CHANGE for the better, down the future road. I will leave you here to ponder over that. Have a good day.

The FED has to control the run away inflation. Increasing interest rates is ONE WAY. The OTHER WAY IS to limit the money supply levels. That lever is not usually used these days as we have become addicted to over-supply ( now called QE ). When the FED says no evidence of economic recession. Yes, true in a sense. The FED has ALL THE METRICS IN THE WORLD TO EVALUATE REALIST OUTCOMES. However, the FED often get it wrong. WHY? Economic models based on theories, assumptions and their biased prediction of where they thing it will go. More importantly, as has been bourne out in each major market crash, the economy flows afterwards in slowing down or crashing. It LAGS the market crash (from its top). China is a poorly run country with many false or massaged statistics . It has over shoot its own mountain of debts. Like western countries (whom they copied) they have fallen into this economic trap due to the over-supply of excess money. LIKE THE WEST, THEY DO NOT KNOW A FEW KEY PARAMETERS THAT ARE IMPORTANT TO NOT VIOLATE .

The "Debt to GDP Ratio by Country: State of Global Debt 2022" article highlights some crucial points. But I wonder if these Debt-to-GDP figures by governments are reliable, as often accounting rules and practices varies and fudged by use of assumptions. Most central banks have proven to show they either do not have good applicable skills in the achievement of long term stability, or the theories they used IS THE PROBLEM, ALONG WITH THEIR ASSUMPTIONS. It is, with them, always a roller coaster ride. And, they did not even see the recession coming, until it was upon us, or someone pointed it out ( to those they listen to ), that it is in progress, before the rest found out. The 2007 recession, for example, where almost everyone was thinking and claiming a great economy, as even when the markets had already started to fall from their all-time high of that time, months later the very big fall occurred. QE's really served to do the opposite to the intended goal. Not surprising since the money supply was violated by over-use, or is it abuse? Maybe it has been some generations past now when private economy, industry and banks use to handle their affairs without government interference. Once upon a time there were no phony laws passed with the aid of bankers wanting "easy and relaxed financial laws", and help with bail outs to save the top banks and big companies when they fail ( as in 2008) or "free" subsidies. if they fail, whether its the external event that brings the critical trouble, or its by their own mess created, their CEOs and executives failed to plan for such occurrences and use prudent financial practices. After all, we have had many boom and bursts and shown the need to take it into account. Yet, NO cushion of cash kept aside for the rainy day by many companies, instead reckless binging on debts. Central banks happy to encourage such practices too, thus creating an unintended future potential spiralling domino effect collapse. Politicians too weak to confront this very problem at their feet. Perhaps the current culture of appeasing the public to spend, spend and over-spend in their 5-year term, and the confused blind belief in the central bankers and economists by pushing aside the traditional prudent practices and personal responsibilities of individuals, companies and bankers. Private industry use government as a punch bag or for "free money" to bail them out when needed. EVERYONE HAS FORGOTTEN THAT GOVERNMENT, ONCE UPON A TIME EVERYWHERE BALANCED THEIR BOOKS ANNUALLY. BUT APPEASING POLITICIANS, AND BANKERS, HAVE VESTED INTEREST IN EXPANDING DEBTS, EACH FOR THEIR OWN PURPOSE. GOVERNMENRTS ARE THERE TO GOVERN, TO SEE THAT GOOD AND JUST LAWS EXISTS, ARE USED, ETHICS MAINTAINED, MONITOR GOOD PRUDENT PRACTICS AND ARE UNDERTAKEN BY INDUSTRY, NOT CREATIVE ACCOUNTING, NOT BE OVERLY-INDEBTED AND BAISC BUSINESS / FINANCIAL GUIDENCE USED. IF THEY CONSIDER ALL THIS IS TAKING PLACE, THIS FELLOW HAS GOT IT WRONG, THEN THERE SHOULDN'T BE ANY BUST ISSUES ANYWHERE, SHOULD THERE? WOULD YOU FINANCE, TO ANY DEGREE, A COMPANY WITH MILLIONS TO TRILLIONS IN VALUATION BUT HAVE NONE OR LITTLE CASH FLOW, NO PROFITS EVER, AND EVEN HUGE DEBTS? WOULD YOU FINANCE, TO ANY DEGREE, A SPECIAL PURPOSE COMPANY, THAT DOES NOT SAY WHAT IT WILL USE THE MONEY FOR? BANKERS SEEM TO BE HAPPY TO ALLOW IT, ECONOMISTS DON'T SEE THE PROBLEM WITH THAT, POLITICIANS APPEAR TO BE BLIND TO THE ERROR OR FLAWS IN IT, AND FINANCIERS AND INVESTERS ARE WILLING TO GAMBLE WITH IT. SO WHAT COULD GO WRONG? MAYBE THER IS NOTHING WRONG AT ALL. NO FLAWS. MAYBE IT IS JUST ME WITH A SENSE OF "SOMETHING WRONG HERE, SOMEWHERE" FEELING. DO YOU HAVE A SIMILAR FEELING?

As John Kicklightrer pointed out: 10-Yr yield reflects the economic outlook, as a growth measure tool. The 2-Yr yield reflects the Interest rates moves. WHEN THE SPREAD INVERTS A RECESSION CAN BE MORE LIKELY. SO, HOW DID WE GET TO HIGHER INFLATION? Most economists and financiers forget that IT IS THE MONEY SUPPLY THAT GOVERNS FUTURE INFLATION LEVELS. The FED knows this yet it does the opposite to its control, by having QE for a very long time. Maybe they think they are the gods of the economy..... yet they cannot foretell the effects of QE beforehand or they are trying out a desperate measure to create growth by more and more flooding the market with excess fiat money, WAY BEYOND THE GOODS AND SERVICES DELIVERED. IT IS BACKWARD THINKING TO THINK GREATER GROWTH WILL OCCUR AND MAGICALLY MAKE THE ECONOMY DO WELL. YOU CAN LIKEN IT TO GIVING A JUNKY **** MORE AND MORE, TO KEEP HIM HIGH IN AN ILLUSION, THUS KILLING HIM EVENTUALLY. OR, YOU STOP IT AND HE SUFFERS FROM THE WITHDRAWAL EFFECTS WHICH NO ONE SEEMS TO WANT TO CONFRONT AND DO, TO GET HIM OUT OF THAT ADDICTION. EITHER WAY, IT WAS THE INCORRECT ACTION, OF FEEDING THAT **** IN THE FIRST PLACE. FOR US, THAT MEANS THE OVER-SUPPLY OF THE MONEY. THIS HAS INFLATED MOST THINGS TO EXTREME LEVELS, E.G., STOCKS, COMMODITIES, HOUSE PRICES, ETC.. MOST OF THIS MONEY WAS NOT USED FOR INVESTING BACK INTO DEVELOPING NEW GOODS, NEW DEVELOPMENTS OR BETTER CASH FLOWS AND CASH LEVELS WITH COMPANIES. MARKETS BOOMING DO NOT REFLECT CORRECTLY A RISING ECONOMY. WE HAD AN ECONOMY GDP THAT HAS AVERAGED LESS IN THIS BULL MARKET (WHICH HAD REACRED HIGHEST EVER VALUATONS) THAN IN PREVIOUS BULL PHASES AND ECONOMIC GROWTH CYCLES. EXCESS MONEY HAS GONE INTO THE STOCKS, SHARE BUYBACKS, AND ULTRA LOW RATES HAVE ENCOURAGED HUGE DEBT BUILD-UP WITH COMPANIES, GOVERNMENTS, HIGHEST-EVER MARGIN-DEBTS, EXCESSIVE BETS IN THE MARKETS, WORSE ILLIQUIDITY-BUILD-UP WITH BANKS. WHY, THE FED WAS HAPPY TO CREATE ALL THIS YEAR AFTER YEAR, AFTER YEAR. LATER ON THE FED IS LIKELY TO SAY: 'Oh, we did not know this would happen', OR, 'this was an experiment', OR, 'this was too complex to see the outcome' OR, 'All central banks have done the same so we all are suffering the same -- not our fault, mate' (i.e., don't take responsibility and resign, and not change any theories we use) etc... IF ANY SUCH EXCUSES APPEARS ( as similar ones have in past phases ), THEN WHY ARE THEY IN BUSINESS? THEY CANNOT CONTROL THE ECONMY WELL, AS ALL BOOMS AND BURSTS HAVE SHOWN; AND HUGE LOSS OF PURCHASING POWER HAS SHOWN; AND AS THE TRILLIONS LOST ON EACH CYCLE BY BUSINESSES; AND EVEN THE GENERAL PUBLIC HAVE LOSSES HAVE SHOWN. RESULTS SPEAK FOR THEMSELVES, NOT TALK. WHEN WILL PEOPLE, COMPANIES AND BANKERS WAKE UP FROM THEIR ILLUSIONS OF BEING EXPERTS WHO "KNOW", YET CANNOT HANDLE OR CONTROL IT? IN ECOMONICS THEY ARE FINE LAWS WE DO KNOW BUT THEY ARE ABUSIVELY USED. ALSO THERE ARE CHANGING VARIABLES AND EVENTS THAT JUST CANNOT BE PREDICTED IN ANY MODELS. CURRENT FUTURE IS NOT GOOD. TIME FOR A CHANGE? ARE YOU READY TO CHANGE YOUR PRACTICES AND THEORIES?

Great answers from Gervais Williams. Now review what Mervyn King states from his experience and know-how about inflation and other key factors, and the problems.

Soaring Inflation has caught out the central banks. They know the key causes of inflation, primary start point is the MONEY SUPPY LEVELS, as I have discussed in my previous blogs. ECB is in a hard place trying to juggle its southern member states mega-debts. So increasing rates as needed to control inflation (like other central banks have started to act on ), the ECB is very slow to act, afraid of this looming problem of servicing debts. They will suffer worse problems down the road and Italy will suffer a lot more , along with Germany ( the member that is financing the southern states debts indirectly via the Target2 system of the European Union members. It is similar to the old Soviet Union accounts system (among its states), and look what happened to them - collapsed. Similar fate for the EU down the line? Central banks have enticed every one ( & all entities ) to borrow like mad because of "ultra cheap rates". That is the madness because rates have to go up at some point, especially having kept them so ultra low for so long. It is not natural economics. They will not be able to control the debt-implosion as they have assisted in creating the debt mountain, in attempting to "solve the economy". IT PROBABLY DOES NOT OCCUR TO THEM OR OTHERS THAT MAYBE THERE ARE OTHER KEY FACTORS THAT NEEDED TO BE SOLVED INSTEAD. WE HAVE GOTTEN INTO THE ADD-ON-LOANS, LOWER & LOWER RATES (EVEN NEGATIVE ) MEGA QE, AND LOWER AVERAGE GDP GROWTH DWINDLING ECONOMIC CYCLE. ISN'T MONETARY THEORY GREAT!!!!!!!! If you think "yes" seriously then I do not know why, when you look at all the failures using this theory, time after time, after time. Same old practices, same old "solutions" hence the same old problems delivered again. Now we have the everything bubble period where the bubbles will burst one by one over time. More generally, Jeremy Grantham has interesting points going forward at:

Thank you for the info, above. And good points made. Plenty of volatility will remain, time to time, in my view. It seems to be a first that the FED acted fast (though still behind the curve), and the rates were raised. Good for them. Unlike EU central bank with their their own creative accounting practices. It would also be good if the FED stop the constant reporting with double meanings interruptible and instead change to give a decisive, firm "it is this, or that we will do this next. The maybes, wait and see, future says xxx, are not of any help in solving the immediate issues and major problems that exist now. Besides it shows they appear to be uncertain despite all the metrics they have at their disposal. And the market takes over control with a relatively better reaction, or volatility, or a brief period of uncertainty. We are NOT out of the woods after years of QE which creates many consequences, it gets any central banker into trouble, along with the rest of the world that has been advised to copy and use this theory. We worry about the geo-politics and war but we create our own domestic problems that are far worse in its effects. JUST LOOK AT ANY RECESSION / DEPRESSION THAT EVER HAS BEEN, SERIOUSLY, AND YOU SHOULD THEN SEE WHAT I MEAN. THAT ALSO SHOWS NO CENTRAL BANK EVER ACTUALLY SOLVED THE PROBLEMS AND THE "SOLUTIONS" GIVEN, INTERNATIONALLY, FAILED TO CURE THE CONDITONS. THOSE ARE THE PAST AND PRESENT FACTS. The market big boys ( other then the users) who pushed up the commodities prices sky high have taken a breather by taking their big profits. It is NOT all external causes that pushed up hugh rises. So these energy prices may come down FOR NOW. FOR STABILTY THE FED SHOULD BE CAUTIOUS TO NOT BRING RATES DOWN FAST IN MY OPINION. A major problem to worry about for the government and central bankers are the key factors that THEY HAVE NOT ADDRESED. IF A FUTURE RECESSION or a DEPRESSION IS TO BE KEPT UNDER BETTER CONTROL with a relative shorter PERIOD THEN WOULD OTHERWISE BE PRESENT. As very smart as many central bankers maybe, the ability to actually solve problems is a different trait. I mean that the economic and financial calamities destructive effects can be reduced and the financial world can live through it, without pushing further covert taxes on the average citizens, or by transferring other toxic costs of companies and banks away from them. Otherwise it encourages malpractices and other financial abuses. These often come to attention during bad times. There are several fundamental natural laws that are abused which in turn, eventually, causes a dwindling spiral of problems for all. The funny thing is the FED was designed and set up by a private group of banks ( "The Bankers Club" ) in order to save their bacon in any calamities by them providing the solutions afterwards. If the central bankers are great then how come they are not in good health? Which factors were allowed to be abused to lead to that? It seems we have got into the habit of not letting individual companies and banks into taking their own responsibilities to solve their own caused problems, or THEM NOT SEEING THEM COMING. Whatever the external factors that come in their way they should be street wise analysts and executives to work through that, shouldn't they?

Yes, it should be a good thing provided the rules are sensible and, primarily to protect the consumer. Often when rules (in law) are brought in there are other bad or adversely effecting additional rules put in too. The whole object is to bring cryptos under governments control rather then merely a good set of rules to protect the "consumers". Vested interest biases are often included. The digital currencies are coming and this will aid that process. The digital currencies are different from cryptos. The famous and brilliant Jim Richards explains this very well. I shall post something from him in the future. So, watch this space!

P.S. on GOLD ARTICLE! MONEY IS AN EXCHANGE SYSTEM BACKED BY CONFIDENCE. THAT CONFIDENCE USE TO BE BACKED BY GOLD, WHICH KEPT THE PURCHASING VALUE OF THE CURRENCY RELATIVELY STABLE --- UNLIKE NOW, WHERE WE HAVE OUTLAWED THE THE GOLD STANDARD THANKS TO THE MISS-GUIDED OF ADVICE OF BANKERS. CONFIDENCE CANNOT BE BACKED BY ANY PR FOR THAT IS TOTALLY ARBITUARY AND CAN BE UNRELIABLE. THIS IS WHY RUSSIA AND CHINA HAVE ACCUMULATED GOLD. THE WESTERN COUNTRIES CENTRAL BANKS AGREED TO GET RID OF THEIRS OR REDUCE THEIR STOCK PILE. BUT THE SILLY THING IS THEY HAVE OFTEN SOLD IT OFF AT THE LOWER PART OF THE GOLD PRICE CYCLE!!!!! HOW SILLY IS THAT???? AND COSTLY!

GOLD, GOLD, GOLD!!! Russia and China have been collecting lots of physical gold for a long time. QE ( EXCESSIVE MONEY PRINTING) destroys the purchasing value of money, and could have caused hyperinflation but it did not. This was, i believe, because of the cheap Chinese products imported that kept prices low or lower. And that commodities then were going down in prices, overall until2021 bottom. However, IT IS NOT THAT WE DID NOT HAVE HYPERINFLATION. WE DID AND STILL DO. This is in the form of BUBBLE MARKETS (BUBBLE EVERYTHING) THAT EXISTS NOW. Once the bubble burst then other dynamics will play out. Inflation does not measure many things. Basically, the FED, along with most other central banks ( who use the same misguided practice they have been preached )have made a mess of their economy ( not all ) and the purchasing power of the currency value ( in local value). Central banks have failed to recognise the true factors that if consciously known would handle or improve the economy. MANY TIMES THEY HAVE FAILED, AND THEN GIVEN "SOLUTIONS" THAT DID NOT REALLY RESOLVE THE DANGEROUS CONDITION. The economy, when it is working, does so BECAUSE OF MARKET FORCES , NOT BECAUSE OF THE CENTRAL BANKERS ACTIONS. The key focus on a 2% inflation target they have seems arbitrary. In a genuinely expanding economy you will have, naturally, inflation to move the expansion forward. YOU ALSO, PRIMARILY, NEED TO HAVE INDUSTRY GROWING ORGANICALLY AND INVESTING IN THEIR BUSINESSES, which in our climate has not been there by many companies. Over indebtedness has hampered their ability in any meaningful and constant expansion. THERE ARE A LOT OF ARBITUARIES THAT ARE USED, BIG BUZZ WORDS USED IN A GLIB FASHION THEN WHEN THINGS GO WRONG --- WHY IT IS ALL A BIG SUPPRISE. IT is at times like this that their THEORY SHOULD HAVE BEEN ADDRESSED TO LOCATE INCORRECT OR FLAWED DATA WITHIN IT, AND NOT CARRY ON USING THE FLAWED THEORY. But human behaviour being what it is, PEOPLE CLING ON TO THEIR TREASURED BELIEFS IN THE FACE OF BEING MADE WRONG. THIS IS A SIMILAR PSYCHOLOGICAL BEHAVIOUR AS IN THE SHARE MARKETS -- MARKET CRASHES BIG TIME, PEOPLE HOLD ON, HOPING AND HOPING, AND THINGING --- NO, IT WILL COME BACK UP, BUY THE DIPS!! THE ADAGE "GARBAGE IN, GARBAGE OUT APPLIED IN ANY DISCIPLINE. SO WHAT IS THE "GARBAGE" HERE? NO DEGREE OF STATUS MAKES YOU ANY WISER.

The natural Gas margin was a steady 3 points , day and night. Now, it has changed to 9 usually (3x previous value(, and 10 sometimes , 5 or 3 on occasions> Why such a big change?

True information is money to those who know how to use it. I thought i share some of my experiences with you to help you, all free, here! I had my share of being made wrong by the markets. Never underestimate the market. And don't enter at random points. If you are going to trade then understand technical analysis, and chart patterns. For many traders, scrubbers, swing, daily and longer term traders many either work in the financial field or belong to some type of technical charting service and so have some angle to trading success. However, non-professional traders and the novice have many hurdles to handle on a regular basis. So what is the thing to bear in mind prior to trading? After all you have to know your game, the environment you operate in. Generally you may consider: The economic factors The geo-politics Newspaper tips (not really good) Company fundamentals Technical charting methods. Subscription services Brokers advice Well, I could add a few others but it points to the the appearance of too much information if all are used. Which is correct or best at the time? Answer: In a well defined bull market you cannot go wrong, most are going up. Most factors will be rationalised as being positive! Vice versa for the bear market. The media tips are often not worth it at all. Fundamentals are ok in the bull phase. Charting, if used correctly, gives a good way to trade in a bull or a bear market. Brokers and analysts will tell you all is fine even when a bear has began. “buy on dips will remain their mantra, it will always remain the case to them. Subscription services, some have a great win rate, others not so. The rest of the points above are a fleeting knee-**** reactions at the time. Beware of the big players and the market makers, in bull & bear markets. They have all the data, trades taking place, in & out. Professionals go after positions opened by retail traders or others. Say you buy, the market trader sells it to someone – that someone is betting against you, often a bigger bet. You may notice this quickly on short term trading easily as the price often moves against you to get your stop loss or to flush you out at a loss before it moves in the original direction. And the last hour of trading is riskier to trade in, as the market makers control that period and give false signals. It is observable with several different indices , e.g. Dow, s&p500, and japan225 move in similar copy moves, similar patterns, often – as happened on 28 June 2022. It does not happen by chance. Professional big bets often do not go via the normal exchange. The public traders do not see that part easily. Market makers cater for their big clients and are more important to their bread & butter. So a big client sells or buys means getting an average sell / buy price to meet the client's required total volume transaction needs. It is done bit by bit, usually otherwise the price will go down or up hard if all was sold or bought at once. Rest of the market will try to catch that. Pension funds, trust funds, and long term investors invest using fundamentals analysis for long term gain. All fine in a bull market, but fall victim in bears and their operating rules are inflexible. Besides they all like herd thinking ( same behaviour ), that's bad practice. That makes them give poorer returns, overall. So when is a bear a bear? Technical definition used is a 20% fall of the underlying. Mostly you get recessions and the big ones are depressions (bigger effects). But the signs are there well before, using certain metrics. In the final stage of a bull market all sorts of stocks shoot up way beyond their rational worth. Tons of hype and buy any stock “will make money” craze is present. And for a short while they do. ( another honey for the bear trap to come, for the uninitiated). In a bear market, it unfolds slowly to start with. There is great volatility, often. Much of this volatility is the selling action of actual underlying shares then others are pushed up. You only look at the overall market index and see it go down, then up. It plays out over months. The big boys are getting out and getting others in with PR from the brokers, newspapers, media, and key individuals. Honey for the bear trap. Hence it is not a market where all win. It isn't called a zero-sum game for nothing. Most investors realise this too late or, go on holding in hope. Individual stocks, good and the ****, go down 50%, 75% or more. This has already happened in many stocks. Do your home work and check. The big stocks like the fang go down last as they hold up the average index price higher. The mainstream PR is that all is either fine or will be “normalised”. They miss-evaluate the current scene. Garbage data used gives garbage results out. The general public relies on this message to maintain their investments. The politician, as usual, is ignorant and relies on false or misleading information from the so called “experts” in these fields. It could be that these “experts” have, as in the past cases, just miss-evaluated and passed on bad information to act on, and given their own “solutions” for the problem down the road. And here we all are, again!!! What did they “solve” in the past? After all, when you solve something it is no longer going to crop up as a problem again and again. Its fixed, cured. So, did we ever get that? No. In the worst part of the initial stage all hell breaks lose. Panic in the markets. Bad news in the media. In the mid and late stages chant of a doomsday scenarios; fear, fear, and more fear is plied into the psyche via the media. Politicians panic and a public outcry. Central banks wait in the wings to give their (incorrect) “solutions”. Tax-write off for companies (fixed in law), subsidies for companies and banks, and more qe to “offset” the banking system calamities arising. The poor public gets nothing (and no tax write offs!) And have to pay for all these “pay-outs” via further covert taxes to come, and the loss of their investments and real estate value. You pay for their created, irresponsible mess due to over leverage positions (trillions) and bad analysis. They will give justifications of that war or this geo-political incident, etc... Being the causes but the primary cause will still be missed out. They will not say we'll write-off our own bad debts and mess, shoulder the responsibility and go bankrupt if that applies (which they should). Instead they put fear into the politicians or that it will all collapse. The politician remains afraid of losing votes, and no clue how to really solve the problems correctly, they depend on "experts". The burst would clear up faster if the bankrupt companies and banks are closed. The government should really “save” only all the depositors in a new entity, and that will then be run by new individuals with a past successful track in the field. Later on the government can sell it at a good profit. After all, you wouldn't want to keep employing incompetent or consistently bad performers in your employ??? Or, would you? New world agreement type solutions that will be put forward later on will not really solve the underlying economic issues as they will not have been addressed, nor identified and handled. Realise this: central bankers everywhere are using a theory based economic science ( currently it is monetary theory ). An exact science the other hand would solve things genuinely To get a good perspective on inflation, deflation, money supply, central bankers, the fed, and more then see my other blogs to gain further understanding of our game's environment and how it was shaped.

This is the topic lot of professionals will continue to talk about but will still remain confused at to what the outcome will be. Some think we are heading for stagflation, others think a big recession and others worry about the sharp rise in inflation only. Everyone has the illusion that an economy is doing well because the markets are doing well. Well, the markets have been running high on steroids ( QE money) and because of the whole masses of companies being fundamentally healthy and organically growing the businesses. We have a EVERYTHING BUBBLE ECONOMY. First thing to recognise is that THE OVER-SUPPLY OF THE MONEY SUPPLY and hence the huge "mount Everest" of mountain debts. The Fed has worried like hell about a likely Deflation for many years and pretended to themselves and hence everyone else that JUST BY DOING QE (HYPER-SUPPLY OF PRINTED MONEY) WOULD BALANCE IT OUT. Central bankers have all bypassed the facts and experiences of history. They live in a self-created dilemma that then affects the pockets of everyone. Their goal is to PREVENT LOSS OF THE CURRENCY'S PURCHASING POWER, YET, THEIR ACTUAL ACTIONS & PRACTICE FOR DECADES HAS BEEN TO OVER-SUPPLY THE MONEY, WELL BEYOND THE GOODS & SERVICES DELIVERED. WHY? WELL, BANKERS EARN THEIR INCOME BY LENDING and USING IT IN INVESTING. SIMPLE BUSINESS ECONOMICS. THERE IS NO CONTROL OF LENDING. After all look around for the companies, individuals and governments that are in highest ever debts that they have NOW. Companies valuations are way way beyond their worth. Businesses are only valuable when they have little debts, are well run, grow organically, and make a profit. Inflation is a misunderstood term. Inflation can be good in a properly healthy growing economy, which we do not really have. That is always balanced by the delivery of goods and services plus the bit more money supply for the expansion. Deflation IS a result of excessive over-lending and hence the inability of companies to grow their businesses and the GDP grinding (not at a good above average growth). The macro level is screwed up. Then Some trigger collapses the overall market. And as Jim Richard says: "the house of cards economy" is what we have. NOBODY, OR RATHER VERY FEW HAVE KEPT AN EYE ON THE ABUSE OF THE MONEY SUPPLY FOR SO MANY DECADES. We therefore gotten use to this environment that the central bankers have put us into. Current scene was predictable, but not by the people who blindly followed the preaching's of the central bankers. Jim Richard and Harry Dent are just a few who have seen all this coming. And they simply used correctly the basics of economics and see what is what. Recession will unfold slowly but it will likely be the worst one ever. It does not matter what PR or opinions some central bankers state, that it is not likely. But such bankers have been here before, and said similar things before the start of and in the initial period of past recessions. Those who listened to them in the past paid the price of incorrect evaluations.

Can IG change the 24 hours daily history to : A. DAILY ONLY HISTORY B. Additional Options for longer periods via a pop up menu Over to you.

True politicians rarely understand what is inflation. Hike rates will handle but can cause problem to all loan interest payers. What is not considered is THE KEY ECONOMIC LAW THAT IS BEING DELIBRATELY ABUSED. FIX THAT AND RATES INCREASE THEN INFLATION COMES UNDER CONTROL. Over leverage is beyond the empirical usable level and along with other derivatives created makes complex and easier to fall as a domino effect a crash when a major calamity occurs. No control or discipline kept by bankers in the first place. SEE MY recent BLOGG ON: INFLATION, MONEY SUPPLY AND EX-BANKER

Brexit --- what was it all about? The above discussion points out key facts of the time yet there is more behind the scenes mega facts that most people are not aware of when you delve further into the historical bigger picture, and the bigger league players involved in it who remain behind the curtain, so to speak. Life is not a simple quest of all merrily going towards the same goal. Brexit illustrates this really well, with polarised sides fighting for control and the EU to maintain obsessive control of a sovereign country. The battle of Brexit was whether a country could be released from the EUs tight grip on sovereign states under its belt. The EU at every turn has fought to not allow countries leaving it and use its PR and big money to advertise the glories of the new 'roman empire' through its allies in member states. The European union was led by Germany and France to establish the united states of Europe. And the euro to compete and later maybe takeover the world currency status. But the latter will not be the next world currency as plans are to have SDRs take over from the us dollar, once major calmatives occur. Watch this event horizon to come (be awhile yet). However, it all began in a way that few of today's generation remember their history. We humans forget important historical events too often and their relevance to all the people. This story's stage began over a 120-years ago. It involves power hungry vested interest groups with their subterfuges looking to gain obsessive control over other competitors, political and economic affairs than their own business interests. Their business interests included into big oil and big banks at the time. On may 1910 a handful of wealthy bankers led by Rockefeller and J.P Morgan had an ultra secretive meeting on Jekyll island. The seven men (6-bankers & a senator) spent days locked in a room, devising a plan that would alter the American economy… a plan that controls the fate of everyone's wealth around the world to this day. Eventually in 1913 they got the federal reserve system into law (owned by them), to run government financial affairs and to squash competitors and have a fail-safe system should their banks foul up so they can be rescued and protected. By 1933 the fed was designed to keep on lending or buying up other entities debts without showing any profit or loss account creating an endless debasement system, this is diametrically opposite to controlling inflation in order to maintain the purchasing power of the currency. Over a century's of results speak for themselves, with over 80% debasement of the dollar. Later on it be “said” that the dollar too failed to hold its value just as in other countries. Note also, that this is totally different from retail banking where all have to show profit and loss, and maintain solvency, just like any other business. The Rockefeller’s set up the council on foreign relations, chaired by David Rockefeller until his death in 2017. It is from this group that influences all of USA’s major foreign policies. There is a similar entity established in the EU. At every major financial crisis point (severe bear markets) a plan was devised as a “solution”, such as the Breton Wood agreement, with the IMF establishment to prevent such future calamities occurring. We now have the IMF and the world bank to help “manage” the world's debts. You might observe that all the “solutions” to date have not permanently solved anything but maintained the similar problems occurring again, and again, but on a larger scale. With the German elites and their empire domination desires World War 1 began after the archduke's assassination. This was the war that was said to be. “the war that ends all wars”. But with hindsight we should know that that is not true. Later on came the world war 2 to continue German world domination. That failed, however the German bankers realising they would lose devised a master plan for domination in the future, by a peaceful method. Hence was established the European free market leading to a more tighter European common market and then to the European union legal status. The aim as in the war periods, a “take over of European nations” – basically they control everything. This is where we are today. The aim is still to take more countries in. Britain's desire to break free ( Brexit ) was met with hostile and a very hard nosed and oppressive EU divorce settlement with very hostile EU allies in the UK and amongst the top banks like J P Morgan and Goldman sacks (the one-world-order members). And foreign policy objectives still create friction and wars around the world. Banding countries has not solved it all. Whatever the system there is it is human behavior that governs peace or war. If countries want to remain free sovereign states and do business freely then they would not create difficulties and blocks towards that aim with like-minded nations. However those wanting a different way will and do make it difficult via complex legalities or otherwise. The fed has exported monetary theory practice around the world through formal world leaders gatherings. So if all follow similar theory than all suffer similar mega-problems down the road. Which means that they all need a “solution” or a “fix”. So, who better than the world-order boys to the “rescue”? This will save all their banks from going down. A neat plan, but at a great expanse put onto the rest of the world's population. As Robert Kiyosaki said, that at the Davos meeting on may 22 of 2022, the IMF stated: “ the world economy is going to hit the biggest financial headwind ...” The world-order groups such as the IMF know what lies ahead and have a plan to take full control of the financial banking world once a serious calamity exists. One likely target will be digital currency and a new reserve currency. History of empires and world domination has shown that such extreme form of control in few hands eventually leads to their demise and the world around them. It would be sad if they did not now review their history and come up with more constructive plans. See also, my blog on: inflation, money supply and an ex-banker

Margin debts is NOW THE HIGEST EVER IN HISTORY (US). MAYBE THE "ERRIEeeeness" is we are in the eye of the big storm.