from Bloomberg Television
The Inflation Ruination to Come
All forecasts are useless amid a global financial structure of unstable criticality in which any snowflake can bring an avalanche
by Jeffrey Race
Asia Times
The coming years are going to be a bumpy ride for more reasons than appear in press chatter, talk shows and podcasts and bumpier than the chatterers and “experts” imagine.
Global finances are at an epochal turn. The world has been living on capital (energy, water, land) and credit for many, many decades and that has stopped.
Economists blithely call it “The Great Moderation” and congratulate themselves. Highly skilled in their discipline, they are innocent of history and other kinds of insight essential to comprehending today’s situation.
With their narrow understanding, American economists just told their leaders to max the national credit card, possible once President Nixon had in 1971 cut the dollar’s link to gold, theretofore the sole restraint keeping American politicians and public modestly responsible.
21 Essential Skills for Thriving During Hyperinflation
by Scott Mackenzie
MSN
Hyperinflation is an economic nightmare that can devastate savings and upend entire societies in the blink of an eye. Just look at Venezuela, where inflation hit 65,000% in 2018, or Zimbabwe, where it reached a mind-boggling 79.6 billion percent in 2008. While it may seem far-fetched, history shows that no economy is completely immune. The skills outlined here aren’t just nice-to-haves; they’re potentially life-saving in a world where money loses its value by the hour. Ignore them at your peril.
Analysis: How Will Inflation, Interest Rates and the U.S. Consumer Fare in 2025?
by Brandy Hadley
PBS
Brian Blank is a finance scholar and Fed watcher who researches how companies navigate downturns and make financial decisions, as well as how markets process information. Brandy Hadley is a finance professor who leads a student-managed investment fund and studies corporate decision-making and incentives. Together, they’re also the resident economic oracles at The Conversation U.S., and their forecast for 2024 held up notably well. Here, they explain what to expect from 2025.
New year, new questions
Heading into 2024, we said the U.S. economy would likely continue growing, in spite of pundits’ forecast that a recession would strike. The past year showcased strong economic growth, moderating inflation, and efficiency gains, leading most economists and the financial press to stop expecting a downturn.
High Rates and Continued Inflation Mean Housing Prices Stay High
by Roger Valdez
Forbes
Like anyone in the housing discourse, I’ve done my share of prognosticating about mortgage rates and inflation and their impact on housing in general and housing policy specifically. It makes sense at the beginning of a new year to think about where rates may go in 2025, why, and what impact that will have on the housing economy.
Housing continues to be a huge share of the American economy, making up as much as 18% of Gross Domestic Product (GDP). That figure includes single-family home construction and multifamily construction but the associated services and economic production created by the housing economy. When changes happen in one part of the housing economy it has profound effects on other sectors as well. Changes in interest rates means a change in the cost to borrow which means shifts in demand.
How Do Cryptocurrencies Combat Hyperinflation?
from Coin Gecko
Introduction
Hyperinflation, an economic disaster characterized by astronomical hikes in price of goods and services, and the resultant overnight erosion of a currency’s value, has become synonymous with the economic devastation that countries such as Venezuela and Argentina have experienced.
While traditional approaches, like currency redenominations or price controls, do little to remedy the situation, cryptocurrencies such as Bitcoin or stablecoins are increasingly becoming attractive alternatives. With Bitcoin’s independent and decentralized nature, as well as stablecoin offerings that are tied to more reliable fiat currencies, such as the US dollar, these virtual assets have created a beacon of hope in protecting one from the worst forms of inflation. But will crypto be able to provide a truly sustainable solution for economies teetering on the edge of collapse?
Skyrocketing Prices Are an Age-Old Problem. Here’s How Roman Emperors Battled Runaway Inflation.
by Peter Edwell
The Conversation
Therefore, who would not know that effrontery hijacks the public interest? […] It ratchets up the prices of things for sale, not fourfold or eightfold but so much that the human tongue’s reckoning cannot untangle what to call the accounting and the deed!
The language is different but this edict on maximum prices, issued in 301 CE by Roman emperor Diocletian, reflects a feeling familiar to many: why is everything so expensive lately?
Diocletian’s edict highlights the deep outrage he and and his imperial colleagues felt at the rampant inflation that had engulfed the Roman empire for much of the third century.
Inflation eroded the pay of the soldiers whose loyalty was the basis of the emperors’ authority.
So, how did the Roman Empire get into this mess – and how did it get out of it?
The Fed Has Two Bad Options in 2025: Accept Higher Inflation or Risk a Recession
El-Erian: Expect slower U.S. growth and higher Treasury yields — but America will continue to outperform other major world economies
by Mohamed A. El-Erian
Market Watch
Political and geopolitical upheaval — and the limited prospects for significant improvements — pose a risk to U.S. economic exceptionalism.
It is something of a tradition every December to take stock of the year that is ending and consider what might lie ahead. This is true on a personal level: in my family, we tend to do this around the dinner table. It is also true more broadly, with the time of year inviting an examination of the intersection of economics, national politics, and global geopolitics.
You would be forgiven if, as a starting point, you expected these three areas to be in alignment. They are deeply interconnected, which suggests self-reinforcing dynamics. But 2024 brought some unusual dispersion in this relationship that actually widened, rather than narrowed, over the course of the year.
The Bond Market Crisis: Inflation, Debt, and the Fed’s Balancing Act
by Money Metals
GoldSeek
In a gripping Christmas-week interview, Mike Maharrey spoke with Michael G. Pento, a noted economist, portfolio strategist, and author of The Coming Bond Market Collapse, to dissect the Federal Reserve’s actions, inflation concerns, and the burgeoning U.S. debt crisis.
[…] Federal Reserve Policy and Inflation
Michael Pento expressed frustration with the Federal Reserve’s continued pursuit of its 2% inflation target, criticizing its mismanagement of monetary policy. Over the past 43 months, inflation exceeded this target, yet the Fed aggressively cut interest rates, including a recent 50 basis point cut. According to Pento, these actions aim to sustain bubbles in equities and real estate, provide relief to the government’s rising debt service costs, and support Treasury markets.
Credit Card Defaults Spike to Highest Level Since Aftermath of 2008 Financial Crisis
by Sean Moran
Breitbart.com
American credit card defaults have risen to the highest levels since the aftermath of the 2008 financial crisis as consumers grapple with years of high inflation.
Credit card lenders wrote off $46 billion in delinquent loan balances in the first three quarters of 2024, a 50 percent increase from the same period last year. These forms of write-offs are are viewed as a highly monitored measure of loan distress.
This is the highest level since 2010, according to industry data gathered by BankRegData.
Mark Zandi, the head of Moody’s Analytics, said, “High-income households are fine, but the bottom third of US consumers are tapped out. Their savings rate right now is zero.”
Gold Has Nowhere to Go but Up in 2025
from King World News
As we get ready to kickoff a new year, gold has nowhere to go but up in 2025.
December 31 (King World News) – Matthew Piepenburg, partner at Matterhorn Asset Management: Another year is ending, which means it’s time to look back in order to better look forward.
For 2025, I see no other realistic option or scenario ahead other than a weaker dollar and rising gold.
This is not “selling my book,” it’s just a common-sense approach to the realities of history, debt markets and the signals of my often-repeated mantra that can’t be repeated enough, namely: “The bond market is the thing.”
Below, we see why.