Many people simply do not understand that we actually are moving into a long-lasting economic emergency. So much of the economic optimism that sustained rallies in the monetary markets throughout 2022 was based upon a belief that the COVID pandemic would quickly be given an end. Well, that obviously has actually not happened. After whatever that has actually been done, the COVID pandemic in the United States is now worse than ever. In truth, on Wednesday there were 465,470 newly verified cases in the United States alone. That shattered the old day-to-day record by more than 100,000. The Omicron version is spreading like wildfire, and this is going to trigger mass panic throughout the early stages of 2022.
It doesn’t take a genius to determine what this is going to indicate for the economy. Worry of Omicron is going to tax production all over the globe, therefore there will be less things offered for us to buy. On the other hand, fear of Omicron is likewise most likely to make our supply chain crisis even worse. It will be even more of a difficulty to move products around the world in a prompt way, and that is going to mean a lot more empty shelves.
But thanks to the negligent policies of the Biden administration and the Federal Reserve, Americans have lots and lots of money in their pockets. All of those dollars are going to be going after decreasing levels of products and services, and that is going to lead to hair-curling inflation.
Of course what we have actually currently experienced has been painful enough. Earlier today, the top moderator of among the most popular discussion online forums on the Internet posted this…
Just purchased 2 prime ribeyes for $64 …
I was surprised!
That’s got to be double what I used to pay.
Meat costs are getting truly crazy, however they are just going to go even higher.
The exact same thing can be said for all other food rates too. Even prior to Omicron occurred, significant companies all over the country were preparing major rate hikes for 2022.
For instance, the maker of Oreos and Ritz crackers has actually revealed that all of their rates will be going up 6 to 7 percent next year …
Mondelez International, which makes treats including Oreo cookies and Ritz crackers, will increase prices by 6% to 7% in January, the business said last month.
Other food manufacturers will be carrying out much bigger rate boosts. When the Wall Street Journal reported that Kraft Heinz would be lifting prices by as much as 20 percent in 2022, that certainly alarmed a lot of individuals …
According to the Wall Street Journal, Kraft Heinz’s rate boosts were amongst the most remarkable heading into 2022, with some products increasing as much as 20%; the price of the business’s Grey Poupon mustard, for example, will increase between 6% to 13%.
And it is being reported that General Mills will likewise be raising costs by around 20 percent…
A “significant regional wholesale provider” dripped to CNNa letter that General Mills sent merchants to notify them that the price of some products might increase by as much as 20% beginning in mid-January. This would be on the extreme end, however that high rate is certainly concerning.
So get ready to pay a lot more for cereal.
Even rates at Dollar Tree will be going from $1.00 to $1.25 in a few months.
Regretfully, this is just the beginning, and even Goldman Sachs is now confessing that “the inflation overshoot will likely become worse”…
In a recent analyst note to customers, Goldman Sachs financial experts alerted that pandemic-induced interruptions in the global supply chain– which have actually triggered blockage in ports and warehouses nationwide– might last longer than expected as rising demand struggles to keep up, indicating that inflation metrics will stay “rather high for much of next year.”
“It is now clear that this process will take longer than initially anticipated, and the inflation overshoot will likely become worse before it improves,” they composed.
The optimists at Goldman Sachs think that things will ultimately enhance, but that is since they still have faith that the experts at the Federal Reserve can magically make everything better in some way.
But the Fed just has 2 “solutions” to any crisis.
They can cut rates of interest, but they have actually already been pressed all the method to the floor.
They can likewise pump more cash into the system, and they have actually been doing this for several years. But now all of that cash pumping has developed a raving inflation nightmare, and they don’t know how to put the fire out.
They could attempt to get inflation under control by raising rates, however that would badly injure the economy at a time when we are plunging into a fresh crisis since of Omicron.
So now the Fed finds itself in a really tough spot, and Nouriel Roubini is cautioning that this could lead to huge difficulty in 2022…
As long as central banks remained in non-traditional policy mode, the celebration could keep going. However the asset and credit bubbles might deflate in 2022 when policy normalization begins. Additionally, inflation, slower growth, and geopolitical and systemic dangers might develop the conditions for a market correction in 2022. Come what may, financiers are most likely to remain on the edge of their seats for most of the year.
There will be no simple way out for the Federal Reserve this time.
When push concerns shove, Fed officials will constantly turn to printing more money, and that is going to set the stage for the sort of financial situations that I have actually described in my books.
It looked like 2022 was going to be really bad even before Omicron came along, and now the outlook for next year is downright scary.
Worry is toxin for any financial system, and the level of fear in this nation simply continues to rise with each passing day.
*** It is finally here! Michael’s new book entitled “7 Year Armageddon” is now offered in paperbackand for the Kindleon Amazon. ***
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