China Crisis Deepens, Globalists Lose – Bitcoin Magazine
“Fed Watch” is a macro podcast, true to bitcoin’s insurgent nature. In each episode, we question mainstream and Bitcoin narratives by examining macro current events from around the world, with an emphasis on central banks and currencies.
In this episode, CK and I get dirty on the Consumer Price Index (CPI) for August, some shocking Chinese economic data, and we talk about bitcoin and ether prices.
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Food and shelter Components of CPI
After covering some charts, such as bitcoin, the S&P 500, the German DAX and European natural gas futures, we dive into the big topic of the week, US CPI data.
In this episode, I delve into the biggest story of the week, the US CPI report from the Bureau of Labor and Statistics. We place particular emphasis on CPI’s food and shelter components. Food prices saw a slowdown in the rate of increase, resulting in what I interpret as signaling a peak in food prices has occurred. We also cover shelter costs in the CPI. It is the largest single component by weight, and it has continued to increase. In the episode, however, I point to a couple of reasons why shelter is a very lagging indicator and is probably 18-24 months behind other prices.
For CPI, the most important thing about this podcast is the need to emphasize monthly changes, rather than year-to-year. If you only consider year-over-year rates, you’ll find yourself thinking rates are rising 8% year-over-year right now, when in fact they’ve risen less than 1% year-over-year over the past two months. There is a big difference there.
China exports and oil demand
At “Fed Watch”, we are proud that we have been on top of the crisis in China since its inception. When others were – and still are – on the rising China bandwagon, we called out China’s obvious economic deterioration and fundamentally weak geopolitical position.
Well, things don’t get any better for them. This week we have received reports that Chinese exports are falling off a cliff. In an article from the South China Morning Post, we read that instead of the normal high season for Chinese exports with the approaching holiday season in the US and Europe, Chinese exporters claim that they are actually seeing a figure that looks like the ‘off season’.”
“This decline reflects declining demand for shipping, both due to excess inventory among some importers as inflation reduces spending among some consumers, and as others shift to other types of goods and services as the pandemic subsides,” said Judah Levine, head of research. at Freightos. “Many retailers pulled peak season orders earlier in the year to avoid delays.”
Not only are their exports falling, but demand for oil is also falling. I read a report that explains China’s oil demand has fallen for the first time since 2002!
“The main downward pressure on oil prices in recent days has been a report that China could see its annual oil demand shrink for the first time since 2002 due to Covid restrictions under Beijing’s zero-Covid policy.”
This is completely in line with what I have predicted, that the world has reached peak demand for oil, at least for the next couple of decades. The main driver of declining demand is deglobalization and the associated economic slowdown. The world has grown to demand about 100 million barrels of oil per day, and with the depression of deglobalization, I can see it falling to 90 million barrels per day and staying there for years.
Populism, nationalism and anti-globalists
In the last segment of the show, we give an update on the political situation in Europe. The Swedish elections are complete and the anti-globalist right has taken control of their parliament. It’s a result that seemed to come out of the blue. In the country famously left behind and seen as a bulwark of modern socialism of the European brand, Sweden has shifted rapidly towards the global Marxists.
Two other choices of brand will arrive before the end of the year. Italy, where the brothers of Italy and their anti-globalist coalition are set to take a possible super majority in their parliament, and the US mid-term elections, where the anti-globalists are expected to win control of both houses of Congress.
This is actually a massive swing towards Marxism in Davos, Washington and Brussels. It is also a very good sign for individualism, more decentralized governance and the rise of neutral money.
This is a guest post by Ansel Lindner. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.
