“Fed Watch” is a macro podcast, true to bitcoin’s rebellious nature. In each episode, we challenge the mainstream and Bitcoin narratives by examining current macro events around the world, with an emphasis on central banks and currencies.
In this episode, CK and I break down August’s Consumer Price Index (CPI) data, some shocking Chinese economic data, and discuss the price of bitcoin and ether.
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Food and shelter components of the IPC
After covering some charts, including bitcoin, the S&P 500, the German DAX and European natural gas futures, we dive into the big topic this week, the 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 pay particular attention to the food and shelter components of CPI. Food prices experienced a decrease in their rate of increase, resulting in what I interpret as a sign of a spike in food price increases. We also cover housing costs in the CPI. It is the largest single component by weight and has been increasing. However, in the episode, I point out a couple of reasons why shelter is a very lagging indicator and is likely to be 18-24 months behind other prices.
For CPI, the main takeaway from this podcast is the need to emphasize month-to-month, rather than year-to-year, changes. If you only consider year-over-year rates, you’ll find yourself thinking prices are rising 8% annualized right now, when in fact they’ve risen less than 1% annualized over the past two months. There is a big difference.
China’s exports and oil demand
At Fed Watch, we are proud to have been on top of the crisis in China from the beginning. When others were – and still are – on the bandwagon of China’s rise, 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 received reports that Chinese exports are falling off a cliff. In an article in the South China Morning Post, we read that instead of the normal peak season for Chinese exports with the arrival of the holiday season in the US and Europe, Chinese exporters claim that they are actually seeing a number that seems the “low season”. .”
“This decline reflects the fall in demand for goods, both due to excess inventories by some importers, as inflation reduces spending by some consumers, and as others switch to other types of goods and services as the pandemic recedes,” said Judah Levine, head of research. in Freightos. “Many retailers pulled off peak season orders earlier this year to avoid delays.”
Not only are their exports falling, but so is their demand for oil. I read a report that 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 policy Beijing zero-Covid”.
This is in line with what I have been predicting, that the world has peaked in demand for oil, at least for the next two decades. The main driver of the collapse in demand is deglobalization and the associated economic contraction. The world has grown to require roughly 100 million barrels of oil per day and with the depression of deglobalization, I see it dropping to 90 million barrels per day and staying there for years.
Populism, nationalism and anti-globalists
In the last segment of the program, we give an update on the political situation in Europe. The Swedish elections have been completed and the anti-globalist right has taken control of its parliament. It’s a result that seemed to come out of the blue. In the country that has been left leaning and seen as a bulwark for modern socialism of the European brand, Sweden has moved quickly against the global Marxists.
Two other high profile elections are coming up before the end of the year. Italy, where the Brothers of Italy and its anti-globalist coalition will assume a possible super-majority in its parliament, and the United States, where anti-globalists are expected to win control of both houses of Congress.
In fact, it is a massive swing against the Marxism of Davos, Washington and Brussels. It also bodes very well for individualism, more decentralized governance and the rise of neutral money.
This is a guest post by Ansel Lindner. The opinions expressed are entirely my own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.
