Category Archives: Offshore

Hyperinflation Watch No. 4

(SGS Subscription required) • Intensifying Risks of Financial-Market and Systemic Instabilities
• November U.S. Monetary Base Declined at an Extreme Annual Pace of 12% (-12%); As Seen Similarly With Federal Reserve Policy Errors of 1936/1937 That Helped Trigger the Second Down Leg of the Great Depression
• Current FOMC Tightening Is Triggering an Unfolding New Recession
• Sell-Off in Equities Likely Has Just Begun
• Watch for Heavy Selling of the U.S. Dollar and Heavy Buying of Gold as Portents of Extreme Political and Financial-Market Turmoil and Systemic Instability

No. 978 Second Part Residential Construction, Home Sales, Construction Spending and Revised GDP

(SGS Subscription required) • FOMC Tightening Has Strangled Consumer Liquidity
• October 2018 U.S. Construction Spending Revised and Turned Sharply Lower, Both Before and After Inflation Adjustment, Consistent With an Unfolding New Recession
• Plunging October Residential Construction and Home Sales Numbers All Continued in Deepening Downtrends and Intensifying Quarterly Contractions
• Second Estimate of Third-Quarter 2018 Gross Domestic Product (GDP) Annualized Real Growth Was Unrevised at 3.50%, Versus 4.16% in Second-Quarter
• Yet, Downside Revisions to Motor Vehicle Consumption and Upside Inventory Revisions Pushed Third-Quarter Final Sales Down to a Revised 1.23% from 1.43%, Versus 5.33% in Second-Quarter 2018
• Also Hitting GDP Growth, the Record Deficit in Third-Quarter Net Exports Expanded in Revision to a New Record Trade Shortfall
• Negative Early Trend for the Fourth-Quarter Real Merchandise Trade Deficit Suggests an Even Greater Net-Exports Hit to Fourth-Quarter 2018 GDP
• Hints of a Recession-Driven Shift in Federal Reserve Policy Intensify Risks of Major Financial-Market Upheaval
• Watch for U.S. Dollar Weakness/Instability and Spiking Gold and Silver Prices; the Dollar and Precious Metals Serve as the Canary in the Coal Mine for the Domestic Stock and Bond Markets

No. 978 Part I: October CPI and PPI, Retail Sales, Production, New Orders and Freight Activity

(SGS Subscription required) • Fed Begins to Waffle on Interest Rates and Tightening? Watch the Dollar and Gold!
• Broad Systemic Liquidity and Real Earnings Growth Have Been Impaired by Federal Reserve Tightening
• Constrained Consumer Liquidity Has Taken an Increasing Toll on Economic Activity; GDP Final Sales Revised Lower
• Motor Vehicle Sales Are in a Downward Spiral
• Real Retail Sales, New Orders, Manufacturing, Residential Construction and Home Sales All Have Weakened
• Deteriorating Construction-Activity and Residential-Sales Never Have Recovered Pre-Recession Peak Levels
• With No End in Sight, October 2018 U.S. Manufacturing Remained Shy by 4.3% (-4.3%) of Recovering Its December 2007 Pre-Recession Peak
• The 130 Straight Months of Economic Non-Expansion in Manufacturing Is Unlike Anything Ever Seen in the 100-Year History of the Series
• Slowdown in Consumer-Driven Activity Looks Like the Onset of a New Recession
• Unadjusted October 2018 Annual Inflation Bounced Back from Year-Ago Disruptions, but Falling Gasoline Prices Should Offer Some Relief