Confirmation Of Recession: The ECB Raises Rates
Twice before the ECB raised rated to combat inflation. Both times, the move down was in. Once again, the ECB joined the party, raising rates this week. However, like the previous times, they are joining a collapsing bridge.
In this video I discuss how the ECB did this in July 2008, in between Bear Stearns and Lehman. Not exactly the time to start tightening as it turned out.
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I don’t know when, likely to be replaced by the poison that is CBDC, but the European Central Bank is a failure of a monetary system I think. They are always doing things intentionally wrong and late, to the pain of the citizens of Europe.
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The ECB, along with other central banks are all failures because they are not central banks. If they were, they would be able to step in during times of monetary need, ie economic contraction. Yet they cannot. They play their games with reserves, which are just bank tokens that cannot be used to buy food or clothing. Hell, even to the commercial banks they are worthless since they cannot be used as collateral.
So yes it is a failure but not for reasons people think. If everyone stopped listening to them, especially markets, people would quickly see how impotent they truly are.
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Summary:
In this video, Task discusses the confirmation of a global recession, specifically focusing on the European Union (EU). He highlights the recent decision by the European Central Bank (ECB) to raise interest rates for the first time in 10 years, drawing parallels to previous instances where this move indicated economic turmoil. Task dives into the factors driving this recession, such as inflationary pressures, negative GDP prints, declining real estate markets, and overall economic contraction. He emphasizes the significant implications of these indicators, foreseeing a challenging economic landscape ahead and implying that this recession is inevitable.
Detailed Article:
Task delves into the concerning economic situation, beginning with the ECB's decision to raise interest rates for the first time in a decade, aligning with the Federal Reserve's previous actions that he has criticized. Drawing from history, he recalls the ECB's past rate increases in 2008 and 2012, both preceding significant economic downturns. Task emphasizes the ECB's tendency to be "late to the party" in recognizing economic troubles, highlighting parallels with the current situation where inflationary pressures, particularly in energy and food prices, are exacerbating the economic challenges in the EU.
He draws attention to the negative GDP prints observed in various regions and sectors, hinting at the looming recessionary headwinds. Task discusses leading indicators like new orders, layoffs, and real estate trends as warning signs of economic contraction. He specifically mentions the decline in mortgage applications and new constructions selling at reduced prices, indicating a struggling real estate market. Task underlines the domino effect of economic contraction, starting from deflationary pressures to defaults and further tightening of the money supply.
Task hints at the US dollar also facing shortages, suggesting a broader currency challenge beyond regional impacts like the euro. He alludes to upcoming content on the US dollar shortage, setting the stage for future discussions on related economic issues. In closing, Task expresses concern about the economic trajectory and recommends preparing for the challenging times ahead.
Overall, Task's analysis paints a bleak picture of the global economic landscape, particularly focusing on the EU's recessionary path. He intertwines historical precedents, current economic indicators, and future implications to underscore the severity of the situation, urging caution and preparedness for the economic turbulence that lies ahead.