Post by NFA on Dec 9, 2022 14:12:02 GMT 8
Blackrock Warns of Severe Global Recession Ahead as Central Bank Ability to Control Inflation, Caused by Global Energy Shift, Will Have Consequences
December 8, 2022 | Sundance
It is always worth a reminder when reviewing anything from Blackrock, that the institutional investment firm has strong ties to almost every sphere of White House policy.
Today Blackrock is warning of severe economic conditions looming, the unspoken origin traces to the collective western economic shift in energy policy, aka “Build Back Better.”
As noted in the Blackrock warning, under the auspices of inflation control, central banks can try and shrink economic activity – but they are limited. Organically, economies will free fall once the full weight of BBB energy policy accumulates.
(Business Insider) – […] A worldwide recession is just around the corner as central banks boost borrowing costs aggressively to tame inflation — and this time, it will ignite more market turbulence than ever before, according to BlackRock.
The global economy has already exited a four-decade era of stable growth and inflation to enter a period of heightened instability — and the new regime of increased unpredictability is here to stay, according to the world’s biggest asset manager.
That means policymakers will no longer be able to support markets as much as they did during past recessions, a team of BlackRock strategists led by vice chairman Philipp Hildebrand wrote in a report titled 2023 Global Outlook.
“Recession is foretold as central banks race to try to tame inflation. It’s the opposite of past recessions,” they said. “Central bankers won’t ride to the rescue when growth slows in this new regime, contrary to what investors have come to expect. Equity valuations don’t yet reflect the damage ahead.” (read more)
This type of macroeconomic prediction should not come as a surprise to most CTH readers, because we have been outlining the natural conclusion of consequence.
Once the decision was collectively made to shrink the use of oil, coal and natural gas for energy development, the subsequent inflationary impact would lead to a need to shrink economic activity. Raising interest rates to shrink demand does make the economy contract; however, the energy driven supply side inflation continues.
Nothing can stop supply side inflation, except a massive decline in energy use.
A severe reduction in energy use, similar in scale to the energy use reduction when pandemic lockdowns were in full effect, can only lead to the same overall economic conditions as present within the lockdown. Which is to say, almost no economic activity.
Today Blackrock is warning of severe economic conditions looming, the unspoken origin traces to the collective western economic shift in energy policy, aka “Build Back Better.”
As noted in the Blackrock warning, under the auspices of inflation control, central banks can try and shrink economic activity – but they are limited. Organically, economies will free fall once the full weight of BBB energy policy accumulates.
(Business Insider) – […] A worldwide recession is just around the corner as central banks boost borrowing costs aggressively to tame inflation — and this time, it will ignite more market turbulence than ever before, according to BlackRock.
The global economy has already exited a four-decade era of stable growth and inflation to enter a period of heightened instability — and the new regime of increased unpredictability is here to stay, according to the world’s biggest asset manager.
That means policymakers will no longer be able to support markets as much as they did during past recessions, a team of BlackRock strategists led by vice chairman Philipp Hildebrand wrote in a report titled 2023 Global Outlook.
“Recession is foretold as central banks race to try to tame inflation. It’s the opposite of past recessions,” they said. “Central bankers won’t ride to the rescue when growth slows in this new regime, contrary to what investors have come to expect. Equity valuations don’t yet reflect the damage ahead.” (read more)
This type of macroeconomic prediction should not come as a surprise to most CTH readers, because we have been outlining the natural conclusion of consequence.
Once the decision was collectively made to shrink the use of oil, coal and natural gas for energy development, the subsequent inflationary impact would lead to a need to shrink economic activity. Raising interest rates to shrink demand does make the economy contract; however, the energy driven supply side inflation continues.
Nothing can stop supply side inflation, except a massive decline in energy use.
A severe reduction in energy use, similar in scale to the energy use reduction when pandemic lockdowns were in full effect, can only lead to the same overall economic conditions as present within the lockdown. Which is to say, almost no economic activity.