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    Daily Digest 10/16 – IMF Warns Of ‘Limited Ammunition’ To Fight Recession, Fed Awaits Answers On Liquidity Strains

    by Daily Digest

    Wednesday, October 16, 2019, 8:00 AM


Economy

U.S. Inflation Expectations Slip to Record Low in Fed Survey (Saxplayer00o1)

A gauge of inflation expectations from the Federal Reserve Bank of New York fell in September to the lowest level in data going back to 2013, the latest sign of weakness that could raise concerns among central bankers already fretting over muted price pressures.
The measure of inflation expectations three years from now slipped to 2.4% last month from 2.5% in August, according to the New York Fed’s monthly survey of consumer expectations published Tuesday.

Fed’s Bullard Warns of Too-Low Inflation and Risk of Slowdown (Saxplayer00o1)

Federal Reserve Bank of St. Louis President James Bullard said U.S. policy makers are facing too-low rates of inflation and the risk of a greater-than-expected slowdown, suggesting he’d favor an additional interest rate cut as insurance.

Rising risks to growth “may make it more difficult for the Federal Open Market Committee to achieve its 2% inflation target,” Bullard said in remarks prepared for delivery at Bloomberg’s monetary and financial policy conference Tuesday in London.

Fed awaits answers on liquidity strains (Saxplayer00o1)

Late last week the US central bank announced it would continue injecting cash in exchange for Treasuries or other high-quality collateral for at least a few more months, in the hope of easing strains in the repurchase, or repo market.
Regulators are still trying to establish why banks flush with reserves are short of cash, and why money is not getting to those who need it.

IMF warns there is ‘limited ammunition’ to fight recession (Saxplayer00o1)

“With central banks having to spend limited ammunition to offset policy mistakes, they may have little left when the economy is in a tougher spot,” Gopinath said in the WEO’s foreword.

Larry Summers: US economy is just one bad recession away from zero rates or worse (Saxplayer00o1)

Without major change in the U.S., Summers predicts there’s little chance of policy rates set by the Federal Reserve staying above zero. “We’re one recession away from a situation of that kind.”

CPI Report + This 1929 Chart Will Scare You (Thomas R.)

The all items index increased 1.7 percent for the 12 months ending September, the same increase as for the 12 months ending August. The index for all items less food and energy rose 2.4 percent over the last 12 months, also the same increase as the period ending August. The food index increased 1.8 percent over the last year, while the energy index decreased 4.8 percent.

Central Bank Issues Stunning Warning: “If The Entire System Collapses, Gold Will Be Needed To Start Over” (Thomas R.)

While gloomy predictions of a monetary reset are hardly new, they have traditionally been relegated to the fringe of mainstream financial thought – after all, as Mario Draghi stated on several occasions in recent years, the mere contemplation of a “doomsday scenario” is enough to create the self-fulfilling prophecy which materializes it. As such, it is stunning to see a mainstream financial institution open up about the superior value of limited supply, non-fiat, sound money assets. It is also hypocritical given the diametrically opposed Keynesian practices regularly engaged in by central banks and official institutions worldwide: after all, just a few months back, the IMF published a paper bashing Germany’s adoption of the gold standard in the 1870s as the catalyst for instability in the global monetary system.

The Lightning Beneath Our Feet (Thomas R.)

In studying this phenomenon, scientists first looked up to the sky. They tried to explain it away as atmospheric abnormalities, optical illusions, and even hoaxes. But today scientists suspect that these lights originate beneath our feet. According to NASA senior scientist Friedemann Freund, earthquake lights owe their existence to the electrical currents developed in magmatic rocks as the result of pressure exerted by shifting tectonic plates.

We’re in a permanent coup (Thomas R.)

This latest incident, set against the impeachment mania and the reportedly “expanding” Russiagate investigation of U.S. Attorney John Durham, accelerates our timeline to chaos. We are speeding toward a situation when someone in one of these camps refuses to obey a major decree, arrest order, or court decision, at which point Americans will get to experience the joys of their political futures being decided by phone calls to generals and police chiefs.

IRS Data Shows Large Farm Losses (Don R.)

2012 data shows that farmers in net reported about $200 million of net taxable income on Schedule F and Form 4835. This is about the only year in the last 10 years where farmers have ever reported net income.

‘Insect Armageddon’: Europe reacts to alarming findings about decline in insects (Henry H.)

It was a scientific bombshell. Insect numbers had crashed by 75 per cent over 27 years, prompting global headlines of “Insect Armageddon”. Politicians across Europe suddenly faced demands to do something about the crisis. Farmers were blamed for excessive spraying of insecticides.

Plan for blackouts in California to prevent wildfires ‘did not go well’ (thc0655)

Trouble has long dogged PG&E, California’s largest utility and one of the biggest in the country. The company has said one of its transmission lines was probably responsible for the most destructive wildfire in state history, the Camp Fire, which killed more than 80 people and destroyed the town of Paradise last November. About a decade earlier, one of the company’s gas lines south of San Francisco exploded, destroying a neighborhood and killing eight people.

Gold & Silver

Click to read the PM Daily Market Commentary: 10/14/19

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

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