Hi Readers
So the Fed only moved .25% on rates, and the market had an orgasm and exploded higher. We saw the dollar come down to the low 100.50 levels before the realization kicked it that the FED is fully aware that the US economy falling apart. So while the media is spinning out bullshit that the Fed is going to pivot the reality is that even if they want to they can't. Taking the interest rate route was wrong but now can't stop, as it will put a tailspin into wage rises.
This is the reason the all the central banks are now fixed on raising rates to stop wage rises. In real term at the current level peoples wages are similar to 2007 buying power. Yes we have lost a decade of wages growth and its the consumer who is feeling the pain, but as long as the media keep pressing that things are improving people are blaming themselves for the positions they are in. Who walks away free from the responsibility of easy lending, YEP the banks.
The one thing people need to understand is that mortgage's in the US are fixed at the level they are created where as in Australia they fluctuate with moves by the central bank.Therefore the impact is immediately affected where as in the US no one cares if rates go up as your rate of 2% is what it is for the life of the loan. Sure new rates have the new rate and people then start refinancing when rates come down, but little affect till then.
Now Fridays Non Farm Payrolls have put a spanner in the works, yes we are now hearing that the FED is going to orchestrate a soft landing. Nothing can be further from the truth, The economy is falling apart and while the jobs numbers are true or false the bottom line is that there are jobs out there, US employers are going to have to pay up. Its why so many companies aren't getting rid of people as they might need them, so there reducing there hours. Oh and the other crap your hearing about layoff's be very skeptical of it. why would you train staff 2 years and then sack them to save cost, just doesn't make sense, but until I find facts won't comment.
Dollar has bounced from Wednesday and you now need to understand that the playing field has changed. Fed has tried to assist overseas central banks with a weaker dollar, but inflation round two is coming and they are aware of it. Lumber, Copper and Sugar aren't falling in demand or price. So the move up on the dollar will hurt asset prices moving forward so just be aware of it.
The UkraineAmerican/Russian war is starting to seriously affect the world economy. The US needs to refill the strategic reserves, public sentiment is starting to turn on the US with 22,000 marine sending a letter to the joint chiefs that they will not fight against Russia should they be ordered and should the US send troops that they will make there own way to Russia and fight with the Russians against Ukraine.
GEOpolitical events will start to impact asset markets so take note.
We saw the dollar move slaughter Gold and silver prices some what and yes while there is a little more to go I'll be using it to buy moving forward.
To the Crypto traders becareful a stronger dollar will dip bitcoin and Alt coins, so be on the look out for signs.
The Central banks around the world are going to have to increase rates quicker moving forward or else there currencies will devalue and inflation in there countries will continue to increase.Regardless of what they have said to the media moving forward not increasing will increase costs to the public.
As always use the above as an indicator to your own work.
The above is based on Financial Astrology
Ask your financial advisor on more on the above
