“Fed Watch” is a macro podcast, true to the rebellious nature of bitcoin. In each episode, we challenge traditional narratives and Bitcoin by examining current macro events around the world, with a focus on central banks and currencies.
In this episode, CK and I smash through the August Consumer Price Index (CPI) data, some shocking Chinese economic data, and we talk about the price of bitcoin and ether.
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IPC power and housing components
After covering some charts, like bitcoin, S&P 500, German DAX and European natural gas futures, we dive into this week’s big topic, US CPI data.
In this episode, I dive deep into the biggest story of the week, the US CPI report from the Bureau of Labor and Statistics. We pay particular attention to the food and shelter components of CPI. Food prices saw a decline in their rate of increase, resulting in what I interpret as signaling that a spike in food price inflation has occurred. We also cover accommodation costs in the CPI. It is the largest component by weight and it continues to increase. However, in the episode, I give a few reasons why housing is a very lagging indicator and probably 18-24 months behind other prices.
For CPI, the main takeaway from this podcast is the need to focus on month-to-month changes, rather than year-to-year. If you just look at year-over-year rates, you’ll find yourself thinking that prices are rising 8% annualized right now, when in fact they’re up less than 1% in annualized rate over the past two months. There is a big difference there.
China’s Oil Exports and Demand
On “Fed Watch”, we are proud to have been on top of the crisis in China from the very beginning. When others were – and still are – on the bandwagon of China’s rise, we decry the obvious economic deterioration and fundamentally weak geopolitical position of China.
Well, things don’t work out for them. This week we received reports that Chinese exports are falling off a cliff. In an article in the South China Morning Post, we read that instead of the normal peak season for Chinese exports with the approaching holiday season in the United States and Europe, Chinese exporters say they are seeing actually a number that looks like the “off season”. .”
“The decline reflects lower demand for freight, both due to excess inventory at some importers as inflation reduces spending by some consumers, and as others shift to other types of goods. and services as the pandemic recedes,” said Judah Levine, head of research. at Freightos. “Many retailers pulled peak season orders earlier in the year to avoid delays.”
Not only are their exports falling, but their demand for oil is also falling. I read a report that says China’s oil demand has dropped for the first time since 2002!
“The main downward pressure on oil prices over the past few days has been a report that China may see its annual oil demand decline for the first time since 2002 due to Covid restrictions under the Beijing’s zero-Covid policy.”
This is exactly what I predicted, that the world has peaked in oil demand, at least for the next two decades. The main driver of the demand slump is de-globalization and the associated economic contraction. The world has grown to require around 100 million barrels of oil per day and with the depression of de-globalization I can see that dropping to 90 million barrels per day and staying there for years.
Populism, nationalism and anti-globalization
In the last segment of the show, we take stock of the political situation in Europe. The Swedish elections are over and the anti-globalization right has taken control of its parliament. It was a result that seemed to come out of nowhere. In the country that is renowned for its leftist leanings and seen as a bulwark of modern European brand socialism, Sweden moved quickly against global Marxists.
Two other important elections are to come before the end of the year. Italy, where the Brothers of Italy and their anti-globalist coalition should take control of a possible super-majority in their parliament, and the United States at midterm, where the anti-globalists should take control of both houses of Congress.
Indeed, it is a massive swing against the Marxism of Davos, Washington and Brussels. It is also a very good sign of individualism, more decentralized governance and the rise of neutral money.
This is a guest post by Ansel Lindner. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.