That’s the summer of mine!

July 19-25, 2025

Big news. There is almost no real economic news, it is summer. The only thing to mention is the leaked information that in 2024-2025 the Fed secretly provided the ECB and the Bank of England with $400 billion through currency swaps at 0.25% per annum (with inflation in the US at 4.1%). This allowed Europe to print €520 billion and £180 billion without public reporting.

The source of the leak is Trump’s adviser to the FOMC (Federal Open Market Committee) Christopher Waller, who officially voted against this decision.

As is customary for leaks, there is no exact information, but it is highly likely to correspond to reality. In particular, Mikhail Khazin has repeatedly noted in his Telegram channel in recent weeks that it is quite possible that it was the Fed that provided the EU with money for its military programs (through swap lines).

Macroeconomics. The PMI (expert index of the state of the industry; its value below 50 means stagnation and decline) of US industry (S&P version) is the weakest in 7 months and fell below 50 points:

The Richmond Fed’s regional manufacturing activity index is the worst in 10 months. It is only 1 point away from a 16-year low (excluding the Covid-related dips). Interestingly, both the backlog of existing orders and new orders fell simultaneously – the latter usually grow in such cases, compensating for the fulfillment of previous ones:

Leading indicators in the US are -0.3% per month. Over the past 39 months, they have only been positive three times. Nothing like that happened even in 2007/09, and this is a good indicator of what would actually happen in the US economy without a boost from the treasury (the budget deficit is not included in the index):

Or, to put it another way: the US economy is showing signs of life only because the budget deficit, which is stimulating the economy, is constantly growing.

US existing home sales continue to decline amid renewed price growth:

The indicator fluctuates around 30-year lows (taking into account population growth – even 35-year lows):

Note: the indicators are worse than during the Covid crisis! In fact, the US economy has approached the Covid quarantine indicators in some parameters and this is not even discussed!

The number of recipients of unemployment benefits in the US continues to hover near the peak in almost 4 years:

Sweden’s PPI (industrial inflation index) -0.6% per month, 5th consecutive decline:

And -3.1% per year is the weakest dynamics in a year and a half:

Very high level of deflation, showing the scale of the decline in the real sector of the economy.

The unemployment rate in Norway (5.4%) is the highest since the peak of Covid, before that similar figures were only at the beginning of 2016:

The budget deficit excluding state banks in Britain is the worst in 13 years (excluding Covid). In fact, in the entire history of statistics, the figure was slightly higher only twice, in 2009 and 2012:

China’s central bank left monetary policy unchanged (key rate at record low), as expected:

Indirect evidence that official optimism (see previous reviews) is not entirely justified.

No changes in the ECB policy either. The easing cycle is over, it is time to analyze trends in the economy and inflation; overall, the Central Bank has recouped half of all interest rate increases from the zero lows of 2022:

This had no effect from the economic point of view, as can be seen from the macroeconomic indicators.

The Central Bank of Turkey cut the rate by 3% to 43%. It is not very clear what the objective reasons for this are, and we are not discussing the political situation.

Main conclusions. The data for the USA is very bad. As well as for the European Union. Even the summer did not help, however, it is possible that the seasonal cleaning did not work well. In general, it can only be noted that without a constant emission pumping (see the first section of the Review), no one can maintain the economy. Well, with the exception of Russia, where the Central Bank prefers to collapse the economy, if only the liberal ideology would triumph.

The fact that the emission continues is evidenced by a lot of facts. In particular, the growth in silver prices continues, it continues to update 14-year highs:

Japan’s 10-year government bonds are also hitting records, hitting 17-year highs ahead of the central bank’s meeting next week:

The same picture is with 30-year German government bonds, only there are “only” 14-year peaks:

In general, it’s summer, of course, and we wish our readers a good rest! But, be vigilant!