March 8-14, 2025
Big news. Gold hits $3,000 per ounce:
Рис. 1
Some will say that gold is not a matter of principle. I categorically disagree. Gold is a classic defensive asset (of course, we are talking about physical gold), so its growth has always been a signal of serious economic problems. Since active attempts are now being made to prove that everything is fine in the global economy, the growth of gold prices should be stopped. But – it does not work …
An additional factor is the revision of the reserves at Fort Knox in the US. The higher the price of gold, the greater the desire to conduct a revision, and it is possible that the Trump administration will push through this desire. Here the price of gold would be lowered, which would significantly ease the pressure on the Federal Reserve (since politically, a revision of Fort Knox is equivalent to a revision of the Federal Reserve), but, again, something is not working out.
Macroeconomics. Industrial production in Germany -1.6% per year, 20th consecutive monthly minus:
Рис. 2
In Italy -0.6% per year, 24th minus in a row:
Рис. 3
In Britain -1.5% per year, the 16th minus in a row (and before that, with a mini-pause, there were another 2 years of decline):
Рис. 4
How much money do they want to spend on rearmament? 800 billion euros? Well, well.
In Mexico -2.9% per year, 6th minus in a row:
Рис. 5
Japan Economic Watch Index at 2.5-year low:
Рис. 6
Yuan loans in China +7.3%, a new anti-record in 27 years of observations:
Рис. 7
China’s CPI (consumer inflation index) is -0.7% per year, just 0.1% off its 16-year low a year ago:
Рис. 8
Рис. 9
Clear signs of depression.
Norway CPI +1.4% m/m, repeating highest value since 2008:
Рис. 10
Norway’s PPI (industrial inflation index) is +23.3% per year; it was higher only in 2021/22, and earlier – 14 years ago:
Рис. 11
Italy’s PPI is +1.6% m/m, excluding the 2020/22 spikes, a 25-year high:
Рис. 12
Brazil PPI +9.7% p.a., 2.5-year high:
Рис. 13
Clear signs of inflation.
US consumers are pessimistic the most in 2 years (University of Michigan survey):
Рис. 14
And their expectations are the worst in 2.5 years:
Рис. 15
5-year inflation expectations are at a 32-year high (3.9%):
Рис. 16
Note that the inflation data for February is of no interest, as the picture has remained virtually unchanged compared to January.
Household spending in Japan is -4.5% per month; omitting the Covid dips, this is a 10-year minimum:
Рис. 17
But the yield on Japanese government bonds hit a 17-year high:
Рис. 18
Canada’s central bank cuts rate by 0.25% to 2.75% as expected
Main conclusions. We can add the constant decline of the US stock market against the backdrop of increased customs duties. But this will most likely affect macroeconomic indicators in a few weeks. Inflation has increased, most likely this is the result of emission, but central banks do not admit it yet. However, they have many different tools. In any case, given the decline in the standard of living of the population (which is evident in the US according to data from the University of Michigan), the authorities are forced to support households through budget mechanisms. Others are no longer working.
A few additional words need to be said about the University of Michigan data, and here we turn to information from Pavel Ryabov.
“Collapse of consumer sentiment in the US and a sharp acceleration of inflation expectations
In the US, the Michigan Consumer Sentiment Index fell sharply in March to the crisis zone of 2008-2009 and 2022.
The decline was 6.8 points in March, before that there was a loss of 7 points in February and another 2.3 points in January, a loss of 16.1 points in three months, which is the sharpest decline since May 2020, previously comparable dynamics were in August 2011 and in the spring of 2008.
The speed and scale of the decline indicate that the crisis in the U.S. consumer sector is becoming more acute.
According to the University of Michigan:
“The decline was consistent across age, education, income, wealth, political views, and geographic regions.
While current economic conditions have remained relatively unchanged,
expectations about the future have worsened in many aspects of the economy, including personal finances, labor markets, inflation, business conditions, and stock markets.
Many consumers cited high levels of uncertainty around politics and other economic factors;
frequent swings in economic policy make it very difficult for consumers to plan for the future, regardless of their political leanings. Consumers across all three political lines agree that the outlook has worsened since February.”
The University of Michigan Consumer Sentiment Index is made up of two sub-indices: the Current Economic Conditions Index (CECI) and the Consumer Expectations Index (CEI). The CECI measures consumers’ views on their current financial situation and the overall economy, while the CEI assesses their future prospects.
The outlook has taken the brunt of the decline, with the stock market crash and the new White House administration’s chaotic, erratic policies contributing to the decline.
Full-year inflation expectations jumped from 4.3% last month to 4.9% in March, the highest since November 2022, amid the 2022 inflation storm. An inflation rate of 2.4-2.7% is considered normal.
The scenario of three consecutive months of abnormally large growth of 0.5 percentage points or more, characteristic of an inflation crisis, is being realized.
Long-term inflation expectations rose from 3.5% in February to 3.9% in March. This is the largest monthly growth since 1993.
According to the data, everything is damn bad, and although the research of the University of Michigan does not always accurately reflect the actual macroeconomic trend, in 8 out of 10 cases they correctly identify the general trend.”
So the structural crisis continues and the political activity of Trump and against Trump only increases tension, both in the economy and in the social sphere. However, this does not apply to our readers, they know everything in advance, and we congratulate them on this!