Analyst and financial writer John Rubino warns that we are in a “debt and death spiral” when it comes to inflation and that there is no sparing the detrimental impact on the world’s biggest currencies. “We are in the part of the cycle now where things just get worse and there is nothing we can do about it…You either have mass bankruptcies or inflate away the currencies of the world, and we’re there—finally,” he said. Economist Mohamed A. El-Erian backs up this sentiment as he criticizes the concept of “transitory inflation” that has recently made a comeback. The concept portrays inflation as a “short-lived, reversible phenomenon,” which dangerously encourages the Fed to become complacent, only making matters worse long-term.

USWatchdog via ZeroHedge/Greg Hunter
“Welcome To The Endgame” – Rubino Warns “Everyone’s About To Realize There’s No Fix For This”

Analyst and financial writer John Rubino says we are in a “debt and death spiral” that will force dramatic changes on the world.

Rubino explains, “The debt spiral part of this means things from here continue to get worse and worse for the big currencies of the world until they die…”

“In other words, until people lose faith in them, refuse to use them and hold them anymore until their value falls to their intrinsic value, which is zero. That manifests to hyperinflation. The value of the currency falls as opposed to the things you buy with it…

Things feel basically okay for a long time as long as governments could force interest rates down to really low levels. The side effects of that are massive money creation and, eventually, inflation. That’s what we are dealing with now. So, here we go. Welcome to the end game for the world’s big currencies.”

Continue reading, here.

MarketWatch/Mohamed A. El-Erian
Opinion: Inflation isn’t going away without some more pain, El-Erian says

Nearly two years into the current bout of inflation, the concept of “transitory inflation” is making a comeback as the COVID-related supply shocks dissipate. This comes at a time when it is critically important to keep an open mind about the trajectory of inflation, including by avoiding an oversimplified transitory narrative that risks obfuscating the real issues facing the U.S. economy.

“Transitory” is a comforting notion suggesting a short-lived, reversible phenomenon.

Critically, the concept assumes away the need to adjust behaviors. After all, if an inflation scare is only temporary, the best way to deal with it is simply to wait it out (or, to use a policy and market term, “look through it”). That is why this narrative is particularly dangerous. By encouraging complacency and inertia, it could exacerbate an already serious problem and make it harder to solve.

You can read the full article, here.

The Fed’s Focused on Data. Why Tuesday’s Inflation Figures Are Crucial for Markets.

Markets appeared sure the Federal Reserve would soon stop hiking interest rates, rallying strongly to start 2023.

But they performed a pivot of their own as January’s jobs data came in hotter-than-expected. Last week, the S&P 500 and the technology-heavy Nasdaq Composite indexes both suffered their worst week since December.

The message that the central bank may have more work to do is finally sinking in, particularly after a series of hawkish Fed speakers labored the point.

You can read the full article, here.

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