Is Stagflation Coming, Or Is It Already Here?

Central Banks Across the World Are Fighting a Losing Battle Against Rapidly Surging Inflation

According to economists, that term simply confirms what we have all been thinking for some time now – that Central banks across the world are fighting a losing battle against rapidly surging inflation and no matter what actions they take now, it will be nowhere enough to tame rising inflationary pressures.

This year, for the first time in history, every major central bank from the U.S Federal Reserve, ECB to the Bank of England has come together in a global effort to engineer their most aggressive monetary tightening cycle since the early 1980s.

And so far, those efforts have hardly made a dent on inflation.

If anyone expected inflation to peak in this year, the U.S Consumer Price Inflation report for September has definitely dashed any hope that price pressures had peaked.

Data released this week, showed U.S Consumer Price Inflation in September accelerated at its fastest pace in four decades – registering its largest annual increase since 1982.

With inflation showing no signs of abating – many economists anticipate that the world may be about to revisit something it’s not seen in decades – Stagflation.

The Stagflationary shock of 2022 is truly global, with diverging growth and inflation expectations across most countries with many different factors exacerbating the trend in a synchronised way. In country after country, similar trends can be seen playing out – a surprise surge in prices and decline in activity over the past few months.

The prospect of stagflation’s return strikes fear into policymakers because there are few monetary tools to address it. Raising interest rates may help reduce inflation, but increased borrowing costs would further depress growth. Keeping monetary policies loose, meanwhile, risks pushing prices higher.

There can be no denying that global policymakers find themselves caught in a vicious circle of their own making because they didn’t move quickly enough on raising rates last year.

And if that wasn’t enough, OPEC’s recent decision to cut Oil production by 2 million barrels per day – presents yet another headache for the Federal Reserve and its central-banking peers.

While the United States and Western economies would prefer to see Oil prices trading close to $50 a barrel. Saudi Arabia and its allies, including Russia prefer to keep Oil prices at about $100 a barrel. The cartel has already demonstrated that it is prepared to go to any lengths to keep Oil prices elevated – ultimately throwing further fuel on the inflationary fire!

As traders very well know – there is a strong correlation between inflation and Commodity Prices. When inflation accelerates at a red-hot pace, so does the prices of Commodities.

Extraordinary times create extraordinary opportunities and right now, as traders we are amidst “one of the greatest wealth transfers ever in history”. If you truly want to build life-changing wealth, then there is no better time than now!

Commodity Price Forecast Video for October 14, 2022

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions: