Lately, the US CPI has become solidly disinflationary if not a touch deflationary. Core. Ex shelter. Something to be concerned about rather than celebrated?

Eurodollar University’s Money & Macro Analysis

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DISCLOSURES
Jeffrey Snider (The Promoter) is acting as a promoter for an investment advisory firm, Atlas Financial Advisors, Inc. (AFA). Jeffrey Snider is affiliated with AFA as a promoter only and is not in any way giving investment advice or recommendations on behalf of AFA. The Promoter is being compensated by a fee arrangement: The Promoter will receive compensation on a quarterly basis, based on the increase in account openings that can be reasonably attributed to the Promoter’s activity. The Promoter will not be receiving a portion of any advisory fees. The Promoter has an incentive to recommend the Adviser because the Promoter is being compensated. The opinions expressed on this site and in these videos are those solely of Jeffrey Snider and Eurodollar University and do not represent those of AFA….(read more)

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Why is it all going down? A closer look at recession, deflation, inflation, interest rates, the economy, and Jeff Snider’s perspective.

In recent times, the world has witnessed an alarming downturn in multiple economic indicators. With talk of recession, deflation, inflation, and fluctuating interest rates dominating headlines, there is a growing unease about the state of the global economy. Amidst this uncertainty, one expert who has garnered significant attention is Jeff Snider, an executive at Alhambra Investments. Snider’s unique perspective on these issues has piqued the interest of many, prompting a deeper examination into the factors that contribute to the current economic climate.

Firstly, the term “recession” has become a recurring theme in economic discussions. It refers to a significant decline in economic activity, often characterized by falling GDP, rising unemployment rates, and decreased consumer spending. A recession is typically linked to an economic contraction following a period of economic growth. Some experts argue that geopolitical tensions, trade disputes, or internal policy decisions can contribute to the onset of a recession.

In tandem with recession fears, deflation has emerged as a major concern. Deflation is the decrease in the general price level of goods and services, leading to a sustained period of negative inflation. While many may perceive falling prices as a benefit, deflation actually has dire consequences for the economy. It can hamper economic growth, as consumers delay purchases in expectation of lower prices. Furthermore, deflation increases the real burden of debt, as the value of outstanding loans does not decrease.

On the flip side, inflation is another factor that captures the attention of economists and policymakers. It is the rise in the general price level of goods and services over time, eroding the purchasing power of money. Controlled inflation is often regarded as a sign of a healthy and growing economy. However, if inflation rates become too high, it can lead to a loss of economic stability, decreased consumer purchasing power, and increased costs for businesses.

While interest rates may seem mundane to the average person, they play a crucial role in shaping economic conditions. Central banks often use interest rates to control inflation and stimulate or slow down economic activity. Interest rates can influence borrowing costs, consumer spending, and investment decisions. When rates are low, borrowing becomes favorable, encouraging spending and economic growth. Conversely, when rates are high, borrowing becomes more expensive, leading to reduced spending and potential economic contraction.

Now, enter Jeff Snider, an economist who has gained prominence for his alternative interpretation of economic indicators and trends. Snider challenges the mainstream view that points to central bank monetary policy as the primary driver of economic outcomes. He argues that problems in the global monetary system, specifically the Eurodollar market, are at the core of economic instability. The Eurodollar market refers to US dollar-denominated loans and deposits held outside the United States, which has grown to be a crucial source of global funding.

Snider contends that certain economic indicators, such as the yield curve, the relationship between long-term and short-term interest rates, are signaling underlying weaknesses in the global monetary system. He suggests that these indicators, often used to predict recessions, may not be reliable in the current economic landscape. According to Snider, the current challenges faced by the economy are indicative of deeper imbalances stemming from a structurally deficient global monetary system.

While Snider’s perspective may differ from mainstream economists, his analysis is a reminder that understanding the complexities of the global economy requires careful consideration of multiple factors. It is crucial to balance conventional economic theories with alternative viewpoints to gain a comprehensive understanding of the issues at hand.

In conclusion, the discussion surrounding recession, deflation, inflation, interest rates, and the overall health of the global economy has become increasingly crucial in recent times. Jeff Snider’s unique perspective challenges conventional wisdom and urges a deeper examination of the complexities within the global monetary system. As the economy continues to evolve, it is vital for policymakers, economists, and individuals to remain open to diverse viewpoints in order to gain a holistic understanding of the forces shaping our economic landscape.