James Rickards 摧毀供應鏈拖垮全球經濟

售罄：供應鏈斷裂、通脹飆升和政治不穩定將如何拖垮全球經濟

https://www.amazon.ca/Sold-Out-Inflation-Political-Instability/dp/0593542312
作者：詹姆斯·裏卡茲（James Rickards）（作者）2022 年 12 月 6 日

吉姆·裏卡茲（Jim Rickards）曾預測美國曆史上最嚴重的經濟危機，他的第二個預測是——全球經濟崩潰。

供應鏈危機即將到來。如今，您最喜愛的產品已從商店貨架上消失，陷入太平洋某個地方的供應鏈困境。但六個月甚至三年後，這種供應鏈中斷會是什麽樣子呢？雖然我們希望大流行後的複蘇能夠解決這些問題，但現實是數字貨幣、迷因和社交媒體無法解決跨越海洋和大陸生產和運輸實物商品的古老問題。吉姆·裏卡茲表示，消費者的不滿隻是威脅全球經濟崩潰的巨大冰山一角。

在《售罄》一書中，裏卡茲分享了他對大流行後未來的預測，並概述了消費者和企業主如何在崩潰之前渡過難關。您將了解由與澳大利亞的貿易戰引發的中國能源短缺如何擾亂鋼鐵市場並迫使整個工廠關閉。您還將了解到通貨膨脹率上升將如何在短短幾年內最終導致通貨緊縮——因為消費者支出最終會因稅收增加、債務過多和裁員增加而減少——以及為什麽這種經濟狀況將與 1930 年代非常相似。最後，裏卡茲將展望貨幣的未來，包括美元本身的消失。

未來幾個月，我們的全球經濟將麵臨前所未有的挑戰。但我們是沉還是浮取決於我們的準備程度以及我們現在采取的措施來阻止即將到來的崩潰。

"The Radicalism Is The Speaker Of The House Who Is Basically Working With The Democrats": James Rickards Calls Out Establishment Republicans

是一位美國律師、投資銀行家、媒體評論員以及金融和貴金屬領域的作家。他是《貨幣戰爭：下一次全球危機的形成》（2011 年）和其他六本書的作者。他目前住在康涅狄格州。

Rickards 於 1969 年畢業於新澤西州開普梅地區高中。1973 年畢業於約翰·霍普金斯大學，獲得榮譽文學學士學位，並於 1974 年畢業於保羅·尼茨高級國際學院在華盛頓特區學習，獲得國際經濟學碩士學位。他獲得了賓夕法尼亞大學法學院的法學博士學位和紐約大學法學院的稅務法碩士學位。

他曾在花旗銀行、長期資本管理公司和 Caxton Associates 擔任高級職務。作為對衝基金長期資本管理公司 (LTCM) 的總法律顧問，他於 1998 年通過美聯儲成功談判了對該公司 36 億美元的救助。裏卡茲在華爾街工作了 35 年。後來，Rickards 成為位於紐約市的商業銀行 Tangent Capital Partners LLC 的高級董事總經理，以及位於弗吉尼亞州麥克萊恩的技術、專業和科學谘詢公司 Omnis, Inc. 的市場情報高級董事總經理2009年3月24日，裏卡茲在約翰·霍普金斯大學的一次研討會上發表了自己的觀點，認為美元麵臨迫在眉睫的惡性通貨膨脹，很容易受到外國政府通過積累黃金和建立新的全球貨幣的攻擊。

2009 年 9 月 10 日，裏卡茲在美國眾議院科學監督小組委員會就金融模型、風險價值和 2008 年金融危機的風險作證。

他還聲稱自己就全球金融問題向美國國防部、美國情報界和主要對衝基金提供谘詢，並擔任五角大樓首次金融戰爭遊戲的協調人。他還在西北大學凱洛格學院和約翰霍普金斯大學高級國際研究學院擔任客座講師。他表示，他是製裁和非法金融中心的顧問委員會成員，該中心是華盛頓特區的右翼智囊團和遊說組織捍衛民主基金會（FDD）的前組織。

刊物
裏卡茲的第一本書《貨幣戰爭：下一次全球危機的形成》於 2011 年出版。在書中，他認為貨幣戰爭不僅是經濟或貨幣問題，而且是國家安全問題。他堅持認為，美國的國家安全麵臨著嚴重威脅，從中國秘密購買黃金到主權財富基金的隱藏議程，而比任何單一威脅更嚴重的是美元本身崩潰的真正危險。裏卡茲指責美聯儲參與了他所謂的“金融史上最大的賭博”。他寫道，美聯儲通過降低長期利率來放鬆金融狀況“本質上是一項印鈔刺激經濟增長的計劃”。

貨幣之死：國際貨幣體係即將崩潰 (2014)
大跌：如何在即將到來的崩潰中增加你的財富 (2015)
黃金新案 (2016)
毀滅之路：全球精英應對下一次金融危機的秘密計劃 (2016)
後果：在即將到來的混亂中保存財富的七個秘密 (2019)
新大蕭條：大流行後世界的贏家和輸家（2021）
售罄：供應鏈斷裂、通脹飆升和政治不穩定將如何拖垮全球經濟（2022 年）
裏卡德的第二本書《金錢之死》於 2014 年 4 月 8 日出版，並成為《紐約時報》暢銷書。他的第三本書《黃金新案例》於2016年4月5日出版。他的第四本書《走向毀滅：全球精英應對下一次金融危機的秘密計劃》於2016年11月15日出版。

在《走向毀滅之路》中，裏卡茲宣揚了一種陰謀論，即“全球精英”正在利用氣候變化這匹“木馬”來推進包括全球貨幣在內的“世界新秩序”。

全球精英正在利用氣候變化作為幌子來推動全球稅收和全球治理議程。

—吉姆·裏卡茲（Jim Rickards），全球精英的問題——當金錢被武器化時
他是《金融時報》、《標準晚報》、《紐約時報》和《華盛頓郵報》的專欄撰稿人。他是財經通訊《戰略情報》的編輯，也是詹姆斯·裏卡茲項目的總監，該項目旨在探究地緣政治和全球資本的複雜動態。

你能預期持續的通貨膨脹——還是通貨緊縮甚至通貨緊縮的趨勢嗎？這可能是當今經濟學中最重要的問題。

這不僅僅是一個相互競爭的敘述問題。這個問題涉及現代經濟學的核心（所謂的新凱恩斯主義共識）和經濟預測中使用的模型。

事實上，它通常涉及經濟學的核心，並有助於解釋為什麽如此多的預測如此嚴重錯誤。

通貨膨脹的敘述很簡單。從 2021 年中期開始，通脹勢頭強勁，直到 2022 年 6 月達到 40 年來的最高點。這一峰值為 9.1% 的通脹率，這是 1980 年代初以來的最高水平。與此同時，失業率處於 3.4% 左右的低點，這是 20 世紀 60 年代末以來的最高水平。

高通脹和低失業率的結合似乎證實了菲利普斯曲線的有效性，該曲線假定通脹和失業之間存在負相關關係。當失業率低時，通貨膨脹率就高，反之亦然。

包括通貨緊縮在內的通縮敘述也很簡單。到 2021 年底，美聯儲越來越擔心通脹並決定采取行動。美聯儲於 2022 年初開始收緊貨幣政策，通過不展期到期抵押貸款和美國國債來減少基礎貨幣供應量。

他們進一步收緊政策，從去年3月開始連續10次加息，一直持續到今年5月。（美聯儲在 2023 年 6 月沒有加息，但暫時保留了進一步加息的選擇。）這使美聯儲的政策利率升至 5.25%，這是美聯儲曆史上該幅度最快的升息之一。

美聯儲的貨幣緊縮政策似乎奏效了。通貨膨脹率已從去年 6 月的 9.1% 降至今年 5 月的 4.0%。這仍然遠高於美聯儲 2% 的目標通脹率，但確實代表著朝著這一目標取得了重大進展。

看來美聯儲要做的就是再一次加息，也許是這個月，耐心等待，通脹很快就會回落到美聯儲的目標利率。如果溫和的衰退和更高的失業率是這一成功的代價，那麽這就是美聯儲主席傑伊·鮑威爾準備付出的代價。

如果說這種兩年通脹-通貨緊縮的敘述看起來過於簡潔明了，那麽事實確實如此。

標準的經濟模型和簡單的解釋在很多地方都失效了。事實上，這種細分如此廣泛，以至於讓人懷疑美聯儲和主流經濟學家是否知道他們在做什麽。

首先，菲利普斯曲線表明，通脹下降應該伴隨著失業率上升。但那並沒有發生。 5 月份失業率從上個月的 3.4% 上升至 3.7%，但目前的失業率仍處於 20 世紀 60 年代以來的最高水平。

3月份失業率為3.5%，2月份失業率為3.6%。事實上，即使在貨幣緊縮16個月之後，失業率也沒有大幅上升。

20世紀30年代是高失業率和低通脹時期。 20 世紀 60 年代是低失業率和低通脹時期。 20 世紀 70 年代末是高失業率和高通貨膨脹時期。

我們必須在其他地方尋找具有真正預測價值的解釋因素。同樣，盡管美聯儲收緊政策，但經濟衰退並未出現在數據中。自上次經濟衰退結束以來已經過去了 38 個月。期間年均增長率為5.88%。

2023 年第一季度增長率為 1.3%。根據亞特蘭大聯邦儲備銀行的 GDPNow 預測，2023 年第二季度的預計增長率為 2.1%。最近的增長數據雖然疲弱，但並未出現衰退。

有充足的衰退警告信號，包括收益率曲線倒掛，我預計衰退很快就會發生。但它還沒有到來。

如果失業率仍然很低，經濟繼續增長，股指處於泡沫之中，盡管美聯儲曆史性地收緊貨幣政策，這就會讓人對美聯儲的模型以及主流新凱恩斯主義共識產生質疑。

基於模型的預測的第一個缺陷是分析師未能區分供應方出現的通貨膨脹和需求方出現的通貨膨脹。從預測的角度來看，這種差異至關重要。

2021-2023年的通貨膨脹是真實存在的，但它是由供應鏈瓶頸以及關鍵商品和工業投入的短缺造成的。烏克蘭戰爭引發的前所未有的經濟和金融製裁加劇了供應鏈中斷。

這種供給側通脹往往會自我否定。高價格導致需求減少，進而導致價格下降。我們每天都會看到這種情況，從加油站開始，2022 年夏季創紀錄的高價已大幅下降（盡管仍高於 2021 年）。

我們看到歐佩克決定削減石油產量以支撐價格的進一步證據。簡而言之，通貨膨脹是真實存在的，但它已經因為與美聯儲無關的原因而消退。

模型的第二個缺陷是未能理解如果通脹持續足夠長的時間，通脹從供給側轉向需求側的過程。這是消費者心理的變化，並體現在行為反應中。標準模型無法解釋心理和行為。

如果通貨膨脹心理在公眾中占據主導地位，那麽盡管經濟衰退和實際工資下降，這種心理也可能會自行蔓延。模型沒有顯示這一點，但曆史卻顯示了這一點。這正是 20 世紀 70 年代發生的事情。

隨後，隨著 1973 年贖罪日戰爭後阿拉伯石油禁運，通貨膨脹從供給側開始。 1973年至1975年間，美國經曆了嚴重的經濟衰退，失業率最高達到9.0%。美國在 1980 年經曆了另一次經濟衰退，並在 1981 年至 1982 年經曆了第三次經濟衰退，失業率達到 10.8%。上次經濟衰退是大蕭條以來最嚴重的一次。

盡管九年間經曆了三次經濟衰退、兩位數的失業率和兩次股市崩盤，但 20 世紀 70 年代中後期和 80 年代初卻出現了二戰結束以來最高的通貨膨脹率。到1981年，通貨膨脹率達到15%，利率提高到20%以對抗通貨膨脹。

低增長和高通脹的結合稱為“滯脹”。 1973年從供給側開始的通貨膨脹到1977年已經轉移到需求側，並且已經失控。經濟衰退無法阻止它。

即使在經濟困難時期，消費者也會以合理的方式應對通貨膨脹。他們加速購買，因為他們預計價格會進一步上漲。他們利用杠杆購買硬資產和股票，因為他們將這些視為抵禦通脹的避風港。

零售商提高價格是為了滿足更高的工資成本並維持利潤。整個過程以自身為基礎。即使在經濟衰退的情況下，這種自助也可以繼續下去，就像 1975 年和 1981 年那樣。

英國已經出現滯脹，英國CPI通脹率為8.7%。與此同時，英國正瀕臨衰退，22 年第 4 季度和 23 年第 1 季度經濟增長 0.1%，此後增長預測轉為負數。滯脹不僅僅是曆史上的異常現象。這是當今的現實。

我們到了那個時候了嗎？我們是否處於一個人性決定通脹防禦策略的世界，盡管可能出現經濟衰退和貨幣緊縮，但通脹防禦策略仍會自我維持？

我們看到了這方麵的一些證據，包括紐約市工會教師的一份新的五年期合同，該合同提供拖欠工資和簽約獎金，並將工資提高 20%。

沒有必要爭論教師是否值得加薪。顯而易見的事實是他們明白了。而且類似的例子還有很多。教師和其他人的工資上漲需要多長時間才能推動更多的消費者需求和更高的零售價格，從而抵消工資漲幅。

經濟衰退和股市下跌的可能性很高。盡管如此，持續通脹和高利率的可能性也很高。不管標準模型怎麽說，這兩種現象並不矛盾。

我們曾在 20 世紀 70 年代末和之前的劇集中見過他們在一起。

我們可能會看到通貨膨脹和利率持續時間比華爾街和美聯儲預期的要長。（順便說一句，如果您有興趣更深入地分析這一通貨膨脹-通貨緊縮難題，請參閱我最近出版的《售罄》一書的第 4 章和第 5 章。

考慮到通貨膨脹/通貨緊縮鬥爭的不確定性，投資者的最佳方法是采取多元化的杠鈴策略，以防範通貨膨脹和通貨緊縮。

一個模型投資組合可以用黃金、自然資源和能源股作為通脹對衝，用國債作為通貨緊縮對衝，並在杠鈴兩端之間健康地分配現金，以便在情況變得更加明朗時提供流動性和選擇性。

作者：詹姆斯·裏卡茲 2012 年 8 月 28 日
https://www.amazon.com/Currency-Wars-Making-Global-Crisis/dp/B00DPNUVLC

已經開始的全球貨幣戰爭將如何影響我們所有人。美元貶值、對希臘和愛爾蘭的救助以及中國的貨幣操縱都是明確的跡象，表明我們正在經曆一場新的貨幣戰爭。貨幣戰爭是一國貨幣對其他國家貨幣的一係列競爭性貶值，是國際經濟中最具破壞性和最令人恐懼的結果之一。如果不加以控製，新的貨幣戰爭可能會導致比 2008 年恐慌更嚴重的危機。《貨幣戰爭》結合了經濟史、網絡科學和社會學，深入了解了美元對美國國家安全日益增長的威脅。歐洲外圍國家的貨幣貶值到崩潰、非洲國家的失敗、中國的新重商主義、俄羅斯的冒險主義以及當前的黃金爭奪戰。曾在金融和國家安全最高層工作過的專家詹姆斯·裏卡茲（James Rickards）解釋了我們需要了解的一切。了解這一日益嚴重的全球僵局。他閉門帶領世界各地的讀者通過引人入勝的第一手軼事解釋複雜的金融和政治潮流。

金磚國家領導人峰會於8月24日結束，作出自2010年以來首次擴大金磚國家成員規模的重大決定。

沙特阿拉伯、阿拉伯聯合酋長國、埃及、阿根廷、埃塞俄比亞和伊朗均於 2024 年 1 月 1 日起獲準加入。巴西和印度對此均持保留態度。

但最終，俄羅斯和中國不顧反對，用自己的力量推動了新成員的加入。金磚國家現在是金磚國家+，擁有 11 名正式成員，並正在走向更大的政治權力和新的貨幣聯盟。

這是一個重大的發展，盡管其影響需要時間才能完全顯現出來。

這是因為所有現有和未來的金磚國家成員以及整個南半球國家（包括上海合作組織和歐亞經濟聯盟的成員）都在遭受美元武器化的影響。

他們擔心他們的美元計價儲備可能會被美國凍結，就像俄羅斯最近發生的那樣。

他們的解決方案是建立一個足夠大的新貨幣聯盟，以提供繞過美元的各種商品和服務（最終是債券）。這不會在一夜之間發生，新貨幣將麵臨挑戰，但這一過程正在開始。

金磚國家成員擴大的影響實際上遠遠超出了貨幣聯盟的範圍。

隨著沙特阿拉伯、伊朗和阿聯酋的加入，金磚國家現在已經有效包圍了波斯灣。隨著埃及和沙特阿拉伯的加入，他們現在有效地控製了紅海和蘇伊士運河。

與此同時，阿根廷的加入使金磚國家控製了從大西洋到太平洋的麥哲倫海峽（祝德雷克海峽好運；我去過那裏。這是一個令人畏懼的水域）。

金磚國家正在向地緣政治理論家哈爾福德·麥金德和海軍戰略家阿爾弗雷德·馬漢的雙重願景靠攏。哈爾福德·麥金德是一位地緣政治理論家，他的世界島和心髒地帶的概念都以亞洲為基礎；阿爾弗雷德·馬漢是一位海軍戰略家，他的海上力量理論強調對關鍵海峽和其他海域的控製。阻塞點。

金磚國家成員的擴大也標誌著石油美元時代結束的開始。沙特阿拉伯加入金磚國家是朝這個方向邁出的一大步。這就是為什麽新成員的加入和新貨幣的推出不能孤立地看待。

它們是一個共同項目的兩個部分。擴大的會員國正是使新貨幣更加可行的原因。

這一切都發生在美國決策者的眼皮底下，他們似乎對曆史和時事一無所知。

The BRICS Leader’s Summit ended on August 24 with a momentous decision to expand the membership of BRICS for the first time since 2010.

Saudi Arabia, the United Arab Emirates, Egypt, Argentina, Ethiopia, and Iran were all admitted to membership effective January 1, 2024. Both Brazil and India have some reservations about this move.

But in the end, Russia and China used their muscle to push through the new members despite objections. The BRICS are now BRICS+ with eleven full members and on their way to greater political power and a new currency union.

This is a momentous development, though its effects will take time to fully manifest themselves.

As a result of this expanded membership, the new BRICS currency will emerge in the year ahead.

This is because all current and prospective BRICS members and the entire Global South (including members of the Shanghai Cooperation Organization and the Eurasian Economic Union) are suffering from the weaponization of the U.S. dollar.

They fear that their dollar-denominated reserves may be frozen by the U.S., as recently happened to Russia.

Their solution is to start a new currency union big enough to offer a diverse range of goods and services (and eventually bonds) that bypasses the dollar.

It won’t happen overnight and the new currency will face challenges, but the process is getting underway.

The implications of expanded BRICS membership actually go far beyond the currency union.

With the additions of Saudi Arabia, Iran and UAE, the BRICS have now effectively surrounded the Persian Gulf. With the addition of Egypt and Saudi Arabia, they now effectively control the Red Sea and the Suez Canal.

Meanwhile, the addition of Argentina gives BRICS control of the Straits of Magellan for transit from the Atlantic to the Pacific Oceans (good luck in the Drake Passage; I’ve been there. It’s a daunting body of water).

BRICS are moving closer to the dual visions of Halford Mackinder, the geopolitical theorist whose notion of the World Island and Heartland were both based in Asia — and to Alfred Mahan, the naval strategist whose theory of sea power emphasized control of critical straits and other sea chokepoints.

The BRICS are consolidating physical control of both the land and sea pivots of history.

Expanded BRICS membership also marks the beginning of the end of the petrodollar era. Membership of Saudi Arabia in the BRICS is a large step in that direction. This is why the admission of new members and the launch of a new currency cannot be viewed in isolation.

They are two parts of a common project. The expanded membership is precisely what makes the new currency more feasible.

This is all happening under the noses of U.S. policymakers who seem ignorant both of history and current events.

by James Rickards August 28, 2012
https://www.amazon.com/Currency-Wars-Making-Global-Crisis/dp/B00DPNUVLC

How the worldwide currency war, already under way, will soon affect us all. The debasement of the dollar, bailouts in Greece and Ireland, and Chinese currency manipulation are unmistakable signs that we are experiencing the start of a new currency war. Fought as a series of competitive devaluations of one country's currency against others, currency wars are one of the most destructive and feared outcomes in international economics. Left unchecked, the new currency wars could lead to a crisis worse than the panic of 2008.Drawing on a mix of economic history, network science, and sociology, Currency Wars provides a rich understanding of the increasing threats to U.S. national security, from dollar devaluation to collapse in the European periphery, failed states in Africa, Chinese neomercantilism, Russian adventurism, and the current scramble for gold.James Rickards, an expert who has worked at the highest levels of both finance and national security, explains everything we need to know about this growing global standoff. He takes readers around the world and behind closed doors to explain complex financial and political currents with absorbing firsthand anecdotes.

Sold Out: How Broken Supply Chains, Surging Inflation, and Political Instability Will Sink the Global Economy

From the man who predicted the worst economic crisis in US history comes Jim Rickards’ second prediction – the collapse of our global economy.

The supply chain crisis is coming to a head. Today, your favorite products are missing from store shelves, caught in supply chain limbo somewhere in the Pacific Ocean. But what does this supply chain disruption look like six months, or even three years, from now? While we hope that post-pandemic recovery will absolve these issues, the reality is that digital currency, meme stonks, and social media can’t solve the age-old problem of producing and moving physical goods across oceans and continents. According to Jim Rickards, consumer frustration is only the tip of a very large, menacing iceberg that threatens global economic collapse.

In Sold Out, Rickards shares his predictions for our post-pandemic future and outlines how consumers and business owners can get ahead of the collapse. You’ll learn how energy shortages in China – fueled by the trade war with Australia – are disrupting the steel market and forcing entire factories to shut down. You’ll also learn how rising inflation will ultimately lead to deflation in a few short years – as consumer spending eventually tanks due to higher taxes, excessive debt, and increased layoffs – and why such economic conditions will closely resemble the 1930s. Finally, Rickards will look at the future of money, including the erasure of the American dollar itself.

Our global economy faces unprecedented challenges in the next few months. But whether we sink or swim depends on how prepared we are – and what we do now to thwart the coming collapse.

That’s probably the most important question in economics today.

This is more than a matter of competing narratives. The question goes to the heart of modern economics (the so-called Neo-Keynesian consensus) and the models used in economic forecasting.

In truth, it goes to the heart of economics generally and helps to explain why so many forecasts are so badly wrong.

The inflation narrative is straightforward. Inflation was gaining momentum from mid-2021 until it peaked at 40-year highs in June 2022. That peak was 9.1% inflation, a rate not seen since the early 1980s. At the same time unemployment was at lows of about 3.4%, a rate not seen since the late 1960s.

This combination of high inflation and low unemployment seemed to confirm the validity of the Phillips curve, which posits an inverse correlation between inflation and unemployment. When unemployment is low, inflation is high and vice versa.

The Case for Deflation

The deflation narrative, which includes disinflation, is also straightforward. By late 2021, the Federal Reserve became increasingly concerned about inflation and decided to act. The Fed began tightening monetary policy in early 2022, reducing the base money supply by not rolling over maturing mortgages and U.S. Treasury securities.

They tightened further with a policy of 10 straight interest rate hikes beginning last March and continuing until this May. (The Fed skipped a rate hike in June 2023 but is keeping the option to hike further on the table for now.) This took the Fed’s policy rate to 5.25%, one of the fastest increases of that magnitude in Fed history.

The Fed’s monetary tightening seemed to work. Inflation has dropped from 9.1% last June to 4.0% this May. That’s still well above the Fed’s target inflation rate of 2%, but it does represent significant progress toward that goal.

It seems all the Fed has to do is raise rates one more time, perhaps this month, and wait patiently and inflation will soon fall to the Fed’s target rate. If a mild recession and higher unemployment are the price of this success, then that’s a price Fed Chair Jay Powell is prepared to pay.

If this two-year inflation-deflation narrative seems too neat and tidy, it is.

The standard economic models and simple explanations break down in a number of places. In fact, the breakdown is so extensive it calls in question whether the Fed and mainstream economists have any idea what they’re doing.

The best evidence is that they don’t.

The Phillips Curve Is Junk Science

To begin, the Phillips curve says the falling inflation should have been accompanied by higher unemployment. That hasn’t happened. The unemployment rate rose in May to 3.7% from 3.4% the month before, but the current rate is still at levels not seen since the 1960s.

The March unemployment rate was 3.5% and February’s was 3.6%. The fact is the unemployment rate has not risen much at all even after 16 months of monetary tightening.

The 1930s were a period of high unemployment and low inflation. The 1960s were a period of low unemployment and low inflation. The late 1970s were a period of high unemployment and high inflation.

History and data show that there is no correlation between unemployment and inflation.

We have to look elsewhere for explanatory factors that have real predictive value. Likewise, recession has not turned up in the data despite Fed tightening. It has been 38 months since the end of the last recession. Average annual growth during that period has been 5.88%.

Growth for the first quarter of 2023 was 1.3%. Projected growth for the second quarter of 2023 is 2.1% according to the Federal Reserve Bank of Atlanta’s GDPNow forecast. These recent growth figures are weak, but they are not recessionary.

There are ample warning signs of recession including inverted yield curves and I expect a recession soon. But it’s not here yet.

If unemployment remains low, the economy continues to grow and stock indexes are in a bubble despite the Fed’s historic monetary tightening, this calls into question the Fed’s models as well as the mainstream Neo-Keynesian consensus.

What’s going on?

The first flaw in the model-based forecasts is the failure of analysts to distinguish between inflation that emerges from the supply side and that which emerges from the demand side. The difference is crucial from a forecasting perspective.

The Psychology of Consumer Behavior

The inflation of 2021–2023 was real but it was caused by supply chain bottlenecks and shortages of critical goods and industrial inputs. The supply chain disruptions were exacerbated by unprecedented economic and financial sanctions because of the war in Ukraine.

This kind of supply-side inflation tends to be self-negating. The high prices cause reduced demand, which in turn tends to lower prices. We’re seeing this every day starting at the gas pump where the record high prices of the summer of 2022 have come down significantly (although still higher than 2021).

We see further evidence in OPEC’s decision to cut oil output as a way to prop up prices. In short, the inflation was real, but it’s already fading for reasons that have nothing to do with the Fed.

The second flaw in the models is the failure to understand the process by which inflation can shift from the supply side to the demand side if inflation persists long enough. This is a change in the psychology of consumers and plays out in behavioral responses. Neither the psychology nor the behavior is accounted for by standard models.

If inflationary psychology takes hold in the general public, it can feed on itself despite recession and declining real wages. The models don’t show this but history does. This is exactly what happened in the 1970s.

Inflation Can Be a Stubborn Thing

The inflation then began from the supply side with the Arab oil embargo of 1973 after the Yom Kippur War. The U.S. suffered a severe recession from 1973–1975 with peak unemployment of 9.0%. The U.S. had another recession in 1980, and a third in 1981–1982 in which unemployment hit 10.8%. That last recession was the most severe at the time since the Great Depression.

Despite three recessions in nine years, double-digit unemployment and two stock market crashes, the mid-to-late 1970s and early 1980s witnessed the highest inflation since the end of World War II. By 1981, inflation had reached 15% and interest rates were raised to 20% to combat the inflation.

The term for this combination of low growth and high inflation was “stagflation.” The inflation that began on the supply side in 1973 had moved to the demand side by 1977 and was out of control. Recessions couldn’t stop it.

Even in periods of economic stress, consumers respond to inflation in ways that make sense. They accelerate purchases because they expect prices to rise further. They use leverage to buy hard assets and stocks because they see these as safe havens against inflation.

Retailers raise prices to meet higher wage costs and to maintain margins. The entire process feeds on itself. And this self-help can continue even in recessionary conditions as it did in 1975 and 1981.

Stagflation has already emerged in the U.K. CPI inflation in the U.K. is 8.7%. At the same time, the U.K. is bordering on a recession with growth of 0.1% in Q4 22 and Q1 23, and forecast growth turns negative after that. Stagflation is not just an historical outlier. It’s a present-day reality.

Are we at that point? Are we in a world where human nature dictates inflationary defense tactics that feed on themselves despite possible recession and monetary tightening?

We’re seeing some evidence of this, including a new five-year contract for unionized teachers in New York City that offers back pay and signing bonuses and raises wages by 20%.

There’s no need to debate whether teachers deserve this raise. The plain fact is they got it. And there are many similar examples. How long before the pay raises to teachers and others get pushed into more consumer demand and higher retail prices that inflate away the wage gains.

The economy could party like it’s 1979.

Use the Barbell Strategy to Combat the Inflation/Deflation Tug-of-War

The odds of a recession and stock market decline are high. Still, the odds of persistent inflation and high interest rates are also high. Those two phenomena are not inconsistent despite what the standard models say.

We’ve seen them go together before in the late 1970s and in prior episodes.

We could be witnessing a case of inflation and interest rates higher for longer than Wall Street and the Fed expected. (By the way, if you’re interested in a much more in-depth analysis of this inflation-deflation conundrum, please see Chapters 4 and 5 of my most recent book Sold Out.

Given the uncertainties of the inflation/deflation struggle, the best approach for investors is a diversified barbell strategy that protects against both.

A model portfolio could have gold, natural resources and energy stocks as inflation hedges, with Treasury notes as deflation hedges, and a healthy allocation to cash between the two ends of the barbell to provide liquidity and optionality as conditions become more clear.

I’ll continue to follow these developments and keep readers informed. Stay tuned.

風蕭蕭_Frank

James Rickards 摧毀供應鏈 拖垮全球經濟

The Case for Deflation

The Phillips Curve Is Junk Science

The Psychology of Consumer Behavior

Inflation Can Be a Stubborn Thing

Use the Barbell Strategy to Combat the Inflation/Deflation Tug-of-War