Those of you who are old enough can remember the 80s. Not only the music from the 80s but politics on the right side. UK`s PM Margareth Thatcher and US President Ronald Reagan. Two characters who did so much great for the world.
Take a closer look at the pound. It`s 1 against the US dollar. Just like it was in the ’80s. The economy in the UK is in trouble, but PM Liz Truss wants to do something about that. And what she`s planning to do is very similar to Trump’s policy: tax cuts.
Liz Truss is pro-growth, and this is similar to Giorgia Meloni`s policy. They are both dismissed as extremists, and people are worried. Truss is also pro-fracking, and she will end the ban on fracking from oil and gas.
On top of that, she will provide relief for rising energy costs, reduce to the income tax rate, and slash corporate and payroll taxes. This is very similar to Trumponomics. If not to say; Reaganomics. And if Liz Truss can do all this, she can become the UK`s next Margareth Thatcher.
Many people believe that the more tax people pay, the more the government earns. But it isn`t that easy, and it doesn`t always work like this. When you raise taxes, very often we can see that revenues are declining.
I like to see a cheap pound because it makes me buy things from the UK very cheap. The lower the pound is, the cheaper the products are. Not only that. A lot of people around the world will take their next trip to the UK because of a lower pound. It means a party for the rest of us, and that can boost the economy in the UK. This is bullish.
Italy is doing the same. Meloni will cut taxes as well, and people are worried. They call them both extremists and neo-fascists. But they are the opposite. Let`s wait and see.
Many people around the world are in shock as right-wing Giorgia Meloni is set to become Italy`s first female prime minister. The leader of the euro-skeptic Brothers of Italy party won a clear majority in Sunday`s election.
Meloni was born in the place where everything started: Rome. A place on earth where everything was fine until Julius Ceasar was killed and Rome started to collapse. Now, thousands of years later, the Italian politician and journalist Giorgia Meloni is the new leader.
She`s been a member of the Chamber of Deputies in Italy since 2006, has led the Brothers of Italy (Fd) political party since 2014, and has been the president of the European Conservatives and Reformists Party since 2020.
Meloni joined Youth Front, the youth wing of the neo-fascist political party Italian Social Movement (MSI) in 1992. She was appointed Minister of Youth in the Berlusconi IV Cabinet, a role she held until 2011. In 2012, she co-founded Brothers of Italy (Fd) and became its president in 2014.
She is a right-wing populist and Italian nationalist, and her political positions have been described as far right. She is opposed to abortion, euthanasia, and to partnerships, marriages, and parenting by same-sex couples, instead asserting that nuclear families are exclusively headed by male-female pairs.
Opposed to the reception of non-European migrants and multiculturalism, she has been accused of xenophobia and Islamophobia. A supporter of NATO, she maintains Eurosceptic views regarding the European Union and she was in favor of better relations with Russia before the 2022 Russian invasion of Ukraine, which she condemned, pledging to keep sending arms to Ukraine.
In 2004, Meloni was the first woman president of Youth Action, the AN youth wing. During these years, she worked as a nanny, waitress, and bartender at the Piper Club, one of Rome’s most famous nightclubs.
Meloni`s policy is more like Trump`s; Italians first. She also has an anti-immigration policy. Many people around the world are worried that her leadership could have a huge impact on other places around the world. Because Meloni and Italy are not alone.
Salvini, Berlusconi, and Meloni led their right-wing alliance to election victory, and people around the world react to it. Right-wing Marine Le Pen was one of the first to congratulate Meloni on the win, and she tweeted:
«The Italian people have decided to take their destiny into their own hands by electing a patriotic and sovereigntist government. Congratulations to Giorgia Meloni and Matteo Salvini for resisting the threats of an anti-democratic and arrogant European Union by obtaining this great victory!»
The Kremlin said Moscow was open to developing «constructive» ties with Rome. «We are ready to welcome any political forces that are able to go beyond the established mainstream, which is filled with hate for our country… and show a willingness to be constructive in relations with our country,» Kremlin spokesman Dmitry Peskov said.
Balazs Orban tweeted this: «Congratulations to Giorgia Meloni, Matteo Salvini, and Silvio Berlusconi on the elections today! In these difficult times, we need more than ever friends who share a common vision and approach to Europe`s challenges.»
Polish Prime Minister Mateusz Morawiecki congratulated Meloni and hailed the Italian far right`s «great victory.» Poland`s governing Law and Justice (PiS) party and the Brothers of Itlay are both parts of the right-wing European Conservatives and Reformists (ECR) group.
Former prime minister Beata Szydlo tweeted: «I`m glad that a party from the ECR group is assuming responsibility for yet another European nation.» Other Polish governing politicians highlighted the overlap between the two parties, including their emphasis on Catholic family values.
«The EU right is growing stronger….. We will defeat the communists, leftism, and the LGBT lobby. Everyone who is ruining our civilization,» Deputy Agriculture Minister Janusz Kowalski said on Twitter.
Deputy Justice Minister Michal Wojcik said Meloni`s victory was a «defeat» for European Commission President Ursula von der Leyen, calling her a «representative of anti-democratic forces in the EU.»
Juergen Hardt, a lawmaker and foreign policy expert for the conservative Christian Democratic Union in Germany (CDU), said he was troubled by the «openly post-fascist statements» of Meloni and the «hair-raising positions» of her fellow Brothers of Italy party members.
«Racism and the exclusion of minorities can no longer have a place in Europe,» Hardt told the DPA news agency. Hardt said Berlusconi, who is nearly 86 years old, had acted as kingmaker in order to share power once more.
Secretary of State Antony Blinken said the United States looked forward to working with Italy`s new government but would encourage respect for human rights. « We are eager to work with Italy`s government on our shared goals; supporting a free and independent Ukraine, respecting human rights, and building a sustainable economic future,» Blinken tweeted.
«Italy is a vital ally, strong democracy, and valued partner,» Antony Blinken said.
Giorgia Meloni is Italy`s first-ever female prime minister at the head of its most right-wing government since World War Two. What is the Pope saying now?
Spanish Foreign Minister Jose Manuel Albares warned on Monday that populist movements always surge during difficult times but always end badly in response to the election results.
Inflation is serious stuff. It makes people`s money less valuable, and it means a lot of trouble for a lot of people. But I`m not shocked, because we knew it was coming someday. I wrote about nine years ago, and here we are.
Ronald Reagan was fighting against inflation in the ’80s, and he once said;
«Inflation is as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man.»
I bet Chair Powell thinks the same, as he raised the federal fund’s rate by 75 bps to the 3% – 3,25% range during its September meeting. This is the third three-quarter point increase, pushing borrowing costs to the highest since 2008.
Policymakers also anticipate that ongoing increases in the target range will be appropriate which was reinforced by Chair Powell during the press conference.
«We have got to get inflation behind us. I wish there were a painless way to do that. There isn`t. The so-called dot plot showed interest rates will likely reach 4,4% by December, above 3,4% projected in June, and rise to 4,6% next year.
Meanwhile, GDP growth forecasts were revised lower to show a 0,2% expansion this year, compared to 1,7% seen in June and 1,2% in 2023, below 1,7% seen in June. Inflation as measured by PCE is seen to reach 5,4% in 2022 (5,2% projected in June) and 2,8% in 2023 (vs 2,6%).
They also expect the unemployment rate to raise up to 4,4% next year. In August this year, the unemployment rate rose to 3,7%, which is the highest since February and above market expectations of 3,5%.
The number of unemployed people increased by 344 thousand to 6,014 million, while employment levels went up by 442 thousand to 158,732 million. Meanwhile, the labor force participation rate rose to 62,4% in August from 62,1% in July.
The unemployment rate was about 4% right after the dot com bubble, but it rose to about 6% a few years later. In 2010, the unemployment rate rose to about 10% but it peaked at an all-time high of nearly 16% after all the lockdowns.
Banks in nearly every country (not China and Japan) are facing similar trade-offs as they raise rates to combat their own inflation problems.
The inflation rate in the US is 8,3%. In the UK it`s 9,9%. Euro Area; 9,1%. In China and Japan, the inflation rate is 2,5% and 3,0%. But this is nothing compared to Turkey where the inflation rate rose for the 15th consecutive month to 80,2% in August of 2022.
FedEx plummeted more than 20% on Friday, and it was the worst day ever for the stock, based on data going back to 1978, according to Dow Jones Market Data. I repeat the worst day for the stock since 1978!
The real reason for the drop is the demand for freight which dropped significantly. It isn`t funny to be a CEO when you know that your company has lost $11 billion in market value, but that`s a fact.
The company will take some essential steps to fix some of the problems. They will cut some costs. Cut worker’s hours. Park some aircraft, and close more than 90 FedEx Office locations.
CEO Raj Subramaniam isn`t optimistic about the economy and claims we will see a recession very soon. But he is not alone in saying so. The chief executive officer of McDonald`s Corp. said earlier this week he expects a minor US recession in 2023 and a more significant one in Europe.
Earnings from FedEx were worse than expected. Earnings came in at $3,44 a share, which is well short of the $5,10 average estimate of analysts. Revenue of $23,2 billion ended in August missed expectations. FedEx is trading at $161,02 on Friday.
What a day in the stock market. Nasdaq plummeted 5,16%. That`s 632,84 points. Dow Jones and S&P 500 were also sharply down, followed by cryptos like Bitcoin. They all went down because the annual inflation rate in the US eased for a second straight month to 8,3% in August of 2022.
This is the lowest number in four months, so why did investors have so much panic? The rate is down from 8,5% in July. But it`s down from 9,1% in June, so, it’s on the way down. For all I know, it will continue the same path, and probably end up in the opposite direction; deflation in the long run.
The energy index increased by 23,8% (32,9% in July). Gasoline increased 25,6% (44% in July). Fuel oil increased 68,8% (75,9% in July).
Natural gas increased 33% vs 30,5%, and electricity was at the highest since August 1981, at 15,8%. Prices for food rose by 11,4%, and that is the most since 1979. The shelter is up 6,2%, which is the most since 1984.
CPI, which excludes volatile energy and food prices, increased 6,3% in a year. This is the most since March, and up markedly from 5,9% in June and July.
The Federal Reserve has done a lot to push down inflation because inflation over time could have dramatic consequences for consumers. The Fed has been hawkish when it comes to interest rate hikes this year.
They try to make it expensive for consumers to borrow, and the interest rate hikes will affect consumers’ interest rates like credit cards, loans, and mortgage rates.
CPI measures changes in the cost of consumer goods and is a key indicator of just how bad inflation is.
Economists anticipated a lower CPI in August, but the index rose 0,1% from the previous month and 8,3 on an annual basis. More rate hikes from the Fed will force consumers to change their lifestyles in the future.
The Fed looks at CPI when deciding whether to raise rates or not. Experts claim that we must expect the Fed to continue to be very aggressive when it comes to rate hikes. So, fasten your seat belts.
So far this year, the central bank has already raised rates by 225 basis points, and many investors are waiting for another 75 basis point rate hike at their meeting next week.
The cost of living is increasing. Higher electricity bills, food, gasoline, and gas prices are making it difficult for many, and it isn`t easy to borrow either. The cost of borrowing is also increasing. On the other side; the rate on your saving account is also increasing.
Experts predict that we could see many more months of rampant inflation.
The Fed funds futures are pricing in a 36% chance that the bank will raise its benchmark rate by a full percentage point. Nomura forecasted a 100 basis point hike in September.
Investors don`t like Fed`s hawkishness, and they are worried that the Fed`s inflation fight will bring in a recession. On the other hand; the Fed is also ramping up the unwinding of its balance sheet to $95 billion per month.