The latest forecast for international interest rates next year, 2024, was released by the International Monetary Fund (IMF) World Economic Outlook report in October.
International interest rates are forecast to fall in 2024 for most G7 countries, seven of the largest advanced democracies, except for Japan
Generational high inflation and the fear of ever-rising interest rates would have on global demand and the level of loan defaults have been prominent features on investors’ radars in 2023.
This year will be remembered for the great US treasury bond market crash, the worst treasury bear market in history, which wiped trillions of dollars off the value of treasury portfolios.
Aggressive Fed tightening, not seen in decades in 2023, burst the bond bubble, triggering a banking liquidity crisis and a credit squeeze, which toppled five banks.
“International interest rates are forecast to fall in 2024 for most G7 countries”
It takes about two nautical miles to turn a supertanker around. Similarly, monetary policy implementation in the world’s largest economy has a time lag of six to twelve months before the effects trickle down to the economy. Financial markets are the first impacted by monetary tightening, then businesses and eventually households as the recession hits with rising unemployment.
So, the full fallout from the Fed’s restrictive monetary policy could occur in the first quarter of 2024.
A recessionary cycle is one of the negative consequences of a lengthy restrictive policy.
Businesses could adjust to tighter liquidity conditions and lower demand by reducing output, pushing unemployment higher.
So businesses could try to recalibrate their optimum output by reducing their supply, which could maintain prices and profitability.
If the above plays out on a macro scale, rising unemployment leads to lower aggregate demand and businesses continue to cut output.
“A recessionary cycle is one of the negative consequences of a lengthy restrictive policy”
Joblessness rises with a recessionary vicious cycle playing out
Is this all by design, and are we witnessing the US economy shifting into a wartime economy with its reserve army of labour being tomorrow’s soldiers? This could be the economic draft where the army makes their numbers.
If the above is correct, then a war economy needs production fuelled by affordable credit.
All Wars Are Bankers Wars. Central banks equate to a planned economy.
Restrictive monetary policy is the metaphoric dam obstructing the civilian economy from liquidity and funnelling it and scarce resources into a wartime economy.
“Maybe the puppet masters are laughing at the 34 trillion US dollar Public deficit because, in WW3, it doesn’t matter”
– Win Investing
“Without warning, hundreds of noncommissioned officers were ordered via email to report to the recruiting school at Fort Knox, Kentucky, in less than a week, with hundreds more set to start at the school in December — a sudden unexpected move by the Army as the service scrambles to boost its recruiting force by 800 by the end of the year,” according to Militar.com, October, 23.
Maybe the puppet masters are laughing at the 34 trillion US dollar Public deficit because, in WW3, it doesn’t matter. America has conquered every European army, the Spanish, the French, the British and the Germans.
WW3 is a play for all the marbles, with two superpowers, Russia and the US, locked in an existential fight with the latter determined to maintain hegemony, the international rules that keep the dollar on the throne.
Russia is determined to maintain its sovereignty, the encroachment of NATO five times near its border and the inclusion of Ukraine into NATO, with NATO missiles perceived as an existential threat to Russia.
The strategic advantage of having NATO missiles so close to Russia’s borders would give NATO splendid first-strike capabilities, which is the rationale for Russia invading Ukraine.
Super power struggles, WW3 and international interest rates next year
Both sides are gearing up for a high-stakes war.
WW3 has already begun.
“The US and its allies could be gearing up for a war economy”
– Win Investing
“Escalating war in Europe with no road map to peace
“When big ships go down, that typically marks the beginning of a world war. Brits sinking German ships in Jutland marked the beginning of WW1.
The Japanese sinking of US ships in Pearl Harbor was the beginning of WW2.
The sinking of the Moskva, and blowing up the Nord Stream 2 Russian-German pipeline appear to be the beginning of WW3,” written in February, in a piece entitled, Escalating War in Europe.
The end of the road map could be a limited nuclear war.
But both sides will try to wear each other down using conventional war as a preferred strategy because the risk of nuclear escalation and its catastrophic consequences makes nuclear war the least preferred option. A kingdom of ashes is no victory.
The US and its allies could be gearing up for a war economy, which will likely be supported by an accommodating central bank.
To fight a conventional war, the US and its allies will likely want to bolster their productive economy and rebuild supply lines with affordable credit.
It is no surprise international interest rates next year are expected to fall
Industrial stocks are likely to outperform if fighting continues to escalate in Europe. If the war spreads to Western Europe it could disrupt industrial production in Germany, which is already disadvantaged by higher gas costs.
In a classic Beggar-thy-neighbor policy, the more dire the prospects look in Europe, the brighter opportunities are in the US.
“Fuck the EU” Nuland gets promoted to Under Secretary of State for Political Affairs, and the dots are connected.
The International Monetary Fund (IMF) expects most advanced economies to begin gradually easing international interest rates by mid-2024
Japan is poised to do the opposite. In 2025, the country is forecasted by the IMF to see its first positive interest rates in nine years.