The latest inflation data shows what we have all been saying....

The latest inflation data shows what we have all been saying. The "soft landing" mantra is BS (and so is all the AI hype).

=> If there is no severe recession, then inflation just keeps going up and up and up (like it did in the 70s). This is because wages keep rising and businesses have to keep putting up their prices to pay for the higher wages and other costs.

The only way to stop it is to hike rates, break the economy and cause a reset (i.e. the evaporation of wealth). Then they can cut rates to zero and start QE again to help everyone climb out of the mire and restart the cycle all over again.

I think the reset is way overdue and was deliberately postponed by Biden pumping up the US economy (with trillions in gov spending) and by propping up the banks with hidden bailouts (e.g. the BTFP and bond swap deal). They are also lying about the real inflation and employment data.

So the long term outlook is bad. What about the short term?

If the market goes up in the coming month, it's not going to go up much. This is because consumers are worried and cutting back up on spending. The likelihood of a rate hike soon has made this worse. Forward orders on miners are grim and banks aren't lending and are competing on margin.

The chart below is the All Ords dividend yield. The spikes up are market crashes. When the market goes sideways and the dividend yield goes down, its a bad omen. It means businesses are earning less and are cutting the dividend and could be cutting jobs soon.




https://www.marketindex.com.au/news/could-asx-earnings-and-dividends-beat-the-odds-and-rise-this-year