One reason why Federal Reserve Chairman Janet Yellen may have been keen to suggest that Brexit would create international chaos is that it diverts attention away from the Fed’s own failings. Despite claiming that the US economy was strong enough to begin raising interest rates; the one attempt to do so last December resulted in the worst stock market opening ever in January this year. Since then, the four rate rises the Fed promised have failed to materialise, suggesting that they know something that the mainstream media has not picked up on.
According to Michael Pento at CNBC, that “something” is a string of economic indicators that show that the US economy has already slipped into recession:
“The falling copper price, tumbling global trade, a flattening yield curve, weakening industrial production and the rolling over of monthly job creation all point to an economy headed into contraction.”
Pento also points to last month’s surprise slump in US employment as evidence that the recession has already begun. This is important because employment figures are a backward looking indicator – firms do not lay workers off in anticipation of a recession; they do so when they can no longer afford to keep people on. So a fall in employment signals that employers are already responding to a downturn.
The problem for us all this time around is that the US economy was the only one that was thought to have escaped the Great Recession:
“There is little debate that the worldwide economy is stagnating, and despite what some would like to argue, the United States has not been immune from this slowdown at all.”
If the US economy stalls, it is likely to cause an economic domino effect around the world. Moreover, this time around many of the solutions available to governments and central banks in 2008 will not work. Interest rates are already at rock bottom – negative in Germany and Japan. Quantitative easing has experienced severe diminishing returns. It may well be that nothing short of a debt-jubilee and a global currency reset will save us this time… but that is the one thing the global elite is determined not to do.