Hi members, In today’s live session we kicked off with the term Stagflation. So are there signs of stagflation?
What is Stagflation?
According to Investopedia, “Stagflation is characterized by slow economic growth and relatively high unemployment—or economic stagnation—which is at the same time accompanied by rising prices (i.e., inflation). Stagflation can also be defined as a period of inflation combined with a decline in the gross domestic product (GDP).
Here is a link to a Youtube video that explains this in one min. I have also put a link for an article that I found on the Forbes website.
I then went on to show that we can see this currently already happening in the United Kingdom. If you saw last week’s GDP and manufacturing figures you can clearly see that the UK economy is slowing down. Then the Employment figures also came out worse than expected. Wages have slowed down, the Unemployment rate has increased by 0.2% and more people have filed for unemployment in the previous month. The BOE also forecasted that they will see unemployment rise to 5% by end of this year/start of next year.
This is just some proof for one country but it could have already started in other parts of the world.
The top 3 Aussie miners lost $11bn in value this week due to China demand dropping because of the COVID lockdown and also global fears of a recession.
This is not good news for the Australian economy because as we know almost 50% of their GDP comes from exports of Iron ore, coal, petroleum gas and gold.
Also they export 40% to China and most of this is Iron ore and coal. Therefore If things continue this way the Australian economy could suffer.
The website below has information on various countries, imports, exports etc.
In Europe Macron lost control of the French National Assembly following a strong performance by a left alliance and the far right.
He will now be facing a no confidence vote soon which will decide if we will be president or not.
This is not good news for the Euro and as mentioned the market doesn’t like uncertainty so trading the EUR could be tricky for the next few weeks.
You can find the full webinar session below, I start going into the trades at 10:30 and Earth and Sky towards the end around 38min :