Thursday's Markets Update (December 21, 2023)

22 Dec 2023 by rate3

On Thursday, the Nasdaq and other stock indexes rallied, as weaker-than-expected US GDP growth reinforced expectations of future Fed interest rate cuts. Tesla stock rose nearly 3% on reports of potential US tariffs on Chinese electric vehicle makers. Meta shares added 1% and are headed for their best year on record. BTC and ETH, although trading in the green zone, were still lacking a decisive bullish impulse to get them over two-week old resistance levels.

Details

The economy grew 4.9% annually in Q3, slightly below estimate of 5.2%. Consumer spending and trade rose less than expected, but business investment and government spending increased more than anticipated. Still the strongest growth since late 2021.

Comment: Why such a spike in GDP happened while all main-stream analysts predicted the recession?

The unexpected spike in the US's Q4 real GDP, driven by a substantial increase in retail sales and sustained consumer expenditure, provides a compelling testament to the resilience of the public amidst a backdrop of negative rhetoric from aging government officials and politicians. Despite the prevailing doom and gloom portrayed by centralized government elites, this economic surge suggests that the traditional model of "representative democracy" might be losing its grip on shaping public sentiment.

The continued rise in consumer spending, seemingly unaffected by the narratives propagated by the political establishment, underscores a growing disconnection between official channels and the public's lived experiences. It hints at a shift where citizens are increasingly relying on decentralized information sources and forming opinions outside the influence of government-led manipulation.

This economic endurance, defying pessimistic projections, aligns with the principles of decentralized systems, challenging the efficacy of centralized control in shaping public opinion and economic behavior. The Q4 GDP performance serves as a stellar confirmation that the public is carving its own path, guided less by traditional political narratives and more by decentralized and diverse sources of information.

World Economic

Japan's annual inflation rate fell to 2.8% in November from 3.3% in October, the lowest since July 2022. Price growth moderated across most categories, especially food and fuel, while core inflation also declined to 2.5%. Deflationary monthly price changes indicate easing inflationary pressures in Japan.

Comment: Do you need more prove that Fed is useless?

The news about Japan's inflation tanking while the Bank of Japan keeps rates in the basement, and the Fed cranks them up to the stratosphere, is a stark slap in the face to the supposed gospel of central banking. Despite Japan leaning on Chinese and EU markets and being heavily into oil exports, they keep their inflation numbers down just by waiting it out and recognizing that it has nothing to do with their central bank (BoJ) actions or non-actions.

All BoJ has been caring about all those post-enclosure years is to stimulate employers to rise (!) the wages of their employees in order to help them to keep up with the non-core inflation. Meanwhile, the U.S., which isn't as entangled in those oil/food messes, sees the Fed hiking rates like there's no tomorrow but still unable to combat the inflation as effectively as BoJ with its non-action approach.

The fact that Japan's inflation is doing a nose-dive, despite the BoJ keeping rate below zero, seriously questions our necessity in these Fed aging "wizards". The Fed's policy doesn't seem to have much grounding in reality. If anything, this stark contrast between Japan and the U.S. exposes the Fed's scam. Maybe it's time to ask if we're all just caught up in a central banking slavery for no reason at all.