RECESSION officially arrives

It’s official. Recession for Europe.

And the reason is simple. Energy.

Unlike the so-called experts, none of us are surprised.

(I’ve been arguing for months that an energy crunch could massively disrupt the global economy.)

And the moment has finally come.

In defiance of what many were expecting, the eurozone actually shrank for two consecutive quarters. A recession is underway.

The main surprise came from Germany. It dramatically had to reduce its growth estimate into a decline. Now, eight nations in the EU in total are contracting during the first quarter of this year – Estonia, Lithuania, Malta, the Netherlands, Hungary, and Greece are down. Ireland is down by 4.6% during the first three months, all during an immigration and housing crisis.

What’s incredible is that this is happening when the European Central Bank is preparing to raise interest rates again, because it wants to get inflation down to 2%.

In other words, this is probably going to get worse before it gets better.

Energy prices are the crucial factor. On one hand, gas prices are down somewhat.

However, the increasing reliance on renewable energy makes Europe extremely vulnerable to price swings. Seasonally, we are looking at major volatility.

That in turn makes it far more difficult for companies to plan for the long term. The natural response is to cut back, exacerbating the problem.

So if we see a decline in energy prices in the short term, that may simply be because we are plunging into a Continental recession.

As the geopolitical picture heats up, especially as the Ukrainian counteroffensive gets underway, oil and gas will remain the central concern. Stay focused on what’s important, protect yourself and your investments, and never take the happy talk from the politicians and the central bankers at face value.

Our job is to give you the facts – and we will never stop doing our duty.

Keep Moving,

WORD ON THE STREET

BAD NEWS IS GOOD NEWS

Jobless Spike May Cause Fed To Lighten Up – First-time jobless claims were up last week by 28,000, hitting 261,000 for the week ended June 3. It’s the highest level since October 30, 2021 and was well ahead of the expected 237,250. That’s bad – but it means the Fed’s campaign to cool down the economy is working. That could lead to the Fed lightening up on interest rates – which would be very good news.
Trump Faces Indictment – Special counsel Jack Smith has reportedly informed former president Donald Trump that he is facing federal charges on handling classified information out of office. “I’ve done NOTHING wrong, but I have assumed for years that I am a Target of the WEAPONIZED DOJ & FBI,” Trump posted on social media.

President Trump accused Jack Smith of being part of a “pack of rabid wolves” using the justice system to interfere with his comeback bid

A Sign Inflation Is Declining – Used car prices in the United States have declined for the second month in a row. The Manheim Used Vehicle Value Index was down to 224.5, a 2.7% drop from April and 7.6% lower year-over-year.
Ukraine Launches Counteroffensive – The Zaporizhzhia region is the center of the new battle between Ukraine and Russia, with the flat region ideal for an armored push. Mariupol, one of the key prizes taken by Russia in the war, could be the final target. However, failure could jeopardize continued Western support for Kyiv.

HOT SPOTS: What’s Going on in Geopolitics

New Cold War Just Dropped – The Wall Street Journal reports that China and Cuba have reached an agreement to set up a new base on the island to spy on the United States. China will get access to communications in the southeastern United States; Cuba will reportedly get several billion dollars from Beijing.
Saudis Seize On Sports – Saudi Arabia’s Public Investment Fund, worth about $700 billion, is taking over four domestic soccer clubs in the Kingdom. Combined with the merger of the PGA Tour with LIV Golf, the Sovereign Fund is now one of the most important forces in global sports.
USA Ups Foreign Aid To Middle East – American Secretary of State Antony Blinken said that the United States will up its contribution to a fund of about $600 million that will take care of areas once ruled by the Islamic State. Blinken said poor security and lack of economic opportunity “are the fuel for the kind of desperation on which the [Islamic State] feeds and recruits.”

CUTTING EDGE: What‘s Happening In Tech

Energy Drink Supplement Linked To Longer Life? – If true, I will live forever. Taruine, an amino acid found in certain foods and, most importantly, energy drinks, was linked to longer life. Of course, the study was only for mice, monkeys, and worms – so don’t go through that case of Red Bull just yet.
OOPS… COVID-19 Vax Pulled – Don’t worry, it was just 19 million people. Johnson & Johnson’s COVID-19 vaccine authorization has been pulled by the FDA. The single-dose vaccine has been mired in controversy after it was accused of causing severe blood clotting disorders in rare cases.
The Power Of The Void – Commonwealth Fusion Systems, along with seven other companies, have received a grant from the Department of Energy worth $46 million in total to research nuclear fusion. The very form of energy created by stars, it could potentially solve the energy crisis for good – but a solution is a long way off. “We’re at the beginning of a race,” said CEO Bob Mumgaard to CNBC.

The company has raised $2 billion in venture capital

It isn’t that people don’t want to own a home; they simply can’t afford one.

There’s perhaps no bigger financial decision than whether or not to buy a home. With interest rates increasing and Wall Street prowling the housing market, is this the time to act? In this critically important column, Dr. Brian Jones presents what you need to know.

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RECESSION officially arrives

WORD ON THE STREET

BAD NEWS IS GOOD NEWS

A Sign Inflation Is Declining – Used car prices in the United States have declined for the second month in a row. The Manheim Used Vehicle Value Index was down to 224.5, a 2.7% drop from April and 7.6% lower year-over-year.

HOT SPOTS: What’s Going on in Geopolitics

Saudis Seize On Sports – Saudi Arabia’s Public Investment Fund, worth about $700 billion, is taking over four domestic soccer clubs in the Kingdom. Combined with the merger of the PGA Tour with LIV Golf, the Sovereign Fund is now one of the most important forces in global sports.

CUTTING EDGE: What‘s Happening In Tech

OOPS… COVID-19 Vax Pulled – Don’t worry, it was just 19 million people. Johnson & Johnson’s COVID-19 vaccine authorization has been pulled by the FDA. The single-dose vaccine has been mired in controversy after it was accused of causing severe blood clotting disorders in rare cases.

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