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Japan just joined the “inflate or die” party.
Globally, central banks are engaged in an aggressive monetary easing cycle. The European Central Bank (ECB) has already cut rates eight times… The Bank of England (BoE) has cut rates five times…The Swiss National Bank (SNB) has cut rates six times to ZERO. And the Fed just implemented its first cut in 2025, with the Fed dot plots forecasting two more rate cuts by year end.
Why are central banks doing this? Don’t they understand that this easing will likely trigger another round of inflation?
Central banks are easing monetary conditions because they have no choice.
The pandemic ended over two years ago… but governments have NOT returned to pre-pandemic levels of spending. Globally governments continue to engage in massive fiscal stimulus programs/ overspending. Because taxes are inadequate to finance this it means that governments are running huge fiscal deficits. And these deficits require the large-scale issuance of debt to finance.
Put simply, globally the debt bubble is increasing at an alarming rate.
Now, there are three ways of dealing with excess debt:
- Pay it off/ grow out of it.
- Default.
- Attempt to “inflate it away” by devaluing your currency so each future debt payment is worth less in real terms.
Central banks are opting for #3. And as I noted earlier, Japan has finally joined the “inflate or die” party.
Earlier this week, the people of Japan elected Sanae Takaichi, a pro-fiscal spending, pro-inflation candidate. This marks a massive shift globally as it signals that EVERY major government in the world (the US, China, Japan, and Europe) is now PRO-fiscal spending.
This is only going to worsen the debt situation… which is going to force central banks to ease even more aggressively. And the markets know it!
Gold hit a new all-time high yesterday. As I write this it’s now within spitting distance of $4,000 per ounce. Bitcoin is also at new all-time highs. And so are stocks.
This is the Great Global Melt Up. And it is nowhere near over. Remember, EVERY major country in the world is now in a race to devalue its currency. This means that trillions of Dollars/ Euros/ Yen in capital is fleeing cash and moving into risk assets.
The time to profit from this is NOW… because when this melt up ends and the bubble bursts… the world will experience a debt crisis that will make 2008 look like a picnic.
On that note, we just published a Special Investment Report concerning THREE investments poised to produce extraordinary gains during the Great Global Melt Up. As I write this, all three of them are roaring to new all-time highs.
Normally I’d charge $499 for this report as a standalone item, but based on what is happening in the markets today we are making just 100 FREE copies available to the public.
To grab one of the last remaining copies…
Best Regards
Graham Summers, MBA
Chief Market Strategist
Phoenix Capital Research