‘Too big to fail’ was bad enough for the banks. Now we have ‘too many to fail.’
Last Updated: Feb. 13, 2024 at 1:20 p.m. ET

People line up outside of the shuttered Silicon Valley Bank headquarters on March 10, 2023, in Santa Clara, Calif.
Getty Images
Almost a year after the mini banking crisis in the United States, it is worth revisiting the episode. Was it just a tempest in a teacup? Was there really a systemic threat, or was it just a problem with a few banks? Should the interventions by the U.S. Federal Reserve and Treasury worry or comfort us?

Recall that three mid-size U.S. banks suddenly failed around March 2023. The most prominent was Silicon Valley Bank, which became the second-largest bank failure in U.S. history, after Washington Mutual in 2008. Roughly 90% of the deposits at SVB were uninsured, and uninsured deposits are prone to runs. Making matters worse, SVB had invested significant sums in long-term bonds, the market value of which fell as interest rates rose. When SVB sold some of these holdings to raise funds, the unrealized losses embedded in its bond portfolio started coming to light. A failed equity offering then triggered a classic bank run.

It is convenient to think that these issues were confined to just a few rogue banks. But the problem was systemic.

When the Fed engages in quantitative easing (QE), it buys bonds from financial institutions. Typically, those sellers then deposit the money in their bank, and this results in a large increase in uninsured deposits in the banking system. On the banks’ asset side, there is a corresponding increase in central-bank reserves. This is stable, since reserves are the most liquid asset on the planet and can be used to satisfy any impatient depositors who come for their money. Unfortunately, a number of smaller banks (with less than $50 billion in assets) moved away from this stable position as QE continued.

Historically, smaller U.S. banks financed themselves conservatively, with uninsured demandable deposits accounting for only around 10% of their liabilities. Yet by the time the Fed was done with its pandemic-era QE, these banks’ uninsured demandable deposits exceeded 30% of liabilities. Though that level was still far below SVB’s, these institutions clearly had drunk from the same firehose.

Smaller banks were also more conservative about liquidity in the past. At the outset of QE in late 2008, banks with less than $50 billion in assets had reserves (and other assets that could be used to borrow reserves) that exceeded the uninsured demandable deposits they had issued. By early 2023, however, they had issued runnable claims (in aggregate) that were one and a half times the size of their liquid assets. Instead of holding liquid reserves, their assets were now more weighted toward long-term securities and term lending, including a significant share of commercial real-estate (CRE) loans.

Advertisement
Thus, as the Fed raised interest rates, the economic value of these banks’ assets fell sharply. Some of the fall was hidden by accounting sleight of hand, but SVB’s sudden demise caused investors to scrutinize banks’ balance sheets more carefully. What they saw did not instill confidence. The KBW Nasdaq Bank Index duly fell by over 25%, and deposits started flowing out of a large number of banks, many of which lacked the liquidity to accommodate the sudden outflows. The risk of contagious runs across smaller banks was real, as was the possibly of the problem spreading more widely.

The Treasury essentially took bank runs off the table, while the Fed provided banks the funds to accommodate the continuing — though no longer panicked — depositor outflows.

Importantly, as private money flowed to large banks, very little flowed to small- and medium-size institutions. That is why the authorities had to come to the rescue. Soon after SVB’s demise, the Treasury signaled that no uninsured depositor in small banks would suffer losses in any further bank collapses.

The Fed opened a generous new facility that lent money for up to one year to banks against the par, or face value, of the securities they held on their balance sheets, without adjusting for the erosion in the value of these securities from higher interest rates. And the Federal Home Loan Banks (FHLBanks) — effectively an arm of the U.S. government — increased its lending to stressed banks, with total advances to the banking system having already tripled between March 2022 and March 2023 amid the Fed’s policy tightening. Borrowing by small- and medium-size banks from these official sources skyrocketed.

The Treasury essentially took bank runs off the table, while the Fed provided banks the funds to accommodate the continuing — though no longer panicked — depositor outflows. A potential banking crisis was converted into a slow-burning problem for banks as they recognized and absorbed the losses on their balance sheets.

Just recently, New York Community Bancorp NYCB, -5.17%, which bought parts of one of the banks that failed in 2023, reminded us that this process is still underway when it announced large losses. With the Russell microcap index of small companies significantly underperforming the S&P 100 index OEX of the largest companies since March 2023, it appears that smaller banks’ troubles have weighed on their traditional clients: small- and medium-size companies.

Where does that leave us? Although the situation could have been much worse if the Treasury and the Fed had not stepped in, the seeming ease with which the panic was arrested allowed public attention to move on. Apart from die-hard libertarians, no one seems to care much about the extent of the intervention that was needed to rescue the smaller banks, nor has there been any broad inquiry into the circumstances that led to the vulnerabilities.

As a result, several questions remain unanswered. To what extent were the seeds of the 2023 banking stress sown by the pandemic-induced monetary stimulus and lax supervision of what banks did with the money? Did advances by the FHLBanks delay failed banks’ efforts to raise capital? Are banks that relied on official backstops after SVB’s failure keeping afloat distressed CRE borrowers, and therefore merely postponing an eventual reckoning?

It is not good for capitalism when those who knowingly take risks — bankers and uninsured depositors, in this case — pay no price when a risk materializes. Despite sweeping banking reforms over the past 15 years, the authorities have once again shown that they are willing to bail out market players if enough of them have taken the same risk.

“Too big to fail” was bad enough, but now we have “too many to fail.” The mini-crisis of March 2023 was much more than a footnote in banking history. We cannot afford to bury it.

Raghuram G. Rajan, a former governor of the Reserve Bank of India, is professor of finance at the University of Chicago Booth School of Business and the author, most recently, of Monetary Policy and Its Unintended Consequences (The MIT Press, 2023). Viral V. Acharya, a former deputy governor of the Reserve Bank of India, is professor of economics at New York University’s Stern School of Business.

This commentary was published with the permission of Project Syndicate — The Danger of Forgetting the 2023 Banking Crisis.

More: Regional-bank bondholders seem unworried by New York Community Bank’s problems

Also read: Recession in 2024? A quarter of economists think it will happen.


PAR-TY… . https://www.marketwatch.com/story/too-big-to-fail-was-bad-enough-for-the-banks-now-we-have-too-many-to-fail-d89dcdda

Getting Sick More Often Because of "Immunity Theft or Debt"
Concepts Proposed to Explain Kids and Adults Getting Sick More Often

Peter McCullough, MD
By Peter A. McCullough, MD, MPH

Prior to the pandemic, I was healthy and on average had 2-4 head colds per year. In 2020, I contracted COVID-19, probably the alpha variant with some pulmonary involvement. Treated late in an FDA approved RCT with drugs that later were incorporated into the McCullough Protocol. In 2021 I declined COVID-19 vaccination, and contracted SARS-CoV-2 infection a second time, probably with Omicron. In 2022, I had no less than 12 upper respiratory tract infections (URI) with post-infectious asthma. In 2023 I had at least six such infections with the finale being a three month illness with persistent, productive cough. Many of you saw me on national TV or podcasts with a raw voice and at times an unstoppable cough. Could SARS-CoV-2 infection or something about the pandemic response altered my immunity to common respiratory viruses? Has this happened to you or your children?

An OPED appeared in JAMA from Rita Rubin, a medical writer introducing new pandemic terms “immunity theft” and “immunity debt.” The paper largely focusses on children and hints at either lockdowns, social distancing, masks, or other factors that could have changed our susceptibility to common upper respiratory tract infections including respiratory syncytial virus (RSV) in children. Not mentioned in the paper are recurrent SARS-CoV-2 infection and vaccination, both of which install the SARS-CoV-2 Spike protein in the body as a constant stimulus and potentially a distractor or suppressant to the immune system.


Rubin R. From "Immunity Debt" to "Immunity Theft"-How COVID-19 Might Be Tied to Recent Respiratory Disease Surges. JAMA. 2024 Jan 10. doi: 10.1001/jama.2023.26608. Epub ahead of print. PMID: 38198193.
Rubin also failed to mention the emerging literature on false positive HIV tests occurring both after COVID-19 illness and vaccination. Even though the HIV virus is not present, could the antigens that are stimulating HIV antibodies also work as immunosuppressants?

I recognize this article raises more questions than it answers, but I wanted our readers to be thinking about the effects in their bodies of what happened:

2020, 2021 we all had less exposure other other people and the viruses they harbor

Virtually of us contracted SARS-CoV-2 at least once if not more

75% of Americans took one or more COVID-19 vaccines, 94% were mRNA products probably still in the body altering the immune system today

We need considerable research on population and individual level immunity. In the meantime the risks of more frequent URI’s include secondary bacterial bronchitis and pneumonia must be anticipated. This is strong call for all adults to to have an Emergency Medical Kit from The Wellness Company at home, school, office, and on the road. It has a formulary of antimicrobials, a guidebook, and telemedicine consultation to help you through the next illness. Use PROMO Code COURAGE for a free membership and additional savings as a Courageous Discourse reader.


Please subscribe to Courageous Discourse as a paying or founder member so we can continue to bring you the truth.

Share

Peter A. McCullough, MD, MPH

Chief Scientific Officer, The Wellness Company

Rubin R. From "Immunity Debt" to "Immunity Theft"-How COVID-19 Might Be Tied to Recent Respiratory Disease Surges. JAMA. 2024 Jan 10. doi: 10.1001/jama.2023.26608. Epub ahead of print. PMID: 38198193.

https://open.substack.com/pub/petermcculloughmd/p/getting-sick-more-often-because-of?r=29hg4d&utm_medium=ios&utm_campaign=post

USING YOUR MENTAL ENERGY
PART 94

#Mental faculties always work under something that stimulates them.

This #stimulus might come either from without, thru external senses, or from within, by the #consciousness of something not perceptible on the #PhysicalPlane.

The recognition of this internal source of stimulus enables you to bring into your consciousness any state you desire.

The Age of Megathreats
Nouriel RoubiniNov 4, 2022
op_roubini3_Getty Images_worlddisaster Getty Images
NEW YORK – Severe megathreats are imperiling our future – not just our jobs, incomes, wealth, and the global economy, but also the relative peace, prosperity, and progress achieved over the past 75 years. Many of these threats were not even on our radar during the prosperous post-World War II era. I grew up in the Middle East and Europe from the late 1950s to the early 1980s, and I never worried about climate change potentially destroying the planet. Most of us had barely even heard of the problem, and greenhouse-gas emissions were still relatively low, compared to where they would soon be.

Moreover, after the US-Soviet détente and US President Richard Nixon’s visit to China in the early 1970s, I never really worried about another war among great powers, let alone a nuclear one. The term “pandemic” didn’t register in my consciousness, either, because the last major one had been in 1918. And I didn’t fathom that artificial intelligence might someday destroy most jobs and render Homo sapiens obsolete, because those were the years of the long “AI winter.”

Similarly, terms like “deglobalization” and “trade war” had no purchase during this period. Trade liberalization had been in full swing since the Great Depression, and it would soon lead to the hyper-globalization that began in the 1990s. Debt crises posed no threat, because private and public debt-to-GDP ratios were low in advanced economies and emerging markets, and growth was robust. No one had to worry about the massive build-up of implicit debt, in the form of unfunded liabilities from pay-as-you-go social security and health-care systems. The supply of young workers was rising, the share of the elderly was still low, and robust, mostly unrestricted immigration from the Global South to the North would continue to prop up the labor market in advanced economies.

Against this backdrop, economic cycles were contained, and recessions were short and shallow, except for during the stagflationary decade of the 1970s; but even then, there were no debt crises in advanced economies, because debt ratios were low. The kind of financial cycles that lead to crises were contained not just in advanced economies but even in emerging markets, owing to the low leverage, low risk-taking, solid financial regulation, capital controls, and various forms of financial repression that prevailed during this period. The advanced economies were strong liberal democracies that were free of extreme partisan polarization. Populism and authoritarianism were confined to a benighted cohort of poorer countries.

Goodbye to All That

Fast-forward from this relatively “golden” period between 1945 and 1985 to late 2022, and you will immediately notice that we are awash in new, extreme megathreats that were not previously on anyone’s mind. The world has entered what I call a geopolitical depression, with (at least) four dangerous revisionist powers – China, Russia, Iran, and North Korea – challenging the economic, financial, security, and geopolitical order that the United States and its allies created after WWII.

There is a sharply rising risk not only of war among great powers but of a nuclear conflict. In the coming year, Russia’s war of aggression in Ukraine could escalate into an unconventional conflict that directly involves NATO. And Israel – and perhaps the US – may decide to launch strikes against Iran, which is on its way to building a nuclear bomb.


Subscribe to PS Digital now to read all the latest insights from Nouriel Roubini.

Digital subscribers enjoy access to every PS commentary, including those by Nouriel Roubini, plus our entire On Point suite of subscriber-exclusive content, including Longer Reads, Insider Interviews, Big Picture/Big Question, and Say More.

For a limited time, save $15 with the code ROUBINI15.

Subscribe Now

With Chinese President Xi Jinping further consolidating his authoritarian rule, and with the US tightening its trade restrictions against China, the new Sino-American cold war is getting colder by the day. Worse, it could all too easily turn hot over the status of Taiwan, which Xi is committed to reuniting with the mainland, and which US President Joe Biden is apparently committed to defending. Meanwhile, nuclear-armed North Korea has once again been seeking attention by firing rockets over Japan and South Korea.

Cyberwarfare occurs daily between these revisionist powers and the West, and many other countries have adopted a non-aligned posture toward Western-led sanctions regimes. From our contingent vantage point in the middle of all these events, we don’t yet know if World War III has already begun in Ukraine. That determination will be left to future historians – if there are any.

Even discounting the threat of nuclear Armageddon, the risk of an environmental Apocalypse is becoming increasingly serious, especially given that most of the talk about net-zero and ESG (environment, social, and governance) investing is just greenwashing – or greenwishing. The new greenflation is already in full swing, because it turns out that amassing the metals needed for the energy transition requires a lot of expensive energy.

There is also a growing risk of new pandemics that would be worse than biblical plagues, owing to the link between environmental destruction and zoonotic diseases. Wildlife, carrying dangerous pathogens, are coming into closer and more frequent contact with humans and livestock. That is why we have experienced more frequent and virulent pandemics and epidemics (HIV, SARS, MERS, swine flu, bird flu, Zika, Ebola, COVID-19) since the early 1980s. All the evidence suggests that this problem will become even worse in the future. Indeed, owing to the melting of Siberian permafrost, we may soon be confronting dangerous viruses and bacteria that have been locked away for millennia.

Moreover, geopolitical conflicts and national-security concerns are fueling trade, financial, and technology wars, and accelerating the deglobalization process. The return of protectionism and the Sino-American decoupling will leave the global economy, supply chains, and markets more balkanized and fragmented. The buzzwords “friend-shoring” and “secure and fair trade” have replaced “offshoring” and “free trade.”

But on the domestic front, advances in AI, robotics, and automation will destroy more and more jobs, even if policymakers build higher protectionist walls in an effort to fight the last war. By both restricting immigration and demanding more domestic production, aging advanced economies will create a stronger incentive for companies to adopt labor-saving technologies. While routine jobs are obviously at risk, so, too, are any cognitive jobs that can be unbundled into discrete tasks, and even many creative jobs. AI language models like GPT-3 can already write better than most humans and will almost certainly displace many jobs and sources of income. In due course, some scientists believe that Homo sapiens will be rendered entirely obsolete by the rise of artificial general intelligence or machine super-intelligence – though this is a highly contentious subject of debate.

Thus, over time, economic malaise will deepen, inequality will rise even further, and more white- and blue-collar workers will be left behind.

Hard Choices, Hard Landings

The macroeconomic situation is no better. For the first time since the 1970s, we are facing high inflation and the prospect of a recession – stagflation. The increased inflation in advanced economies wasn’t “transitory.” It is persistent, driven by a combination of bad policies – excessively loose monetary, fiscal, and credit policies that were kept in place for too long – and bad luck. No one could have anticipated how much the initial COVID-19 shock would curtail the supply of goods and labor and create bottlenecks in global supply chains. The same goes for Russia’s brutal invasion of Ukraine, which caused a sharp spike in energy, food, fertilizers, industrial metals, and other commodities. Meanwhile, China has continued its “zero-COVID” policy, which is creating additional supply bottlenecks.

While both demand and supply factors were in the mix, it is now widely recognized that the supply factors have played an increasingly decisive role. This matters for the economic outlook, because supply-driven inflation is stagflationary and thus increases the risk that monetary-policy tightening will produce a hard landing (increased unemployment and potentially a recession).

What will follow from the US Federal Reserve and other major central banks’ current tightening? Until recently, most central banks and most of Wall Street belonged to “Team Soft Landing.” But the consensus has rapidly shifted, with even Fed Chair Jerome Powell recognizing that a recession is possible, that a soft landing will be “very challenging,” and that everyone should prepare for some “pain” ahead. The Federal Reserve Bank of New York’s model shows a high probability of a hard landing, and the Bank of England has expressed similar views about the United Kingdom. Several prominent Wall Street institutions have also now made a recession their baseline scenario (the most likely outcome if all other variables are held constant).

History, too, points to deeper problems ahead. For the past 60 years in the US, whenever inflation has been above 5% (it is above 8% today), and unemployment has been below 5% (it is now 3.5%), any attempt by the Fed to bring inflation down toward its 2% target has caused a recession. Thus, a hard landing is much more likely than a soft landing, both in the US and across most other advanced economies.

Sticky Stagflation

In addition to the short-term factors, negative supply shocks and demand factors in the medium term will cause inflation to persist. On the supply side, I count eleven negative supply shocks that will reduce potential growth and increase the costs of production. Among these is the backlash against hyper-globalization, which has been gaining momentum and creating opportunities for populist, nativist, and protectionist politicians, and growing public anger over stark income and wealth inequalities, which is leading to more policies to support workers and the “left behind.” However well-intentioned, such measures will contribute to a dangerous wage-price spiral.

Other sources of persistent inflation include rising protectionism (from both the left and the right), which has restricted trade, impeded the movement of capital, and heightened political resistance to immigration, which in turn has put additional upward pressure on wages. National-security and strategic considerations have further restricted flows of technology, data, and talent, and new labor and environmental standards, as important as they may be, are hampering both trade and new construction.

This balkanization of the global economy is deeply stagflationary, and it is coinciding with demographic aging, not just in developed countries but also in large emerging economies such as China. Because young people tend to produce and save more, whereas older people spend down their savings and require many more expensive services in health care and other sectors, this trend, too, will lead to higher prices and slower growth.

Today’s geopolitical turmoil further complicates matters. The disruptions to trade and the spike in commodity prices following Russia’s invasion were not just a one-off phenomenon. The same threats to harvests and food shipments that arose in 2022 may well persist in 2023. Moreover, if China does finally end its zero-COVID policy and begin to restart its economy, a surge in demand for many commodities will add to the global inflationary pressures. There is also no end in sight for Sino-Western decoupling, which is accelerating across all dimensions of trade (goods, services, capital, labor, technology, data, and information). And, of course, Iran, North Korea, and other strategic rivals to the West could soon contribute in their own ways to the global havoc.

Now that the US dollar has been fully weaponized for strategic and national-security purposes, its position as the main global reserve currency could eventually begin to decline, and a weaker dollar would of course add to inflationary pressures in the US. More broadly, a frictionless world trading system requires a frictionless financial system. But sweeping primary and secondary sanctions have thrown sand in what was once a well-oiled machine, massively increasing the transaction costs of trade.

On top of it all, climate change, too, will create persistent stagflationary pressures. Droughts, heat waves, hurricanes, and other disasters are increasingly disrupting economic activity and threatening harvests (thus driving up food prices). At the same time, demands for decarbonization have led to underinvestment in fossil-fuel capacity before investment in renewables has reached the point where they can make up the difference. Today’s large energy-price spikes were inevitable.

The increased likelihood of future pandemics also represents a persistent source of stagflation, especially considering how little has been done to prevent or prepare for the next one. The next contagious outbreak will lend further momentum to protectionist policies as countries rush to close borders and hoard critical supplies of food, medicines, and other essential goods.

Finally, cyberwarfare remains an underappreciated threat to economic activity and even public safety. Firms and governments will either face more stagflationary disruptions to production, or they will have to spend a fortune on cybersecurity. Either way, costs will rise.

The Worst of All Possible Economies

When the recession comes, it will not be short and shallow but long and severe. Not only are we facing persistent short- and medium-term negative supply shocks, but we are also heading into the mother of all debt crises, owing to soaring private and public debt ratios over the last few decades. Low debt ratios spared us from that outcome in the 1970s. And though we certainly had debt crises following the 2008 crash – the result of excessive household, bank, and government debt – we also had deflation. It was a demand shock and a credit crunch that could be met with massive monetary, fiscal, and credit easing.

Today, we are experiencing the worst elements of both the 1970s and 2008. Multiple, persistent negative supply shocks have coincided with debt ratios that are even higher than they were during the global financial crisis. These inflationary pressures are forcing central banks to tighten monetary policy even though we are heading into a recession. That makes the current situation fundamentally different from both the global financial crisis and the COVID-19 crisis. Everyone should be preparing for what may come to be remembered as the Great Stagflationary Debt Crisis.

While central banks have been at pains to sound more hawkish, we should be skeptical of their professed willingness to fight inflation at any cost. Once they find themselves in a debt trap, they will have to blink. With debt ratios so high, fighting inflation will cause an economic and financial crash that will be deemed politically unacceptable. Major central banks will feel as though they have no choice but to backpedal, and inflation, the debasement of fiat currencies, boom-bust cycles, and financial crises will become even more severe and frequent.

The inevitability of central banks wimping out was recently on display in the United Kingdom. Faced with the market reaction to the Truss government’s reckless fiscal stimulus, the BOE had to launch an emergency quantitative-easing (QE) program to buy up government bonds. That sad episode confirmed that in the UK, as in many other countries, monetary policy is increasingly subject to fiscal capture.

Recall that a similar turnaround occurred in 2019, when the Fed, after previously signaling continued rate hikes and quantitative-tightening, stopped its QT program and started pursuing a mix of backdoor QE and policy-rate cuts at the first sign of mild financial pressures and a growth slowdown. Central banks will talk tough; but, in a world of excessive debt and risks of an economic and financial crash, there is good reason to doubt their willingness to do “whatever it takes” to return inflation to its target rate.

With governments unable to reduce high debts and deficits by spending less or raising revenues, those that can borrow in their own currency will increasingly resort to the “inflation tax”: relying on unexpected price growth to wipe out long-term nominal liabilities at fixed interest rates.

How will financial markets and prices of equities and bonds perform in the face of rising inflation and the return of stagflation? It is likely that, as in the stagflation of the 1970s, both components of any traditional asset portfolio will suffer, potentially incurring massive losses. Inflation is bad for bond portfolios, which will take losses as yields increase and prices fall, as well as for equities, whose valuations are hurt by rising interest rates.

For the first time in decades, a 60/40 portfolio of equities and bonds suffered massive losses in 2022, because bond yields have surged while equities have gone into a bear market. By 1982, at the peak of the stagflation decade, the average S&P 500 firm’s price-to-earnings ratio was down to eight; today, it is closer to 20, which suggests that the bear market could end up being even more protracted and severe. Investors will need to find assets to hedge against inflation, political and geopolitical risks, and environmental damage: these include short-term government bonds and inflation-indexed bonds, gold and other precious metals, and real estate that is resilient to environmental damage.

The Moment of Truth

In any case, these megathreats will further contribute to rising income and wealth inequality, which has already been putting severe pressure on liberal democracies (as those left behind revolt against elites), and fueling the rise of radical and aggressive populist regimes. One can find right-wing manifestations of this trend in Russia, Turkey, Hungary, Italy, Sweden, the US (under Donald Trump), post-Brexit Britain, and many other countries; and left-wing manifestations in Argentina, Venezuela, Peru, Mexico, Colombia, Chile, and now Brazil (which has just replaced a right-wing populist with a left-wing one).

And, of course, Xi’s authoritarian stranglehold has given the lie to the old idea that Western engagement with a fast-growing China would ineluctably lead that country to open itself up even more to markets and, eventually, to democratic processes. Under Xi, China shows every sign of becoming more closed off, and more aggressive on geopolitical, security, and economic matters.

How did it come to this? Part of the problem is that we have long had our heads stuck in the sand. Now, we need to make up for lost time. Without decisive action, we will be heading into a period that is less like the four decades after WWII than like the three decades between 1914 and 1945. That period gave us World War I; the Spanish flu pandemic; the 1929 Wall Street crash; the Great Depression; massive trade and currency wars; inflation, hyperinflation, and deflation; financial and debt crises, leading to massive meltdowns and defaults; and the rise of authoritarian militarist regimes in Italy, Germany, Japan, Spain, and elsewhere, culminating in WWII and the Holocaust.

In this new world, the relative peace, prosperity, and rising global welfare that we have taken for granted will be gone; most of it already is. If we don’t stop the multi-track slow-motion train wreck that is threatening the global economy and our planet at large, we will be lucky to have only a repeat of the stagflationary 1970s. Far more likely is an echo of the 1930s and the 1940s, only now with all the massive disruptions from climate change added to the mix.

Avoiding a dystopian scenario will not be easy. While there are potential solutions to each megathreat, most are costly in the short run and will deliver benefits only over the long run. Many also require technological innovations that are not yet available or in place, starting with those needed to halt or reverse climate change. Complicating matters further, today’s megathreats are interconnected, and therefore best addressed in a systematic and coherent fashion. Domestic leadership, in both the private and public sector, and international cooperation among great powers is necessary to prevent the coming Apocalypse.

Yet there are many domestic and international obstacles standing in the way of policies that would allow for a less dystopian (though still contested and conflictual) future. Thus, while a less bleak scenario is obviously desirable, a clear-headed analysis indicates that dystopia is much more likely than a happier outcome. The years and decades ahead will be marked by a stagflationary debt crisis and related megathreats – war, pandemics, climate change, disruptive AI, and deglobalization – all of which will be bad for jobs, economies, markets, peace, and prosperity.

The Age of Megathreats
Nouriel RoubiniNov 4, 2022
op_roubini3_Getty Images_worlddisaster Getty Images
NEW YORK – Severe megathreats are imperiling our future – not just our jobs, incomes, wealth, and the global economy, but also the relative peace, prosperity, and progress achieved over the past 75 years. Many of these threats were not even on our radar during the prosperous post-World War II era. I grew up in the Middle East and Europe from the late 1950s to the early 1980s, and I never worried about climate change potentially destroying the planet. Most of us had barely even heard of the problem, and greenhouse-gas emissions were still relatively low, compared to where they would soon be.

Moreover, after the US-Soviet détente and US President Richard Nixon’s visit to China in the early 1970s, I never really worried about another war among great powers, let alone a nuclear one. The term “pandemic” didn’t register in my consciousness, either, because the last major one had been in 1918. And I didn’t fathom that artificial intelligence might someday destroy most jobs and render Homo sapiens obsolete, because those were the years of the long “AI winter.”

Similarly, terms like “deglobalization” and “trade war” had no purchase during this period. Trade liberalization had been in full swing since the Great Depression, and it would soon lead to the hyper-globalization that began in the 1990s. Debt crises posed no threat, because private and public debt-to-GDP ratios were low in advanced economies and emerging markets, and growth was robust. No one had to worry about the massive build-up of implicit debt, in the form of unfunded liabilities from pay-as-you-go social security and health-care systems. The supply of young workers was rising, the share of the elderly was still low, and robust, mostly unrestricted immigration from the Global South to the North would continue to prop up the labor market in advanced economies.

Against this backdrop, economic cycles were contained, and recessions were short and shallow, except for during the stagflationary decade of the 1970s; but even then, there were no debt crises in advanced economies, because debt ratios were low. The kind of financial cycles that lead to crises were contained not just in advanced economies but even in emerging markets, owing to the low leverage, low risk-taking, solid financial regulation, capital controls, and various forms of financial repression that prevailed during this period. The advanced economies were strong liberal democracies that were free of extreme partisan polarization. Populism and authoritarianism were confined to a benighted cohort of poorer countries.

Goodbye to All That

Fast-forward from this relatively “golden” period between 1945 and 1985 to late 2022, and you will immediately notice that we are awash in new, extreme megathreats that were not previously on anyone’s mind. The world has entered what I call a geopolitical depression, with (at least) four dangerous revisionist powers – China, Russia, Iran, and North Korea – challenging the economic, financial, security, and geopolitical order that the United States and its allies created after WWII.

There is a sharply rising risk not only of war among great powers but of a nuclear conflict. In the coming year, Russia’s war of aggression in Ukraine could escalate into an unconventional conflict that directly involves NATO. And Israel – and perhaps the US – may decide to launch strikes against Iran, which is on its way to building a nuclear bomb.


Subscribe to PS Digital now to read all the latest insights from Nouriel Roubini.

Digital subscribers enjoy access to every PS commentary, including those by Nouriel Roubini, plus our entire On Point suite of subscriber-exclusive content, including Longer Reads, Insider Interviews, Big Picture/Big Question, and Say More.

For a limited time, save $15 with the code ROUBINI15.

Subscribe Now

With Chinese President Xi Jinping further consolidating his authoritarian rule, and with the US tightening its trade restrictions against China, the new Sino-American cold war is getting colder by the day. Worse, it could all too easily turn hot over the status of Taiwan, which Xi is committed to reuniting with the mainland, and which US President Joe Biden is apparently committed to defending. Meanwhile, nuclear-armed North Korea has once again been seeking attention by firing rockets over Japan and South Korea.

Cyberwarfare occurs daily between these revisionist powers and the West, and many other countries have adopted a non-aligned posture toward Western-led sanctions regimes. From our contingent vantage point in the middle of all these events, we don’t yet know if World War III has already begun in Ukraine. That determination will be left to future historians – if there are any.

Even discounting the threat of nuclear Armageddon, the risk of an environmental Apocalypse is becoming increasingly serious, especially given that most of the talk about net-zero and ESG (environment, social, and governance) investing is just greenwashing – or greenwishing. The new greenflation is already in full swing, because it turns out that amassing the metals needed for the energy transition requires a lot of expensive energy.

There is also a growing risk of new pandemics that would be worse than biblical plagues, owing to the link between environmental destruction and zoonotic diseases. Wildlife, carrying dangerous pathogens, are coming into closer and more frequent contact with humans and livestock. That is why we have experienced more frequent and virulent pandemics and epidemics (HIV, SARS, MERS, swine flu, bird flu, Zika, Ebola, COVID-19) since the early 1980s. All the evidence suggests that this problem will become even worse in the future. Indeed, owing to the melting of Siberian permafrost, we may soon be confronting dangerous viruses and bacteria that have been locked away for millennia.

Moreover, geopolitical conflicts and national-security concerns are fueling trade, financial, and technology wars, and accelerating the deglobalization process. The return of protectionism and the Sino-American decoupling will leave the global economy, supply chains, and markets more balkanized and fragmented. The buzzwords “friend-shoring” and “secure and fair trade” have replaced “offshoring” and “free trade.”

But on the domestic front, advances in AI, robotics, and automation will destroy more and more jobs, even if policymakers build higher protectionist walls in an effort to fight the last war. By both restricting immigration and demanding more domestic production, aging advanced economies will create a stronger incentive for companies to adopt labor-saving technologies. While routine jobs are obviously at risk, so, too, are any cognitive jobs that can be unbundled into discrete tasks, and even many creative jobs. AI language models like GPT-3 can already write better than most humans and will almost certainly displace many jobs and sources of income. In due course, some scientists believe that Homo sapiens will be rendered entirely obsolete by the rise of artificial general intelligence or machine super-intelligence – though this is a highly contentious subject of debate.

Thus, over time, economic malaise will deepen, inequality will rise even further, and more white- and blue-collar workers will be left behind.

Hard Choices, Hard Landings

The macroeconomic situation is no better. For the first time since the 1970s, we are facing high inflation and the prospect of a recession – stagflation. The increased inflation in advanced economies wasn’t “transitory.” It is persistent, driven by a combination of bad policies – excessively loose monetary, fiscal, and credit policies that were kept in place for too long – and bad luck. No one could have anticipated how much the initial COVID-19 shock would curtail the supply of goods and labor and create bottlenecks in global supply chains. The same goes for Russia’s brutal invasion of Ukraine, which caused a sharp spike in energy, food, fertilizers, industrial metals, and other commodities. Meanwhile, China has continued its “zero-COVID” policy, which is creating additional supply bottlenecks.

While both demand and supply factors were in the mix, it is now widely recognized that the supply factors have played an increasingly decisive role. This matters for the economic outlook, because supply-driven inflation is stagflationary and thus increases the risk that monetary-policy tightening will produce a hard landing (increased unemployment and potentially a recession).

What will follow from the US Federal Reserve and other major central banks’ current tightening? Until recently, most central banks and most of Wall Street belonged to “Team Soft Landing.” But the consensus has rapidly shifted, with even Fed Chair Jerome Powell recognizing that a recession is possible, that a soft landing will be “very challenging,” and that everyone should prepare for some “pain” ahead. The Federal Reserve Bank of New York’s model shows a high probability of a hard landing, and the Bank of England has expressed similar views about the United Kingdom. Several prominent Wall Street institutions have also now made a recession their baseline scenario (the most likely outcome if all other variables are held constant).

History, too, points to deeper problems ahead. For the past 60 years in the US, whenever inflation has been above 5% (it is above 8% today), and unemployment has been below 5% (it is now 3.5%), any attempt by the Fed to bring inflation down toward its 2% target has caused a recession. Thus, a hard landing is much more likely than a soft landing, both in the US and across most other advanced economies.

Sticky Stagflation

In addition to the short-term factors, negative supply shocks and demand factors in the medium term will cause inflation to persist. On the supply side, I count eleven negative supply shocks that will reduce potential growth and increase the costs of production. Among these is the backlash against hyper-globalization, which has been gaining momentum and creating opportunities for populist, nativist, and protectionist politicians, and growing public anger over stark income and wealth inequalities, which is leading to more policies to support workers and the “left behind.” However well-intentioned, such measures will contribute to a dangerous wage-price spiral.

Other sources of persistent inflation include rising protectionism (from both the left and the right), which has restricted trade, impeded the movement of capital, and heightened political resistance to immigration, which in turn has put additional upward pressure on wages. National-security and strategic considerations have further restricted flows of technology, data, and talent, and new labor and environmental standards, as important as they may be, are hampering both trade and new construction.

This balkanization of the global economy is deeply stagflationary, and it is coinciding with demographic aging, not just in developed countries but also in large emerging economies such as China. Because young people tend to produce and save more, whereas older people spend down their savings and require many more expensive services in health care and other sectors, this trend, too, will lead to higher prices and slower growth.

Today’s geopolitical turmoil further complicates matters. The disruptions to trade and the spike in commodity prices following Russia’s invasion were not just a one-off phenomenon. The same threats to harvests and food shipments that arose in 2022 may well persist in 2023. Moreover, if China does finally end its zero-COVID policy and begin to restart its economy, a surge in demand for many commodities will add to the global inflationary pressures. There is also no end in sight for Sino-Western decoupling, which is accelerating across all dimensions of trade (goods, services, capital, labor, technology, data, and information). And, of course, Iran, North Korea, and other strategic rivals to the West could soon contribute in their own ways to the global havoc.

Now that the US dollar has been fully weaponized for strategic and national-security purposes, its position as the main global reserve currency could eventually begin to decline, and a weaker dollar would of course add to inflationary pressures in the US. More broadly, a frictionless world trading system requires a frictionless financial system. But sweeping primary and secondary sanctions have thrown sand in what was once a well-oiled machine, massively increasing the transaction costs of trade.

On top of it all, climate change, too, will create persistent stagflationary pressures. Droughts, heat waves, hurricanes, and other disasters are increasingly disrupting economic activity and threatening harvests (thus driving up food prices). At the same time, demands for decarbonization have led to underinvestment in fossil-fuel capacity before investment in renewables has reached the point where they can make up the difference. Today’s large energy-price spikes were inevitable.

The increased likelihood of future pandemics also represents a persistent source of stagflation, especially considering how little has been done to prevent or prepare for the next one. The next contagious outbreak will lend further momentum to protectionist policies as countries rush to close borders and hoard critical supplies of food, medicines, and other essential goods.

Finally, cyberwarfare remains an underappreciated threat to economic activity and even public safety. Firms and governments will either face more stagflationary disruptions to production, or they will have to spend a fortune on cybersecurity. Either way, costs will rise.

The Worst of All Possible Economies

When the recession comes, it will not be short and shallow but long and severe. Not only are we facing persistent short- and medium-term negative supply shocks, but we are also heading into the mother of all debt crises, owing to soaring private and public debt ratios over the last few decades. Low debt ratios spared us from that outcome in the 1970s. And though we certainly had debt crises following the 2008 crash – the result of excessive household, bank, and government debt – we also had deflation. It was a demand shock and a credit crunch that could be met with massive monetary, fiscal, and credit easing.

Today, we are experiencing the worst elements of both the 1970s and 2008. Multiple, persistent negative supply shocks have coincided with debt ratios that are even higher than they were during the global financial crisis. These inflationary pressures are forcing central banks to tighten monetary policy even though we are heading into a recession. That makes the current situation fundamentally different from both the global financial crisis and the COVID-19 crisis. Everyone should be preparing for what may come to be remembered as the Great Stagflationary Debt Crisis.

While central banks have been at pains to sound more hawkish, we should be skeptical of their professed willingness to fight inflation at any cost. Once they find themselves in a debt trap, they will have to blink. With debt ratios so high, fighting inflation will cause an economic and financial crash that will be deemed politically unacceptable. Major central banks will feel as though they have no choice but to backpedal, and inflation, the debasement of fiat currencies, boom-bust cycles, and financial crises will become even more severe and frequent.

The inevitability of central banks wimping out was recently on display in the United Kingdom. Faced with the market reaction to the Truss government’s reckless fiscal stimulus, the BOE had to launch an emergency quantitative-easing (QE) program to buy up government bonds. That sad episode confirmed that in the UK, as in many other countries, monetary policy is increasingly subject to fiscal capture.

Recall that a similar turnaround occurred in 2019, when the Fed, after previously signaling continued rate hikes and quantitative-tightening, stopped its QT program and started pursuing a mix of backdoor QE and policy-rate cuts at the first sign of mild financial pressures and a growth slowdown. Central banks will talk tough; but, in a world of excessive debt and risks of an economic and financial crash, there is good reason to doubt their willingness to do “whatever it takes” to return inflation to its target rate.

With governments unable to reduce high debts and deficits by spending less or raising revenues, those that can borrow in their own currency will increasingly resort to the “inflation tax”: relying on unexpected price growth to wipe out long-term nominal liabilities at fixed interest rates.

How will financial markets and prices of equities and bonds perform in the face of rising inflation and the return of stagflation? It is likely that, as in the stagflation of the 1970s, both components of any traditional asset portfolio will suffer, potentially incurring massive losses. Inflation is bad for bond portfolios, which will take losses as yields increase and prices fall, as well as for equities, whose valuations are hurt by rising interest rates.

For the first time in decades, a 60/40 portfolio of equities and bonds suffered massive losses in 2022, because bond yields have surged while equities have gone into a bear market. By 1982, at the peak of the stagflation decade, the average S&P 500 firm’s price-to-earnings ratio was down to eight; today, it is closer to 20, which suggests that the bear market could end up being even more protracted and severe. Investors will need to find assets to hedge against inflation, political and geopolitical risks, and environmental damage: these include short-term government bonds and inflation-indexed bonds, gold and other precious metals, and real estate that is resilient to environmental damage.

The Moment of Truth

In any case, these megathreats will further contribute to rising income and wealth inequality, which has already been putting severe pressure on liberal democracies (as those left behind revolt against elites), and fueling the rise of radical and aggressive populist regimes. One can find right-wing manifestations of this trend in Russia, Turkey, Hungary, Italy, Sweden, the US (under Donald Trump), post-Brexit Britain, and many other countries; and left-wing manifestations in Argentina, Venezuela, Peru, Mexico, Colombia, Chile, and now Brazil (which has just replaced a right-wing populist with a left-wing one).

And, of course, Xi’s authoritarian stranglehold has given the lie to the old idea that Western engagement with a fast-growing China would ineluctably lead that country to open itself up even more to markets and, eventually, to democratic processes. Under Xi, China shows every sign of becoming more closed off, and more aggressive on geopolitical, security, and economic matters.

How did it come to this? Part of the problem is that we have long had our heads stuck in the sand. Now, we need to make up for lost time. Without decisive action, we will be heading into a period that is less like the four decades after WWII than like the three decades between 1914 and 1945. That period gave us World War I; the Spanish flu pandemic; the 1929 Wall Street crash; the Great Depression; massive trade and currency wars; inflation, hyperinflation, and deflation; financial and debt crises, leading to massive meltdowns and defaults; and the rise of authoritarian militarist regimes in Italy, Germany, Japan, Spain, and elsewhere, culminating in WWII and the Holocaust.

In this new world, the relative peace, prosperity, and rising global welfare that we have taken for granted will be gone; most of it already is. If we don’t stop the multi-track slow-motion train wreck that is threatening the global economy and our planet at large, we will be lucky to have only a repeat of the stagflationary 1970s. Far more likely is an echo of the 1930s and the 1940s, only now with all the massive disruptions from climate change added to the mix.

Avoiding a dystopian scenario will not be easy. While there are potential solutions to each megathreat, most are costly in the short run and will deliver benefits only over the long run. Many also require technological innovations that are not yet available or in place, starting with those needed to halt or reverse climate change. Complicating matters further, today’s megathreats are interconnected, and therefore best addressed in a systematic and coherent fashion. Domestic leadership, in both the private and public sector, and international cooperation among great powers is necessary to prevent the coming Apocalypse.

Yet there are many domestic and international obstacles standing in the way of policies that would allow for a less dystopian (though still contested and conflictual) future. Thus, while a less bleak scenario is obviously desirable, a clear-headed analysis indicates that dystopia is much more likely than a happier outcome. The years and decades ahead will be marked by a stagflationary debt crisis and related megathreats – war, pandemics, climate change, disruptive AI, and deglobalization – all of which will be bad for jobs, economies, markets, peace, and prosperity.

Optimists were assaulted by Friday’s data, the Eurozone manufacturing PMI down to 45.5 despite subsidies, stimulus, and lower energy, and the US only 50.4 despite being ‘back in the factory business’.

PromptPro

Introduction


Question
Are you tired of language models generating repetitive and uninspired responses?

Just like a musician needs a variety of instruments to create a diverse range of melodies, language models require diverse prompts to generate unique and creative responses.
Meet Devin, a Generative Prompt Engineer (GPE) who revolutionizes language models by crafting prompts that encourage diverse and dynamic responses.

"Thanks to Devin's prompt engineering, our language model's responses are more creative and engaging than ever before." - Anissa Thomas

In this blog post, we'll explore how Generative Prompt Engineering can revolutionize language models and how skilled engineers like Devin can make it happen.
Ready to take your language model usage to the next level? Keep reading to learn more about the power of Generative Prompt Engineering (GPE).
Generative Prompt Engineering is a technique used to generate high-quality text using natural language processing (NLP) models.

Question
How can we generate more diverse and interesting responses from language models?

GPE can help by designing prompts that encourage language models to generate more diverse and creative responses. For example, GPE might experiment with using more open-ended prompts, providing more context or background information, or asking more thought-provoking questions.

The Impact of AI on the Future of Work

As artificial intelligence continues to advance, its impact on the labor market is becoming increasingly important to consider.

Diverse and creative responses in language models are critical because they enable the model to produce a range of unique and interesting outputs that are not limited to a single response. Language models that are capable of generating diverse and creative responses have a greater chance of producing outputs that are relevant and engaging to the user, thereby improving the user experience. In this section, we will discuss the importance of diverse and creative responses in language models.
Avoiding Repetitive Response
One of the primary benefits of diverse and creative responses in language models is the ability to avoid repetitive responses. Language models that produce the same or similar responses repeatedly can quickly become boring and uninteresting to the user. This can lead to a lack of engagement and a decrease in user satisfaction. By generating diverse and creative responses, language models can keep the user engaged and interested in the conversation.
Providing a Range of Options
Another benefit of diverse and creative responses in language models is the ability to provide a range of options to the user. This can be especially useful in situations where the user is looking for information or assistance. For example, a language model that is capable of providing multiple solutions to a problem can help the user find the solution that works best for them. By providing a range of options, language models can also help to build trust with the user by demonstrating that they are capable of providing useful and relevant information.
Personalization
Diverse and creative responses in language models can also help to personalize the conversation with the user. By generating responses that are tailored to the user's interests and preferences, language models can create a more engaging and enjoyable conversation. This can also lead to increased user satisfaction and loyalty.
Enhancing Creativity
Finally, diverse and creative responses in language models can help to enhance creativity. Language models that are capable of generating unique and interesting responses can inspire the user to think more creatively and explore new ideas. This can be especially useful in situations where the user is looking for inspiration or new perspectives.
Overall, diverse and creative responses in language models are critical because they can help to avoid repetitive responses, provide a range of options, personalize the conversation, and enhance creativity. By generating unique and interesting responses, language models can keep the user engaged and interested in the conversation, leading to increased user satisfaction and loyalty. As language models continue to evolve, the ability to generate diverse and creative responses will become even more important.

Why You Should Learn About Generative Prompt Engineering
Discover how Generative Prompt Engineering can help you create innovative content, save time and costs, personalize your communication with customers, and advance your career.
Generative Prompt Engineering is an emerging field that combines natural language processing, machine learning, and creativity to generate new and original content based on prompts or cues. The field has been gaining popularity in recent years due to its potential to automate content creation and enable personalized communication with customers. In this blog, we will discuss in detail why you should learn about Generative Prompt Engineering.
Innovative Content Creation
Generative Prompt Engineering is an innovative approach to content creation that can help you create unique and engaging content. Unlike traditional content creation methods, which often involve a lot of manual effort, Generative Prompt Engineering can produce a large amount of content in a short amount of time. The content generated through Generative Prompt Engineering can be used for a variety of purposes, including marketing, advertising, and content creation.
Time and Cost Efficiency
Generative Prompt Engineering can save you time and money by automating content creation tasks that would otherwise be done manually. This can be especially useful if you work in an industry where content creation is a frequent and time-consuming task. With Generative Prompt Engineering, you can produce content faster and at a lower cost, freeing up time and resources to focus on other aspects of your business.
Personalization
Generative Prompt Engineering can help you create personalized content tailored to your audience's interests and preferences. Personalization is becoming increasingly important in marketing and advertising as customers expect a more personalized experience. With Generative Prompt Engineering, you can create content that is relevant and engaging to your audience, which can lead to increased engagement and customer loyalty.
Career Opportunities
Generative Prompt Engineering is an emerging field with a growing demand for skilled professionals. Learning about Generative Prompt Engineering can help you stay ahead of the curve and open up new career opportunities. As more businesses start to adopt Generative Prompt Engineering, there will be a growing need for experts who can develop and implement these technologies.
Advancements in Artificial Intelligence
Generative Prompt Engineering is a prime example of the advancements being made in artificial intelligence and machine learning. Learning about Generative Prompt Engineering can help you understand the potential of these technologies and stay up-to-date with the latest developments. As the field continues to evolve, there will be more opportunities to apply these technologies to new areas and industries.
Learning about Generative Prompt Engineering can provide you with a range of benefits, from innovative content creation and time and cost efficiency to personalization, career opportunities, and a better understanding of artificial intelligence and machine learning. If you are interested in pursuing a career in the tech industry or looking to enhance your skills, learning about Generative Prompt Engineering is a great place to start.

Why Generative Prompt Engineering is an Essential Skill for Content Creators

In a world where content is king, Generative Prompt Engineering can help you create unique, personalized, and engaging content quickly and efficiently.

Generative Prompt Engineering is an innovative approach to content creation that combines natural language processing, machine learning, and creativity to generate new and original content based on prompts or cues. This field is becoming increasingly important as it has the potential to automate content creation and enable personalized communication with customers. Here are some reasons why content creators should learn about Generative Prompt Engineering:
Creating Unique and Engaging Content
Generative Prompt Engineering can help you create unique and engaging content that stands out from the competition. With traditional content creation methods, it can be challenging to come up with new and exciting ideas. Generative Prompt Engineering can produce a large amount of content in a short amount of time, allowing you to explore new ideas and produce content that is original and engaging. For example, if you're a social media marketer, you can use Generative Prompt Engineering to create unique and eye-catching social media posts that will capture your audience's attention.
Time and Cost Efficiency in Content Creation
Generative Prompt Engineering can save you time and money by automating content creation tasks that would otherwise be done manually. With Generative Prompt Engineering, you can produce content faster and at a lower cost, freeing up time and resources to focus on other aspects of your business. For example, if you're a blogger, you can use Generative Prompt Engineering to generate article topics and outlines, allowing you to spend more time researching and writing the actual content.
Personalization for Better Customer Engagement
Generative Prompt Engineering can help you create personalized content tailored to your audience's interests and preferences. Personalization is becoming increasingly important in marketing and advertising as customers expect a more personalized experience. With Generative Prompt Engineering, you can create content that is relevant and engaging to your audience, which can lead to increased engagement and customer loyalty. For example, if you're an email marketer, you can use Generative Prompt Engineering to generate personalized email subject lines and body text based on the recipient's preferences and behavior.
Career Opportunities in the Emerging Field of Generative Prompt Engineering
Generative Prompt Engineering is an emerging field with a growing demand for skilled professionals. Learning about Generative Prompt Engineering can help you stay ahead of the curve and make you a valuable asset to any company looking to improve their content creation process. There are a variety of career opportunities in this field, including positions in content creation, marketing, advertising, and technology. For example, companies like OpenAI and GPT-3 are actively seeking talented individuals with skills in Generative Prompt Engineering.
In full, Generative Prompt Engineering is an essential skill for content creators in today's digital age. It can help you create unique, personalized, and engaging content quickly and efficiently while also providing career opportunities in an emerging field. Whether you're a blogger, social media marketer, or email marketer, learning about Generative Prompt Engineering can help you take your content creation game to the next level.
Generative Prompt Engineering is an emerging field that combines natural language processing, machine learning, and creativity to generate new and original content based on prompts or cues. While the field is relatively new, it has its roots in a long history of research and development in natural language processing and machine learning.

A Moment in Time: Historical Context and Development of Generative Prompt Engineering
The development of natural language processing can be traced back to the 1950s, when researchers first began experimenting with computer algorithms that could understand and process human language. However, progress in this area was slow, and it wasn't until the 1990s that natural language processing began to gain wider attention and recognition.
During the 1990s, the focus of natural language processing research shifted towards statistical approaches and machine learning. This led to the development of algorithms that could analyze large datasets of text and identify patterns and relationships between words and phrases. These algorithms were used to build more sophisticated language models, which could be used to generate new text based on existing data.
In the early 2000s, this approach was further refined with the development of neural language models. These models used artificial neural networks to simulate the way the human brain processes language, and they were able to produce more natural-sounding text than earlier language models. This led to the development of applications like chatbots, virtual assistants, and automated customer service systems.
However, the text generated by these models was often generic and lacked creativity, leading researchers to explore new ways to generate more engaging and original content. This led to the emergence of Generative Prompt Engineering as a field of study and research.
Today, Generative Prompt Engineering is an area of active research and development, with new techniques and approaches being developed and tested all the time. One of the most important recent developments has been the use of generative adversarial networks (GANs) to generate text. GANs are a type of machine learning algorithm that can generate new text based on a set of prompts, and they are becoming increasingly popular in the field of natural language processing.
Overall, the historical context and development of Generative Prompt Engineering can be traced back to a long history of research and development in natural language processing and machine learning. The emergence of this field represents a new frontier in creative content generation, and it holds the potential to revolutionize the way we communicate and interact with technology.

How GPE Can Help in Creating Diverse and Creative Responses
Designing Prompts for Diverse and Creative Responses in GPE
The key to generating diverse and creative responses in language models lies in the design of prompts. In this segment, we will discuss how Generative Prompt Engineers (GPE) can design prompts to encourage language models to produce unique and engaging content.
Understanding the Importance of Prompts
The first step in designing effective prompts is understanding their importance in generating diverse and creative responses in language models. A prompt serves as a cue or stimulus for the language model to generate content. The quality and specificity of the prompt can greatly influence the type of response the model generates. A well-designed prompt can lead to a range of diverse and creative responses, while a poorly designed prompt may limit the model's output.
Using Open-Ended Prompts
Open-ended prompts are a great way to encourage language models to produce diverse and creative responses. These prompts give the model the freedom to generate content without constraints. For example, consider the prompt "Describe your ideal vacation." This prompt allows the language model to generate a variety of responses, from tropical beach getaways to adventurous hiking trips.
Incorporating Novelty and Surprise
Incorporating novelty and surprise into prompts can also lead to more diverse and creative responses. This can be achieved by using prompts that are unexpected or unusual. For example, consider the prompt "Write a story about a giraffe who can fly." This prompt introduces an unexpected element that can lead to unique and engaging responses.
Focusing on Specific Details
Focusing on specific details in prompts can also encourage language models to generate more diverse and creative responses. Specific details can provide context and constraints for the language model, while still allowing for flexibility and creativity. For example, consider the prompt "Describe a day in the life of a firefighter." This prompt provides specific details about the subject matter, while still allowing for a range of responses.
Incorporating User Feedback
Incorporating user feedback can also be a valuable tool in designing effective prompts. User feedback can help GPEs understand what types of prompts lead to the most diverse and creative responses. For example, a GPE can analyze user responses to a set of prompts and use that information to refine and improve their prompt design in the future.
In full, effective prompt design is crucial for generating diverse and creative responses in language models. By using open-ended prompts, incorporating novelty and surprise, focusing on specific details, and incorporating user feedback, GPEs can design prompts that encourage language models to produce unique and engaging content.

Techniques for designing effective prompts in Generative Prompt Engineering
By using open-ended prompts, contextual prompts, and thought-provoking questions, Generative Prompt Engineers can encourage language models to generate diverse and creative responses that can be used for a variety of purposes, including marketing, content creation, and personal communication.
In order to generate diverse and creative responses, Generative Prompt Engineers employ a variety of techniques to design prompts that encourage language models to produce unique and engaging content. Here are some examples of techniques that are commonly used.
Open-Ended Prompts
One technique that Generative Prompt Engineers use is to create open-ended prompts. These prompts encourage language models to generate responses that are not limited by a specific set of parameters. By giving the model more freedom to explore different possibilities, the resulting content can be more diverse and creative. For example, an open-ended prompt might ask the model to generate a story that begins with the phrase "Once upon a time."
Contextual Prompts
Another technique that can be effective is to provide more context in the prompt. This can help guide the language model towards a specific topic or idea while still allowing for creativity. For instance, a prompt asking the model to generate a recipe for a vegan chili would provide more context than simply asking for a recipe, which could lead to a wider range of responses.
Thought-Provoking Questions
Generative Prompt Engineers can also design prompts that provoke thought and inspire the language model to generate more unique and interesting responses. These types of prompts can be especially effective in generating content that is engaging and thought-provoking for the audience. For example, a prompt asking the model to generate a conversation between two characters who have just met on a deserted island could lead to a range of creative responses that explore themes such as survival, isolation, and human connection.
Key Skills for a Generative Prompt Engineer
The ideal candidate for this role will have a strong technical background, excellent problem-solving skills, and the ability to work both independently and as part of a team. Additionally, excellent communication, organization, and time management skills are crucial in order to ensure projects are completed on time and on budget.
Technical Background
A Generative Prompt Engineer must have a strong technical background in natural language processing, machine learning, and programming languages such as Python. Understanding the fundamentals of these fields is essential for designing effective prompts and developing high-quality models. Familiarity with software development tools and platforms is also important for creating and testing models.
Problem-Solving Skills
Problem-solving skills are critical for a Generative Prompt Engineer, as they must be able to identify and address issues that arise during the model development process. They must also be able to analyze data and adjust models to improve their performance. Strong problem-solving skills allow a Generative Prompt Engineer to create models that are accurate, efficient, and effective.
Communication
Effective communication is crucial for a Generative Prompt Engineer, as they often work as part of a team that includes developers, designers, and other stakeholders. Clear communication helps to ensure that everyone is on the same page and working towards the same goals. Additionally, communicating technical concepts to non-technical stakeholders is essential for gaining buy-in and support for projects.
Organization
A Generative Prompt Engineer must be highly organized, as they are often working on multiple projects simultaneously. They must be able to prioritize tasks and manage their time effectively to meet deadlines and ensure that projects are completed on time and within budget. Strong organizational skills allow a Generative Prompt Engineer to be efficient and effective in their work.
Time Management
Time management is essential for a Generative Prompt Engineer, as they must balance multiple competing priorities and deadlines. Effective time management allows them to ensure that they are meeting deadlines, managing their workload, and delivering high-quality work. It also helps them to stay on top of emerging trends and technologies, which is critical in this rapidly evolving field.
Overall, A Generative Prompt Engineer requires a diverse skill set that includes technical knowledge, problem-solving skills, communication, organization, and time management skills. These skills are essential for developing and implementing effective models that generate high-quality, diverse and creative responses.
The Importance of Language Skills in Generative Prompt Engineering
Parsing, Syntax, and Grammar Skills

Tip
Language skills, including parsing, syntax, and grammar, are essential for creating effective prompts in Generative Prompt Engineering, enabling the generation of diverse and creative responses."

Generative Prompt Engineering (GPE) is an interdisciplinary field that combines natural language processing, machine learning, and creativity to generate new and original content based on prompts or cues. As we discussed earlier, GPE is an emerging field with a growing demand for skilled professionals. While technical background, problem-solving skills, communication, organization, and time management skills are important in this field, language skills are also key to success.
In this section, we will discuss the importance of parsing, syntax, and grammar skills in GPE. These language skills are essential for creating effective prompts that can generate diverse and creative responses.
Parsing Skills
Parsing refers to the process of analyzing a sentence to understand its grammatical structure. In GPE, understanding the grammatical structure of a prompt can help the engineer create prompts that are grammatically correct and easy for the language model to understand. For example, consider the prompt "The cat sat on the mat." By parsing this sentence, a GPE can identify the subject ("the cat"), the verb ("sat"), and the object ("the mat"). This understanding can then be used to create similar prompts that are grammatically correct and easy for the language model to understand.
Syntax Skills
Syntax refers to the arrangement of words and phrases to create well-formed sentences. In GPE, understanding syntax is important for creating prompts that are clear and easy to understand. For example, consider the prompt "Write a story about a man with a dog who goes on an adventure." By using proper syntax, a GPE can create a clear and concise prompt that is easy for the language model to understand and generate a creative response.
Grammar Skills
Grammar refers to the rules that govern the use of language. In GPE, understanding grammar is important for creating prompts that are grammatically correct and use proper word choice. For example, consider the prompt "Write a poem about nature." By using proper grammar, a GPE can create a prompt that is clear and easy for the language model to understand, while also encouraging the generation of a creative and engaging response.

Language skills play a critical role in Generative Prompt Engineering as they enable GPEs to create effective prompts that can generate diverse and creative responses. Parsing, syntax, and grammar skills are particularly important for GPEs as they enable them to create prompts that are grammatically correct, clear, and easy for the language model to understand.
These language skills also allow GPEs to identify and address any issues that may arise during the model development process. For example, if a language model generates responses that are not grammatically correct or do not make sense, a GPE can use their parsing, syntax, and grammar skills to identify the issue and adjust the model accordingly.
Furthermore, language skills are essential for creating prompts that are engaging and thought-provoking. By using proper grammar and syntax, GPEs can create prompts that are clear and easy to understand, while also encouraging the generation of creative and engaging responses. For example, a prompt like "Write a story about a man with a dog who goes on an adventure" is more engaging and thought-provoking than a prompt like "Write a story about a man who goes on an adventure."
Lastly, language skills are crucial for GPEs to create effective prompts and ensure the successful completion of projects on time and within budget. By having strong parsing, syntax, and grammar skills, GPEs can create prompts that are grammatically correct, clear, and engaging, which in turn results in the generation of diverse and creative responses.
By combining technical knowledge, problem-solving skills, communication, organization, and time management skills, GPEs can effectively develop and implement models that generate high-quality, diverse and creative responses, while ensuring project completion on time and on budget. Additionally, language skills such as parsing, syntax, and grammar skills are crucial for creating effective prompts that can generate diverse and creative responses, which is a key component of GPE.


Example
Let's say a GPE is working on a project to develop a chatbot that can provide customer service for an e-commerce platform. The GPE would need to have a strong technical background in natural language processing, machine learning, and programming languages such as Python to design effective prompts and develop high-quality models that can accurately understand customer queries and provide helpful responses.

As the GPE works on the project, they may encounter issues such as poor model performance, data quality issues, or unexpected user behavior. Strong problem-solving skills are crucial in such situations as they allow the GPE to quickly identify and address the issues, keeping the project on track and minimizing delays.
Effective communication is also critical for the success of the project. The GPE would need to communicate clearly and effectively with other team members, stakeholders, and clients to ensure everyone is on the same page and working towards the same goals. This would reduce the likelihood of misunderstandings or miscommunication that can lead to project delays or cost overruns. Additionally, clear communication of technical concepts to non-technical stakeholders is essential for gaining their buy-in and support for the project, which can help to secure adequate resources and funding.
As the GPE works on multiple projects simultaneously, effective organization skills would enable them to prioritize tasks and manage their time effectively to meet deadlines and ensure that projects are completed on time and within budget. Good time management skills would help them balance competing priorities and deadlines, allowing them to stay on top of emerging trends and technologies that are critical in this rapidly evolving field.
In full, the combination of technical knowledge, problem-solving skills, communication, organization, and time management skills is crucial for a GPE to effectively develop and implement models that generate high-quality, diverse and creative responses, while ensuring project completion on time and on budget. Language skills such as parsing, syntax, and grammar skills are also important for creating effective prompts that can generate diverse and creative responses, which is a key component of GPE.

The Role of a Generative Prompt Engineer
I'm a skilled Generative Prompt Engineer with a technical background and exceptional problem-solving abilities. My organization, communication, and time management skills set me apart, allowing me to thrive both independently and as part of a team.
What makes me particularly effective is my ability to parse the English language using my knowledge and understanding of syntax and grammar. These tools enable me to craft prompts rapidly and with efficiency, getting swiftly to the heart of the project requirements.
My experience with technical planning and communicating complex requirements make me particularly adept at outlining project scope, goals, and requirements for clients and team members. I'm tenacious when it comes to developing and testing new software and systems, using customer feedback and data to drive iterative improvements.
Collaboration is key for me, and I'm able to communicate effectively and work well with multiple stakeholders, guiding them through the process and keeping them updated as the project evolves. Lastly, staying at the forefront of tech and AI advancements is of utmost importance to me to ensure that I always offer the best solutions to clients.
As a Generative Prompt Engineer, I am skilled in quickly and effectively creating prompts with precision and accuracy. My extensive knowledge of English parsing, syntax, and grammar is instrumental in crafting prompts that are efficient and effective. By understanding the intricacies of language, I am able to ensure that my prompts are grammatically sound and convey the intended meaning.
Additionally, my attention to detail and analytical skills allow me to identify patterns and generate unique and diverse prompts. I am also proficient in using natural language processing tools and techniques to aid in prompt creation. Overall, my skills and expertise make me a valuable asset in the development of intelligent and dynamic prompt systems.
Ultimately, my skills and experience as a Generative Prompt Engineer make me a valuable asset to any team looking to implement intelligent and dynamic prompt systems. With my technical expertise, problem-solving abilities, and communication skills, I can help clients and team members meet their project goals efficiently and effectively. If you are seeking a Generative Prompt Engineer with a passion for language and a dedication to staying at the forefront of technology, look no further than me.

The Importance of English Parsing, Syntax, and Grammar in Crafting Effective Prompts

English parsing, syntax, and grammar are instrumental in crafting effective prompts that resonate with a target audience. With the help of NLP technology, writers can use these tools to generate marketing copy that achieves desired results.

Natural Language Processing (NLP) is a powerful tool that can be used to analyze and generate human language. As an avid user of NLP technology, I have utilized its intelligent algorithms to assist me in writing two books. NLP technology has helped me streamline my writing process, improve my prose, and develop a unique voice. Now, I plan to leverage its capabilities once again to create a marketing campaign that will wow my audience.
Effective prompts are essential for any marketing campaign. They need to be carefully crafted to resonate with the target audience and achieve the desired results. English parsing, syntax, and grammar are critical components of creating effective prompts. Parsing is the process of breaking down a sentence into its component parts to understand its meaning. Syntax refers to the rules for constructing phrases and sentences in a language, while grammar is the set of rules for using language correctly.
By utilizing NLP technology, writers can use these tools to analyze and understand the language used by their target audience. This allows them to craft compelling marketing copy that resonates with their audience and achieves the desired results. NLP technology can even help generate language that is unique, creative, and effective.
In my personal experience, NLP technology has been instrumental in improving my writing process, allowing me to create unique and compelling content that resonates with my readers. It has also helped me in crafting marketing copy that achieves my desired results. By leveraging the power of NLP technology and these essential language tools, writers can create effective prompts that generate high-quality, diverse, and creative responses.

The Role of Analytical Skills and Attention to Detail in Writing Books and Crafting Marketing Campaigns
Analytical skills and attention to detail are crucial in crafting effective writing, whether it be in the form of a book or a marketing campaign. These skills allow the writer to identify patterns, discern important information, and generate unique and diverse prompts that resonate with the intended audience.
In writing the two books, the use of analytical skills and attention to detail helped in developing the plot, identifying plot holes, and creating well-rounded characters. Analyzing character motivations, for example, helped to ensure that each character's actions and decisions were consistent and believable throughout the book. Attention to detail also aided in creating vivid descriptions of the setting, immersing the reader in the story and bringing the fictional world to life.
Similarly, in crafting the marketing campaign, analytical skills and attention to detail played a crucial role in developing a message that resonates with the target audience. Analyzing market trends, consumer behavior, and demographics helped to ensure that the campaign message was tailored to the specific needs and interests of the target audience. Attention to detail was also important in creating effective prompts that engaged the audience and generated interest in the product or service being marketed.
In both cases, the use of analytical skills and attention to detail helped to create writing that was engaging, informative, and effective in achieving its intended purpose.
Conclusion
Generative Prompt Engineers (GPEs) are instrumental in revolutionizing language models by creating diverse and creative responses. With their technical knowledge of natural language processing, machine learning, and programming languages such as Python, GPEs can design effective prompts and develop high-quality models that can accurately understand customer queries and provide helpful responses.
GPEs also need strong problem-solving skills to quickly identify and address issues such as poor model performance, data quality issues, or unexpected user behavior, keeping the project on track and minimizing delays. Effective communication is also critical for the success of the project, as GPEs need to communicate clearly and effectively with other team members, stakeholders, and clients to ensure everyone is on the same page and working towards the same goals.
In addition to technical knowledge and communication skills, GPEs also need strong analytical skills and attention to detail to identify patterns and generate unique and diverse prompts. This is essential for creating effective prompts that can generate compelling marketing copy, resonate with the target audience, and achieve desired results.
Overall, the combination of technical knowledge, problem-solving skills, communication, organization, time management skills, and analytical skills is crucial for a GPE to effectively develop and implement models that generate high-quality, diverse, and creative responses, while ensuring project completion on time and on budget.
Generative Prompt Engineering (GPE) has numerous implications and applications in various fields. Here are some of them:

Language Generation: GPE can revolutionize language generation by creating more diverse and creative responses to prompts. It can be applied in chatbots, virtual assistants, customer service, and other natural language processing (NLP) applications.
Creative Writing: GPE can help writers develop their unique writing voice, streamline their writing process, and generate new ideas. It can be used to create different types of content, including novels, screenplays, and marketing copy.
Marketing: GPE can be applied in marketing to craft compelling and persuasive messages that resonate with the target audience. It can help create unique and diverse copy that grabs the audience's attention and drives conversions.
Education: GPE can be used in education to generate questions and responses for quizzes, exams, and homework assignments. It can help create personalized learning experiences for students and provide them with immediate feedback.
Data Analysis: GPE can be applied in data analysis to generate natural language summaries of data and insights. It can help automate data reporting and make it easier for non-technical stakeholders to understand complex data.
Content Creation: GPE can be applied in content creation to generate content for websites, blogs, and social media. It can help generate diverse and creative content that engages the audience and drives traffic.
Personalization: GPE can help create personalized experiences for users by generating tailored responses based on their preferences and past interactions.

One thing's for sure, Generative Prompt Engineering has significant implications and applications in language generation, creative writing, marketing, education, data analysis, content creation, and personalization. Its potential applications are vast, and it has the potential to transform many industries and fields.
I hope this discussion on Generative Prompt Engineering has inspired you to think about the power of natural language processing and the potential for creating diverse and creative responses. As you reflect on this topic, I challenge you to consider how you can apply this knowledge to your own lifescape.
Perhaps you can take some time to refresh your language and analytical skills, exploring new vocabulary and grammatical structures to improve your own communication. Or maybe you can explore the potential for using natural language processing to improve your own business, writing, or creative projects.
Whatever path you choose, I encourage you to take action and apply your learning to make a positive impact in your life and in the world around you. Let's harness the power of technology and language to create something truly remarkable.
If you're feeling inspired by what you just read, don't just sit there, take action! Leave your comments, give me an upvote, and hit that follow button to stay tuned in for more content that'll uplift your soul. And if you're new to #hive and #ecency, don't worry, sign up is free and easy. Just click the link in the description and you'll be ready to go.
But wait, there's more! If you want to help me out and support my somewhat ok posts, you can make a donation to help me with free giveaways, contests, and airdrops. You can upvote, comment, follow/subscribe, and share on different social media platforms like [HIVE, PublishOx, Medium, Reddit,](<HIVE, PublishOx, Medium, Reddit, or other social media platforms.>) and more. The quickest methods of donation are Cash.App and PayPal, and your contributions and gifts are greatly appreciated.
And hey, I'm not just here to inspire you, I'm here to learn too. I'm looking for advice to help me create new communities on Hive and other platforms, and I need your help. So if you've got some great ideas, or just want to help me pay it forward, hit me up with a tip or two and let's keep making the world a better place.

Disclaimer
Please note that the above-provided information is for general educational purposes only and is not intended to be a substitute for professional advice. It is always best to check with a licensed professional before making any decisions regarding your professional life.

Where do bed bugs hide? Watch these ones respond to heat from this persons hand.

???? VegForU (full link below)

Heat as host location stimulus: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5201007/
Full video: https://www.youtube.com/watch?v=3HgJ3-kG0wc

Motivation is the word derived from the word ’motive’ which means needs, desires, wants or drives within the individuals.
It is the process of stimulating people to actions to accomplish the goals.
In the work goal context the psychological factors stimulating the people’s behaviour can be -
desire for money
success
recognition
job-satisfaction
team work, etc
One of the most important functions of management is to create willingness amongst the employees to perform in the best of their abilities. Therefore the role of a leader is to arouse interest in performance of employees in their jobs. The process of motivation consists of three stages:-
A felt need or drive.
A stimulus in which needs have to be aroused.
When needs are satisfied, the satisfaction or accomplishment of goals.
Posted using SoMee

The chances of a crypto bull market in 2023 may be decreasing due to the Federal Reserve’s hawkish stance on inflation and economic growth. The Fed has increased interest rates, which can reduce investment in cryptocurrency as investors seek more stable returns from traditional assets like stocks and bonds. Additionally, recent threats of a recession in the U.S economy have further reduced investor confidence, making it less likely that they will invest heavily into cryptos over the next few years.
Cryptocurrency markets are highly volatile compared to other asset classes; this means that any downturn could lead to large losses for those who invested early or at peak prices during previous bull runs. This makes it difficult for investors to justify investing such high amounts into digital currencies when there is no guarantee they will see a return on their investments if markets crash again shortly after entering them long term.. Furthermore, with central banks around the world tightening monetary policy amid rising inflationary pressures caused by stimulus spending programs implemented during COVID-19 pandemic recovery efforts – these policies could also dampen demand for cryptocurrencies as well as other riskier assets like equities and commodities going forward too .
In conclusion, while there is still potential for significant gains from investing in cryptocurrencies over time given their disruptive nature within financial services – current macroeconomic conditions suggest caution should be taken before committing large sums of capital towards them anytime soon due to increasing uncertainty about future price movements based upon both domestic & global economic trends alike . That being said , only time will tell whether or not we experience another crypto boom similar what was seen back 2017/2018 - but until then its best advised not take excessive risks without proper research first before doing so.

Japan’s Borrowing: The Reasons Behind the Country’s High Debt Levels.

Japan is one of the most indebted countries in the world, and it’s a surprising fact that they continue to borrow money despite their massive debt burden. The reasons behind Japan’s high levels of debt are complex and multifaceted, but there are some key factors that explain why this nation continues to take on more debt.

One reason for Japan's large amount of national debt is its aging population. As people live longer lives and birth rates remain low, fewer workers exist to pay taxes into government coffers while elderly citizens require more medical care than ever before. This means that the Japanese government must find new sources of revenue or increase borrowing in order to fund social programs for its aging citizens.

Another factor contributing to Japan's growing debts has been its reliance on public works projects as an economic stimulus measure since the 1980s recession hit hard in Asia following World War II ended up leaving many Japanese companies bankrupted or struggling financially . These projects have often been expensive investments with little return which has caused further strain on public finances over time leading them having no choice but taking out loans from abroad lenders like China & US banks etc., resulting even higher level of foreign debts piling up each year .

Last but not least , another major contributor towards rising national debts can be attributed due largely by expansive monetary policy adopted by Bank Of japan (BOJ) during past two decades especially after 2008 Global Financial Crisis where BOJ was forced into quantitative easing program causing unprecedented surge liquidity across markets which led investors seeking higher yield elsewhere such as buying bonds issued by central governments thereby driving down yields & increasing cost interest payments thus making it difficult for country make ends meet without additional funds coming from outside sources i-e global financial institutions/lenders .

Despite all these challenges , however , thanks prudent fiscal management along with strong export based economy still able maintain relatively healthy balance sheet when compared other nations around world so far allowing them access capital needed finance current expenditures while also keeping inflation under control at same time ensuring sustainable growth future generations come .

Today's inflation numbers are good news for the economy, and a sign of progress. President Joe Biden says. After years of stagnant growth, we're finally seeing signs that our country is on the upswing.

The Consumer Price Index (CPI) rose 4.2% over last year’s figures—the largest annual increase since 2008—and this indicates that consumer prices across the board have grown significantly in recent months due to increased demand from consumers as more Americans receive stimulus payments and unemployment benefits during the pandemic recovery period.

This economic report comes at an opportune time for President Biden who has been pushing forward with his ambitious agenda to revive America’s economy through infrastructure investments, tax relief measures, and other initiatives aimed at creating jobs and improving wages nationwide. The new CPI data suggests these efforts may be paying off as consumer spending increases alongside rising wages; this could mean even better times ahead if current trends continue in fiscal year budget proposal by Mr Biden administration .

In addition to providing hope for future economic growth , today's inflation numbers also provide evidence that effective government policies can make a real difference in people’s lives when it comes to issues such as income inequality or poverty levels . As long as policy makers stay focused on helping those most affected by financial hardship , then there is no doubt America will see continued improvement throughout fiscal year budget proposal by Mr Joe Biden administration .

6% Rates Incoming? Gundlach Spars With Dimon 24 Hours Before Crucial CPI Print


Stocks rallied kind of hard, but not really hard yesterday. The Dow added 189 pts or 0.6%, the S&P gained 28 or 0.7%, the Nasdaq advanced by 106 pts or 1%, the Russell added 27 pts or 1.5% while the Transports tacked on 37 pts or 0.3%.

And it’s the “Fed will cave” story all over again. Bloomberg summed up the day best with the headline: “Stocks Bounce Back with Brewing Optimism Over CPI (https://ca.finance.yahoo.com/news/asia-stocks-set-tepid-opening-230147384.html)”. Meanwhile, two of the biggest names on Wall Street are at odds with one another over where the Federal Reserve is going to head from here.

After all, brewing optimism is all the smart logic algos needed. Traders and algos raised the temperature in the room yesterday, betting that the forthcoming CPI report will not only weaken, but weaken beyond what the very optimistic estimates already are - thus ‘building a case’ for the Fed to stop the madness and pause further rate hikes beyond March.

At the end of the day, Doubleline’s CEO Jeffrey Gundlach stood up and said: ‘Don’t be ridiculous, the Fed? Investors need to pay 100% attention to what the bond market is saying rather than what the FED is telling you they are saying.’ In fact, he said it this way: “My 40 plus years of experience in finance strongly recommends that investors should look at what the market says over what the Fed says.”

This echoes the comments Gundlach (https://twitter.com/TruthGundlach) made on Twitter last week when he said: “There is no way the Fed is going to 5%. The Fed is not in control, the bond market is in control.”

Meanwhile Yahoo Finance reported yesterday that Wallstreet heavyweight,CEO of JP Morgan, "Jamie Dimon Says Fed 'May Very Well' Raise Interest Rates to 6%"

(https://finance.yahoo.com/news/jamie-dimon-says-fed-may-very-well-raise-interest-rates-to-6-195147027.html)"Jamie Dimon expects the Federal Reserve will raise interest rates higher than most officials and Wall Street strategists have forecast as the U.S. central bank continues its fight against persistent inflation.

The chief executive officer of JPMorgan (JPM), the largest consumer bank in the U.S. by assets, said Tuesday in an interview with Fox Business Network that the Fed’s terminal rate may hit 6%, a level notably above the 5% many have called for.

'Whether 5% interest rates are enough to slow inflation to where it needs to be, I don’t know,' Dimon said during the discussion at JPMorgan’s annual health-care investment-banking conference in San Francisco, citing fiscal stimulus that was 'so large and still largely unspent.'

'Is it 5%? My view is, it may very well be 6%,' he added.

This time last year, Dimon was among the first voices on Wall Street to predict – correctly – that Federal Reserve officials would deliver as many as six or seven increases to their benchmark policy rate as prices rose at a historic pace. He said the three or four hikes investors were bracing for at the time were a low estimate.

In 2022, the U.S. central bank lifted rates seven times to a cumulative increase of 4.25% to the highest in 15 years from near-zero levels. At least 75 basis points more of hikes are expected this year."

:link:Source: Zerohedge (https://www.zerohedge.com/news/2023-01-11/6-rates-incoming),
Quoth The Raven (https://quoththeraven.substack.com/p/6-rates-incoming-gundlach-spars-with),
Yahoo Finance (https://finance.yahoo.com/news/jamie-dimon-says-fed-may-very-well-raise-interest-rates-to-6-195147027.html),
Bloomberg (https://ca.finance.yahoo.com/news/asia-stocks-set-tepid-opening-230147384.html)

???? Follow:
t.me/g3news