Eurozone Inflation Reaches New High – Recession Incoming

Armstrong Economics Blog/European Union Re-Posted Nov 2, 2022 by Martin Armstrong

Inflation in the Eurozone hit a new record in October, according to Eurostat who reported a 10.7% rise. That marks an increase from September’s 9.9% posting and an all-time high since Eurostat began compiling Eurozone data in 1997. The European Central Bank (ECB) attempted to curb inflations with another 75 bps hike last week. The ECB knows that inflation is here to stay. They recently changed their annual inflation target for next year to 5.8% compared to the 3.6% they were predicting three months ago. They can’t release the actual figures without causing a panic.

Economic growth “slowed significantly in the third quarter of the year and we expect a further weakening in the remainder of this year and beginning of next year,” ECB head Christine Lagarde warned. Inflation is hitting some countries harder than others. Estonia (22.4%), Latvia (21.8%), and Lithuania (22%) all experienced nearly double the average inflation rate this October.

The downturn will not be equal across the Eurozone. The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, is warning that half of the 19 countries in the bloc will fall into a recession. “Europe is affected more severely by the increase of energy prices. The heat on European economies is such that we actually expect half of the countries in the eurozone to experience at least two quarters of negative growth. In other words, a recession,” she said, without naming the countries,” Georgieva warned. She further stated that the IMF’s pre-pandemic projections compared to current projections differ by a loss of half a trillion euros.

“I am not going to sugar-coat it: 2023 will be tougher than 2022. Next winter for Europe may be even harsher than this winter,” she declared. “Why? Because European policymakers acted very swiftly to fill gas storage. If conditions remain as they are with Russia not providing gas to Europe, how is this gas storage going to be filled next year?”

Another question comes to light – can Europe remain untied amid a serious recession? The ECB will use the same strategy in an attempt to fix the broken system for the entirety of the Eurozone instead of looking at each individual economy. Let’s not forget that deeply indebted countries will only face higher costs that they likely will not be able to repay. The ECB dug its grave in 2014, and they do not have the tools to handle the current crisis. It is easy for Europe to appear as a united front when there is peace and prosperity. The real test will come when everything crashes down, and fairness goes out the window.

Russia not seeking to revive Soviet Union – Putin

Reuters Published originally on Rumble on September 30, 2022

Russian President Vladimir Putin on Friday (September 30) denied seeking to revive the Soviet Union, moments after announcing Moscow would annex four Ukrainian provinces following what it called “referendums”, votes that were denounced by Kyiv and Western governments as illegal and coercive.