The economic jolt is here
Geopolitical Research – Switzerland – 11 April 2025 (delayed & truncated release 13 June 2025)
In recent months we said 2025 will be a year of sacrifices for many and on February 18th we predicted that an economic jolt was coming. It has begun.
As we have been saying for years the Western economies are in deep trouble. They are full of bubbles and they could implode any moment.
Many people are reaching out to us and want us to respond to any news. But we will not add to the noise. Many have read our research for years, but they didn’t act upon it. Those that took action and diversified strategically are at ease now.
Let’s recap – we wrote on 18 february the following:
“An economic jolt is coming
Although media is failing to report the full extent of the trouble the Western economies are in (risks of defaults and devaluations have been suppressed, but they are a rising again) people around the world sense something has to give in the coming months – the 15% rise in the price of Gold in just a few months reflects that. People are smarter than what most politicians think, people are right – here is why
(a) After surviving a doubling of key consumer products’ and house prices, suddenly Americans realise prices are rising again and many things in the country are broken. 2025 could be a year of sacrifices. The aftermath of Bidenomics’ massive fiscal spending will have to be endured. We are just seeing the tip of the iceberg of the reckless spending. (this help inflated GDP artificially)
(b) European governments were already deeply indebted before Covid, the energy transition and the war in Ukraine. Europe is preparing to announce a massive increase in spending and deficits – Germany is about to give up its famous “Schuldenbremse” (debt ceiling). More inflation and tax increases are imminent as cash-strapped Europe prepares to rebuild its military. The already large size of the state in Europe is about to get larger – To avert a default Europe is becoming a state-run economy. America and Europe are on diametrically opposed paths and on collision course.
(c) Demand from emerging markets for Chinese products is stunning economists in China and the West. Emerging Markets are a new engine of export growth shielding China from US and European sanctions.
(d) Africa and Latin America remain self absorbed, but overall pragmatic enough to bend with the wind.
(e) While the Chinese economy is struggling with its shrinking labor force and its debt-ladden state enterprises and construction sector, the growing demand from emerging economies is a lifeline that will help Beijing mitigate the losses ..”
The Economic Jolt is here
And it will be felt around the world.
In our humble opinion many are misreading President Trump’s actions. The White House cannot be too open about the full extent of the bubbles and pending threats without triggering a recession or worse: panic, attack by an enemy state. Trump’s policy moves are definitely not about a trade war. His moves are actually aiming at saving the global financial system and the US economy from an implosion. There are other and better ways to achieve the necessary multiple goals. But that is not possible in today’s Washington. The tariffs were necessary to keep compromised senators and courts at bay.
President Trump had to try without the support of the broader government apparatus. As we have been writing here for over a decade – practically everything in Western economies is artificially inflated. It is the result of 49 years of reckless fiscal-monetary stimulus. We have lived beyond our means and we are approaching the Day of Reckoning. That is why wars are coming back.
President Donald J. Trump (public domain)
While we in Europe are doubling down on more debt, more deficit spending and a larger role of the state, Washington is trying to do exactly the opposite. This is part of the escalating war we are in. America and Europe will clash even more in years to come.
The world is at war
Please, avoid being carried away with the news – Try to stay focused on that which is strategic. As we started to warn in 2016, we are entering a period of global hostilities and war. A war fought on many fronts – information, trade, technology, currencies, sanctions, monetary policy, UN resolutions, open hostilities. Ultimately total war. We haven’t had total wars since WW2. People think that they know war, all they are acquainted with is our managed wars.
It is in times like this that we should avoid being deceived. Not easy, when most people are caught in a wealth illusion. They rejoice at the rise of their assets, while the central bankers know it is the currency that is losing inherent value and the massive excess liquidity following the “momentum investing”. Yes, much of smart money follows the trend. It works until it doesn’t.
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Washington begins to deflate the bubble
Watch the 10 Yr Treasury Yield – there is panic
Europe faces more pain ahead
A false sense of security?
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Geopolitical Research Team – 11 April 2025 (Delayed and truncated public release on 13 June 2025)
info@geopoliticalresearch.com
Research made in Switzerland
Geopolitical and economic conditions need close monitoring, because they can change suddenly.
No part of this analysis should be taken or construed as an investment recommendation.
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