Author: Author1

Consumer confidence has plummeted already. With gasoline and food prices weighing on far more than American sentiment, it’s no wonder much of the public may have come around to the idea of recession. Politicians and economists are another matter. Nothing in life—let alone the economy—is inevitable, but the entire global system may have passed that point of no return some time ago before anyone (outside of markets) had realized it.

“And I heard a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine.” Rev. 6:6

Treasury yields and eurodollar curves have been forecasting contraction not inflation for well over a year already. Starting out as small relative probabilities, as longer-term yields buckled and the eurodollar curve distorted, this was just the markets’ way of signaling a higher degree of confidence in this pessimism.

It all broke wide open, so to speak, once already shameful gasoline prices took a step too far around the beginning of March. In all likelihood, that was the point of no return.

Since then, these same markets after having moved on from “if” to “when” are now thinking especially hard about “how bad.” And this is where recent data fits in.

Unfortunately, various major and minor economic statistics around the world have rather unsurprisingly confirmed these market suspicions. First, a slowdown rather than acceleration in the middle of last year when the public’s attention was exclusively fixed on what “everyone” said was big inflation.

That slowing was a warning it had only ever been “inflation” (supply shock, not excess money) which meant it all came with an expiration date (yes, transitory). This unappreciated 2021 downturn was picked up in all the data, too, including U.S. (and overseas) real GDP.

Then, like curves, GDP changed for the worse during 2022’s first quarter. In America, the Bureau of Economic Accounts (BEA) said output adjusted for prices (real) fell rather alarmingly in those three months. The final revisions to Q1 were released just now and were even weaker than previously thought (below).

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After threatening to do so for a couple months now, Russia has pulled the trigger on expanding the list of commodities for which it demands payment in rubles to now include grain exports, effective Friday per a government legal website.

So now grain, sunflower oil and extracted meal are the next to follow the March decision to charge clients from “unfriendly” countries – including major customers in Europe – in rubles for natural gas instead of the normative dollars and euros.

On top of this move, recently Agriculture Dmitry Patrushev announced that Russia’s agricultural products will go to “friendly countries” only, and according to “who needs it most” – a hugely significant statement sure to continue sowing uncertainty and chaos for the global food supply.

^“And I heard a voice in the midst of the four living creatures saying, “A ^[b]quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine.” Rev. 6:6

Via Farmdocdaily: Russia and Ukraine account for 14% of global wheat production and rank 1^stand 5^threspectively. Both countries are prominent exporters, providing nearly 30% of global wheat exports.  The EU, U.S., and Canada are also major producers and exporters of wheat.  China and India are major wheat producers, but are net importers and provide relatively small shares of global wheat exports.  Other countries with fairly large wheat export shares include Australia (8.4%), Argentina (6.6%), Kazakhstan (4.1%), and Turkey (3.4%).

Russian state media detailed further of the new decree published to a government law portal, “It also provides for a one-year extension of duties to be paid in the national currency in respect of exported sunflower oil and sunflower meal until August 31, 2023.”

And further, “As part of the new payment mechanism, the base price for calculating the export duty on wheat will be 15,000 rubles (over $267) per ton.”

While Russia has blamed Western sanctions aiming to punish and isolate the Russian economy for blowing back on the global food supply, and especially the Middle East and African countries already heavily reliant on Ukraine and Russia grain exports, G7 countries days ago at their summit in Germany blasted Moscow in a statement for what it called “a geopolitically motivated attack on global food security.”

Read More @ Zero Hedge HERE