If we search the news from 2007, we can find plenty of headlines with the IMF and the Federal Reserve predicting a soft landing. No one seemed to worry about rising imbalances. The main reason is that market participants and economists like to believe that the central bank will manage the economy as if it were a car. The current optimism about the U.S. economy reminds us of the same sentiment in 2007.

Many readers will argue that this time is different, and we will not see a 2008-style crisis, and they are right. No crisis is the same as the previous one. However, the main pushback I get when discussing the risks of a recession is that the Fed will inject all the liquidity that may be needed. Quantitative easing is seen as the antidote that will prevent a crisis. However, if the only antidote to prevent a 2008-style contraction is monetary easing, then the risk of stagflation is even higher. So, the good news for those fearing a recession is stagflation.

Oil prices are soaring, and, as always, we read in many articles that OPEC and Russia are to blame. However, if OPEC and its allies were almighty and the drivers of oil prices, why have Brent and West Texas Intermediate (WTI) crude plummeted in 2022? OPEC only reacts to demand, but it is not a price-setter. It is a price-taker.

WTI is up 13% year-to-date, but it only started bouncing in May. WTI is only up 6% in the past year. At $90.7/barrel, it is still far away from the June 2022 high of $122/barrel and barely reaching the levels of November 2022.

The viability of a currency change and the loss of “monetary sovereignty” are frequently discussed in the argument over dollarization in Argentina, but the most crucial aspect is sometimes overlooked: the peso is a failed currency. Due to the common belief that “the dollar is rising” when the peso is falling, this important element is disregarded in the media in Argentina.

The peso is a failed currency. Why?

First, there are more than ten bogus peso exchange rates. The “dollar blue” is the closest approach to a real exchange rate that represents the real value of the currency. A country with ten or more exchange rates has a fictitious and failing currency.

The eurozone economic figures show the risk of stagflation, and the short-term impact is clear in Germany and France, but it extends to the rest of the countries.

Why has the eurozone lagged the United States and other developed economies in recent years? The enormous stimulus packages, including the 2009 Growth and Job Plan, the Juncker Plan, the New Green Deal, and the Europe Next Generation, are proving that central planning only delivers poor growth, elevated debt, and now high inflation.

The ECB’s latest figures show that monetary aggregates are starting to moderate, but inflation remains high and, in the latest print, is rising.