InfraCap Report Update, October 2023, New York, NY ~ The Global Monetary Base is a critical leading indicator of inflation/deflation and a driver of global stock and bond prices.
October GMB Key Changes (with September Data update)
The Global Monetary Base [GMB] declined significantly in September with a $288 billion dollar decline.
This wrapped up a total decline of 4.2% over the last two quarters, representing almost a $1 trillion reduction in global liquidity.
October GMB Insights from InfraCap
We at InfraCap continue to project that the decline in the Global Monetary Base will stabilize over the next few months of 2023.
We at InfraCap expect the GMB will start growing again in early 2024 as the ECB [European Central Bank] and the PBOC [Peoples Bank of China] will be forced to ease monetary policy in response to a recession in Europe and slow growth in China. In fact, the Euro Zone GDP Now-Cast for 3rd quarter GDP came in as negative .3%. The Now-Cast data indicates a mild recession is underway due to the ultra-tight ECB monetary policy.
If the Global Monetary Base can indeed stabilize in 4th Quarter 2023, we expect global interest rates to also stabilize this year and then decline in 2024. Declining global interest rates should then support the global stock and bond markets.