Weekly Digest: Cost of Living Crisis, Inflation Problem


4 minutes read

Mar 24, 2022

global cost of living crisis represented by a picture of a cartoon man carrying theburden of credit, housing, and student loan costs.

24/07/22: The U.K. hit by the worst cost-of-living crisis in decades, Powell finally admits inflation is “much too high”, European stocks drop. And more.

Investment news

As markets stay cautious over the Russia-Ukraine conflict and high inflation, here’s how the prices of precious metals have changed over the past week:

The price of gold went up 0.24% to $1,943.06 an ounce, silver dropped 0.76% to $25.10 an ounce, platinum fell 0.67% to $1,018.57 and palladium rose 3.46% to $2,527.43.

"You're seeing a little bit of safe-haven demand and a little perceived bargain hunting at lower price levels in the gold market," said Jim Wyckoff, the senior analyst at Kitco Metals, adding that high inflation is in favor of precious metals and it is "not going to go away anytime soon.” (Reuters)

a table showing the weekly change in prices of gold, silver, platinum and palladium
A table showing a weekly change in prices of gold, silver, platinum and palladium

Read our SPOTLIGHT to learn why investor demand for gold is booming right now.

It’s happening! Powell says “inflation is much too high” and the Fed will take “necessary steps” to address it. (CNBC)

“The labor market is very strong, and inflation is much too high,” the central bank leader said, adding that the Fed will continue increasing interest rates until inflation comes under control.

Remember when we said the Fed was not taking inflation seriously?

UK inflation has jumped to a new 30-year high as soaring energy costs, food prices and fuel bills drive Britain’s worst cost of living crisis in decades. (The Guardian)

The U.K. consumer prices increased by 6.2% in the year to February, up from 5.5% in January, the Office for National Statistics said. That’s the highest inflation level since March 1992.

Read our SPOTLIGHT to see how high inflation can affect the price of gold.

UK experiencing the worst cost of living crisis in decades represented by a picture of a lit-up percent sign and UK map

European stocks closed lower on Wednesday affected by continued worries about inflation and Russia’s invasion of Ukraine. (CNBC)

The pan-European Stoxx 600 closed down by 1%, with almost all sectors in the negative territory.

Learn more here: Will the Stock Market Crash in 2022?

Russia’s stocks moved sharply on Thursday as the market partially reopened for limited trading after its longest shutdown since the fall of the Soviet Union. (CNBC)

The Moscow Exchange resumed trading in 33 Russian stocks, including some of its biggest names like Gazprom and Sberbank. Meanwhile, oil giants Rosneft and Lukoil jumped 20% and 16%, respectively, while aluminum company Rusal went up more than 14%.

The dollar inched up on Wednesday while the euro weakened as oil prices saw another increase as Biden is expected to announce new Russia sanctions during his trip to Europe. (CNBC)

The dollar index rose 0.291%, with the euro down 0.46% to $1.0976.

“If we get another round of sanctions, then people therefore say the blowback on the West is going to fall on Europe disproportionately,” said Huw Roberts, head of analytics at Quant Insight.

Read our SPOTLIGHT to learn how the Russia-Ukraine conflict can affect your savings.

rising oil prices represented by a picture of an oil production field

Oil prices rose 5% to over $121 a barrel on Wednesday as a weather-related disruption to Russian and Kazakh crude exports added to concerns over tight global supplies. (Reuters)

Crude oil exports from Kazakhstan's CPC terminal on Russia's Black Sea coast were halted after damage caused by a major storm, a port ship agent and the head of CPC said.

Energy markets have been extremely volatile over the past few weeks as many fear that supplies of oil and gas from Russia could be disrupted or cut off completely.


Speaking of the impact of inflation and the war in Ukraine on global food prices… Here’s a scary chart from The Wall Street Journal that speaks for itself.

a chart showing the change in global food prices since January 2020 as prices keep growing due to inflation and war in Ukraine.

According to IMF chief Kristalina Georgieva, “a war in Ukraine means hunger in Africa” because many countries in the Middle East and North Africa are reliant on Ukrainian grain and seed oil, and thus especially vulnerable to food price shocks.

What else is happening

A Boeing 737-800 flight carrying 132 people crashed Monday afternoon in China’s southern region of Guangxi. No survivors found. (CNBC)

Authorities are yet to report the number of dead, but it is feared none of the 132 people on board survived the crash. A black box from the flight is under examination.

Russia will seek payment in roubles for gas sold to "unfriendly" countries, President Vladimir Putin said, with European gas prices soaring on concerns the move would worsen the region's energy crunch. (Reuters)

It remains unclear, however, whether Russia has the power to unilaterally change existing contracts agreed upon in euros.

Russian gas accounts for around 40% of Europe's total consumption.

U.S. President Joe Biden left for Brussels on Wednesday for emergency talks with European leaders about the war in Ukraine, and is expected to slap more sanctions on Russian officials that sources said include members of the Russian parliament. (Reuters)

Biden's trip includes a meeting with NATO and European leaders and a visit to Warsaw for consultations with Polish President Andrzej Duda.

NATO countries set to give Ukraine a kit to protect against nuclear and chemical attacks as the war continues. (The Guardian)

“I expect allies will agree to provide additional support including equipment to help Ukraine protect against chemical, biological, radiological and nuclear threats”, NATO chief said.

And finally

🐲 Paleontologists have found the skull of a ferocious marine predator, an ancient ancestor of modern-day whales, in Peru, scientists said on Thursday. (Reuters)

The roughly 36-million-year-old well-preserved skull (with rows of long, sharp teeth) was unearthed last year from the bone-dry rocks of Peru's southern Ocucaje desert, chief of paleontology at Peru's National University of San Marcos, said.


See you next week!


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