Blackrock, the world’s largest asset manager, is now warning that a world wide recession is coming in 2023 and that it will be unlike any other. “What worked in the past won’t work now”, according to Blackrock.
Central banks around the world have been raising rates rapidly this past year to try to get skyrocketing inflation under control. But this is limiting how effective banks can be in trying to ease pressure during a recession. Blackrock is now warning of a period of heightened instability because of it.
A team of BlackRock strategists led by vice chairman Philipp Hildebrand wrote in a report titled 2023 Global Outlook that policymakers aren’t going to be in a position this time to support markets like they did in the past.
“Recession is foretold as central banks race to try to tame inflation. It’s the opposite of past recessions,” they said. “Central bankers won’t ride to the rescue when growth slows in this new regime, contrary to what investors have come to expect. Equity valuations don’t yet reflect the damage ahead.”
“What worked in the past won’t work now,” the strategists said. “The old playbook of simply ‘buying the dip’ doesn’t apply in this regime of sharper trade-offs and greater macro volatility. We don’t see a return to conditions that will sustain a joint bull market in stocks and bonds of the kind we experienced in the prior decade.”
In the 2023 Global Outlook report, Blackrock predicted that Central banks will back off of rate hikes in the near future but that inflation will stay higher than their target of 2% inflation. They also warned that it would take a deep recession to tame inflation, which they expect to begin in 2023.
The Great Reset
There is another piece of this story that I haven’t seen anyone else report and that is the connection to the Great Reset.
During the report, they claim that their research “suggests the global transition could accelerate, boosted by significant climate policy action, by technological progress reducing the cost of renewable energy and by shifting societal preferences as physical damage from climate change – and its costs – become more evident”. They point out that the high cost of energy is fueling a transition away from fossil fuels and towards renewables.
They mentioned the “Inflation Reduction Act” which was signed into law by President Biden and claimed that the bill is “poised to unleash enormous investment”.
They also claimed that “The faster the transition, the more out of sync the handoff could be –meaning more volatile inflation and economic activity”.
It’s important to point out that this is all by design. The significant increase in energy. The increase in inflation. And the rapid transition away from fossil fuels. And who is the main financier of the Great Reset and ESG? Blackrock.