 who, Makoba, are you in the room one second? Yeah, Makoba, you're in the room. Could you, because I know there was a question that you've had with regards to inflation and I think it was inflation in GDP. Makoba, are you there? Yeah, right. So I don't know if you can unmute your mic and ask the question because I'm talking about the economy and inflation right now. Hopefully I can explain your question within a few minutes or so. So what was it again? So what was your question? Hi, Makoba. Yeah, I can hear you. Yeah, yeah. The problem is when the inflation and GDP is going in two directions. Maybe for example, if the economy is into recession, it's going into recession and the inflation is going up away from 2% target. Yeah. I get confused what central bank gonna do if there is a difference in, because in order for the central bank to rise rates, GDP and inflation, they must be going in the same direction. They must be going high. So the case when they are not going in the same direction. When I was trying to answer the test, I faced some situation where the economy is in contraction. At the same time, inflation is going high. So it's just a problem for me to understand what the direction. Okay, all right. So what you're describing and thank you for that as well. And it is a difficult question to ask to answer. And it's what's known as stagflation, Makoba. Yeah, so stagflation, yeah, is, let me just type in stagflation, all right, the definition of stagflation. And it's when in economics, zoom in, so in economics, stagflation or recession inflation is a situation where inflation rate is high, yeah, going higher or increasing, and the economic growth rate slows and unemployment remains steadily high, right? But what we're focusing on is this. And this is basically exactly what you're talking about. So we're going into economic contraction, negative growth potentially and slowing down, but inflation is going high. So it's known as stagflation, known as stagflation. And so it is what is a bit of a conundrum for central banks, right? And so I guess anyone who hasn't taken the test is probably gonna get the answer now. It's gonna get the answer for the test, but as long as you understand it, this is over one of the questions of the test, I should say, but as long as you understand it, that's the main thing. So it's, as you correctly said, typically for central banks to high crates, what you would expect to happen is for the economy to be growing, yeah? But this isn't always the case. We don't live in a perfect world, unfortunately. So there are gonna be situations economically and inflation-wise where inflation is going higher, but we have what is known as, I guess, a contraction or an economic slowdown. So as you're saying, what do you do in that situation? We're really kind of like two things or that you can do, yeah? Or what central banks, because really the question is, to think like a central bank, right? So what do you prioritize? Do you prioritize GDP, right? IE, you know, a recession, right? Do you prioritize that or do you prioritize inflation? What is the bigger threat? And it's difficult to say. I can't, you know, it's not a one answer. That's supposed to be an end, by the way. It's not a one answer thing. It's not a binary thing where it's like, if this happens, then we must do this. It's very dynamic in the way that you have to think about these things. But in terms of stagflation, yeah? There are, in the way to trade stagflation, there are really, you know, kind of two things that you can do, yeah? Is going into detail, is actually looking at what the market is more focused on in terms of, is it focused on the central bank? Is it focused on the inflation side of things because they have to get things back to the 2% target? Yeah? Or are they focused on GDP and avoiding a recession? Yeah? So in the situation that we're in currently today's, you know, not hypotheticals, but in today's environment, we've known for a long time or for a while that central banks are prioritizing inflation over GDP. Hence the reason why they are hiking rates, even though you're having an economic slowdown, we're going into the contraction, potentially, you know, recession phase, if this is recession, this is the contraction phase, yeah, of the economic cycle and that's maybe the bustle slump and then that's the recovery right there, yeah? So what they're doing is, is they're saying, okay, before we potentially get to recession, before the data gets to a recession, right? We have a bit of leeway. Let's try to combat inflation first by hiking interest rates, right? By hiking interest rates, yeah? To try to get inflation back down to that 2% target. Yeah? Because inflation at the moment is, you know, is basically getting out of control and I'm going to talk about that, you know? I think the data come out today, which was talking about inflation at 9.1% in Europe. Is that correct? Something like that? Someone double-checked that for me, but I think it's over about 9.192%. I think I updated the fundamental analysis spreadsheet. Europe is actually number three on the fundamental analysis spreadsheet. Crazy to think. I haven't seen that in a long time, but I'll get to that anyways in a little bit. But to understand what, you know, ultimately central banks are thinking, the central bankers are thinking about, you know, stack inflation, it's either one of two things. Either they're prioritizing GDP or they're prioritizing inflation. And we've known that they've been prioritizing inflation because, so Daniel says 9.1% and core is 4.3. Okay, brilliant. They've been prioritizing inflation, right? So hence the reason why you're seeing interest rates, right? Hike, you know, hike interest rates. Now that doesn't always mean, it doesn't always translate into a currency being appreciating because a central bank is hiking rates. Typically we know that to be true, yeah? We know that to be true. Or what typically happens historically is that whenever central banks hike rates, they obviously, you know, that should appreciate and create demand for a currency because, you know, investors who are holding that currency want a better return, right? So, you know, that's basically what it is. But when you have a recession on the horizon or potential recession on the horizon, you know, the question is where do investors, what are investors really concerned about? Are they more concerned about the coming recession, the impending recession? Or are they more concerned with potentially holding, you know, dollars or euros or, you know, pounds to try and get a return on their, or to get a yield, right? On their investment by holding that particular currency. It's very difficult to know, to get into the minds of, you know, millions of people, right? It's difficult to do that. But so the general consensus is, or I should say really, is understanding the nuances, yeah, of every situation, because every situation is unique. The last stagflation situation, there would be, there are different, there are slightly different factors to what is happening in, you know, 2022. And, you know, if we ever have another stagflation scenario and maybe the next 10, 15, 20 years, it will be slightly different to how what we're facing today, yeah? So to kind of wrap this up, what does that mean for, for how you trade currencies? Because ultimately that's what, you know, the question that we're ultimately asking. Now, if you're unsure about stagflation, personally, you can either stay out of that currency, yeah? Because if you don't know whether it's good, whether, you know, the currency is going to go higher or lower because, you know, you know, the market or generally market, the market is concerned more about, you know, inflation or if it's concerned more about a recession and it's difficult to understand, then what you can do is stay out of that. But as we trade currencies in pairs, yeah? The smarter thing to do, I guess, would be to trade a currency, yeah? Because currencies are obviously traded against each other, trading them in pairs, is to trade, is to buy a currency that is, is doing economically good, right? Versus a currency that isn't doing, or that is in stagflation, right? So if that's in stagflation and there's a lot of uncertainty around, yeah? Where do you think the majority of traders or what should follow logically, yeah? In terms of where would you put your money into? What we, where would you invest is, would you invest in an economy, in a country, in a central bank that is more stable or would you go into stagflation? You know, risk your money in a country and an economy that is going into stagflation, right? It's a no-brainer to put your money into, you know, this economy, right? So if you can identify, which we do, the economy, yeah, that is doing, you know, pretty well or doing okay or again, you know, the phrase that I use all the time is the dog with the least fleas compared to a country that is, you know, suffering from stagflation and a lot of uncertainty, this is where you wanna buy and this is where you would want to sell, yeah? And if you're obviously buying the base currency and you're selling the quote currency, then you should see the market do something like this. If this is, you know, if you're buying a quote currency, let's say for example, that is the economy that you think is doing well and that's the economy that is in stagflation, then you will see or typically see a downtrend. I'm saying downtrends are gonna, you know, look perfect and they're gonna make perfect lower highs and lower lows, right? But ultimately you should see the market do that. And you'll see in that take place. And I think Spenk, yeah, Spenk said that's, you know, he mentioned the UK, right? And the reason why the UK is going through, it's, you know, it's selling off is because there are a number of risk factors as well as stagflation going on with the UK economy, the cost of living crisis, inflation going higher. And that's the same across the board, right? Same in Europe and it's the same even in the US. But again, when you compare all three or all, you know, eight currencies that we trade side by side, which is what we're looking at in terms of the fundamental analysis spreadsheet. Again, it's all about who is the best of the worst over time. It's difficult to try to match that week to week, day to day, because we know that there are, you know, traders are positioning themselves, banks are positioning themselves, there's liquidity, you know, traders and investors are looking to buy up bargains, there's, you know, iceberg orders, et cetera. So I can't say this day in time or this week in time, this is exactly what's gonna happen. No one can. If it did, then I would just take that one trade, you know, bet all the money I had and, you know, make, you know, millions of pounds, right? On that one trade, nobody knows. So it's a probabilities game. So I know overall, and you guys have been with me for at least a minimum now of two to three months and you've seen for your own eyes, right? Week in, week out, the fundamental analysis videos I've been doing week to week and you're seeing that play out in the market, right? Overall, yeah, when we've looked at when you joined and I've been saying, okay, you know, short, for example, pound dollar over the last two to three months, what's happened to the pound dollar? Where was the money really being made to the short side? And it's because the pound dollar, yeah, the dollar CAD and I can name, you know, loads of currencies that you guys have been trading them, where my bias has literally been either long or short and you're seeing that play out. So that is really how you trade stagflation, yeah? But it is understanding the nuances you do have to keep abreast with is what the central banks are actually saying, what they're prioritizing and what's going on in the country, what other risk factors do they have and what the market thinks of those risk factors? And we'll get into confirming that with bank analysis and things like that. But does that explain your question, Makoba? Does that answer your question? And has anyone else got any questions that they want to ask about that? Is that clear for everyone? Yeah, 100% survey, brilliant, all right, cool. Yeah, very clear, excellent, excellent. So anyone who's new or doesn't understand these things, brilliant, that's how you trade stagflation. Yeah, you're not trading it in a vacuum, it's not in isolation. Trade it against the currency that is, you know, that is doing better than that currency and then it's easier to see. Yeah, excellent, okay, brilliant. Right, let's move on. So with that being said, going back to Jackson Hole Review. Yeah, so pretty much all central banks are hawkish. You know, we've got Jackson Hole, top central bank has delivered a hawkish message to Jackson Hole and ECB's officials as well that are acting forcefully to curb red-hot prices. So that is, you know, pretty much the nuts and bolts of Jackson Hole, right? And again, we've seen that kind of playing out. And I think the only bank that was pretty much pledging the loose policy, meaning that they're not looking to high crates. And by the way, the Bank of Japan does have a habit historically of surprising the market as well. So you have to be aware of that. You know, it's like the Bank of Canada as well where they might say one thing and then, you know, maybe, you know, two months down the line, all of a sudden they just switch their bias, right? Now that's not to say that, you know, you're trying to, you know, second guess to central bankers always go with what they, you know, typically go with what they say. But it sets up a nice trade when you understand, in, for example, with the Bank of Japan, we all know, or we shouldn't know anyway, that the 140s, yeah, 140, 141 area is the area where you wanna look, where they basically said that they may start to, you know, change policy or adjust the policy in terms of, you know, maybe interest rates, you know, adjusting their bonds, quantitative easing, et cetera, right? So 140 is still the level to kind of, you know, pay attention to. Now, if you still stop, if you stop to see prices go above that 140, I'm not saying that it's gonna be at that exact price, right? Nobody knows, but if it starts to go around the 140, but you also start to see, yeah, that inflation for Japan is rising, again, away from their 2% target, because I think they're at 2.4 or something like that, 2.6% inflation, and you start to see maybe it goes to maybe 3%. The central banks, you know, the Bank of Japan are gonna be forced to do what? A hike or cut rates? Are they gonna continue to, you know, be dovish or would they start to turn a hawkish? That's the question. As Sabi says, hike, so hawkish, Ademola says hawkish, yeah, that's exactly it. Daniel says, hike, absolutely. So you understand now, you know, and you know, what's happening? So what potentially could happen? So although right now they're quite dovish and continues to be dovish, that could change depending on obviously inflation and inflation being driven up by a weaker yen, right? A weaker yen and a devaluing yen pushes up inflation, which then forces the central bank to have to potentially now step in to try to get inflation to come down because they don't want inflation to get to four, five, six percent, seven percent, et cetera. Yeah. So there's that. So again, no matter what guys, if you have a solid understanding of how fundamental analysis works, you can, I'm not saying that you can never be taken off God. Of course you can, but you have a roadmap and you can have a plan for the future, right? And you know, you can understand why bankers will be doing certain things. And on many, some occasions you can actually get ahead of, you know, the situation and start to position you.