CPI jumps 5% in May of 2021, fastest since 2008

[Krugminator2]

https://twitter.com/AuronMacintyre/status/1701957262867087606

That take is why the Fed was so slow to deal with inflation and why they've now overtightened. The headline number is for the trailing 12 months so inflation won't look as bad when it flares up and will look worse even after it is beaten.

M2 has had it biggest percentage decline ever. From page 232-233 of my copy of Money Mischief by Milton Friedman

4. It takes time (measured in years, not months) for inflation to develop; it takes time for inflation to be cured

5. Unpleasant side effects of the cure are unavoidable. The United State has embarked on raising its monetary growth five times between 1960 and 1990. Each time the higher monetary growth has followed first by economic expansion and later by inflation. Each time the authorities have slowed monetary growth to stem inflation. Lower monetary growth has been followed by a recession.

The Fed has done its job. But they went too far and historically you get a recession out of this. The 3 month and 10 year yield curve inverted October of 2022. The average lead time for recession is 18 months which would put a recession first qtr of 2024, but it can be multiple years as was the case in 2008. Worrying about inflation right now doesn't mean there will be less inflation long term. It probably does mean there will be an even bigger recession and more government stimulus and more Fed easing instead. I think we will look back on this and wish the Fed stopped tightening last year.

 

[acptulsa]

I think we will look back on this and wish the Fed stopped tightening last year.

But of course we will. America didn't need a middle class anyway.

The only thing I can't figure out is what the Fed was allegedly tightening? Certainly not Zelinsky's belt. Not their own, either.

 

[Occam's Banana]

The Fed has done its job.

Or course it has. When has it ever not?

 

[Krugminator2]

Or course it has. When has it ever not?

I know that is some sort of snarky response. I honestly don't know what you are getting at. Could you tell me? Are you saying they should continue to tighten so we get an even more severe downturn?

 

[Occam's Banana]

I know that is some sort of snarky response. I honestly don't know what you are getting at. Could you tell me? Are you saying they should continue to tighten so we get an even more severe downturn?

Why ask me? They're the "experts".

They should just do whatever they think best.

Otherwise, what is even the point of them?

 

[Krugminator2]

Why ask me? They're the "experts".

They should just do whatever they think best.

But are they the experts? The yield curve is the best predictor of recession. Their own website using market signals and not their "expert" opinions says this is the highest probability of recession since 1981, yet they are talking about their base case is no recession. https://www.newyorkfed.org/medialibrary/media/research/capital_markets/Prob_Rec.pdf

Otherwise, what is even the point of them?

I would say no point. I have seen no evidence that human judgment is a better predictor than markets. I would say they shouldn't exist. There should be a rules based system whether it is a gold standard or Taylor Rule or Friedman rule or nominal GDP targeting.

 

[oyarde]

if the fed hasnt proven how useless they are now they never will

 

[Swordsmyth]

Rising Gas Prices Driving Inflation Higher


https://www.thefinancialtrends.com/2023/09/14/rising-gas-prices-driving-inflation-higher/

 

[Swordsmyth]

August Retail Sales Strengthen As Gasoline Prices Soar


https://www.thefinancialtrends.com/...ail-sales-strengthen-as-gasoline-prices-soar/

 

[oyarde]

Credit card losses at highest level since last great financial crises , moving near 4 percent , up 1 1/2 percent from 2021. Expected to rise another percent in next 1 1/2 years

 

[Swordsmyth]

Germany To Restore 19% Tax On Gas


https://www.thefinancialtrends.com/2023/09/23/germany-to-restore-19-tax-on-gas/



Global Debt Soars – IIF Report


https://www.thefinancialtrends.com/2023/09/23/global-debt-soars-iif-report/

 

[Occam's Banana]

https://twitter.com/profstonge/status/1708966299530035595

 

[Occam's Banana]

https://twitter.com/profstonge/status/1708966299530035595

https://twitter.com/JoeConsorti/status/1709208934551371840

 

[devil21]

Credit card losses at highest level since last great financial crises , moving near 4 percent , up 1 1/2 percent from 2021. Expected to rise another percent in next 1 1/2 years

It'll be a lot more than 1% now that student loan payments have kicked back in.

On "inflation", which I'm convinced is just Wall St fixing prices high to suck money from Main St at this point, not any monetary function anymore, meat prices have gone full retard. $10 for a few chicken breasts?!?! $22 for a very small ham?? Crazy times. Late night dumpster diving for pitched out unsold products sounds more appealing by the day.

 

[Swordsmyth]

Spending Power In The US Falls In New Survey


https://www.thefinancialtrends.com/2023/10/09/spending-power-in-the-us-falls-in-new-survey/

 

[Krugminator2]

From the guy who did the original academic work on the Yield Curve.

1. Inflation is over. Fed should probably cut next meeting if anything. Fed still using backward metrics for shelter that use data from a 12 months ago
2. He used the 2 yr and 10 year yield curve and average recession time would put a recession starting December or early next year. (Note: The 3 month and 10 yr is the more predictive yield curve and it inverted in Oct. Avg recession is 18 months later.)
3. The inverted Yield curve has forecasted 8 out of 8 recessions. No false positives.

 

[oyarde]

wholesale inflation rises 2.2 percent in sept , fastest pace since april , wholesale energy up 3.3 percent aug to sept

 

[oyarde]

inflation up almost a half percent from month prior . official govt core number 4.1 percent , other 3.7 percent. rent , fuel . energy , hotels , new vehicles , auto ins , meat , poultry , fish and eggs still rising. using that math inflation year prior to last and 4.1 percent would mean roughly 12 percent from 2021 to now . seems a little low if you buy groceries but dow is up 65 points. by govt numbers inflation pretty well unchanged since collins started this thread ( 5.0 to 4.1) , fed expecting three more yrs before improvement

 

[oyarde]

mortgage defaults rise to highest level since 2009 in UK

 

[Madison320]

From the guy who did the original academic work on the Yield Curve.

1. Inflation is over. Fed should probably cut next meeting if anything. Fed still using backward metrics for shelter that use data from a 12 months ago
2. He used the 2 yr and 10 year yield curve and average recession time would put a recession starting December or early next year. (Note: The 3 month and 10 yr is the more predictive yield curve and it inverted in Oct. Avg recession is 18 months later.)
3. The inverted Yield curve has forecasted 8 out of 8 recessions. No false positives.

They have to cut rates to keep interest payments on the debt from rising. It's going to be the biggest budget line item in a year or two.

When that happens my guess is that commodities are going to explode.