We spend a lot of time in these letters discussing the economy as it relates to market investments. Economics and investing would seem to go hand in hand. But there’s a big difference between the two. Investors are always trying to look forward. Economists are always looking over their shoulders. Take the current recession debate …
There’s no doubt the Fed’s been aggressive trying to deal with inflation up to this point. Their launch from zero to 2.5% took less than half the time it took them the last time they pumped rates to this level. To save any credibility, the Fed had no choice but to be aggressive in the …
Three Reasons the Fed Better Not Give in to Recession Doves Read More »
Manufactured economies never end well. I recently wrote to our paid subscribers about the manufactured economy that we’re all currently living in… I called it a “fake” economy. Real economies thrive by producing value. Fake or financial (i.e. manufactured) economies thrive on debt. Debt becomes more and more necessary when you can’t pay your bills with …
I’ve been writing about the topic of energy on and off for the last year or so. That’s because energy prices have been one of the biggest drivers of inflation. And the administration’s green energy agenda is one of the biggest drivers of higher energy prices. Energy Inflation As of June, energy prices had soared …
Month’s end is usually a pretty slow time for economic reports. You get things like Durable Goods orders, a few real estate numbers and maybe a few Fed speeches from various venues. But this month is gonna be a little more exciting. This week the FOMC is meeting to once again hike interest rates. And …
There’s no question we’re living through some uncertain times. Inflation is on the rise and expectations (both mine and, according to the NY Fed, the general public) are that it’s going to stay high for a while. But there’s another investor class that’s voicing its expectations. The bond market. And you, as an investor, really …
The Recession Predictor You Should Really Listen To Read More »
A lot of people are obsessed with appearances. That includes the folks at the Federal Reserve. I’m not talking about their personal appearances. All of them look perfectly fine on TV in their tailored suits. The appearances they care about are economic. Specifically how people’s financial futures appear to them. In other words, what people …
Why “Unanchored Expectations” Aren’t Driving Inflation Read More »
Time for a pop quiz… Q. What’s the sworn enemy of inflation? A. Recession. Recessions aren’t just the enemy of inflation, they’re its natural antidote. That’s because recessions slow everything down. People buy less stuff. Manufacturers produce less stuff. Farmers plant less stuff. If nobody’s buying, prices can’t go higher. The fact of the matter …
Big day tomorrow! Our friends over at the Bureau of Labor Statistics are releasing June inflation numbers. The consensus is forecasting that prices rose 8.7%. Just last month headline inflation posted at 8.6% year-over-year which is a 40-plus year high. The number is not likely to be a surprise (unless it comes in at 10%!) …
Captain Jerome Powell of Air-Fed has the US economy on final approach for what he hopes will be a “soft landing.” The phrase “soft landing” (if you’re not familiar, it’s because it’s been shelved for a number of years) means hiking interest rates to cool the economy without crashing us into a recession. But just …
