On July 23, 2020, CNBC published an article by Elizabeth Schulze headlined: Here’s why economists don’t expect trillions of dollars in economic stimulus to create inflation.
That one didn’t age well, did it?
The inflation freight train is still hurtling down the track at breakneck speed.
Everybody expected a big Consumer Price Index number for March. When it was all said and done, we got what was expected. And then some.
There was a little March Madness on Wall Street. In fact, the month turned into an old-fashioned blood bath. But you wouldn’t have found any carnage in the stock market. In fact, the Dow Jones gained a decent 2.3% on the month. But beneath that glittery stock market stage (that attracts the most investor attention) there was some chaos in the orchestra pit. The normally sleepy bond market just experienced one of its worst months ever, and one of its worst quarters in over forty years, down almost 7%. The municipal bond market just posted its worst quarter since 1994, down more than 5%.
Earlier this week, Federal Reserve governor and vice-chair nominee Lael Brainard indicated the central bank will shrink its balance sheet at a “considerably” more rapid pace than it did during the previous cycle. I, Peter Schiff and a few others outside the mainstream have said the Fed won’t be able to do this.
AMC Theaters bought a gold mine last week.
A literal gold mine.
The Fed is supposedly about to step into the ring to fight inflation. But all indications are it’s going to be a feckless fight.