It was a relatively slow news week in the financial realm. For once, the Fed didn’t do anything particularly noteworthy. So, Friday Gold Wrap Host Mike Maharrey took advantage of the lull. Along with covering some economic data and media spin, he hit on a couple of subjects he hasn’t been able to get to in recent weeks, including the fatal flaw in Keynesian economics and the prospect of manipulation in the gold and silver markets.
The CPI cooled in July. The White House and others in the mainstream continue to insist there is no recession. Is everything looking up?
Peter Schiff was on Fox Business with Liz Claman, Kenny Polcari (Slatestone Wealth Peak Market Strategist), and Teddy Weisberg (Seaport Securities) to discuss the Fed’s attempt to fight the inflation it caused. Peter said we haven’t seen peak inflation, and on top of that, the recession will get worse.
The Consumer Price Index data for July cooled even more than expected. The question is how will the Federal Reserve play this? In this episode of the Friday Gold Wrap podcast, host Mike Maharrey breaks down the CPI data, talks about the Fed reaction, and speculates about the Fed’s next move and its impact on the economy.
After the second straight negative GDP print in Q2, the markets began anticipating that the Federal Reserve would pivot away from its monetary tightening. But a few choice words from some Fed members this week caused thoughts of a pivot to pivot. As Peter Schiff put it in his podcast, it appears to be damn the recession! Full ahead with rate hikes. The question is how long can the Fed keep this up?
Another month in and the Fed is still struggling to implement Quantitative Tightening (QT). According to the plan the Fed outlined last May, the central bank should be shrinking the balance sheet by at least $47.5B a month, spread between $30B in Treasuries and $17.5B in MBS.
That’s not happening.
Inflation and rapidly spiking prices aren’t just a problem in the US. It’s gotten so bad in Europe that that perpetually dovish European Central Bank (ECB) has been forced to go hawkish.
But not really. Just hawkish for the ECB.
Last week the ECB raised interest rates for the first time since 2011. The bank surprised markets, raising all of its policy rates by 50 basis points. That pushes its deposit rate all the way to — zero.
We’ve heard all kinds of excuses for inflation. It was COVID. It was Putin’s price hikes. It’s greedy corporations. This week, we learned it’s the millennials’ fault. As host Mike Maharrey explains in this week’s Friday Gold Wrap, all of these notions miss the mark. And they let the real culprit get off scot-free. How? They’ve redefined inflation. Words matter!
Inflation is off the chain. The CPI rose by 9.2% on an annual basis in June. As Ron Paul explains, everybody is feeling the pain. Even penguins.
Putin is causing inflation. Greedy corporations are causing inflation. COVID-19 caused inflation. We hear all kinds of reasons for the recent spike in prices. And now we have a new one. It’s the millennials’ fault.
This is all wrong and it illustrates the problem with redefining inflation to be something it isn’t.
It happened again. The CPI data for June came in hotter than expected. Prices rose at the fastest pace in this inflationary cycle. That pushes the Fed ever closer to having to make a very difficult choice. In this episode of the Friday Gold Wrap, host Mike Maharrey breaks down the most recent CPI data and talks about the “Sophie’s choice” facing the Federal Reserve.
