Inflation, Inflation/Uh Sorry, It’s Not Transitory
Trader Scott’s Market Blog
March 4, 2017
Inflation is picking up around the globe. And no Janet, this time it is not “transitory”. Your moronic, incoherent Fedspeak is not going to stomp out the inflation monster. Because this time, as opposed to the last 37 years, the burgeoning inflation is secular. The CPI on a percent increase basis peaked in 1980, secular-wise. We are going to have a lot of “fun” over the years watching the central bankers squirming around trying to “battle” inflation – they’re going to lose, big time. But of course they will attempt to tweak their permabull econometric models and algorithms, which themselves are also moronic and incoherent, as are the central bankers themselves. But what’s truly amazing aboutall this ishow in the world did Larry Summers not end up at the Fed? Old Larry is possibly the most moronic and incoherent and inept economist of all time. This guy, with all of his “impressive” “economics” “education”, doesn’t even understand that the Fed follows the market. Note to Larry – even someone who barely made it thru college understands that the Fed is a follower, not a leader.
So now we’re going to watch the spectacle of the Fed, and all central banks, chasing inflation higher. Then we’ll hear about how it’s transitory, and it’s contained, and it’s moderate, and the economic fundamentals are solid so it’s just an adjustment. And like from mypost about Bernanke whiffing time and again during 2007-2009, while using his erudite explanations:
February 2005:”Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.” In March 2007 :”At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to becontained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.” In October 2007:”Despite the ongoingadjustmentsin the housing sector, overall economic prospects for households remain good. Household finances appear generally solid, and delinquency rates on most types of consumer loans and residential mortgages remain low.”
Who writes that nonsense, why can’t they speak like normal people, and what is the purpose of the Fed at this point?
Inflation is not contained, and it won’t be transitory, nor moderate. Last Spring was the secular bottom in inflation, and just like the stock market bottom in March 2009, and the gold bottom in December 2015, the huge trend is up. There will be reactions, so to speak, in inflation itself, but eventually it will go to higher highs. We should all have some ways to profit from that trend, and there are many ways to do it. But the selling waves are the places to enter those markets, yet so many people are too afraid to buy into those big selloffs.
So here is just the latest batch of inflation data around the globe, like the Euro area inflation hitting 4 year highs. With those inflation numbers picking up, look for the ECB to begin serious discussions about pulling back on their toxic stimulus and their INSANE “negative rates”. (Can you fathom this braindead notion/scheme?) In China producer inflation is at 6 year highs, and consumer inflation is at 3 year highs. In the US, the CPI increased at the fastest rate in 4 years. But relax, no prob, it’s just transitory.
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day.Scott returned to markets over fifteen years ago where he continues as an independent trader.