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Inflation Returns, Silver and Metals Rally, And The Healthcare Revolution

Inflation is back, Biden is being shuffled aside, and the more ‘they’ push the faster and more comprehensively confidence in them collapses. Where does this all lead? Read on…

user profile picture davefairtex Feb 18, 2024
22
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* 10-year Treasury (DGS10): +13 bp to 4.30%.
* 30 Year Mortage Rate (MORTGAGE30US): +16 bp to 6.77%.
* Fed Balance Sheet (WALCL): +2.6B (+0.03% w/w).
* Total Bank Credit (TOTBKCR): -16.5B (-0.1% w/w). Contraction.
* Consumer Price Index (CPIAUCSL): +0.3% m/m, core-services +0.66% m/m.  Inflation returning.
* Producer Price Index (PPIACO): +0.48% m/m, consumer services +1.0% m/m. Inflation returning.

Both CPI (Tuesday) and PPI (Thursday) were two big market-drivers this week. Substantial inflation is coming back, in spite of the “inflation suppression” psyop employed by the US government.  Wolf has the details:

Beneath the Skin of CPI Inflation, January: Powell’s Gonna Have a Cow when he Sees the Spike in “Core Services” Inflation [Feb 13] (source – wolfstreet); ““Core services” CPI jumped by 0.66% in January from December, or by 8.2% annualized (blue). In this inflation cycle, only three months were worse (April, June, and September 2022).”

Top % increase this month – sorted.  Multiply by 12 to annualize:
+ Hotels, motels, etc. 1.8%
+ Motor vehicle insurance 1.4%
+ Airline fares, other public transportation 1.3%
+ Postage & delivery services 1.2%
+ Water, sewer, trash collection services 1.1%
+ Other personal services (dry-cleaning, haircuts, legal services…) 1.0%
+ Motor vehicle maintenance & repair 0.8%
+ Medical care services & insurance 0.7%

PPI Inflation Spikes in Services and Finished Core Goods, Very Disconcerting (source – wolfstreet); “Final demand services weigh 62.3% in the overall PPI. The surge in the services PPI was driven by a big jump in its biggest component: “Finished consumer services less trade, transportation, and warehousing,” accounting for 32.9% of PPI. It spiked by +1.0% month-to-month or 12.7% annualized.”

This is a big jump in two inflation indicators – for both producers and consumers.  What’s the common thread? Services.  Most “services” areas require healthy, in-person labor – you can’t “work-from-home” (while semi-disabled) in these jobs.  My guess as to the root cause of the ongoing worker shortage: something Safe and Effective that was mandated on the labor force.  It appears that the inflationary effects of the worker-injuring mandate remains in place, regardless of “rate increases.”  Turns out, Fed rate increases do not heal mandate-disabled workers.  Who knew?

Note – my server is offline right now, so I’m going back to using charts from Stockcharts.com, which really does provide a great product for those that want to see what prices are doing (I’m not affiliated). 

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Top Comment

Dave, thank you
Anonymous Author by robie-robinson-2
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