Warsh Ignites Dollar Rally, Rate Hike Likely Coming, and Energy Prices Plunge (For Now)”

Consumer Economy

• Industrial Production (INDPRO) 102.6 +0.14 (+0.14% m/m)
• Retail Sales – Seasonally Adjusted (RSAFS) 763.7B +6.7B (+0.88% m/m)
• Retail Sales – Not Seasonally Adjusted (RSAFSNA) 798.8B +38.1B (+5.04% m/m)

Industrial production increased slightly – just 1.7% annualized. Not BOOMING.

The seasonally-adjusted retail sales jumped higher [10.56% annualized]. B OOMING!

The NON seasonally-adjusted retail sales absolutely screamed higher – at a 60% annualized rate. SUPER BOOMING!

First, some cherry-picked (top 5) increases from the NSA Retail Sales:

FRED: Advance Monthly Sales for Retail and Food Services by Kind of Business, Percent Change, Not Seasonally Adjusted

• Clothing and Clothing Access: +11.8% m/m
• Miscellaneous Store Retailers: +11.8% m/m
• General Merchandise: +9.3%
• Sporting Goods: +9.7%
• Gasoline Stations: +9.2%

A big chunk of this increase is probably due to “summertime” (seasonal) activity. That said, below are the seasonally adjusted numbers.

FRED: Advance Monthly Sales for Retail and Food Services by Kind of Business, Percent Change, Seasonally Adjusted

• Clothing and Clothing Access: +0.3% m/m
• Miscellaneous Store Retailers: +2.3% m/m
• General Merchandise: +0.4%
• Sporting Goods: +0.3%
• Gasoline Stations: +3.4%

The “seasonally adjusted” gasoline store sales are up by 3.4% month/month. Annualized, that’s +40%, after being seasonally adjusted.  BOOMING! i.e., another inflation signal.

Credit & Rates

• Total Bank Credit (TOTBKCR) 19.62T +56.2B (+0.29% w/w) (prior -0.09% w/w)
• Fed Balance Sheet (WALCL) 6.74T +11.0B (+0.16% w/w) (prior +0.21% w/w)
• US 30 Year Mortgage Rate (MORTGAGE30US) 6.47% -5 bp
• 3-Month Treasury (DGS3MO) 3.75% -3 bp
• 1-Year Treasury (DGS1) 3.99% +13 bp
• 10-Year Treasury (DGS10) 4.46% -2 bp
• 20-Year Treasury (DGS20) 4.91% -7 bp
• 20+ Treasury ETF (TLT.N) +1.14% w/w

We saw a big increase in bank credit this week [56B]; about 20 billion/week is “enough” (about 5% annualized). That said, the numbers bounce around a lot, so it might be hard to tell where things are going with a simple chart.

Here’s a w/w change chart of bank credit with a 4-week MA applied. Why do we care about bank credit? The (worthless) fiat money system requires the banksters to create enough new money to cover the interest payments on the existing money created out of thin air for the “loans” to be paid back.  Otherwise, the system gets into big trouble. Right now, things seem more or less fine.  If (when?) the AI debt