Inflation Hits the Basics

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I love the inflation. Yeah. just I wonder how many how many campaign ads are gonna be run with that statement yesterday. Yeah, the president was asked about inflation and he says he loves it. I love the inflation. Yep, inflation four point two percent. I’d like to remind everybody that the Fed’s target is two.

is two. and you’re gonna queue up cue up all the talking heads on Fox and CNN that take one side say that’s you know

They don’t have really have anything else at this point in time, quite frankly. I for years have been obviously very concerned about inflation and devaluing the currency. That’s my job. unlike a lot of other, many other people in my industry, my profession peers, and I really like to focus on that.

They like to pat themselves on the back based upon their portfolio’s performance without actually considering the fact that, you know, inflation plays a part in assets as well. the inflation numbers that are put out by the government oftentimes mass the true problem for most Americans is the I call it the bare necessities inflation. I remember years ago, we actually were playing that song from the jungle book.

It’s the bare necessities. Yeah, but it’s that’s what’s most important. I the Wall Street Journal, which again is a shell of its if its former self editorial board, actually today their their app ed an inflation silver lining. The energy shock is hitting consumers, but not yet overall prices.

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Inflation was too high again in May, with the consumer price index coming in at 0.5% for the month and 4.2% for the last 12%. The silver lining is that this was better than markets expected given the oil price shock and core inflation. This is again, core inflation is minus the bare necessities, slowed for the month. Hmm.

I I quite frankly, I’m gonna break this down for you, okay, as best I possibly can. This the Wall Street Journal is pointing out that without food and energy, prices were only up point two percent. And they’re used cars are I mean, excuse me, new cars have not gone up. yeah, f furniture, furniture has actually come down at this point in time.

again, do you understand how out of touch that is? New cars well first and foremost, we all know how expensive new cars are already here in the United States. you know what’s interesting is is that used cars went up in price.

Used cars went up, new cars did not. you go across the board in regards to the prices that went up, it’s they’re all bare necessities. It’s food, energy, housing, health care, everything that Americans have to spend. That’s why I call it the bare necessities. We must spend money on every single day to live.

They all went up in price. gee, it’s it’s real great that you know, news car you new new cars haven’t gone up, but how often do people need to buy new cars? Again, used cars went up because that’s what most Americans can afford at this point in time. I I remember, you know, years ago, I I tried to explain it on the radio show.

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As you know, they d when they try to like skewer inflation prices, you know, those electronics are way down. I’m like, that’s nice.

That th that’s nice, but how often does someone need to buy a new television set? How often does someone need to buy a new television set and can you eat a television?

It’s different things here that again what affects Americans as a whole. I I I, you know, the president is never, ever, ever this guy, and again, it’s just his you understand anything about him, he’s never wrong. he is the epitome of the that that Lego song, every everything is awesome. Inflation could have ticked up.

to seven percent. And he would tell you that it’s great. He would tell you that it’s awesome. And

The sad, but but true reality is that many of his supporters will go along with that. And they will justify that. this is not good for most Americans by any stretch of the imagination. And if you can’t see that, I I don’t know what to tell you. Okay. I I don’t know what drugs you’re taking, what you’re smoking, what you’re drinking.

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Okay, this is a horrible number. Now, what does this mean for the Federal Reserve? Kevin Walsh is in there. Donald Trump is

Confident that Kevin Warsh is this guy, that he’s going to lower rates. I I don’t see that happening anytime soon. the conversation has been of late. You’ve had various different members of the federal boards, Federal Board of Reserve saying, hey, we might need to raise rates. there’s the conversation out there saying that this is just because we’re this inflation is temporary because of the Iran war, because it’s a temporary war.

Okay.

How do you know it’s temporary? I I got a I got a quick question for everybody out there. What was the last last temporary war we’ve been in? I mean, again, I I I want it to be over today. I want to be over today. If yeah, I was in charge, everybody’d be coming home today. I I that just, you know, that’s not our

That that hasn’t been the American way since you know post-World War II. We we love our we love our quagmire, we love our wars, and we love our quagmires. with that being said, the argument is being made that this is not a monetary issue. This is not something that the Federal Reserve needs to tack tackle because it’s an energy issue that’s filtering its way through. And that is correct. 110% right on that. I’ve explained here on the program inflation.

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That the Fed deals with is a monetary issue. However, we’re $40 trillion in debt. We’re running trillion dollar deficits. And we’re running out of bombs. And we’re running out of missiles. And we have to, they’re not cheap.

They’re not cheap. And again, y you have the you know, the president and certain Republicans out there pushing for a military budget at one point five trillion dollars. Where is that money going to come from?

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The globe at this point in time is not buying our debt like it used to.

It’s not buying our debt like it used to. And I I can I can go back. I mean and I’m gonna be honest with you, I’m happy about this.

I’m I I I actually I actually suggested this when George W. Bush was president. I said, I said, we need a letter writing campaign. I actually did a whole thing to foreign governments telling him, please, please stop enabling the United States in our profligate ways. Please cut us off at some point in time. But, you know, he got that buyer of of last resort out there, which is the Federal Reserve.

Where they can go out, print money, and lend it to our government, and they hold on to the debt. That that’s inflationary.

That’s inflationary. We’re gonna have to print more money. Where is it going to come from?

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Well, we can’t tax our way out of this situation. You know, as of late, I’ve been talking about the issues with Social Security. They’re not even discussing that. That’s a few short years down the road. Where is the money going to come from? Are we going to grow our way out of this? you you’re going along with White House economic advisor Kevin Hassett, who says that GDP growth is gonna be six percent this year? Again, what?

What’s that guy smoking?

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This is this is where we’re at at this point in time. God willing, it you know, again, these numbers again infl if you get energy prices down, it’s not gonna drop like a rock, okay? Inflation is that it’s just not true. The president says that’s not it’s gonna take some time for all of this stuff to filter through. It’s not gonna be lickety split, but it’ll be a step in the right direction as it stands right now.

Okay. How anyone could love inflation like this, which hits the bare necessities. And again, the president’s a politician, you know, he’s gonna, like I said, he’s the everything is awesome guy because he’s in charge. This is not awesome. There’s no silver lining when the the basic costs, the bare necessities of life continue to go up in price. Watchdog on wallstreet.com.