As we’re painfully conscious, The Fed’s exaggerated financial flood mixed with Federal stimulus spending has led to horrible inflation.
Sure, regardless of what authorities speaking heads say, Federal stimulus will increase demand for items, the availability is usually gradual to reply leading to rising costs. Then authorities insurance policies driving up vitality costs additionally results in highers costs. Throw in Federal Reserve financial stimulypto and we now have this chart from hell from Penn-Wharton. The chart reveals that households incomes much less that $60,000 expertise greater bills because of rising costs than their acquire in earnings.
Talking of the federal government push to “go inexperienced” I noticed an advert for a Mercedes Benz EQ sedan that I admit appeared actually cool, however no worth given. I went to Automobile and Driver’s web site and it mentioned “Beginning at $103,360.” I’ll take a tough move, however you’ll be able to see why households making over $150,000 per yr have rising extra bills because of worth will increase. To paraphrase April Ludgate, “Thanks for nothing President Biden and Fed Chair Powell.”
One other chart from hell is the Russian USD Credit score Default Swap (CDS) curve. It’s spiking at over 20,000.
The one-year Russian CDS is presently at a whopping 20,336 indicating that there’s a couple of 99% of a Russian default over the approaching yr. As somebody who lived via the 1998 Russian credit score default scare on Wall Avenue, this can ship a shock wave via credit score and Treasury markets.
On the US Treasury entrance, this chart reveals how steeply sloped the US Treasury actives curve has turn into. Steep till 3 years, then flat. I name this chart “T-Dazzle!” T-Dazzle as a result of I can’t imagine how badly the Biden Administration and The Federal Reserve are screwing up the nation.
Crude oil? WTI Crude is again to nearly $100 per barrel whereas Brent Crude is at $102.78 per barrel. Wheat is up 3.22% thanks largely to issues associated to Russia invading Ukraine (Europe’s bread basket) and a dismal Chinese language wheat harvest.
Cryptocurrencies, the options to the US fiat greenback, are rising (specifically, Bitcoin and Ethereum).
After all, I’ve to complete up with the hovering 30-year mortgage fee.
Listed here are Treasury Secretary Janet Yellen and Transportation Secretary Pete Buttigieg attempting to persuade those who Treasuries are unbelievable and to keep away from options to fiat forex like Bitcoin, Ethereum, Stablecoin or anything.
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