Today’s HOT ‘Consumer Price Index’ (CPI) reading caught many by surprise, off guard and flat-footed. Not I. I expected it to be high. I know we still have inflation out there. I see it everyday.
I never bought into the rate cuts in March 2024 fallacy.
I have always been in the ‘higher for longer’ camp when it comes to interest rates.
But, the whole point of this post is that I predicted this HIGHER INFLATION scenario 2-years ago. SMILE. No wonder I do OK when it comes to investing. SMILE.
U.S. food prices, & with that U.S. core INFLATION, is bound to go up this Fall.
Think what this EXTREME WEATHER is doing to farming & crop production. I am surprised that we haven’t started seeing some price increases already. Some farms are scorched by the intense heat, others are under water. Either way it is not good for us consumers. FOOD PRICES HAVE TO GO UP. To think otherwise is to bury your head in the sand.
Then we have the never-ending Ukraine war & Russia’s latest ban on crop export. That too will hike up food prices.
So, those that think U.S. inflation is under control & on the way down are going to be in for a very rude awakening. Yes, it will take some time for these price increases to show up on inflation gauges such as ‘CPI’. It might take till nearly year end. Then we will AGAIN suddenly see a SPIKE in inflation & interest rates will AGAIN go up.
Click to ENLARGE. The agreement they were TRYING to get me to sign, yesterday.
I am NOT going to say anything, just present you the proof (above) & facts.
They, from what I gather, are sanctioned by ‘Generac‘ though only a few of the Generac dealers have embraced them as yet.
WOW!
Yes, yes, yes … they tell you that this includes maintenance & that after 10 years I will get another Generac BUT I got to carry on paying the $257.25. WOW. They are generosity personified. What a deal. So, over the 10 years I could pay for 2 generators & still have $4,850 left over. Quite the DEAL, but I don’t think it is for I.
Notice that they don’t quote an interest rate, anywhere, in the agreement. WOW.
NO, I did NOT take it. I was actually quite upset & annoyed.
Sales tactics were borderline unethical & I talk as sales ‘closer’ myself.
Who was I dealing with. A Generac ‘super’ dealer in New Hampshire. SMILE.
Click image to access excellent ‘forexlive.com‘ post that explains it all.
Yes, I thought the ‘jobs report’, i.e., the ‘non-farm payrolls’ to be precise, came out on the first Friday of each new month. I was WRONG.
I am not shocked, upset or embarrassed because until a year ago, when the Feds started hiking up interests in anger to fight the brutal inflation, I didn’t pay much attention to ‘CPI’ or the ‘jobs number’. We hadn’t had any interest rates hikes in years. I was not concerned. But, these days I am hugely interested — & of course, one way or another INVESTED — in Fed interest rates & what will happen to them. So, I eagerly await, each month CPI, jobs numbers, Fed Minutes, Fed statement etc. etc.
So, I was waiting to see the jobs number tomorrow.
Then, to my amazement, I heard on ‘CNBC‘ this morning that it will be NEXT Friday, March 10. I thought it was mistake. Then I heard it again. Then I Googled to make sure. Wow. It is next Friday, March 10, rather than tomorrow, March 3.
I, of course, had to know WHY? Come on. Cats have nothing on me when it comes to curiosity. That is how I found the above article. Glad I did. Check it out.
According to it: ” … Bureau of Labor Statistics releases non-farm payrolls on the fourth Friday following the week containing the 12th of a given month …“. Wow. Who knew.
While I was at it, I checked when we get the March CPI — Tuesday, March 14, 2023, at 8.30 am (Eastern).
Soon to be 69 I am old enough to have lived through multiple cycles of rising inflation & rising interest rates. Yes, of course, I know that raising interest rates is said to be the ‘silver bullet’ when it comes to reining in inflation. I, however, think the so called ‘experts’ (most of them economists) missed out a key phrase: “all other things being equal”.
That is why we have a UNIQUE situation — & hence a problem — in 2022. All other things are NOT equal. We have supply-chain issues that we have NOT seen since probably WW II (i.e., over 70-years ago) & unprecedented shortages in labor. If something, e.g., dog biscuits, are hard to come by folks will end up paying more to get some WHEN they can find them on a shelf. If they pay for the dog biscuits with a credit card, most will end up paying more for their interest. It becomes a vicious cycle.
Yes, we have runaway inflation & it needs to be checked. No debate on that.
But, aggressively raising interest rates, in 2022, is not going to help. It is just going to cause additional pain to many. Inflation will continue to rise.
Not good. The remainder of 2022 looks GRIM economically.
