Action Line: Central banks the world over talk about “soft” landings. Listen, I’m not a pilot, I’m Your Survival Guy, government has a history of screwing up landings and cleaning up the wreckage after the crash. I’m not in the prediction business. Prices are what they are. They can go as high as someone else is willing to pay. Prices are essentially a qualitative event. I want you focused on the quantitative. In other words, I want you to get cold hard cash in the form of dividends to be “invested” in the chaos. … [Read more...]
Archives for December 2021
January RAGE Gauge: Free Money for All, and to All a Good Night
Let the parties continue, because the punch bowl is still flowing. Yesterday, when the Fed announced a tighter monetary policy—an end to bond purchases and three rate increases—markets cheered. Because halting asset purchases and raising rates a whopping three times is like moving a few ornaments on your Christmas tree. It’s all for show. And just like the “Jingle Bells” refrain, the Fed’s just another reindeer pulling Biden’s sleigh. It’s free money for all, and to all, a good night. What could possibly go wrong? For serious Americans like you—the savers, entrepreneurs, small business … [Read more...]
PRICE WAR: How Low Can Streaming Go?
You wouldn't guess it from your streaming charges here in America, but overseas, streaming giants are entering a price war. Netflix is cutting its prices for streaming services in India to battle for share with Amazon Prime Video and Disney. Newley Purnell reports in The Wall Street Journal: Netflix Inc. NFLX -0.91% is slashing its prices in India, a key market for global growth where it trails cheaper rival streaming services from Amazon. com Inc. and Walt Disney Co. The Los Gatos, Calif., company this week said in a blog post from India executive Monika Shergill that it is cutting its … [Read more...]
SALES SLOW: Inflation, Shortages, Fear, Hurting Retailers’ Sales
Retailers were unhappy to see sales growth slow to only 0.3% growth in November. That's a far cry from October's growth of 1.8%. There are many reasons sales growth is slowing, including summer fears of shortages that led many shoppers to buy early, and stimulus measures that have driven prices for food and gasoline higher, taking away dollars that may have been earmarked for Christmas presents. After months of politicians telling shoppers to "shop early," to avoid shortages, shoppers may simply be done shopping for the season. Gabriel T. Rubin reports in The Wall Street Journal: “If … [Read more...]
How I Feel at the Grocery Store These Days
Too much money chasing too few goods is how I feel at the grocery store these days. The money just isn’t going as far as it used to. You know the story, fewer potato chips in a bag that’s shrinking. When I’m looking for some meat, I ask myself, “Where’s the beef?” Why do I feel like the lady in that classic Wendy’s commercial? Speaking of which, how is it that White House spokeswoman Jen Psaki places the blame for rising prices on meatpackers? Then I read in The Wall Street Journal about millennials plunking down $625k for a “starter home.” What does that say about inflation? You tell … [Read more...]
How Your Inflation Outlook Moves Interest Rates
Is it all in your head? No doubt some economists and politicians wish it were, but even though inflation is real, how you think about it may have an effect on its duration. Nick Timiraos and Gwynn Guilford report in The Wall Street Journal: Supply-chain disruptions, labor shortages and climbing oil prices have pushed inflation to a 39-year-high. But attention is now focused on another variable: Do people think inflation is here for a while? Because people’s expectations can factor into inflation, the answer plays a critical role in determining how the Federal Reserve and the administration … [Read more...]
BIDENOMICS: The Disaster that is President Joe Biden
Where do we start? Joe Biden’s been a complete disaster. When you pay people not to work, what do you think happens? The labor participation rate stays where it is because why work when you don’t have to? Meanwhile, “Successful Americans” like you who worked for a living and saved ‘til it hurt are penalized as inflation eats away at your fixed income. What’s the solution, more stocks? Please. Leadership talks about ESG investing like it’s the Holy Grail, taking your money, and pushing high-cost renewable energy on Americans. How long will it last? And not a word about the pollution going on … [Read more...]
America’s Plan for Lithium
Lithium prices are rising at the fastest pace in years. The electrification of the vehicle fleet is boosting demand while supply has been constrained by limited investment in new projects and supply-chain bottlenecks. What is America’s plan for a potential lithium age? It looks to be as incoherent as our policy toward oil, natural gas, and coal. Policymakers want more electric, but environmental opposition and permitting are limiting new supply. Thankfully, lithium is abundant so it is just a matter of getting resources developed. Amrith Ramkumar explains in The Wall Street … [Read more...]
INCESSANT INFLATION: Government Destroying the Dollar and Prices
Happy Monday. Are you paying attention to the “transitory” inflation? How much more did you pay this year for your Christmas tree? How about your turkey on Thanksgiving? Inflation is always a monetary event of too many dollars chasing too few goods. But the fact that the Fed has called inflation “transitory” (not anymore they’re not) is a joke. Take a look at this chart and you tell me if the destruction of the dollar was ever transitory. Action Line: Even if it’s the same U.S. President on your dollar bill, its value is hardly what it used to be, and this is not transitory. It’s … [Read more...]
The Fed Risks Everything with Its Inflation Policy
Former member of the Federal Reserve Board, Kevin Warsh, suggests that the Fed's easy-money policies are putting the very social contract that governs America at risk. He writes in a Wall Street Journal op-ed: If price stability is squandered, financial stability is put at risk. If financial stability is lost, the economy is imperiled and the social contract is threatened. During the past several quarters, U.S. inflation has surged—now running about triple the Federal Reserve’s 2% target. The surge in prices is unlikely to reverse on its own. The longer that prices are unstable, the … [Read more...]