It’s Disinflation, Not Deflation.

Yes, inflation isn’t as high as it was before. But it’s not reversing. [The Rude Awakening] July 13, 2023 [WEBSITE]( | [UNSUBSCRIBE]( It’s Disinflation, Not Deflation. - Yes, inflation is slowing. But it’s not reversing. - That’s disinflation, not deflation. - Let’s look at the numbers to see what’s going on. [“Godfather Of AI” Reveals Stunning Prediction]( [Click here to learn more]( He’s a 35-year AI veteran who has worked closely on AI technology for decades… - In 1988, the National Science Foundation funded him to build an AI chess program. - He’s written and published academic papers on AI. - And he’s used AI to trade stocks as early as 2001. [But today, he’s stepping forward with a critical prediction that he says every investor needs to hear.]( Whatever you do, I’m urging you to not invest a single dime into AI technology until you see this man’s warning. [Click here for details.]( [Click Here To Learn More]( [Sean Ring] SEAN RING Happy Thursday from a surprisingly fun New York City! I taught a class on Strategic Thinking today. It was a hoot. I’ll write about it later. But the CPI number came out yesterday, and that’s important. But first, let me give you some news. As a reader of the Rude, you know my good friend and colleague Byron King frequently contributes to our newsletter. If you’ve read his research, it’s clear why. Byron is a Harvard-trained geologist and an all-around fountain of knowledge. I soak up everything he writes. I want to let you know Byron will be [this week’s special guest on]( Uncensored]( With everything going on (including volatile markets, sky-high inflation, geopolitical turmoil, and more)… I highly recommend you attend. If you don’t know, Rickards Uncensored is a private Zoom call we host every week with Jim Rickards and other members of his team. I’ve spoken many times and even hosted a couple of sessions! This private group meets up once per week every Friday at 10 AM with Jim or a member of his team, where we carefully review all of the important developments from that week. Members of this unique group can also directly ask Jim and us questions and more. In short, being a part of this group gives you direct access to Jim and his entire research staff – myself included. And it gives you access to all of our best predictions and insights. As one of my readers, I’d hate to see you miss out. [To see how to secure your spot in the group today – before we go live on Friday morning – click here now.]( Now, let’s get to the economics. Inflation Has Come Down Year-on-year CPI was expected to come in at 3.1% but was actually 3.0%. Last month, it was 4.0%. Year-on-year core CPI came in at 4.8% versus an expected 5.0%. Last month, it was a hefty 5.3%. So the inflation numbers have come down. That’s indeed good news. [SJN] Credit: [The Wall Street Journal]( However, prices are still rising. Just slower than they once were. [Exposed: Biden’s 2022 mistake to cost him election?]( [Click here to learn more]( Will this ugly scandal doom Biden in 2024? In February 2022, [Joe Biden made the most dangerous mistake]( any President has made in the past 150 years. If it all plays out like Jim Rickards is predicting… Biden’s blunder will soon cost good Americans EVERYTHING. There’s still time to protect your money. But you can’t wait. [Click Here To Learn More]( But Did Inflation Decrease? In economics, inflation, disinflation, and deflation are terms used to describe different trends in the general price level of goods and services within an economy. Here's an explanation of each term: Inflation: Inflation refers to a sustained increase in the average level of prices for goods and services in an economy over time. It means that the purchasing power of money decreases as prices rise. Various factors, such as increased demand, supply shocks, changes in production costs, or expansionary monetary policies, cause inflation. Keynesian economists consider mild inflation beneficial for an economy as it allegedly encourages spending and investment. But at least they admit high inflation or hyperinflation has adverse effects, such as eroding savings and creating economic instability. Disinflation: Disinflation refers to a decrease in the rate of inflation. It means the general price level is still rising but slower than before. In other words, disinflation indicates a slowdown in the rate of price increases. For example, if the inflation rate in an economy decreases from 5% to 2%, it’s experiencing disinflation. Disinflation is often the result of deliberate monetary or fiscal policies aimed at reducing inflationary pressures in an economy. Deflation: Deflation is the opposite of inflation. It’s the sustained decrease in the general price level of goods and services over time. In a deflationary environment, the purchasing power of money increases as prices fall. Deflation occurs because of reduced demand, overcapacity in production, technological advancements, or restrictive monetary policies. According to Keynesian economists, falling prices may seem beneficial for consumers. But deflation has adverse economic effects, like decreased spending, lower investment, increased debt burdens, and even economic recessions. I disagree with the Keynesians. Deflation is a good thing. Because young people can afford to buy houses, have one parent working, and raise children. Where did I get that from? A man named Murray. Rothbard on Inflation Murray Rothbard's views on inflation were influenced by his broader libertarian and Austrian school of economics perspectives, which emphasized individual liberty, free markets, and limited government intervention. He considered inflation primarily a monetary phenomenon caused by an expansion of the money supply. Rothbard argued inflation wasn’t simply a price rise but a consequence of an increase in the money supply that distorted the market's price signals and disrupted economic calculation. According to Rothbard, inflation benefited certain groups at the expense of others. He believed the primary beneficiaries of inflation were the government and its favored interest groups, such as politically connected corporations and banks. They received the newly created money first. To me, this point is indisputable. In contrast, those who received the money later in the process or held fixed-income assets, like workers and savers, suffered a decline in their purchasing power as prices rose. Rothbard criticized the mainstream Keynesian approach to inflation, which views it as a necessary evil to stimulate economic growth. He argued that this perspective ignored the negative consequences of inflation, such as the erosion of savings, misallocation of resources, and economic distortions. Rothbard advocated a sound money system based on a free-market approach to money and banking. He believed that a competitive banking system, unrestricted by government intervention, would provide a stable monetary system with minimal inflationary tendencies. Now What? The market popped today on the news. Here’s the SPX over two days with 15-minute bars. [SJN] As soon as the market opened (an hour after the CPI numbers came out), it spiked 0.7% and stayed there for the rest of the session. Gold was up over $20 today to finish at $1,961.70. The dollar index has been getting destroyed lately and took a beating today: [SJN] When the dollar’s down, it takes more of them to buy stuff. Hence, the price of stuff goes up. That’s stocks, bonds, commodities, and real estate. Bitcoin remained subdued, however. Wrap Up According to the charts and the dollar, there’s no reason to be bearish. As bad as I think everything is, everything is going up. That may change with the BRICS announcement. Maybe not. Right now, this is a bull with big horns. Have a great day! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( In Case You Missed It… On Orioles and Areolas [Sean Ring] SEAN RING Happy Hump Day from steamy New York City! I had a great laugh when I disembarked from my airplane on arrival at JFK. I flew ITA Airways (pronounced EE-ta), and the staff is Italian. When the plane door opened, the flight attendant said, “Prego…” “Prego” means “You’re welcome” usually. But in this context, it means “Pray, go” or “Please go.” Upon hearing this, one of the airport staff asked her friend, “Isn’t Prego a can of tomato sauce?” I stifled a bellowing laugh. And then I remembered some pretty embarrassing faux pas on my part. I wrote the Rude edition precisely two years and one day ago. I’ve cleaned it up, but it still conveys the same meaning from back then. This morning, have a laugh at my expense! “It’s a Bird… It’s a Plane… It’s a….” [pub] Hung-Wah sent me a WhatsApp with this picture. Underneath the picture, the message read, "Isn't this the medical name for a nipple?” I burst out laughing. Of course, the words are very close. You don't need to be an ornithologist to know what an oriole is. You just need to be a baseball fan. Of course, an oriole is a bird. But an areola? It’s the pigmented ring of skin around the nipple. Unbeknownst to me, when I learned the word, the whole thing isn’t a nipple. The nipple is just the part where the milk comes out. Part of the reason why I was laughing so hard is because I remember where I first learned the word “areola.” I learned that word from a mutual friend of Hung-Wah's and mine, Adrian. Adrian is a charming, handsome dude with a full head of hair. The chicks loved him. He got laid like train tracks. One night, I remember talking in a London pub over our pints of Kronenbourg 1664, and we were describing our “perfect woman.” Adrian said, "I love women with perky nipples, but I don't like their areolas too big." I looked at him and said, "WTF is an areola?" He looked back at me and said, "Ah, you stupid Yank. The areola is the dark part of the skin around the nipple." I retorted, "I didn't even know they had a name for that." It brings me back to the point Socrates made 2,500 years ago: "The first step to knowledge is the definition in terms." I'm convinced we lose mountains of time because we don't know what we're talking about. To wit: acronyms. Everybody loves acronyms. Everybody in Singapore loves acronyms. Everybody in Hong Kong loves acronyms. I'm convinced part of the US government was invented to devise acronyms to hide all the shit they pull. But acronyms are dangerous. [America no longer a superpower because of Biden?]( [Click here to learn more]( [Ever heard of America’s “Doomsday Deal”?]( It’s a deal so vital to our country’s wealth and security… Every President for 50 years has defended it at all costs. Until Calamity Joe Biden. Biden broke the deal. And I now predict… The America we love is doomed. And the biggest wealth transfer in US history is now underway. [>>See the truth about Biden’s terrible mistake HERE<<]( [Click Here To Learn More]( Let’s Bring in Some SMEs. My good buddy Reto once told a story during one of his classes. He’s a great financial trainer, and we are still pretty close, so I hope he doesn't mind me using this story. It was about two Swiss executives across the conference table from each other, arguing over what now seems to be a ridiculous point. One manager suggested that they bring in some SMEs to study the problem. The other manager thought that was the most absurd idea he'd ever heard. "Why would we want to bring in SMEs to discuss this problem? That's a dumb idea." The conversation lasted for a good five minutes, with them arguing increasingly acrimoniously. But one had the good sense to say, "Hang on a minute. What do you mean by SMEs?" The other replied, "Subject matter experts." The one who had asked the question rolled his eyes and sheepishly said, "I'm very sorry. I thought you were talking about small-medium enterprises." These are highly paid adults, I hasten to remind you. Fancy a Cobra? That reminds me of the most embarrassing incident when I first moved to London. It's also one of the most hilarious. Luckily, it happened long enough ago for me to enjoy retelling the story. When I first secured my transfer to London, my boss, Enver, who I mentioned in a previous Rude, was pretty upset about it. But he quickly overcame it and came to London for a business meeting. We decided to go out to dinner with our good friends and colleagues, Simon and Rob. It was just going to be a nice night out, but I had never had curry before. That sounds ridiculous because thousands of Indian people live in New Jersey. But my parents just hate spicy food, so I never ate Indian, Thai, or Mexican until I got older. Incredibly, I love all those cuisines now. Let me preface this for you. If you're American, you know, when we go out, we get drunk and usually get a slice of pizza. Or if you're in Philly, you get a cheesesteak. I’m sure other cities have their favorite drunken food of choice. As England was the colonial overlord of India for centuries, you usually get curry. Or maybe a kebab. But curry is everyone’s first choice. The boys took me to this lovely place called Mala in St. Katharine's Dock. (It’s since relocated to Westferry Circus.) It was right next to The Dickens Inn, a pub I loved. So we went out and had a couple of pints first and then went to Mala. This was my first time, so I said, "You guys need to order for us. I have no idea what this food's about." My only reference to Indian food was watching movies, so I let them handle it. They first say to the waiter, "Can we get a few papadums and four Cobras?" I said, "Okay," and the conversation continued as if nothing had happened. Increasingly, sweat was covering my brow, and no one seemed to bat an eyelash over those Cobras. I was like, "Ah, that's pretty interesting." I was sitting here across from Simon, who had been guiding me around England, who's one of the best dudes I've ever known. He's still working in the City of London. I looked at Simon and said, "Cobras." He went, "Yeah, of course." I said, "Of course." About two minutes later, I looked at him again and went, "Cobras?" He went, "Yeah, Cobras." And I just couldn't help myself any longer. The suspense was killing me. I looked at him and said, "Simon, you mean like in Indiana Jones and the Temple of Doom?" [pub] That microsecond, the waitress put down four Cobras. [pub] Beer. Simon wet himself laughing. Rob and Enver were cracking up. I had never been so embarrassed in my whole life. And that was my first night's journey in learning what would become my second language, British English. Maybe that’s why I’m so hung up on vocabulary, terms, lingo, and jargon. Luckily, no harm was done. But boy, there are some potholes in business you don’t want to run over for not speaking someone’s language. I hope that brought a smile to your face. Have a great day today! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. 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