The Fed's Fake War on Inflation

The storm is far from over. It might only have begun. [Gilder's Daily Prophecy] August 26, 2022 [WEBSITE]( | [UNSUBSCRIBE]( Pelosi: Queen of Stocks? [Click here to learn more]( Could you live on a yearly salary of $223,000? Speaker of the House Nancy Pelosi can’t. In between her mansion in San Francisco… Her vineyard in Napa Valley… And her condo in Washington D.C… She’s got bills to pay. Maybe that explains why she turned to the financial market… …and made a whopping $16,300,000 from trading stocks in 2021. The secret to her success? We can’t say for sure, but here’s what we can say: There’s a rather unusual source of financial intelligence that can help you find stocks going up next – just like her. [And you can see the full details for yourself right here](. The Fed’s Fake War on Inflation [Jeffery Tucker] JEFFREY TUCKER Dear Reader, This morning’s news gave the Fed exactly what it was looking for. It has wanted an excuse all year to call off its interest rate boosts. All it needed was some evidence that its mild efforts over six months are calming inflation down a bit. That came in today with the so-called core PCE index. It showed a falling rate of increase for the first time since lockdowns of 2020. This is politically very meaningful for the Fed because this is the Fed’s preferred measure of inflation. Why is it preferred? Because it is the only measure that shows that the Fed has more or less hit its inflation target over the last 10 years. We always prefer a scale that shows we are thinner than we are! That’s what this is all about. Regardless it gives the Fed the excuse it has been looking for to call off the dogs of war. Sadly, the measure excludes food and energy — you know, the stuff that people actually buy on a daily basis. So except for the stuff that makes up the bulk of your routine purchases, inflation is gradually going away! Terror at the Fed The Fed is always very anxious to avoid blame for some kind of political disaster this November for the Democrats. Some prognosticators are extremely worried about waking up Wednesday following the election and seeing the whole party — only recently in charge of the whole of the elected portion of the government — utterly demolished, not only at the federal level but at the state level too. As a way of avoiding this, the Biden administration is engaging in desperate moves like student loan forgiveness that most likely will not even stand up to legal challenge. In this country, legislatures are in charge of decisions over budgets and spending. What Biden did was impose a $300 billion burden on the entire country to bail out the credentialled elite that votes disportionately for Democrats. And he did it on a scale never before seen in peacetime! This is far beyond mere bread and circuses. This is brazen pillaging to pump up the politically connected. It makes zero economic sense: even the chairman of Obama’s Council of Economic Advisors blasted it. It means that students will rush to take out more loans with the expectation that they will be forgiven, and colleges will raise tuition more in ways that they have heretofore avoided. Inflation is coming soon to all tuitions! Regardless, the betting odds right now show a 3 to 1 chance that the Democrats will lose the Senate and the House, plus the White House in two years. State houses will flip too. That’s the betting odds. They can be wrong. But they are generally more valuable than polls, and I’ve truly begun to suspect ALL polls on politics right now. After all, they show that Biden is rising in popularity. I simply cannot believe that is true. In any case, if the Democratic Party does in fact euthanize itself in November, the Fed wants to avoid the blame. So it would rather coast between now and then with the appearance but not the reality of monetary tightening. Biden Orders Americans to Turn In Their Dollars? [Click here to learn more]( A former advisor to the CIA and Pentagon predicts President Biden plans to retire the US dollar we know – and replace it with a digital “spyware” currency. Your US dollars could be confiscated – or made worthless. It is underway now. On March 9, Biden signed Executive Order 14067, which could pave the way for the new US currency. AOC tweeted her support. Dems could use this to hold onto power indefinitely. [Please view this warning now](. It’s Old News The thing about economic data as it appears from the various bureaus of government is that it always reports old news. We are hearing about July in late August, just like we heard about June in late July. Meanwhile, economies operate in real time. The numbers from July were helped by a dramatic fall in oil and gas following a dramatic rise, which in turn pulled down the whole index number, allowing even Biden to claim that inflation is zero. Meanwhile, have you looked at your electricity bill lately? This is the main area right now absorbing inflationary energy. It flowed out of transportation and into utilities. In real time, too, food is again moving back up. And this follows months during which most food producers have already retooled their factories to package smaller amounts of the same thing at higher prices. Shrinkflation is the new reality. Prices that had been unresponsive earlier this year such as health care and education are now moving up even as sectors that exploded in price in the Spring are pulling back. From a quick look at the data, however, meaning a comparison of M2 increases against the CPI, we have a very long way to go before economic processes absorb the fullness of monetary expansion. [FRED Chart - M2 vs CPI] We are also starting to see changes in the velocity of money, moving up for the first time after plummeting following lockdowns. That change alone could unleash inflationary forces far too powerful for interest rate shifts to affect. To add more insult, both Congress and the President are throwing away hundreds of billions by the day. There is no money in the bank. The Treasury has to create the debt, which the Fed then buys, and does so with newly created money. It’s the Fed’s job to do this. It can and will do nothing else. We have every reason to expect a long and slow grinding of 7-10% inflation for years to come. In three years, the dollar will have lost a third of its value from the pre-lockdown days. The Household Meltdown I mentioned utility bills earlier but that’s only the beginning. Most households making less than $50K today are saving absolutely nothing for the future. Savings rates continue to fall, which means less investment, less capital build up, and less prosperity. Credit card debt is soaring. Maybe everyone supposes that this too will be forgiven in the future! Who knows these days? [Personal Savings Chart] Let’s take a step back and consider the investments that have actually performed consistently well over the last three years. Real estate. Not even housing as such but land. That’s right. We are back to the wisdom of the 1970s. Stick with what’s real and true and unchanging, in morals, finance, and in investment. That’s the path to survival over the long term. The storm is far from over. It might only have begun. Regards, [Jeffrey Tucker] Jeffrey Tucker P.S. ***AUTHORIZATION STATUS: APPROVED*** You’ve been granted temporary clearance to view this [urgent market briefing](. It contains sensitive materials previously classified by the C.I.A. And now it’s now available to help YOU prepare your money for the next big surprise. You won’t find this information on Google, Bing, Youtube, or DuckDuckGo. You can only see this urgent briefing by [going here now.]( The Metaverse Story You’re NOT Hearing… [Click here to learn more]( Everywhere you turn, people are raving about the Metaverse. Facebook’s now called Meta. Microsoft’s CEO says, “The Metaverse is here.” Apple’s all in too. But there’s a critical piece of the Metaverse story you’re NOT hearing about… [Click here now for the full details](. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( Gilder's Daily Prophecy is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Gilder's Daily Prophecy e-mail subscription and associated external offers sent from Gilder's Daily Prophecy, feel free to [click here.]( Please read our [Privacy Statement](. 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