TBT - Let's Talk Inflation Post-CPI

2024-02-19 00:13:32 ET

Summary

• Inflation is caused by rapid increases in money supply, not rising prices and costs, which come after an inflationary operation.
• The Fed is sending mixed messages about inflation, pretending to be hawkish while making internal moves to forestall liquidity crises.
• The Biden administration benefits from the current disinflationary trend, but the situation may change after the election.
• The Fed aided Trump in 2020 by creating inflation, and it is beneficial to Biden in 2024 as it employs 'tightening lite'.
• We, as investors, are tasked with correctly interpreting the 2024 macro because changes are coming and the potential options could not be more different.

Discussion about this thing we call "inflation" after the January CPI report

A vast majority of people see inflation as rising prices, wages, and 'pushed' costs within the economy. In other words, to quote a line from Full Metal Jacket, "it's a huge s**t sandwich, and we're all gonna have to take a bite."...

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