Dear Reader,

July’s inflation report issued yesterday from the United States government’s statistical torture chambers.

The report exceeded expectations — though very slightly. Reports Reuters:

U.S. consumer prices increased moderately in July, largely in line with expectations…

The consumer price index rose 0.2% last month after gaining 0.3% in June, data showed. In the 12 months through July, the CPI advanced 2.7% after rising 2.7% in June. 

Economists polled by Reuters had forecast the CPI rising 0.2% and increasing 2.8% year-on-year.

All was joy on Wall Street… and the stock market was up and away on the news.

The Dow Jones Industrial Average went spreeing 483 points. Both the S&P 500 and Nasdaq Composite posted fresh records.

Why? The answer reduces to the Federal Reserve.

We’re Finally Getting a Rate Cut!

Tamed inflation — or apparently tamed inflation — warrants a Federal Reserve rate reduction next month.

And Wall Street is hot for a Federal Reserve rate reduction next month.

Mr. Adam Sarhan, chief executive officer of 50 Park Investments:

Inflation is moving closer to the Fed's target of 2% and that is a bullish thing because the lower inflation gets, the greater the chances are the Fed will cut rates. If you look at the data, the jobs report was weaker than expected and inflation was weaker than expected. That increases the odds the Fed will cut rates.

Adds a certain  Ben Laidler, director of equity strategy at Bradesco BBI:

The market is taking a lot of comfort from the headline number, which came in a little bit lower than expected. On the face of it, it's validating this overwhelming consensus for a Fed rate cut in September…

Just so. And CME Group’s FedWatch presently gives 93% odds that the Federal Reserve will reduce its target rate next month.

One month ago those same odds came in at 57%.

Yet does July’s inflation report truly validate the overwhelming consensus for a Fed rate cut in September?

SPONSORED: PARADIGM PRESS

The Trump Dump is starting

Get out of stocks now?

You’re still in stocks… Are you nuts?!
 
There’s one asset you should be buying during the first year of Trump’s presidency… And it ISN’T stocks.
 
In fact, according to one legendary investor, a modest $900 investment in this asset…
 
Could grow to a life-changing $108,000 in just 12 months.
 
See everything you need to know here.
 
For your best shot at these gains, you must be in by August 30th.
 
👉 Free instructions here.

The Worst Core Inflation in Six Months

The same report revealed that July “core” inflation — inflation stripped of food and energy components — came in at 3.1%.

The 3.1% reading is the largest core increase in six months… exceeding June’s 2.9% year-over-year advance.

July shelter costs increased 0.2%. Shelter costs in fact bear heavy responsibility for July’s inflated core reading.

Meantime, the cost of transportation services increased 0.8% — as did the cost of medical services.

The costs of insurance, aerial travel and used automobiles were likewise on the rise.

It is true, July gasoline prices decreased 2.2%. And the price of eggs declined 3.4%.

I am glad of it.

Yet does it comfort you that food and gasoline prices declined… while jumping shelter costs washed away your food and gasoline savings?

Where is your gain? Do you not require shelter in addition to food?

The inflationary burden merely shifts from your one shoulder to your opposite shoulder.

Instead of listing to starboard you now list to port. You are listing nonetheless.

Thus inflation is not licked. It is merely on the move… like an enemy formation mounting a flanking attack.

Yet we are told to take solace from July’s consumer price reading.

How the Government Hides Inflation

Crackerjack economist John Williams hosts a site called ShadowStats.

His expressed purpose is to analyze and expose and “flaws in current U.S. government economic data and reporting.”

Thus this Williams fellow scatters the statistical fogs that government throws up to conceal true inflation.

Once freely available, his data is presently limited to subscribers. I am not a subscriber.

Thus I lack access to his present data.

Yet when the official rate ran to 8.5%, for example, Mr. Williams’ calculations revealed that:

If government number-manglers gauged inflation by 1990’s standards, the true inflation rate at the time neared 14%.

And if they gauged inflation by 1980’s rules? Consumer inflation approached a dollar-devouring 17%... when the official reading registered 8.5%.

Again, I am unaware of Mr. Williams’ July inflation reading.

Yet I wager high that it exceeds — very substantially — the official 2.7% reported yesterday by the Bureau of Labor Statistics.

HONEST and ACCURATE?

I see the president has nominated Mr. E.J. Antoni to direct that agency.

He terminated the bureau’s prior director, one Erika McEntarfer, following a succession of disappointing employment reports.

Mr. Antoni is a booster of President Trump. He holds to his bosom the president’s economic agenda.

And the president believes he will draw a far truer sketch of the United States economy:

Our Economy is booming, and E.J. will ensure that the Numbers released are HONEST and ACCURATE.

Yet what if the previous employment reports gave accurate readings?

And what if the HONEST and ACCURATE numbers disappoint under Mr. Antoni’s reign?

The fellow would come under heavy, heavy political pressure to align them with the president’s wishes.

In which instance he may put out DISHONEST and INACCURATE numbers.

I am for HONEST and ACCURATE numbers — be they positive, be they negative, be they neutral.

Should the numbers prove negative, I say accept them on their face.

I say take the cold bath bravely.

Is the president prepared to?

Brian Maher

for Freedom Financial News

PS: Still think the economy is great? Kiyosaki has the undeniable data that proves otherwise. Protect your future.

» Discover the real story and how to prepare – click here!

 

Keep Reading

No posts found