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Well, today was not a great day for the Federal Reserve’s central monetary planners.To explain the recent upturn in inflation, Fed Chair Jerome Powell casually uttered the words that models of recent price inflation had “kind of fallen apart.”Powell was only talking about a 0.5% increase in expected year-end inflation.Well it’s worse than that, as we will see.[ATTACH=full]189800[/ATTACH]The very rapid increase in the rate of recent consumer price inflation has not been published yet by the Bureau of Labor Statistics (BLS), but it has been predicted in this Substack - because goods price inflation is largely driven by increased monetary aggregates driving currency debasement and it is unavoidable given the Fed’s violent monetary policy of the past 5 years.[ATTACH=full]189801[/ATTACH]Figure 1 - Truflation CPI Index; source: Truflation.com Dec. 18, 2024After the Fed increased the True Money Stock (TMS) (total currency aggregate) in the economy by 57% from 2020 to 2022, it was all over but the crying - prices had to run strongly with such a violent monetary injection.And while the money supply (the year-over-year increase in the money stock) bottomed in May 2023, the money supply then turned upward and here we are roughly 18 months later with price inflation again surging strongly.[ATTACH=full]189802[/ATTACH]Figure 2 - Money Supply Through August 2024 - Rate of Change YoY of Money Stock (TMS=True Money Supply: blue; M2 = M2 Money Supply: gray); source: Mises.org / Ryan McMakenAnd Then There Are The Credit MarketsTotal US debt is $100 trillion dollars in all sectors through Q2 2024.We are now 35 years into Alan Greenspan’s policy of blowing larger bubbles with increasing amounts of monetary leverage and policy loosening where financial markets driven relentlessly higher were misleadingly called ‘beneficial inflation’.Those decades of loose monetary policy are buried in massively overleveraged and overvalued financial asset prices.And we haven’t heard about bank woes for a while. They too will be affected as their ‘debt to the eyeballs’ balance sheets see increasing defaults.This is just getting started and it ends very badly.jog onduc
Well, today was not a great day for the Federal Reserve’s central monetary planners.
To explain the recent upturn in inflation, Fed Chair Jerome Powell casually uttered the words that models of recent price inflation had “kind of fallen apart.”
Powell was only talking about a 0.5% increase in expected year-end inflation.
Well it’s worse than that, as we will see.
[ATTACH=full]189800[/ATTACH]
The very rapid increase in the rate of recent consumer price inflation has not been published yet by the Bureau of Labor Statistics (BLS), but it has been predicted in this Substack - because goods price inflation is largely driven by increased monetary aggregates driving currency debasement and it is unavoidable given the Fed’s violent monetary policy of the past 5 years.
[ATTACH=full]189801[/ATTACH]
Figure 1 - Truflation CPI Index; source: Truflation.com Dec. 18, 2024
After the Fed increased the True Money Stock (TMS) (total currency aggregate) in the economy by 57% from 2020 to 2022, it was all over but the crying - prices had to run strongly with such a violent monetary injection.
And while the money supply (the year-over-year increase in the money stock) bottomed in May 2023, the money supply then turned upward and here we are roughly 18 months later with price inflation again surging strongly.
[ATTACH=full]189802[/ATTACH]
Figure 2 - Money Supply Through August 2024 - Rate of Change YoY of Money Stock (TMS=True Money Supply: blue; M2 = M2 Money Supply: gray); source: Mises.org / Ryan McMaken
Total US debt is $100 trillion dollars in all sectors through Q2 2024.
We are now 35 years into Alan Greenspan’s policy of blowing larger bubbles with increasing amounts of monetary leverage and policy loosening where financial markets driven relentlessly higher were misleadingly called ‘beneficial inflation’.
Those decades of loose monetary policy are buried in massively overleveraged and overvalued financial asset prices.
And we haven’t heard about bank woes for a while. They too will be affected as their ‘debt to the eyeballs’ balance sheets see increasing defaults.
This is just getting started and it ends very badly.
jog on
duc
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