And You Wonder Why Bitcoin And Gold Are At Record Highs

By Ben Hunt of Epsilon Theory

Chief Investment Strategist • Mar 12, 2024 at 1:05 PM EDT

The Fed’s inflation-fighting credibility is shot and everyone in Washington and on Wall Street is in the bag for massive nominal economic growth going into November.

Every month I publish the annualized inflation chart following the CPI release, and every month I get enormous pushback.

(Click on image to enlarge)

CPI Index YOY (source: Bloomberg LP)

Corporations are passing through price increases at will, keeping margins and earnings growth strong. Wages are increasing at 4%+. We’re adding 250k+ jobs per month, even after revisions. Rents are now climbing again, +2% month-over-month. There is *massive* fiscal spending flowing through the real economy via use-it-or-lose-it ARPA billions, Bipartisan Infrastructure Bill programs, and the initial Inflation Reduction Act programs.

Inflation stopped going down 8 months ago and we’re about to take off again. I don’t know why this is so hard to understand. Or rather, I do know why this is so hard to understand, because a lot of jobs on Wall Street and in Washington depend on not understanding it.

Including jobs at the Fed. Which I suppose explains their ‘reaction function’ these days.

And you wonder why Bitcoin and gold – insurance policies against central bank error – are at record highs.

The bottom line is this: the Fed’s inflation-fighting credibility is shot and everyone in Washington and on Wall Street is in the bag for massive nominal economic growth going into November.

What is ‘nominal economic growth’? It’s a ten-dollar phrase that means Number Go Up.

What numbers? ALL NUMBERS.

After that … well, as Louis XV so aptly put it: après moi, le déluge.

Wheeee!

More By This Author:

One Less Vulnerability
The Drumbeat Of Inflation
The Story Arc Of SBF And FTX

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