Overview: Today the US Bureau of Labor Statistics released the April Consumer Price Index (CPI) of 8.3%. This is above expectations of 8.1% and below last month’s 8.5%. Let’s discuss what this means. First, as we pointed out in this post, the CPI doesn’t reflect objective reality. It’s a number made up by the government … Read more
Introduction: We’ve been writing about inflation and the destruction of value in the US Dollar since November last year. However, when we talk to other market professionals, they comment on the strength of the Dollar. How is this possible? Can we have a strong Dollar and a weak Dollar at the same time? Who’s right … Read more
Just posted a lengthy description on inflation on Twitter and thought I’d copy it here so it’s easier for you to find: Last night a client asked me if inflation has peaked. Great question. I think no, but let’s start on the other side. Used auto prices up 40% last year were a huge contributor … Read more
Today, the Federal Reserve raised interest rates by 50bp (half a percentage point), the largest increase since 2000. They also laid out plans to start slowly unwinding the enormous $9 trillion balance sheet the institution is carrying. We first highlighted the danger that understated and rising inflation posed back in November while the Fed was … Read more
Overview: Two months ago, we did a webinar with DKI Board Member, Howard Freedland, and his business partner, Sophie Schneeberger of Echo Fine Properties. We warned that higher interest rates would lead to higher mortgage rates, and that would lead to a softening of the real estate market. We suggested that people who were going … Read more
Overview: The US Bureau of Labor Statistics just announced the March Consumer Price Index (CPI) at 8.5%, the highest number in just over 40 years. Some government officials are pointing to the core number excluding food and energy (for people who don’t use either?) of “just” 6.5% which is the highest number in just under … Read more
Overview: Last year, a message board on Reddit called Wall Street Bets succeeded in driving up the prices of GameStop (ticker: GME) and AMC Entertainment (ticker: AMC) by huge amounts. The efforts caused billions of dollars of losses at hedge fund, Melvin Capital, enabled some large insider sales, and resulted in the bizarre occurrence of … Read more
Overview: After months of teasing, last week, the Federal Reserve announced an increase in the Fed Funds rate of 25 basis points (.25 percent) from the current zero (approximately). While this was the smallest possible increase, the Fed indicated it was expecting to raise rates another six times this year and potentially, another 3-4 raises … Read more
We published a piece in the newspaper that deals with issues so important, we wanted to re-emphasize them here. For our non-U.S. subscribers, please note that while certain discussion of U.S. policy won’t apply to you, key points on energy and food inflation will affect you as well. Link to the original article is here. … Read more
Preparing for Recession/Stagflation: In November, we prepared subscribers for coming inflation and noted that the current CPI number was not accurate. We wrote: “Those huge increases in energy, housing, and food prices indicate that the relatively benign CPI number is underestimating the issue.” In February, we openly said that the recent GDP number of 6.9 … Read more