The hot July PPI number is not inflation, it is an effect of inflation
Just as I often write that the “inflation” numbers the media chase all over the place are not inflation but instead, the effects of Fed monetary policy, so too is today’s big headline about July PPI “inflation” an effect of government fiscal policy. In this case, Trump’s “spanners & monkey wrenches” trade war/tariff policies.
It’s not inflation. Calm down. It’s an effect.
You can tap the graphic below if you want to read all about it from the beleaguered BLS. Itself the recipient of heavy spanners and monkeys thrown its way.
We are being taken right off the charts, unable to trust any source of government data. I am not saying the jobs and inflation data were not somehow gerrymandered before, but in my opinion, Trump sure is not helping matters as he attempts neuter or eradicate all institutions that disagree with his world view. That’s scary in a supposedly free and open society.
CPI and PPI are reports of the effects of inflationary policies. In Q1, 2020 we (NFTRH) were preparing for a whopper of an inflation problem while crude oil was going to zero and the world was in the grip of deflation fear. In 2025 we are preparing for the a phase of disinflation/liquidity drainage/deflation scare while the world is still in the last vestiges of inflation fears, compliments this time of the trade war.
In my opinion, the media are telling you to look over there (at the last problem) when you should actually be patiently looking over here (to the next one). The next – disinflationary- one will be interim to the next inflation problem, which Trump is already trying to cook up with his constant demands of interest rate cuts.
When Trump gets full control over the Fed? Well, von Mises anyone?
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