With the Money Supply (M1) up 358% since January 2020 (as of February 2021), there is simply zero percent probability that prices are not going higher. A 3-4x increase in M1 ought to inflate prices by a similar multiple. Most of the recent $1.9 Trillion (the actual cost will be higher), COVID spending program was … Continue reading The Ugliest Chart I Have Ever Seen
Tag: fiscal stimulus
It is difficult to imagine a scenario in which the U.S. economy does not experience stagflation. Record debt levels, low labor participation, muted long-term Real GDP growth, persistent inflation and the fact that the Federal Reserve is limited in its options to fight inflation leads us to believe that stagflation is imminent. Our premium TEK2day … Continue reading Stagflation Is ImminentPremium
The simple math is that the Federal Government is pumping $1.9 Trillion into the U.S. Economy. Treasury has issued 90 million stimulus payments worth $242 billion. More money in consumers' pockets plus new Treasury bond supply plus relaxing of COVID restrictions translates to higher Treasury bond yields. The higher yields will result in less Technology … Continue reading More Inflation Is Coming
We reviewed the 592 page Biden COVID Relief / Stimulus bill which recently became law. Our breakdown includes the nine primary spend categories and related subcategories as presented in the bill. Needless to say this is a massive debt-funded fiscal spending program at a time when Debt to GDP is at a record level. The … Continue reading A Breakdown of Biden’s Debt-Funded COVID Relief Program
We have said it on our TEK2day Podcast and in conversations with some of you that the Fed's next move is to accelerate its QE effort to control long bond yields. This may occur as soon as this month. An interest rate hike is not coming this year in our view. There is far too … Continue reading The Fed’s Next Move Is To Ramp QE, Not Raise Rates.
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The fiscal deficit will be stimulated to new heights once the $1.9 trillion debt package is passed by Congress. Speculative securities, SPAC deal flow, general fraud and moral hazard will also be stimulated along with housing and automobile prices. This debt package will do nothing to create sustainable employment nor sustainable GDP growth. Rather, the … Continue reading List of 160+ CEOs Who Favor Additional Debt-Funded Transfer Payments To “Stimulate” The U.S. Economy
The Fed would have us believe "There's nothing to see here," (to quote Frank Drebin), as it relates to inflation. Consumer spending funded by government debt is of inferior quality as compared to spending funded by increased production. In January Americans spent their debt-funded government checks that were mailed out at the end of December. … Continue reading Long Rates Continue To Climb As Inflation Persists. Nothing To See Here.
We recently wrote that weening the equity market and Americans off of easy money will be difficult. We expect The Federal Reserve to march in lockstep with Congress and Treasury rather than act as the independent check on Government the Fed was meant to be. Thus, we expect monetary policy to remain loose for the … Continue reading The Fed’s Evolution From Independent Agency to Treasury Subsidiary
FOMO is stronger than ever given social media, the 24-hour news cycle and various fintech apps that facilitate equity trading. FOMO ("Fear Of Missing Out"), is stronger than ever, especially among the retail trading community. Retail traders are flush with cash coming off of 2020's Federal Government issued checks and enhanced unemployment benefits. Technology has … Continue reading FOMO Is Stronger Than Ever