Dollar Purchasing Power Plunge Accelerating.

November 12, 2021

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1. The downtrend in dollar purchasing power is accelerating rapidly, and faster than you may realize. 

The CPI actually understates the downtrend due to “hedonic” adjustments made to the CPI. For example, compare the CPI New vehicles index to the base price, over time, of the F 150 and Toyota Camry LE.

https://wolfstreet.com/2021/11/10/dollar-purchasing-power-plunges-inflation-6-2-for-urban-wage-earners-6-9-highest-in-40-years-in-the-most-monstrously-overstimulated-economy-ever/

2. Inflation, most likely, has not peaked.

Key indicators suggest CPI is likely still accelerating. The PPI leads the CPI and currently stands at 8.6% y/y and is still rising. Also CPI breadth continues to accelerate in the U.S.

https://twitter.com/KeithMcCullough/status/1458374312008822786

https://www.advisorperspectives.com/dshort/updates/2021/11/09/october-producer-price-index-finished-goods-up-12-5-yoy?topic=covid-19-coronavirus-coverage

3. 30 year TIPS real yield hit another record low, just a part of Goldman’s indicator which shows extraordinarily accomodative financial conditions in the US. 

https://twitter.com/SoberLook/status/1458017340533219332

https://twitter.com/SoberLook/status/1458381851509264389

4. Authorized stock buybacks in the U.S. have crossed $1 trillion mark YTD for the first time ever. The top 1% got a $13 trillion wealth boost since March 2020.

https://twitter.com/LizAnnSonders/status/1457678694651138048

As discussed last week this is a great remuneration deal for corporate executives. Trickle this:

https://twitter.com/NorthmanTrader/status/1457012271167717376

5. BREAKING: The Fed’s “transitory inflation” plan revealed.

https://twitter.com/NorthmanTrader/status/1409121359922446341

 

 

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