First thing up this morning is a look at how the Federal Reserve is deliberately manipulating money supplies to make the markets go down. Listen to Janet when she talks.
Here is how this is going to work.
First, we look at the most recent monetary action in the Fed’s H.6 Money Stocks report, like so:
You will see (if the coffee has kicked in) that the money supply growth has just seen the brakes slammed on. This is like the ABS system in your car…used for panic situations.
Here’s the ripple effect to look for:
Think of the value of a stock company as though it is a can of beans. It’s value will vary a bit based on how hungry you are, but the REAL pricing factor is how much money you have in your pocket.
If you live in Zimbabwe, for example, two cans of beans will cost you a few quadrillion Zbucks.
On the other hand, if you have less money in your pocket, by the time you get down to your last dime, the price of the can of beans can only be a dime.
The same thing is about to happen with the stock market.
The US dollar will soar in value.
Gold will get its ass kicked.
It will take less Dollars to buy the beans.
So it will look like a major market decline.
And it will be. Err…sort of. It’s really more of a denomination game…Wal-Mart, Caterpillar, Boeing will all still be good cans of beans.
It’s just Janet on the Brakes. Worth noting by all denominations especially us members of Howard Hill’s Church of the Holy Basis Point.
Less water in the baptismal fount of basis points, the less water is spilled.
Producer Prices – Going up 6% (Annualized)
Well, here we go…proof that Americans have been dumbed down by the corrupted edjumacation system that we don’t even know when to pee. I kid you not:
…reports Wired. God bless Common Core, huh?
Obviously, I can’t speak for you, but this being T-Pee-Pee time, and with the Producer Prices numbers just out, I’m suffering from involuntary bladder contractions, a myself. Hell of a mess to try and write a column in…but not whining, right?
Here’s the Producer Prices fairytale:
“The Producer Price Index for final demand rose 0.5 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today.
Final demand prices fell 0.4 percent in April and advanced 0.2 percent in March. (that’s old news to make you feel better about it – g)
On an unadjusted basis, the final demand index declined 1.1 percent for the 12 months ended in May, the fourth straight 12-month decrease. (See table A.) (This is deflation, but they won’t/can’t be that forthright – g)
In May, the increase in the final demand index can be traced to prices for final demand goods, which rose 1.3 percent.
The index for final demand services was unchanged.
(I.E. THINGS got more expensive – the value of people is flat.)
Within intermediate demand, prices for processed goods climbed 1.0 percent, the index for unprocessed goods jumped 3.3 percent, and prices for services fell 0.5 percent. (See tables B and C.)
Final Demand Final demand goods: The index for final demand goods moved up 1.3 percent in May following a 0.7-percent decline in April.
Eighty percent of the broad-based advance is attributable to prices for final demand energy, which increased 5.9 percent.
(Remember my telling you gas prices would impact sooner or later? Well, this is later now…)
The indexes for final demand goods less foods and energy and for final demand foods rose 0.2 percent and 0.8 percent, respectively.
(This is the usual “If we don’t count the bad stuff, everything is peachy” line.)
Product detail: Sixty percent of the May advance in prices for final demand goods can be traced to the gasoline index, which jumped 17.0 percent.
Prices for diesel fuel, chicken eggs, jet fuel, pharmaceutical preparations, and motor vehicles also moved higher. In contrast, the index for residential natural gas fell 1.6 percent. Prices for hay, hayseeds, and oilseeds and for primary basic organic chemicals also decreased.
I didn’t see a number for governmental BS, but supplies of that are plenty high, so BS must be getting cheaper..
And on that, this morning’s national price of regular is $2.785 per gallon according to Triple A…and that compares with $3.647 a year ago, so there is still a lot of catching up to go.
Meantime, if you’re wondering why gas isn’t cheaper (with coming up on 150,000 layoffs in the oil and gas world ) the answer is simple: Corporations gotta make a buck on summer travel and states are trying to scam through higher gas taxes.
At the Federal level, a glimmer of hope as representative Mike Lee of Utah is proposing a decrease in the federal gas tax, but in return, this would dump costs for transport back on states. And it seems dumb to be cutting Medicare spending in TPP (to pay for displaced workers due to TPP) which could be left well-enough alone so we don’t have to go in hock to China so much, but hey, I’m just a hick in the outback.
The Get-Down Longwave Economic Perspective:
Right now, we plan on the Fed raising rates at their September meeting. The market will trade sideways into fall. Then the market will scream as money comes out of bonds and into stocks. that will be our final shebang. Dow 38,000 will be possible as bond money rolls out from the 30+ year decline and looks for value.
And then we peak in 2017/2018 and then the world ends,…economically speaking.
But we’ll be here to hold your hand along the way. At least for our Peoplenomics® subscribers.
Dow is set to open down 70, or so. But the key indicator is the 10-year Treasury note;
Trade Scam – Achtung Meine Damen und Herren
We don’t need much help figuring out that anyone who votes for a secret law the public hasn’t seen is a crook…
If this passes, I’m getting in our old airplane next week while we still have that tiny bit of freedom to move around the country intact, but that will go, too.
One secret laws leads to another, leads to a “sig heil.”
OK, maybe that’s not fair (what is, anymore?) The truth is it leads to a “sig heil” or a “yes comrade.”
Call your congressoid – for the fat lot of good that will do. More in the Coping section to follow.
Wesley Pruden, writing in the Washington Times calls it a “bipartisan betrayal of trust.” He’s being nicer about it than me.
And the seditious congress will in the process relax visa requirements for Pakistanis…so yeah, by all means, let’s bring in more people who hate us…you bet.
The War With Mexico
Mexico says it is still working with the US on the CBP helicopter shooting last Friday. Someone seems to have grown some balls – sending some Blackhawks to patrol the airspace which should arrive on Friday.
Yes, we’re at war with Mexico…it’s just everyone is too damn embarrassed to admit it.
By the way…Mexico literacy rates are fiction. Only people with birth certificates get to attend school. And since most of the poor are born at home… My, oh, my. Governments are the same the world over, aren’t they?
Federal Workers Screwed
In my book (Broken Web) I made the point several times about how hacking laws aren’t strict enough…yet no one wants to believe me.
History is coming my way, though.
Back from the Sexicide
Oh, my: Dominique Strauss Kahn, former IMF Chief has come back from the dead. No doubt, he’s figured out that he has to shut up about globalist corruption at high levels, but apparently with that understood, he walks.
Walk, don’t talk, Dom. Get a farm in Paraguay (by the Clintons and Bushes) and chill, dude. The Beast is a beast. There’s land here in the Outback, too.
Want to chair my congressional campaign?
Hot Travel Tip
Don’t go to a sacred mountain in Malaysia and strip. Leads to earthquakes and jail time. For one Brit, two Canucks, and a Dutchy.