SD Outlook: In this busy week, both the Fed and Trump will have many chances to remind us that the crap we’re being fed is actually steak. Here’s why…
I’ve been noticing a crap-ton of price inflation everywhere I go, and on everything I buy.
No pun intended.
Where I live, the cost of a monthly bus pass has gone from $50 to $60 (I don’t ride the bus, but if I did that would be a substantial hit to the wallet for transportation), and transportation is something which, whether we use public or private transportation, we all must pay for regularly, and now riders using the monthly bus pass must pay 20% more per month.
Yet Inflation’s low?
The cost of internet service is increasing by $10 a month beginning in May. In my opinion, internet is not a “nice to have” but a “must have”, and where I live, an increase in $10 per month is another substantial hit to the wallet that we all must pay for regularly, and now, depending on what speeds a person purchases, this could be a more than 20% increase that must be shelled out monthly.
Yet Inflation’s low?
My wife’s worker-contribution to her health insurance coverage is increasing by $10 per month, and I have to admit, I don’t recall the specifics, only to bring up a recent example, so it could be a $10 weekly increase or a $10 bi-monthly increase just as well, but more importantly, my point here is that there is really no way to say, “I’m not payin’ that” because when you have kids and when you yourself are a pretty healthy yet actively-concerned and engaged forty-something, doctor visits are a fact of life, and they’re downright expensive with no insurance.
Yet Inflation’s low?
There have been a few more examples of inflation over the past couple of weeks that I’ve noticed, and it is interesting because two of them are “derivatives” of inflation, commonly called “forced obsolescence” and “shrinkflation”.
First, for the regular old “price inflation”, we just got an email over the weekend that Netflix is hiking prices again, and the hike will begin on our next bill. We’ve subscribed to Netflix for several years now, but only ever to the Netflix streaming service, so I can’t speak to the days when they started off as a DVD-by-mail service, but I do recall (I think) a few years back that Netflix started off at $7.99 per month. Netflix will now either cost $12.99 or $13.99 plus tax, and again, sorry for the crappy memory on the exact dollar increase amount, but it’s not like we’re going to just cancel Netflix (even though I’d personally love to cancel it). Now I get it, Netflix is not a “must have”, however, this is the type of crap that is killing the Deplorables.
In other words, at everywhere you turn, and everywhere you look, and on pretty much anything you would buy, with the only exception being silver, ironically, everybody wants an extra $10 here and an extra $10 there.
It used to be called being “nickle-and-dimed to death”, but since the US dollar is literally hyper-inflating in-front of our very eyes, the idiom must be updated for the 21st century to being “ten-and-twentied to death”.
Yet Inflation’s low?
On to the inflation derivatives.
First an example of shrinkflation.
This used to be a term reserved to describe food, as in at one point we all bought 16 ounces (one pound) of savory crackers. Then the box contained 14.9 ounces. I’m pretty sure the box is now 10.XX ounces, and the 16 ounce size, at a much higher price, is now called “family size”, or something stupid like that. But that’s not my point – my point is that many goods become subjected to shrinkflation that aren’t even food items. Have you noticed how less thick and less wide toilet paper has become? Or my personal favorite, which I just discovered recently, Zest bath soap, as in the bars, seems to have brand new molds being used for the casting because that a bar of soap is now thinner in the middle than the bar is on the ends (think of a dog bone treat). Shrinkflation is particularly bad because you get less for the same price, and it does seem, to me anyway, anecdotally, that prices are starting to creep-up even as product continues to be removed,
Yet inflation’s low?
Finally, I’d like to talk about “forced obsolescence”.
A few years back we bought a cordless power-tool set from Home Depot. The 18-volt rechargeable batteries will no longer hold a charge, or charge to a level that is useful. One of the selling points of this cordless power-tool kit was that you use one battery across the spectrum of power tools. As such, most people would have two batteries and one charging unit, like we did, so a fresh battery is always ready for use when using the tools for an extended period of time or when using more than one tool at a time.
So I head over to my local Home Depot to buy a couple of new batteries because I’ve got some manly projects I’ve been putting off, and what do I find? Well, besides not one single employee to assist me after looking all over the power tool battery section for ten minutes, I find that Home Depot no longer carries/makes/sells this battery. If I want to keep using the power tools, I will need to upgrade to a new battery AND a new charger. The two batteries cost $118 (in a 2-pack, which we would need), and I didn’t even price the charger because, I mean, dang, I bought the stupid tool set from the “selling point” that I could come back and buy replacement batteries when I needed to. We’re only talking a few years ago, yet this blatant, in your face, “upgrade or die” mentality is killing the Deplorables. And here’s how forced obsolescence does work – those batteries aren’t even being made anymore, so even if I did find some “new old-stock” batteries, they will be not just over-priced, but the batteries will also be of lesser reliability due to the “just sitting around” factor. Furthermore, even if I did find two overpriced batteries, what would the chances be of me finding them again in a few more years when I need to repeat the process? The tools are in fine shape, but that forced obsolescence forces you to pay up, almost as if the whole concept was “we’re gonna sell you this set, and we’ll tell you that you can replace components and parts as needed, but when you actually need to, we’ll screw you by forcing you to buy new components and parts because we will have never intended to actually follow-through on what we said anyway”.
Yet Inflation’s low?
Inflation is killing the Deplorables.
Sorry, I didn’t mean to ask “inflation’s low”.
I meant to ask “Inflation’s VERY LOW?”.
Because on Friday, well, this:
What a relief!
Yes, that was sarcasm.
If after reading that Tweet you didn’t just feel the nasty, slimy spit that President Trump spat in your face, then you are not a Deplorable.
I bring-up all of this inflation talk because it will be, once again, front-and-center this week:
Not only inflation data to start out the Week, but a two-day Fed Orgy reaching it’s disgusting climax with Fed Head Powell yappin’ his pie hole to softball MSM questions at 2:30 p.m. EST. on Wednesday afternoon.
I think the Fed will hold on interest rates yet again.
We also get the Employment Situation Report on Friday:
Needless to say, it is going to be one of those weeks where if the cartel wanted plenty of stupid excuses for why gold & silver just aren’t rising in price, they’ve got plenty of excuses.
And we all know those excuses are reasons to smash, so be on the look-out for flash sales in gold & silver.
If unsure of which to stack, with one look at the gold-to-silver ratio, my mind is easily made-up:
Until we get into the low 70s and I re-assess the situation, 100% of my purchases are going to be silver.
The cartel is not happy about silver poking its head above silver’s 200-day moving average on Friday:
I do think further downside is limited, however.
While we have not hit my $14.50 downside target, this is certainly turning out to be a correction over time rather than price.
Gold looks like it may not visit $1250 after all:
With ample cover to smash, however, this would be the week for the cartel to smash gold to that price, which also happens to be right around gold’s 200-day moving average.
Palladium could be building support at $1400:
We will need several more days to see if that is the case.
Like palladium, platinum could be building support at $900:
Anybody who purchased platinum at the bottom is up roughly 20%.
The resumption of the precious metals bull market has gone on largely unnoticed, or met with extreme skepticism.
Copper has been basing at $2.90 for the longest time:
I’m looking for copper’s next move to be to the upside, and I do think copper could surprise to the upside along with platinum and silver.
We’ll have to see if President Trump’s direct order to OPEC to pump crude oil more is followed:
I am still holding to my upper $70s by Spring or Summer call, though it is now looking like it will be Summer or even late Summer before we get there, and in my opinion, higher oil prices are all by design to bring max pain to the United States economy & markets, and, ultimately, to bring max pain to Americans.
It’s do-or-die week for the stock market:
Between this week’s Fed Orgy and the Bureau of
Lies Labor Statistics Jobs Report, the market riggers do have ample cover to push the Dow to new all-time highs.
So they may not even need to smash the VIX down to a 10-handle:
When you can jawbone the markets seven days a week, which they surely will this week, then the VIX is already at a place that can support new all-time highs in the stock market.
I’m not looking for a break-out in the dollar here:
I’m pretty sure Trump is currently, overtly, a “weak dollar” guy, and between his calls for money printing and cutting interest rates, not only would a break-out in the dollar crush emerging markets even more, but at its core, you can’t be a money printer and favor low interest rates while wanting a strong dollar at the same time – those two things are mutually exclusive.
Said differently, you either get a strong dollar, or you get money printing and a slashing of interest rates.
But hey, for two-and-a-half years, time and time again, President Trump has been able to have his cake and eat it too, but not only that, he gets to eat as much cake as he wants.
If it is do-or-die week for the stock market, I’d be looking for interest rates to move higher in the short-term:
Another reason why I think the Fed will not hike this week is because if the Fed hikes, and yield on the 10-Year does not rise, The Fed will have the Fed Funds Rate inverted with the 10-Year Note, and that just ain’t gonna fly.
The bottom line is there’s a lot of data this week.
From both the government and from the Fed.
Plenty of cover for the cartel to smash.
So keep your powder nice and dry.
For flash-sale opportunities.
Affording us more time.
So we can prepare.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.