The New Narrative: Inflation Is In The Rear View Mirror, And The Economic Good Times Are Here Again?

The problem with The New Narrative, however, is that going out this Summer costs a whole lot more. It costs at least an arm more, and maybe even a leg…

(by Half Dollar) Interest rates are moving lower as consumer price inflation flares-up and rages like a California wildfire?

That doesn’t make sense, does it?

It does not.

And therein lies the problem: The Fed and the Federal government must suppress interest rates, which is at odds with what must be done in the face of the rapidly rising prices we see both at the wholesale and the retail level.

Of course, if interest rates rise, then “asset” bubbles pop, such as real estate bubbles and stock market bubbles, but really, not only do interest rates need to rise, but interest rates need to rise way more than by just a little bit, which is what all the crying and whining in the mainstream media is currently about.

In other words, casting the stupid “two rate hikes in 2023” meme aside for a moment, interest rates do not need to rise by twenty-five basis points here and twenty-five basis points there, but rather, interest rates need to rise more like twenty-five-hundred basis points, yet with our current crop of “elected” “leaders” and public “servants”, there’s no way that’s going to happen.

So for now, in my opinion, there will be a massive, major push in the mainstream media to not only continue shrugging off the inflation as transitory, but also to spread the propaganda that the inflation we’ve seen thus far is pretty much over.

The mainstream will cherry pick data that suggests the inflation is transitory or even behind us, such as the falling prices of commodities like copper, and even though copper is still up significantly year-to-date, if picking mid-May as the starting point, copper is down over 15% and well into a price “correction”.

Transitory!

Gold is well off its all time record highs.

Transitory!

Etcetera, etcetera, and etcetera.

Transitory!

Now, disingenuously, the mainstream media will even point to the artificially suppressed interest rates themselves as proof that the inflation is transitory, and market participants are none the wiser.

It’s not complicated to understand, for it’s just the fact that for the US dollar to continue, interest rates must keep falling:

It’s called “debt-based” fiat currency for a reason, you know!

Which is why there is such a push for the so-called “central bank digital currencies”:

Really, however, the reset is going to come much sooner than later, and it will be timed to and in conjunction with any implementation of CBDCs.

Unless the goal is to buy just a little more time to keep on kicking that can down the road, but with the dollar having already hyperinflated, I don’t think the Fed or the Federal government will be getting much more time, really.

At that point, weeks, maybe?

Or days?

Despite all of the fear mongering last week about a “crashing” stock market because of “rising” interest rates, well, this:

We haven’t really begun a general stock market crash across all exchanges and indices.

A round of volatility would actually help the Fed and the Federal government right now:

Specifically, if we do get some market volatility, market participants will quickly forget about what Powell and the Fed said last week and instead shout, “do something!”.

Copper is up over 17%, year-to-date:

Kinda runs contrary to the narrative, doesn’t it?

It’s anybody’s best guess as to how much longer the Fed and the Feds can continue to squash interest rates and the commodities:

Surely there are not too many more trips down in interest rates, and with the commodities, such as crude oil shown above, it seems that corrections would more likely be over time than over price.

We’ll see.

It will be interesting to see if palladium begins a new sideways choppy channel:

The question is, has the dust settled?

Platinum opens the week below its 200-day moving average:

Now that platinum has performed as expected, I’m kind of in wait-n-see mode.

With last week’s FOMC “hawkish shocker”, we might have got the spark that I’ve been looking for:

There’s a lot of trading left before we close out the month of June, and the second quarter, so we’ll have to see if gold & silver finally re-converge this week or next.

For now, the Mainstream Media can kill two birds with one stone because not only does the MSM have a transitory inflation talking point, but that point can be made in conjunction with some good old-fashioned gold bashing:

Right now, gold is down about 6.5%, year-to-date.

Silver is perched on its 200-day moving average:

Does anybody really think the Cartel will pass on the opportunity to pound silver below it?

Thanks for reading.

Stack accordingly,

Paul “Half Dollar” Eberhart