13/09 Week, page-3

Inflation isup, up and away in the US and the Fed – their version of our Reserve Bank – isin utter, desperate, utterly pathetic, and yet inevitably disastrous denial.

The greediest people on theplanet who infest the lower part of Manhattan and try to cram into the otherend of Long Island are caught between their ‘trust in the Fed greed’ and theincreasingly undeniable inflation reality.

They ‘balanced that’, so to speak,with Wall St falling nervously but still only relatively marginally overnightFriday.

Inflation? Inflation? Whatinflation? That’s been the pathetically desperate response from the Fed as theever-mounting evidence has rolled out from month to every month.

Oh, it’s only transitory: if weall go to sleep and wake up on New Year’s Day, it will all have disappeared, isessentially what Fed head Jerome Powell has been saying.

Well, whether transitory or not,not a single one of the vast number of experts at the Fed – the Federal Reserve– saw even this supposedly ‘transitory’ inflation asit was actually happening.

It wasn’t a case of gettingpredictions wrong, it was a case of not seeing what was actually happening toprices around them.

If ever there was a open-and-shut,absolutely undeniable, case for sacking a whole cohort of ‘experts’, this hasbeen it.

Back in March, not a single oneof the two dozen or so Federal Reserve Board members and Federal Reserve Bankpresidents saw consumer inflation higher than 2.6 per cent over the course of2021.

On the latest figures, it’salready added to 4.2 per cent in the seven months to July.

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Just to make it very clear,that’s not 4.2 per cent over the12 months to July, but 4.2 per cent in the seven months of this year to July.

That’s to say, in the firstseven months of the year, inflation has run at a 7.1 per cent annual rate.

And just a few months before,the highest that any of those two dozen idiots – sorry, ‘experts’ - projectedit to be would be for the entire year was 2.6 per cent.

Do you think, do you really think,they missed it?

Inflation would not only have tobe zero for the rest of the year, but actually go negative to get even,actually, not close to that 2.6 percent.

The next monthly number comesout in two weeks, for August. Trust me. It will not be negative.

A pointer to what it – consumerinflation – might be came from the inflation figure that surfaced Friday in theUS and which drove the nervous Wall St trading.

This was for producer prices.They were up 0.7 per cent for the month, making 8.3 per cent for the 12 months- which the agency releasing the data noted was “the largest advance (interestingword) since 12-month data were first calculated in November 2010”.

Now, all these ‘experts’ at theFed did lift their inflation forecasts at the June meeting. To an average of3.4 per cent. But the single highest forecast was still ‘only’ 3.9 per cent – alreadybehind what inflation has added up to in the first seven months alone.

But still they persisted with:ah, but next year it will all go away. The single highest June forecast forinflation in 2022 was just 2.5 per cent.

I’ve detailed this at lengthbecause I want to get across to you the absolute stunning ineptitude of thepeople who are controlling your financial future.

As I wrote last week, Wall St istotally dependent on what the Fed does, and our market is totally dependent onwhat Wall St does.

Right now the Fed’s officialinterest rate should be at – to be gentle – 3 per cent; and heading higher,instead of the (disgraceful and inept) zero it’s been since 2010.

If it was at 3 per cent, the Dowwould probably be at half the level it is now. Do your own calculation on whatthe Australian market would be; it would not be at 7300.

Now the Fed can keep the musicplaying for a while, by pretending the inflation doesn’t exist.

But in its total ineptitude, itis utterly incapable of understanding that actually work to entrench it.

There are two futures for theUS: it slumps into the stagflation of the 1970s or it manages to run a highinflation moderately strong growth economy. The latter, for a time.

Either though has to end intears. And when the US starts to (really) ‘cry’ those tears will wash over us –and the rest of the world – like a financial tsunami.

This time it’s going to be worsethan anything we’ve experienced before, because we’ve all been feasting on thefree money fantasy.

By the trillion, by the tens andindeed hundreds of trillion.