Fear The Talking Fed! US Industrial Production/Capacity Utilization Rise In The Face Of Inflation (M2 Velocity Near All-time Low As M2 Money YoY Still Sizzling At 9.85% YoY)

Confounded Interest ^ | 05/17/2022 | Anthony B. Sanders

[Browns Ultra Fan]

Most of us are painfully aware of rising food prices, particularly with the US fighting a proxy war with Russia. Wheat prices have doubled under Biden and the Russian invasion of Ukraine.

But inflation is everywhere. Rising home prices, rising gasoline and diesel prices, etc. When Jeep can see a Wagoneer for $100,000+, you know we have inflation.

The surprise this morning was retail sales, up 0.9% MoM (though still less than expected), despite rising prices. Odd since REAL wage growth is negative.

But the other bit of good news this AM is that US industrial production rose +1.1% MoM in April. And US Capacity Utilization is rising dangerously towards 80%, it is at 79% in April.

You will notice that Fed monetary tightening occurs when capacity utilization hits 80%, indicating an overheated (or OVERSTIMULATED) economy. Yes, we still have The Fed Funds Target Rate (Upper Bound) at only 1% and The Fed Balance Sheet still near $9 trillion. So, Fed stimulypto is still in play.

Meanwhile, M2 Money Velocity is near its historic low and M2 Money YoY is still sizzling at 9.85% YoY.

Wheat prices have doubled under Biden, and you can see how wheat futures soared when Russia invaded Ukraine.

So, despite The Fed’s intent to tighten, The Federal Reserve and Fed government are still overstimulating the economy. But what happens when the stimulus is gone?

Fear the Talking Fed!

[Browns Ultra Fan]

Our media blows. There is STILL an enormous amount of monetary and fiscal stimulus out there, helping to drive up inflation.

[ConservativeInPA]

Whenever possible, overlay economic indicator charts with the Fed balance sheet. The relationships are astonishing.

[neverevergiveup]

‘Journalists’ were never supposed to be thought of as the all-knowing public informers that they are passed off as now. They are experts at nothing, and should not be arbiters of anything.

[Obadiah]

Retail sales up 0.9% and credit card debt is skyrocketing. I believe retail sales are primarily be funded through credit card debt.

[cgbg]

Good point—I heard yesterday that only 15% of the trillion dollar stimulus package had even made it to the states, and of course their bureaucracy will delay expenditure even further.

That plus a negative real interest rate in most sectors (including of course the Fed rate to banks) is a massive stimulus in effect.

Expect inflation to rage for the foreseeable future.

[llevrok]

Ping for later

[alexander_busek]

When Jeep can see a Wagoneer for $100,000+, you know we have inflation.

Huh?!

Regards,

[oldtech]

I want to know what happens when the cost of living gets so high that no one can afford to drive to work to try to make a living. At or near that time, I think someone in government will possibly see that something HAS to be done & I think we are very near that period right now. So, why doesn’t someone do something RIGHT NOW before we get there? All I see is how the prices will just likely keep increasing. That’s a desperate situation being described! We as citizens pay good wages to people in government to figure out the problem & produce answers & what we have right now is those same people sitting on their brains!

[BeauBo]

“So, why doesn’t someone do something RIGHT NOW before we get there?”

I believe that they are pursuing their own interests, rather than the public good.

Overstimulating the economy and partying on the Strategic petroleum Reserve to get people a short term sugar high before the next election, and blowing lots of money where they can get kickbacks, or profit of trading on insider information.