Producer prices surged more than expected in July, spurring inflation concerns

RE: But I was told that tariffs made things cheaper? Oh, that’s right, they’re liars.

BOTTOM LINE: GOVERNMENT IS STILL SPENDING LIKE THERE’s NO TOMORROW.

Even in the Trump Administration and with a Republican controlled Congress, we abandoned all pretense of austerity. In broad strokes:

1. DOGE has been rendered irrelevant, as the Big Beautiful Bill negates all of the former’s cuts by a magnitude of 33 to 1 ($33 in spending for every $1 in cuts).

2. And speaking of tariffs, The Trump administration, despite bringing in ~$100 billion in additional revenues from tariffs, is in fact outspending the Biden administration. July federal deficit was in fact 10% greater than that of July 2024, DESPITE the U.S. bringing in $28 billion in tariff revenues that month.

The markets are fully aware of what’s coming.

For all the talk of inflation disappearing from the official data, gold is refusing to break down in any meaningful way. The precious metal is in fact consolidating near its all-time highs.

And before anyone accuses me of being a Never Trumper, We must consider that this is a GLOBAL phenomenon as the U.S. is not the only nation running massive deficits/ overspending.

Gold is doing the same thing when priced in Euros as well as Yen.

Put simply, the markets are SCREAMING that another round of inflation is coming, regardless of what the official data claims. At the end of the day, inflation is ALWAYS a product of government spending, and the only country that has even flirted with austerity was the U.S… and that lasted for all of just two months before the Trump administration gave up completely.

Throw in the fact that globally, central banks are now easing monetary conditions... with the Fed expected to cut rates in September... despite inflation turning back up again... and you’ve got a recipe for an inflationary storm.

From my experience, prices almost never drop; just the rate of increase drops. I cannot remember any time when prices generally dropped, except for during the Great Depression. If demand drops, prices may drop, but don’t expect to see $2.99 for hamburger ever again. Unless people stop buying hamburger, it will stay higher and will still be bought as the lowest price meat. Personally, I wait for a store coupon or buy the three pound package and freeze it as patties.

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