Chaos is Spreading Everywhere!
Intensifying foreign wars, raging internal political wars, inflation all over again, and disastrous immigration are turning the world into a madding crowd.
Sure, the S&P 500 just broke 5,500 for its first time ever (and then failed miserably), but everything else this past week is proving out all the points I made in my last Deeper Dive, “Why the Fed’s Inflation Fight is Far from Over” and is also building into a “Year of Chaos.”
Take for example, this statement in that Deeper Dive about the one category that did the most to bring a tiny drip to overall CPI in its last report:
Oil, I’ve been saying, is more likely to rise right away, as the summer travel season gets going, than to keep falling. That is elementary because rising in price during the northern hemisphere’s summer is oil’s common pattern because travel in the summer by jet and by car and by RV and by ship all increase in the nations with the largest populations on earth and the most travelers.
What do we see this week but the predictable, which is why no one should have put any stock in that tiny downward blip in CPI, which was dependent on falling oil prices:
“2nd and 3rd busiest days ever for TSA in June”
“This year’s extended AAA Independence Day travel forecast exceeds pre-pandemic numbers, sets new record”
As I continued last weekend,
When so much of the drop in CPI was due to oil prices falling, markets were foolish to think the little wiggle downward in CPI meant anything to the Fed (or to the rest of us who buy gasoline or diesel), as oil is highly likely to reverse that move this month … and, as I keep saying, oil prices into everything else. It affects all prices down the road.
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